There are a couple of Golden Retirement Ages that are extremely popular: ages 57, 60, and 62 are the biggest ones, but there are 3 very specific reasons that people like retiring at 57.
Minimum is The Maximum
Why do so many people leave the government at 57? For many people, 57 is their MRA or minimum retirement age.
If you were born before 1970 then your MRA will be a little bit before age 57 per this chart:
| If you were born | Your MRA is |
|---|---|
| Before 1948 | 55 |
| In 1948 | 55 and 2 months |
| In 1949 | 55 and 4 months |
| In 1950 | 55 and 6 months |
| In 1951 | 55 and 8 months |
| In 1952 | 55 and 10 months |
| In 1953-1964 | 56 |
| In 1965 | 56 and 2 months |
| In 1966 | 56 and 4 months |
| In 1967 | 56 and 6 months |
| In 1968 | 56 and 8 mo |
| In 1969 | 56 and 10 mont |
| In 1970 and after | 57 |
And your MRA is a key player in being eligible to retire.
If you leave the government before your MRA (as a traditional FERS employee) there is almost no way to keep key benefits like your FEHB (health insurance).
So for those who are trying to get out as soon as they possibly can and retain key benefits then 57 (or their MRA) seems like a good fit.
Hold Your Horses!
But not everyone can leave at their MRA with 100% of their benefits. To get a full retirement you have to hit one of these requirements:
- Be at least your MRA with at least 30 years of service
- Be at least 60 with at least 20 years of service
- Be at least 62 with at least 5 years of service
So if you want a full retirement at 57 then you’ll have to have 30 years of service.
However, if you have at least 10 years of service at your MRA then you’d be able to retire, get a pension, and keep your health insurance. This type of retirement is called MRA+10 retirement. The one downside is that your pension will be reduced for retiring ‘early’ unless you choose to postpone your pension.
Many people use the MRA+10 retirement (with postponing their pension) to leave the government early and go work for a private company until they fully retire in their 60s.
Forced Out at 57
Another reason that age 57 is a popular age to retire is that some positions are forced to retire by this age. You would probably know if this rule applied to you.
This rule is typically for very physical jobs like law enforcement or air traffic controllers.
Note: Air traffic controllers are normally forced out one year earlier at 56.
TSP Access, Baby!!
You have to wait until 59 and ½ to access your TSP without penalty, right?
Wrong!!
As long as you leave the government at age 55 or later then you can access your TSP without the normal early penalty that would apply. This is another huge reason federal employees retire around 57.
Note: You would still have to pay taxes on any traditional TSP withdrawals like always. The early withdrawal penalty is the only thing you’d avoid retiring at 55 or later.
Your Perfect Age
So should you retire right at 57 or your MRA? It is certainly an option to consider but you’ll want to make sure it actually makes sense for you.
Some people just aren’t financially ready to retire at that age, and others may like their jobs and want to work longer.
Whatever age you pick to retire you’ll have to make sure all the details work for your life.
