Why can deferred retirement become a financial trap for federal employees? Because it may feel like retirement, even though your federal pension has not started.
When you choose deferred retirement, you leave federal service before becoming eligible to begin your pension immediately. This means you must fund the years between leaving your job and receiving your FERS retirement benefit entirely from your own savings, investments, or other income sources.
That retirement income gap can last a decade or longer, depending on your age and eligibility. Without careful planning, the cost of covering your living expenses and healthcare during those years could place significant pressure on your finances.
Before leaving federal service, understand when your pension will begin and calculate how you will fund every gap year. Federal retirement rules depend on your age, service history, and retirement category, so consider reviewing your options with a qualified federal retirement professional.
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