FERS MRA+10 vs Postponed Retirement: Avoiding the Age Penalty
If you reach your Minimum Retirement Age with at least 10 years of service but fewer than 30, you can retire under "MRA+10." But the immediate annuity comes with a steep age reduction — and postponing it can erase the penalty entirely.
- MRA+10 lets you retire with 10–29 years of service at your MRA.
- An age reduction generally applies before 62; with at least 20 years of service, beginning at 60 avoids it.
- Postponing the start date avoids the reduction and can restore FEHB.
- The trade-off is income now (reduced) vs. a larger annuity later.
The 5% age reduction
Under MRA+10, if you begin receiving your annuity immediately, it is permanently reduced by 5% for each year you are under age 62 (that is 5/12 of one percent for each month). Retire four years early and your pension is cut by roughly 20% for the rest of your life. The reduction is permanent — it does not bounce back when you turn 62. The age reduction does not apply when you have at least 20 years of service and your annuity begins at age 60 or later, or when you meet the MRA with 30 years of service.
| Age annuity begins | Years under 62 | Approx. reduction |
|---|---|---|
| 57 | 5 | 25% |
| 58 | 4 | 20% |
| 60 | 2 | 10% |
| 62 | 0 | 0% |
The postponed annuity option
Instead of starting your annuity right away, you can separate from service and postpone the start date to a later age. By postponing until you reach an age where the reduction is small or zero (for example age 60 with 20 years, or age 62), you avoid most or all of the penalty. This is the key insight many employees miss: MRA+10 retirement and an immediate annuity are not the same decision.
Immediate vs postponed: how to choose
- Choose immediate (reduced) if you need the income now or cannot bridge a gap in health coverage.
- Choose postponed if you can cover health insurance another way and want the larger, unreduced annuity later.
- Run the math on lifetime value: a smaller check for more years vs. a larger check that starts later.
Note that MRA+10 retirees are generally not eligible for the FERS Special Retirement Supplement, which is another reason the postponed strategy is often more valuable than it first appears.
Compare starting ages with the FERS calculator and confirm your eligibility date in the eligibility calculator.
Is the MRA+10 reduction permanent?
Yes. If you take the immediate annuity, the 5%-per-year reduction stays for life. Postponing the start date is the way to avoid it.
Can I keep my FEHB if I postpone?
Coverage is suspended during the postponement gap but can be reinstated when the postponed annuity begins, if you met the five-year FEHB enrollment requirement before you left.
Do MRA+10 retirees get the FERS supplement?
Generally no. The Special Retirement Supplement is for those who retire with an immediate, unreduced annuity, which MRA+10 immediate retirements are not.
Authoritative reference: OPM — FERS. This site is not affiliated with the U.S. government.