ProFeds Founder, Chris Kowalik, reviews how federal employees who are already eligible to retire will be affected by a Reduction in Force action.
Key takeaways:
- What it takes to be “fully-eligible” to retire
- What benefits are retained in retirement
- What benefits may be lost in retirement
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- Link to full RIF training series: FedImpact.com/RIF-training-series
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Transcript of this episode coming soon:
Originally released on 3/7/2025
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We have a couple million federal employees who are worried about their jobs right now, but there’s a subset of this group that I think are important to talk about today, and that is those people who are already fully eligible to retire. What does this mean for them? And so today’s episode is going to talk all about that.
Hi, I’m Chris Kowalik, the founder of ProFeds. Welcome to the Fed Impact Podcast, where we offer candid insights on your federal retirement.
Reduction in Force – What if I am Already Eligible to Retire?
We’re doing this series to be able to answer a lot of questions from federal employees on a lot of different topics with respect to the reduction in force, and I was surprised how many questions we got from people who were already fully eligible, not needed an early out or anything like that. They’ve met the normal full eligibility rules who were worried that their pension was going to go away if they were RIF’ed.
I knew that this was going to be a great topic to talk about. If you like what we’re talking about, I hope that you’ll subscribe to your favorite podcast player, so that shows up in your feed more often.
Fully Eligible to Retire
Let’s talk about full eligibility rules. I covered this in a couple of other videos, but just to make sure that we’re really clear. In order to be fully eligible to retire, under the FERS program, which the vast majority of you are under, you’ll need to be at least 62 with at least five years of service.
At least stage 60 with at least 20 years of service, or have reached your minimum retirement age, which is somewhere between 55 and 57 depending on the year you were born with at least 30 years of service at that time. That’s full eligibility.
Once you meet both the age and the service requirement for that particular gate, you are fully eligible to retire, which means you are in the driver’s seat. You don’t have to get permission from anyone to be able to retire. You can simply go.
We don’t have to worry about is this a voluntary retirement? Is this an involuntary retirement? You are in the driver’s seat. You are making a call of when your retirement date is, dropping your papers and walking out the door. So you’re in a really good spot. There will be nothing taken away from you. You have already earned your right. If you are already eligible, you have locked in your pension.
The question is, how much longer beyond this would you have wanted to work? And of course, that would’ve added to your pension. So I understand that it might be a little bit different for you, but nobody is able to take that pension away.
Now, there are some ways that a pension can be taken away. For instance, if we think of high crimes against the United States like treason or espionage, those are reasons that a pension can be taken away, but I’m going to hope that you’re not doing any of those things, so your pension is likely safe.
Benefits Retained and Lost in Retirement
You’re also going to be able to keep a lot of benefits that you’re qualified for. There are special rules for each of these, so it’s important that we understand those.
The first is the FEHB program and the FEGLI program. This is your health insurance and your life insurance. They both carry the same rule. The rule is it’s kind of a two-pronged rule.
In order to be able to keep your health insurance or your life insurance, you need to be enrolled in that program on the day that you retire from federal service and for the five years prior to that time. So on the day you retire and five years prior. That’s the little mantra that we use.
It’s important to know if in fact you meet that eligibility, you have a choice now of keeping health insurance and or life insurance in retirement, and you’re going to make all those decisions about how those benefits might change.
You also get all of the other benefits like the special retirement supplement, assuming that you’re under the age of 62. That’s the one that kind of looks like Social Security, but it’s paid prior to the age of 62. You get to qualify for all of those things.
The Thrift Savings Plan, of course, you’re able to have access to. We have a special video on TSP where we talk about the rules of accessing and how penalties may rear their ugly head. And so something pretty important that we want to talk about, but keep in mind being fully eligible with the rules that I described, that’s for a regular employee.
If in fact, we have any special provision employees listening, so these are our law enforcement officers, firefighters, air traffic controllers, you’re going to have some different rules that you’re probably familiar with. Again, age 50 with 20 or any age with 25.
It basically mirrors that early out and the discontinued service retirement rules that we’ve covered in other videos, but a great opportunity if you are already fully eligible.
Remember, you are in the driver’s seat and the very strongest position that you could possibly be in during a riff. It doesn’t mean that you’re not going to be asked to leave, but it does mean that you have all of the cards in your favor as far as your benefits go.
Get Connected & Next Steps
But keep in mind, you need to know your numbers. Just because the agency asks you to go ahead and take off doesn’t mean that all the numbers just magically work in your favor. You’ve got to get those numbers straight.
We like to help those employees who are interested in figuring out how all this stuff works and making great decisions. We help them during our retirement workshops and we offer some one-on-one help following those sessions.
These are in-person full day sessions. If you haven’t been to one, I encourage you to go. You can find all the locations and dates on our website. If you’re not familiar with the FedImpact site, you can always pull out your phone, text the word podcast to the number 224-444-6144. We’ll be connected.
We’ll get you a list of all the locations that you can choose from, and that way you’ll stay up to date on all the changes that we’re announcing through the newsletter, as well as additional training opportunities that are available.
I hope that you’ll subscribe to the podcast wherever you might listen to that, whether it’s on YouTube or iHeartRadio or Amazon or Spotify. We hope that you’ll stay connected to us here so that you are sure to see more of this type of content right in your podcast feed. Thank you so much. We’ll catch you at the next episode.
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