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FERS MRA+10 Retirement: Penalty Calculator & Decision Guide

Most federal employees know the standard FERS retirement benchmarks — MRA with 30 years, age 60 with 20 years, or age 62 with just 5 years. But there's a fourth path that lets you leave service much earlier: the MRA+10 provision, which requires only your Minimum Retirement Age and 10 years of creditable service. The price is a permanent 5% per year pension reduction for every year your annuity starts before age 62 — a reduction that never disappears.

This guide explains exactly how MRA+10 works, what it costs, when it makes sense, and what you have to give up that can't be recovered.

What is MRA+10?

FERS has four immediate retirement categories. Three of them are unreduced:

MRA+10 is the fourth: retire at your MRA with at least 10 years of service, but fewer than the 30 needed for an unreduced MRA pension. The annuity is immediate — you don't have to wait for a future date to start getting paid — but it is permanently reduced by 5% for every year the start date precedes your 62nd birthday (prorated monthly at 5/12 of 1% per month).1

The reduction is permanent. It never phases out, and COLA adjustments — which don't start for FERS until age 62 anyway — don't reduce the gap.

Your Minimum Retirement Age by Birth Year

The MRA varies based on when you were born. Unlike Social Security's full retirement age, the FERS MRA caps at 57 for anyone born in 1970 or later.2

Birth YearMRAYears under 62 at MRA
Before 1948557 years → 35% reduction
194855 yrs 2 mo~6.8 yrs → ~34.2% reduction
194955 yrs 4 mo~6.7 yrs → ~33.3% reduction
195055 yrs 6 mo6.5 yrs → 32.5% reduction
195155 yrs 8 mo~6.3 yrs → ~31.7% reduction
195255 yrs 10 mo~6.2 yrs → ~30.8% reduction
1953–1964566 years → 30% reduction
196556 yrs 2 mo~5.8 yrs → ~29.2% reduction
196656 yrs 4 mo~5.7 yrs → ~28.3% reduction
196756 yrs 6 mo5.5 yrs → 27.5% reduction
196856 yrs 8 mo~5.3 yrs → ~26.7% reduction
196956 yrs 10 mo~5.2 yrs → ~25.8% reduction
1970 or later575 years → 25% reduction

The Penalty Formula — A Worked Example

Pension under MRA+10 is computed the same way as any FERS immediate retirement, but with a reduction factor applied:

Annual pension = Years × 1.0% × High-3 × (1 − 5% × years under 62)

Note the 1.0% multiplier. Even if you have 20+ years of service, you do not get the 1.1% multiplier that applies when you retire at or after age 62 with 20+ years — because you separated before 62.1

Example: Career federal employee, born 1970, retiring at MRA (57) with 24 years of service and a High-3 salary of $98,000.
  • Base pension = 24 × 1.0% × $98,000 = $23,520/year
  • Years under 62 = 5 → reduction = 25%
  • Immediate annuity = $23,520 × 0.75 = $17,640/year ($1,470/month)
  • If annuity starts are postponed to 62: $23,520/year ($1,960/month) — same 24 years, no reduction
  • Monthly gap: $490/month until longevity break-even

MRA+10 Penalty Calculator

Enter your birth year, service years, and High-3 salary. The calculator shows your immediate (reduced) pension, your postponed (unreduced) pension, and the break-even age at which total lifetime income equalizes between the two options.

This calculator compares immediate MRA+10 vs postponing annuity to 62 with the same service years. It does not account for time value of money, TSP growth, additional service if you kept working, state taxes, or spousal benefit elections. Use it as a directional tool, not a financial plan.

The Postponement Option — and the FEHB Health Insurance Trap

OPM allows you to separate from service at MRA but delay when your annuity begins — anywhere from MRA to two days before your 62nd birthday. This is called a postponed MRA+10 annuity. By postponing to exactly 62, you eliminate the 5%/year reduction entirely.3

There's a serious catch: FEHB health coverage is suspended from the moment you leave service until your annuity begins.4 Unlike regular retirement, you do not keep FEHB coverage during the waiting period.

What you can do:

  1. Temporary Continuation of Coverage (TCC) — available for up to 18 months after separation. You pay the full premium plus a 2% administrative charge. For a self+family FEHB plan, this typically runs $18,000–$28,000 per year.4
  2. Spouse's employer plan — if your spouse has employer coverage, you can join as a dependent during the gap.
  3. Marketplace (ACA) plan — after TCC expires, if you're still under 65, you'd need marketplace or private coverage at market rates.

When your annuity finally begins, you can re-enroll in FEHB as an annuitant — provided you were continuously enrolled for at least 5 years of service immediately before separating.4

The FEHB gap in numbers (example: retire at 57, postpone to 62):
18 months TCC: ~$21,000 (self+family mid-tier plan at full cost + 2%)
42 months marketplace/spousal: varies, but $800–$2,000/month is typical
Total 5-year health coverage cost: $50,000–$120,000 — a significant offset against the pension reduction savings

Two Things MRA+10 Forfeits

1. The FERS Special Retirement Supplement

The FERS supplement bridges the gap between early federal retirement and age 62 for employees who retire at MRA with 30+ years, or at 60 with 20+ years. It approximates the Social Security benefit you'd receive at 62, based on your FERS-covered earnings. A career federal employee earning $95,000 might receive an $800–$1,200/month supplement.

MRA+10 retirees do not receive the FERS supplement.1 It is reserved for unreduced immediate retirements. If the supplement would be substantial in your case, this is a major cost of the MRA+10 path.

2. No COLA Until 62 — Regardless

FERS pension COLA doesn't start until age 62 for most employees (law enforcement, firefighters, and ATCs are exceptions). This applies to all FERS retirees, but it compounds painfully for MRA+10 retirees because:

After 62, FERS COLA follows its standard formula: full CPI if inflation is under 2%; 2% if CPI is 2–3%; CPI minus 1% if CPI exceeds 3%.

Your TSP: The Rule of 55 Still Works

One important distinction: the MRA+10 penalty is a pension penalty only. It has no effect on your TSP. Under IRC § 72(t)(2)(A)(v), if you separate from federal service in or after the calendar year you turn 55 (or age 50 for law enforcement, firefighters, and air traffic controllers), TSP withdrawals are exempt from the 10% early withdrawal penalty — regardless of whether your pension is reduced.5

This is a significant advantage of MRA+10 over truly early retirement: you can supplement your reduced pension with penalty-free TSP distributions starting immediately after separation, without waiting until 59½. Someone with a $600,000 TSP balance has substantial flexibility to fill the gap left by a reduced pension, particularly if they can calibrate withdrawals to stay in a lower tax bracket.

Timing warning: the Rule of 55 requires that you separate from service in or after the year you turn 55. If your MRA is 55 but you retire in December of the year you turn 54 (e.g., your birthday is in February and you retire in December at age 54 and 10 months), the Rule of 55 does not apply. The separation must occur in the same calendar year as your 55th birthday or later.

See TSP Stay vs. Rollover for a full analysis of the Rule of 55 and how it interacts with rollover decisions.

Partial vs Full MRA+10: The Service Threshold Detail

MRA+10 requires 10 or more years of creditable service, but the standard formula for FERS immediate retirement with 30+ years at MRA is separate. Here's how the thresholds interact:

If you're a few years from the MRA+30 threshold, the math often favors staying. An employee at MRA with 28 years who leaves gets a 25–30% cut on 28 years of service credit. The same employee at MRA+2 gets a full pension on 30 years — roughly 50% more annuity with no reduction.

When MRA+10 Makes Financial Sense

MRA+10 isn't always the wrong choice. Here are the scenarios where the math or the circumstances justify it:

When to Reconsider

Related guides

Model your specific MRA+10 scenario

The calculator above gives directional numbers. Your actual break-even depends on TSP balance, spousal benefit election, FEHB timing, state taxes, and expected Social Security. A specialist who works with federal employees runs these scenarios in full.

Sources

  1. OPM FAQ: What is a Minimum Retirement Age (MRA) plus 10 annuity under FERS? — confirms 5/12% per month reduction, no FERS supplement for MRA+10.
  2. OPM FERS Eligibility — Minimum Retirement Age Table by birth year.
  3. OPM FAQ: What happens if I postpone the MRA plus 10 annuity? — confirms postponement range (MRA to 2 days before 62nd birthday).
  4. OPM FEHB Reference: Annuitants — FEHB suspension during postponement, TCC availability, re-enrollment upon annuity start.
  5. IRS: Exceptions to Tax on Early Distributions (IRC § 72(t)) — Rule of 55 for separation-from-service at age 55 or later.

Values verified as of May 2026. MRA table and penalty calculation per OPM. FEHB rules per OPM Healthcare Reference. Rule of 55 per IRC § 72(t)(2)(A)(v).