Have you noticed that many federal employees retire at age 62? Is that just a coincidence or do they know something you don’t? 

Here are the 4 HUGE reasons why federal employees retire at 62. 

5 Year Magic

To leave the government and keep some of your best benefits (like health insurance, a pension, etc.) you have to be eligible, and as traditional FERS federal employees, you have to meet one of these requirements for a full retirement:

• Hit your MRA (Around age 57) with at least 30 years of service
• Hit age 60 with at least 20 years of service
• Hit age 62 with at least 5 years of service

As you can see, the “years of service” requirement plummets down to only 5 years if you are age 62 and beyond. Many people simply want to leave as soon as they are eligible for a full retirement, but this is only one of the major reasons federal employees retire at 62.  

Long story short, if you have 20+ years of service and retire at age 62+ then your FERS pension will be 10% higher for the rest of your life. 

For those that know how your pension is calculated, your multiplier changes from 1% to 1.1% if you meet the criteria. 

This bonus is especially tempting for those that were planning to retire close to age 62 anyway. For example, if you were planning to retire at 61 and you had 20+ years of service then just working an additional year would mean a large increase to your retirement.