What Changes at 62 for a Federal Retiree

Sixty-two is the age federal retirement literature circles without ever quite explaining. Four separate things happen there, and because they are usually described in one breath, most people come away believing that turning 62 does one big thing to their pension. It does not. Two of the four make the annuity larger, one takes a payment away, and one of them is not decided at 62 at all — it is decided on the day you separate, which is the only one of the four you can still do anything about.

Here is each one, what it is worth, and which rule produces it.

1. The accrual factor rises to 1.1% — but only if you are 62 when you leave

A FERS annuity is 1% of your high-3 average salary for each year of creditable service. The factor rises to 1.1% if you are at least 62 at separation with at least 20 years of service. That is a 10% larger pension for the whole of your retirement, and it is the single largest thing age 62 does.

It is also the one people lose by accident, because the test is written against the day you go, not against the day you turn 62. 5 U.S.C. § 8415(i)(2) reserves the higher factor to an employee who retires entitled to an annuity at 62 or older with 20 years of service. Retire the month before your 62nd birthday and you retire at 1%. You will turn 62 a few weeks later, and nothing recomputes.

On a $98,000 high-3 and 22 years of service, computed with the same engine behind the FERS annuity calculator:

• Separating at 61 years 11 months: 1% × 22 years = $21,560 a year ($1,797 a month).
• Separating one month later, at 62: 1.1% × 22 years = $23,716 a year ($1,976 a month).

One month of work is worth $2,156 a year, every year, for as long as the annuity is paid — and it carries into the survivor annuity too, since that is computed as a share of this figure. Over a 25-year retirement it is more than $53,000 before any cost-of-living adjustment is applied on top of it.

Two details that cost people the factor. The 20 years are creditable service, not sick leave — unused sick leave is added to the service used in the computation, but it cannot carry you over the 20-year line. And a deferred annuity never earns 1.1%, however old you are when it starts, because § 8415(i)(2) tests your age at separation and you separated years earlier.

2. The FERS supplement stops — claimed or not

If you retired on an immediate, unreduced annuity before 62, you have probably been receiving the FERS annuity supplement: a monthly payment from OPM, roughly the share of your age-62 Social Security benefit that your federal career earned. It ends the month before your 62nd birthday under 5 U.S.C. § 8421 — whether or not you have claimed Social Security, and whether or not you intend to.

That is the gap most retirement plans miss. The supplement stops on a fixed date; Social Security starts when you file. If you were planning to delay Social Security past 62 to earn the larger benefit — often the better decision — the months in between come out of savings, not out of either system. Nothing bridges them.

The supplement also carries no cost-of-living adjustment, so the payment you start with is the payment you finish with. And it is subject to the Social Security earnings test the whole time: $1 withheld for every $2 you earn above the annual exempt amount. That test ends with the supplement at 62, which is why a post-retirement job that was expensive at 60 costs nothing at 63.

3. Cost-of-living adjustments begin — and the missed years are never repaid

A regular FERS annuity receives no cost-of-living adjustment at all before age 62. 5 U.S.C. § 8462(c)(3) is a scope rule rather than an exception list: it reaches annuities paid under §§ 8412, 8413 and 8414, which is to say ordinary, deferred and discontinued-service retirements. Disability and survivor annuities were never inside that sentence and are adjusted from the start; special-provision retirees are named exceptions and are adjusted from the start too.

What surprises people is what happens when the adjustments do begin: nothing is caught up. § 8462(b) measures the increase from the last time the system adjusted, not from the last time your annuity did, so the years spent under the wall are gone from the base. Retire at 57 on $21,560 and, at 2.5% inflation, you reach 62 with an annuity of about $21,991 — worth $18,963 in the money you retired on. A comparable CSRS annuity, adjusted throughout, would be paying $24,393 by then: a gap of about $200 a month that never closes, because from that point both figures grow at similar rates from different bases.

When the adjustments do start, FERS pays a reduced one — the diet COLA. Where inflation runs above 3%, a FERS annuity is adjusted by one percentage point less than the price index; between 2% and 3% it is fixed at 2%. Only below 2% do FERS and CSRS receive the same increase.

4. The early-retirement reduction stops applying

If you left under MRA+10 — at your minimum retirement age with at least 10 years but fewer than 30 — or left early enough that your annuity is deferred, the annuity is reduced by 5% for every year you are under 62 when it starts. The word doing the work in § 8415(h)(1) is commencement: the reduction is measured from the date the annuity begins, not from the date you separated. Waiting buys it back at five-twelfths of 1% a month, and at 62 there is nothing left to buy.

§ 8415(h)(2) goes further. It removes the reduction outright rather than tapering it for anyone who would meet an ordinary age-and-service combination on the commencing date — so someone with 20 years of service who postpones to 62 has the reduction removed at once rather than worn down. That is a cliff, not a slope, and it is worth knowing which side of it a chosen commencing date falls on.

What this means if you are choosing a date

Three of these four happen to you. The supplement ends, the adjustments begin, and the age reduction runs out on its own schedule regardless of what you do. Only the first is bought, and it is bought with the separation date.

So the practical question is narrow. If you will have 20 years of creditable service and you are within a year of 62, working until your 62nd birthday is worth 10% of your annuity for life. Nothing else on this page is close to that in value, and nothing else on this page can be recovered after the fact.

Two footnotes for retirements that are not ordinary ones. A disability retirement is recomputed at 62 under § 8452(b), with every month spent on the disability roll counted as creditable service — which frequently pushes a career past 20 years and onto the 1.1% factor. And a special-provision retirement under 6c is on the enhanced 1.7% formula already, is adjusted for inflation before 62, and is a different calculation end to end.

Sources

• 5 U.S.C. § 8415 — computation of a FERS basic annuity, including the 1.1% factor at (i) and the age reduction at (h). Text of § 8415
• 5 U.S.C. § 8421 — entitlement to the annuity supplement, and its termination at 62. Text of § 8421
• 5 U.S.C. § 8462 — cost-of-living adjustments: the FERS bands at (b), the age-62 restriction at (c)(3). Text of § 8462
• OPM CSRS/FERS Handbook, Chapter 51 — Retiree Annuity Supplement. Chapter 51 (PDF)

Every figure above is computed with the modules the calculators themselves use — lib/fers-annuity.js for the annuity comparison, lib/fers-cola.js for the inflation projection — so this page cannot drift from what the tools would tell you.

This guide is informational only. It is not financial, tax, or legal advice, and FedAnnuity is not affiliated with OPM or the U.S. government. Retirement rules turn on the specific facts of a career, and only your agency and OPM can give you a binding figure.

Last reviewed: August 2026 · Against 5 U.S.C. §§ 8415, 8421, 8452 and 8462.