When is the earliest I can start a deferred annuity without a reduction?

It depends on how much service you had at separation. With 30 or more years you can start at your MRA with no reduction. With 20 to 29 years the unreduced date is age 60. With 5 to 19 years it is age 62. The rule is 5 U.S.C. 8415(h)(2): your service is measured as of your separation date, but your age is measured as of the date the annuity starts.

How big is the reduction if I start before 62?

Five-twelfths of 1 percent for each full month the start date comes before your 62nd birthday, which is 5 percent a year (5 U.S.C. 8415(h)(1)). OPM works it from the age you start: an employee who starts at an MRA of 56 is 6 years short of 62, so the reduction is 30 percent, permanently.

Can I keep FEHB and FEGLI with a deferred retirement?

No. For FEHB, 5 U.S.C. 8901(3) defines an annuitant as someone retiring on an immediate annuity or under section 8412 or 8414, and section 8413 is not on that list. For FEGLI, 5 CFR 870.701(a)(1) requires being entitled to retire on an immediate annuity. OPM states it plainly: if you receive a deferred annuity you are not eligible to re-enrol in health benefits, life insurance, or dental and vision benefits.

Is deferred retirement the same as postponed retirement?

No, and the difference is worth a lot of money. Deferred retirement is for someone who separates before their MRA. Postponed retirement is for someone who separates at or after their MRA with at least 10 years and delays the start date under 5 U.S.C. 8412(g). A postponed annuitant can reinstate FEHB and FEGLI when payments begin. A deferred annuitant cannot. If you are close to your MRA, waiting to separate can be the single most valuable decision in the whole plan.

Does my high-3 grow while I wait for the annuity to start?

No. OPM Handbook chapter 45 says the deferred annuity is based on the average salary in effect at separation, and that in the years between separation and age 62 the average salary is not adjusted by any intervening cost-of-living adjustments. A FERS annuity also does not begin receiving cost-of-living increases until age 62 (5 U.S.C. 8462(c)(3)).

Calculator

FERS Deferred Retirement

If you leave federal service before your minimum retirement age with at least 5 years in, you can still draw a FERS annuity later. This works out the earliest date it can start, what the age reduction costs you, and the three benefits a deferred annuity does not carry.

Reviewed by Jonathan D., 20-year federal employee · Formulas verified against OPM.gov · Updated October 2026

Rule snapshot

Reviewed October 3, 2026 · Sources: 5 U.S.C. 8413, 5 U.S.C. 8415(h), (i), OPM Handbook ch. 45, OPM deferred retirement · Inputs stay in your browser. Nothing you type is sent anywhere.

Your numbers

Date of birthSets your minimum retirement age under 5 U.S.C. 8412(h).

Separation dateThe day you left, or plan to leave, federal service.

High-3 average salaryFrozen at your separation salary. It gets no increase before the annuity starts.

Creditable civilian service (years)

Years, then extra months (0 to 11). Needs at least 5 years for any annuity.

Your deferred annuity

$1,069 a month

Your deferred annuity can start as early as July 1, 2037 at $1,069 a month, or wait until July 1, 2042 for the unreduced $1,425 a month.

When you can start it

Each commencing date you may elect, with the age reduction that applies to it.
Start at	First payment	Reduction	Monthly	Yearly
Your MRA (57 years)	July 1, 2037	25.00%	$1,069	$12,825
Age 60	July 1, 2040	10.00%	$1,283	$15,390
Age 62Earliest unreduced	July 1, 2042	None	$1,425	$17,100

Your MRA (57 years): Reduced 25.00 percent: 60 full months before your 62nd birthday at five-twelfths of 1 percent each (5 U.S.C. 8415(h)(1)).
Age 60: Reduced 10.00 percent: 24 full months before your 62nd birthday at five-twelfths of 1 percent each (5 U.S.C. 8415(h)(1)).
Age 62: No age reduction. The annuity starts at 62, so no month precedes your 62nd birthday (5 U.S.C. 8415(h)(1)).

How we got this

Minimum retirement age: born 1980, so your MRA is 57 years (5 U.S.C. 8412(h)).
Age on your separation date: 46 years. That is below your MRA, so this is a deferred retirement under 5 U.S.C. 8413.
Service factor: 1 percent, not 1.1 percent. The 1.1 percent factor in 5 U.S.C. 8415(i) only reaches annuities paid under section 8412, and a deferred annuity is paid under section 8413.
Unreduced annuity: $95,000 high-3 x 18 years of service x 1 percent = $17,100 a year.
Earliest start: 18 years is 10 years or more, so 5 U.S.C. 8413(b) lets you elect any date from your MRA up to age 62.
Earliest unreduced start: 62 years. Under 20 years of service, so the reduction only disappears at age 62.

What a deferred annuity does not come with

FEHB health insurance

Cannot be reinstated when the deferred annuity starts.

5 U.S.C. 8901(3) defines "annuitant" for FEHB as someone retiring on an immediate annuity or under section 8412 or 8414. Section 8413 is not on the list. 5 CFR 890.303(a)(2) also requires meeting the 5 U.S.C. 8905(b) participation test "as of the commencing date" of the annuity.

FEGLI life insurance

Cannot be reinstated when the deferred annuity starts.

5 CFR 870.701(a)(1) continues Basic life insurance only where the employee "is entitled to retire on an immediate annuity". A deferred annuity is not immediate.

FERS annuity supplement

Never payable on a deferred annuity.

5 U.S.C. 8421(a) lists the qualifying annuities: subsections (a), (b), (d)(1), (e) and (f) of section 8412 and subsections (a), (b) and (c) of section 8414. Section 8413 is absent.

Unused sick leave credit

Not added to service in a deferred retirement.

OPM CSRS/FERS Handbook ch. 45, 45B1.1-1: unused sick leave is not creditable for any purpose in a deferred retirement.

Your high-3 is frozen at your separation salary. It gets no cost-of-living increase in the years before the annuity starts (OPM Handbook ch. 45, 45A2.1-2(A), adopted for FERS at 45B2.1-2(A)).
A FERS annuity does not start receiving cost-of-living increases until age 62 (5 U.S.C. 8462(c)(3)).
Taking a refund of your FERS contributions voids these annuity rights for the refunded service (5 U.S.C. 8424(a)).
You must apply. OPM does not start a deferred annuity automatically. Use form RI 92-19 about 2 months before the date you want payments to begin.

What this models

The honest boundary of this tool. Anything in the right column changes your real number and is not in the math above.
Modeled	Not modeled
Earliest commencing date under 5 U.S.C. 8413(a) and (b), and the earliest unreduced date under 8415(h)(2).	Special provision service (law enforcement, firefighter, air traffic controller, customs and border protection). Those groups have their own unreduced doors at 8412(d)(1)(B), (e)(2) and (f)(2).
The annuity at 1 percent of high-3 per year of service, with the five-twelfths-of-1-percent-per-month age reduction.	Any CSRS component in a transferred annuity. The reduction applies to both components, but this tool computes a pure FERS annuity.
The commencing date as the first of the month after you reach the chosen age, which is the OPM convention.	A mid-month elected date. Under 8413(b) you designate the date, and electing a different day can move the reduction by one month.
Loss of FEHB, FEGLI and the FERS supplement, each tied to its own authority.	Survivor annuity elections and their cost, the alternative form of annuity, and court-ordered apportionment.
Service in whole years and months.	Day-level service arithmetic, unused sick leave (not creditable at all in a deferred retirement per OPM Handbook ch. 45), and any redeposit for refunded service.
A frozen high-3, with no indexing before the annuity starts.	Cost-of-living increases after the annuity starts, and the tax treatment of the annuity.

Precision limits: service is handled in whole years and months, and the commencing date is taken as the first of the month after you reach the chosen age. OPM works some figures to the day, so your official computation can differ by about a month of service either way. This is an estimate for planning, not an OPM determination.

Deferred, not postponed

These two words get used as if they mean the same thing. They do not, and the gap between them is measured in six figures. A deferred retirement is what you get when you separate before your minimum retirement age. A postponed retirement is what you get when you separate at or after your MRA with at least 10 years and choose to delay the start date under 5 U.S.C. 8412(g).

The annuity math is nearly identical. The insurance is not. A postponed annuitant can reinstate FEHB and FEGLI when payments begin. A deferred annuitant never can. If your separation date is anywhere near your MRA, that one fact is worth checking before you sign anything.

The two doors in section 8413

With at least 5 years of creditable civilian service, 5 U.S.C. 8413(a) entitles you to an annuity beginning at age 62. That is the only door below 10 years, and no age reduction touches it.

With at least 10 years, 8413(b) opens a second door: you may elect a start date any time from your MRA up to age 62. Starting early costs five-twelfths of 1 percent per month, or 5 percent a year, under 8415(h)(1). The reduction is permanent.

The exception is where it gets interesting. 8415(h)(2) switches the reduction off if you would meet the age and service test of 8412(a) or 8412(b), with service measured at separation and age measured at the commencing date. Since 8412(a) is MRA with 30 years and 8412(b) is age 60 with 20, that gives three unreduced dates: your MRA with 30 years, age 60 with 20 years, or age 62 with anything from 5 years up.

The 1.1 percent myth

A deferred annuity is computed at 1 percent. Always. The 1.1 percent factor exists in 5 U.S.C. 8415(i), but it reaches only an employee who “retires entitled to an annuity under section 8412” and who is at least 62 with 20 years of service “at the time of the separation on which entitlement to the annuity is based.” A deferred annuity is paid under section 8413, so the first test fails. And a deferred annuitant separated before their MRA, so the second fails too.

For a 20-year employee on a mid-career salary, that is roughly $3,000 a year for life, gone, for no reason other than the subsection the annuity is paid under. It is the quietest cost in the whole deferred package. See the FERS Retirement Calculator for what an immediate retirement at 62 would have produced instead.

Before you take a refund instead

Taking back your FERS contributions as a refund voids the annuity rights built on that service (5 U.S.C. 8424(a)). For most people with 10 or more years in, the deferred annuity is worth far more than the contributions, because the government's share is the larger part of what funds it. Check the numbers above against the refund figure on your leave and earnings statement before you decide.

And if you are being separated involuntarily rather than leaving by choice, stop here and check the discontinued service retirement rules first. A DSR pays immediately, carries no age reduction under FERS, and keeps FEHB. It is a different and much better benefit than a deferred annuity.