What is the FERS Annuity Supplement?
The FERS Annuity Supplement is an additional retirement benefit available to certain federal employees who retire before becoming eligible for Social Security at age 62. Sometimes referred to as the “bridge” or “Social Security Supplement,” it serves as a temporary income source for eligible early retirees.
This benefit is paid monthly by the Office of Personnel Management (OPM) and is deposited alongside your regular FERS pension payment on the first business day of each month. For many retirees under the Federal Employees Retirement System, the supplement helps bridge the income gap between retirement and age 62, reducing the need to draw early from the Thrift Savings Plan (TSP) or other personal savings.
Who Is Eligible for the FERS Annuity Supplement and Who Is Not?
Eligibility for the FERS Annuity Supplement is generally tied to retiring with full benefits. You may qualify for the supplement if you retire under one of the following provisions:
- You’ve reached your Minimum Retirement Age (MRA) and have at least 30 years of creditable service
- You are at least 60 years old with 20 or more years of service
- You retire under a Discontinued Service Retirement (DSR) and meet both age and service requirements
- You retire under a Voluntary Early Retirement Authority (VERA) and also meet the minimum age and service criteria
However, not all retirees will qualify for this benefit. You are not eligible if:
- You separate under the MRA + 10 provision
- You leave federal service before reaching your MRA (unless under DSR or VERA)
- You retire with full benefits at age 62 or later. At that point, you’re eligible to begin Social Security and would no longer receive the supplement
Special Retirement Provisions and the FERS Supplement
Federal employees under Special Retirement Provisions (SRP), such as law enforcement officers, firefighters, and air traffic controllers, may also qualify for the supplement. These individuals can usually retire earlier than regular FERS employees and receive the supplement immediately upon retirement.
Importantly, income earned before reaching your Minimum Retirement Age (MRA) does not affect the supplement for SRP employees. However, once they reach MRA, the earnings test applies, just like it does for other FERS retirees.
How to Estimate Your FERS Annuity Supplement
The FERS Annuity Supplement is designed to approximate the Social Security benefit you would receive based solely on your years of federal service. Before we break down the full formula, it’s helpful to understand the basics of how OPM calculates your benefit:
- The supplement uses a modified Social Security benefit formula
- Only federal civilian service is considered, not your full work history
- Earnings from before age 21 are excluded
- Bought-back military time and unused sick leave do not count toward the supplement (though they do count toward your pension)
Quick FERS Estimation Formula:
To approximate your FERS Annuity Supplement amount:
- Divide your total years of creditable federal service (whole years only) by 40
- Multiply that result by your estimated Social Security benefit at age 62
This will give you a rough estimate of your FERS Annuity Supplement. Consulting with a retirement specialist can provide a more accurate projection tailored to your specific service history.
Earnings Test and Reporting Requirements
Once you reach your Minimum Retirement Age (MRA), your supplement becomes subject to an earnings test. For 2025, the income threshold is $23,400. If your earned income exceeds this amount, your supplement will be reduced by $1 for every $2 you earn above the threshold.
Earned income includes wages and self-employment income, but does not include things like your FERS annuity or distributions from your TSP. Retirees receiving the supplement must submit Form RI 92-22 each year to report their earnings to OPM.
Important Note: If you work as a full-time Air Traffic Control instructor after retirement, you are not required to report those earnings for the earnings test.
Keep in mind that any reduction in your FERS Annuity Supplement based on excess earnings will not happen in the same year the income is earned; it takes effect the following year. This delay is important to plan for when budgeting your income in the first few years of retirement.
VERA and Discontinued Service Retirement Eligibility
If you retire under a Voluntary Early Retirement Authority (VERA) or Discontinued Service Retirement (DSR), you may still receive the FERS Annuity Supplement, but not immediately. Instead, the supplement begins once you reach your Minimum Retirement Age. For instance, if you retire at age 53 under a VERA, your supplement won’t start until you turn 57 (assuming that is your MRA).
The same rule applies to DSR retirees who meet the necessary age and service requirements. This delay can impact your cash flow planning, making it critical to prepare financially for this time.
Will the FERS Annuity Supplement Be Eliminated?
One significant proposal currently under consideration in Congress is the elimination of the FERS Annuity Supplement. This proposal is part of a much larger piece of legislation known as the “One Big Beautiful Bill.”
As of this writing, the bill has passed the House of Representatives and is now under review in the Senate. If passed in its current form, the FERS Annuity Supplement will be eliminated effective January 1, 2028. Federal employees who retire before that date will be grandfathered in and continue to receive the benefit. Those who retire on or after January 1, 2028 will not be eligible.
Except for those covered under Special Retirement Provisions (SRP), such as law enforcement officers, firefighters, and air traffic controllers, who will still receive the Supplement.
Other proposed federal benefit changes in the legislation include:
- Implementing at-will employment or higher FERS contribution rates for newly hired employees
- Imposing fees for Merit Systems Protection Board (MSPB) appeals
As of the time this article was published, these proposals have not yet been signed into law. We are monitoring the legislative process closely and will continue to provide timely updates on how these changes may impact your retirement planning.
Planning Ahead: Make the Most of Your FERS Annuity Supplement
The FERS Annuity Supplement can play a significant role in your overall retirement strategy, helping you maintain income without immediately tapping into your Thrift Savings Plan (TSP). Understanding eligibility requirements, estimating your supplement, and navigating the earnings test will help you make more informed retirement decisions.
Start planning for retirement now, and we will work with you to identify the best strategy for maximizing your FERS benefits. Knowing whether you’ll qualify for the supplement, when it begins, and how it interacts with other income sources will set you up for a smoother transition into retirement.
If you have questions about your eligibility or want assistance projecting your retirement income, our team is here to support you. To get started, contact Dugan Brown today.
