Quick reference guide to the Federal Retirement Social Security FERS Supplement, providing federal employees with retirement security and annuity supplement before age 62.
This article is referring to the “special retirement supplement” (SRS) for FERS retirees.
Understanding the Federal Retirement Social Security Supplement
Originally designed for federal employees with special provisions (law enforcement officers, firefighters, and air-traffic controllers), the federal retirement social security supplement is a source of retirement income for all feds who retire with an immediate FERS annuity before the age of 62, when retirement benefits can be claimed from the Social Security Administration (SSA). As for the roughly 1% of CSRS (Civil Service Retirement System) employees still working, they typically do not get Social Security and are most likely older than 62 by now.
What is the FERS Retirement Social Security Supplement?
The Three Components of Federal Retirement: FERS, TSP and Social Security
The Federal Employee Retirement System (FERS) is designed to provide retirement benefits to federal employees. It is a three-tiered retirement plan that includes the FERS basic benefit, Social Security, and the Thrift Savings Plan (TSP). The FERS basic benefit is calculated based on years of service and the employee’s highest three years of salary. Social Security benefits are based on the employee’s earnings history and are payable at age 62 or later. The TSP is a defined contribution plan similar to a 401(k), where employees can contribute a portion of their salary, and the government provides matching contributions. Together, these components aim to provide a comprehensive retirement income for federal employees. So, for feds that enter retirement before turning 62, the FERS supplement provides income until they can claim retirement benefits from the SSA.
Estimate your FERS income with our Federal Retirement Calculator.
What is the Social Security Supplement?
The Social Security supplement, also known as the FERS annuity supplement, is a benefit provided to federal employees who retire before age 62. It is designed to supplement the retiree’s income until they become eligible for Social Security benefits. The supplement is calculated based on the retiree’s years of service under FERS and their estimated Social Security benefit at age 62. It is an essential component of the FERS retirement system, helping retirees maintain their standard of living during the transition to Social Security.
When Can Federal Employees Retire Under FERS?
Early Retirement and FERS Supplement Eligibility
Early retirement under FERS can significantly impact the benefits a federal employee receives. Employees who choose to retire before reaching the age requirements for full benefits may face a reduction in their retirement income. The reduction is typically 5% for each year the employee is under age 62.
Eligibility for the FERS retirement plan is determined by several factors, including the employee’s age and years of service. At MRA (minimum retirement age), normal feds can immediately retire with 30 years of service or with at least 20 years at age 60. Those with special provisions are eligible at age 50 with at least 20 years or any age with 25 years of creditable service. The social security supplement is only available to those with an immediate pension, not postponed and deferred annuities.
How is the FERS Annuity Supplement Calculated?
FERS Special Retirement Supplement Calculation
The FERS annuity supplement is designed to bridge the gap between retirement and eligibility for Social Security benefits. It is calculated based on the employee’s years of service under FERS and their estimated Social Security benefit at age 62. The supplement is payable to those who retire before age 62 and meet specific service requirements. Factors affecting the calculation include the employee’s age at retirement, years of service, and the estimated Social Security benefit. The supplement is subject to reduction if the retiree earns income above a certain threshold, known as the earnings test.
Watch Out for the Earnings Test
The earnings test is a critical factor in determining the amount of the FERS annuity supplement. If a retiree earns income from employment under Social Security above a specified limit ($23,400 in 2025), the supplement will be reduced. For every $2 earned above the limit, $1 is deducted from the supplement. This reduction applies until the retiree reaches age 62, at which point they become eligible for Social Security benefits. The earnings test ensures that the supplement is only provided to those who genuinely need it to bridge the gap to Social Security. The FERS annuity supplement is reduced or eliminated based on the retiree’s earnings and age. If a retiree’s earnings exceed the threshold set by the earnings test, the supplement will be reduced accordingly.
Additionally, the supplement is only payable until the retiree reaches age 62, at which point they become eligible for Social Security benefits. If a retiree returns to federal employment, the supplement may also be suspended. Understanding these conditions is crucial for retirees to plan their finances effectively and avoid unexpected reductions in their retirement income. Like the FERS pension and regular social security benefits, the supplement gets an annual cost of living adjustment (COLA) based off inflation.
Survivors FERS Eligibility for Supplement
FERS Survivor Benefits and the Special Retirement Supplement
FERS survivor annuities provide financial security to the surviving spouse or eligible family members of a deceased federal retiree. Upon retirement, employees can elect to provide a survivor annuity, which reduces their monthly retirement benefit but ensures continued income for their survivors. The survivor annuity is typically 50% of the retiree’s unreduced annuity, but employees can choose a lower percentage to reduce the cost. Understanding the options for survivor annuities is crucial for retirees to protect their loved ones and ensure their financial well-being after their passing.
You can receive a social security supplement with a FERS survivor annuity if you are under 60, eligible for Social Security survivor benefits at age 60, and not receiving any form of SSDI (disability from SSA).
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
