An immediate retirement pension is one which begins within 30 days from your date of separation from employment. If you qualify for such a pension, you’re eligible to an immediate pension benefit: eligibility is based on your age and duration of service. You’re also eligible for a certain amount of lifetime benefit if you’re retired at the age of sixty-five or over. But here’s the catch: if you reach this age, you may no longer qualify for an immediate annuity and may instead have to settle for a deferred annuity.
The Deferred Annuity Option
The Deferred annuity option is only available if you are eligible for Social Security benefits. To determine your eligibility for such a deferred annuity, contact your local SSA. FERS MRA is the government’s guidebook for determining the eligible age for Social Security benefits. The process of applying for a deferred annuity and what it will cost you will be outlined in the SSA website. To find out more about the specifics of your particular situation, talk to your local Social Security office.
If you’ve reached the minimum retirement age, but you’re not yet eligible for the deferred annuity benefit, what do you do? The best way to deal with this predicament is to wait. Wait until you turn age 62. That’s when you’ll be eligible for the full retirement benefit. If you’re looking ahead a few years, and haven’t yet reached the minimum retirement age, see if your employer offers a waiting period or another retirement option.
Never Give Up Hope
If you don’t yet qualify for an immediate annuity, don’t give up hope. There are still ways to achieve a decent income from your work at home business. Read on for more information about how you can receive a nice lump sum, even if you’re at the minimum retirement age.
What If You’re Already Retired?
Does your employer offer a deferred annuity program? If so, you may be able to postpone the start of your retirement benefits. To do this, you would need to withdraw a portion of your federal employee salary. Each year, the government would refund the amount you withdraw, up to a maximum of 10 percent. However, if you continue to work until you reach the required age of retirement, you’ll begin receiving a withdrawal at the full 10 percent rate.
Can you delay your withdrawal for an additional year? While it may be mathematically possible to withdraw an additional year, be sure to calculate your tax liability first. Retiring early can significantly reduce your federal retirement benefits. That’s because the 10 percent tax penalty for early distributions is applicable only to those who begin receiving retirement age at or before the year in which they retire. So if you’re nearing the age of retirement, but think you might want to defer your retirement benefits for one more year, think again!
Retired spouses may also receive creditable retirement income if they have a high-3 average in their first job. The high-3 average is defined as the average of your first job’s pay and your annual compensation; both of these should be at least the same as the amount of compensation you would receive had you not retired. This applies to you only if you continue to receive full monthly compensation after you have reached the high-3 average.