What is Phased Retirement?

FERS Phased Retirement is a program that allows eligible federal employees to transition from full-time employment into retirement gradually while still maintaining a reduced work schedule. This program is designed to help both employees and federal agencies manage the transition to retirement more smoothly. Here's how FERS Phased Retirement works:

Eligibility: To be eligible for FERS Phased Retirement, you must meet certain criteria, including being eligible for immediate retirement (meaning you have the right combination of age and years of service to retire with full benefits). You must also have worked full time for at least three consecutive years leading up to entering the program.

Part-Time Employment: Under FERS Phased Retirement, you switch from full-time employment to part-time employment. You'll work part-time hours, typically about 20 hours per week, while receiving a portion of your salary and benefits.

Retirement Annuity: During your phased retirement, you'll start receiving a portion of your FERS retirement annuity based on the hours you work. The amount of your annuity is prorated based on the percentage of your time worked compared to full-time employment.

Accrual of Service: While in phased retirement, you continue to accrue additional years of service, which can help increase your overall retirement benefits once you fully retire. This is beneficial for calculating your annuity when you transition to full retirement.

Phased Retirement Agreement: You and your agency need to enter into a phased retirement agreement that outlines the terms of your part-time employment, annuity calculations, and other details.

Transition Period: The phased retirement period can last for a maximum of six months, but it can be extended with agency approval. At the end of the phased retirement period, you transition to full retirement status and begin receiving your full annuity.

Full Retirement: Once you fully retire, your annuity is recalculated to include the additional years of service you accrued during phased retirement. Your annuity will also be adjusted based on any cost-of-living adjustments (COLAs) that occur during the phased retirement period.

Benefits: Phased retirement provides a smoother transition into retirement, allowing you to gradually reduce your work hours, maintain some income, and continue accruing service. It also allows agencies to retain experienced employees and facilitate knowledge transfer.

FERS Phased Retirement is a flexible option for federal employees who want to transition into retirement gradually while enjoying a reduced work schedule. If you're interested in participating in this program, you should reach out to your agency's HR department to discuss your eligibility and the application process.

What is 'Phased Retirement' and is it for you?