# Coast FIRE for Federal Employees Under FERS

> How to count a FERS annuity in your Coast FIRE number, why leaving before your MRA costs so much, and why you never coast below the 5% TSP match.

Source: https://mycoastfire.com/blog/coast-fire-federal-employees
Last updated: 2026-09-26

A FERS annuity is smaller than most people expect, but it still takes a big bite out of your Coast FIRE number. The part that trips people up is timing: when you leave matters almost as much as how much you've saved.

For a FERS employee, Coast FIRE usually means staying in federal service until you can retire on an immediate annuity, while cutting TSP savings back to the 5% that gets the full match. Leaving early turns the annuity into a deferred one, which is smaller, starts later and doesn’t come with health coverage.

That makes coasting as a fed look more like coasting as a teacher than like the standard version, where hitting your number frees you to walk away. The pension is part of your number, and you only get the full version if you stay.

## How big is a FERS pension?

Smaller than a military or teacher pension. The [FERS basic annuity](https://www.opm.gov/retirement-center/fers-information/computation/) is 1% of your high-3 average salary for each year of service. If you retire at 62 or later with at least 20 years, it’s 1.1%. High-3 is your highest average basic pay over any three consecutive years, which for most people is the last three. Overtime and bonuses don’t count.

Thirty years at 1% replaces 30% of your salary. That’s a real pension, but it was designed to sit alongside Social Security and the TSP, not to carry retirement alone. You pay into it too: 0.8% of pay if you were hired before 2013, 3.1% if you were hired in 2013, and 4.4% for most people hired from 2014 on, according to [OPM](https://www.opm.gov/retirement-center/publications-forms/benefits-administration-letters/2014/14-107.pdf).

## When can you retire under FERS?

Your minimum retirement age (MRA) depends on when you were born. It’s 56 if you were born from 1953 through 1964, rises two months per birth year after that, and is 57 for anyone born in 1970 or later. From there, [OPM lists](https://www.opm.gov/retirement-center/fers-information/eligibility/) four ways to retire on an immediate annuity:

-   MRA with 30 years of service
-   60 with 20 years
-   62 with 5 years
-   MRA with 10 years, reduced by 5% for each year you’re under 62

That last one, MRA+10, is how people get out early, and the cost is steep. Retire at 57 with 20 years and you lose 25% of the annuity for life. You can postpone the start to shrink or avoid the reduction, and the reduction disappears if you have 30 years, or 20 years and start at 60.

## Nadia’s Coast FIRE number

Nadia is 38 and works for a federal agency in Denver. She was born in 1988 and hired in 2014, so her MRA is 57, and by then she’ll have 31 years of service. She has $200,000 in the TSP, and between her own contributions and her agency’s she adds about $1,300 a month. She wants to retire at 57 and spend $65,000 a year in today’s dollars.

To keep it simple, assume her high-3 is $118,000 in today’s dollars whenever she leaves. At 1% for 31 years, her annuity is $36,580 a year, starting the month after she retires.

Then there’s the COLA. FERS retirees generally [get no cost-of-living increase until 62](https://www.opm.gov/support/retirement/faq/cost-of-living-adjustments/), and after that the increase trails inflation whenever it runs above 2%; for 2026 FERS retirees got 2.0% while CSRS retirees got 2.8%. I’m counting her annuity as if it had no COLA at all, which is what our pension calculator does when you choose No. That’s 67% of the face amount, or $24,616 a year. It’s a little harsh, so treat the result as a cautious one.

She’ll also get Social Security, since FERS employees pay into it. Say her estimate at 67 is $28,000 a year. I’ll count 75% of it, $21,000, as a hedge against future cuts. Because it starts ten years after she retires, her portfolio has to cover those ten years in full.

| Nadia | Social Security only | Social Security and the FERS annuity |
| --- | --- | --- |
| Portfolio needed at 57 | $1,310,000 | $694,589 |
| Coast FIRE number at 38 | $635,165 | $336,778 |
| Coast FIRE reached at $1,300 a month | not before 57 | age 48 |

Counting the annuity lowers her Coast FIRE number by $298,388. Without it, $1,300 a month never gets her there before 57. With it, she crosses at 48, and from then on she could drop to the 5% that gets her the full match and let the TSP grow.

You can open [Nadia’s numbers in the pension calculator](https://mycoastfire.com/coast-fire-with-pension-calculator?age=38&ret=57&spend=65000&assets=200000&contrib=1300&pen=36580&penage=57&cola=0&ss=28000&claim=67&share=75) and replace them with yours. Your own annuity estimate is in your agency’s retirement estimate or OPM’s calculators, and your Social Security estimate is at ssa.gov. Our post on [Social Security and pensions](https://mycoastfire.com/blog/coast-fire-with-social-security) explains why I’d count less than 100% of it.

Retiring at 57 also helps with the TSP. Leave federal service in or after the year you turn 55 and TSP withdrawals skip the 10% additional tax that normally applies before 59½. The [rule of 55 calculator](https://mycoastfire.com/rule-of-55-calculator) shows how that works.

## What does leaving early cost?

A lot, because FERS rewards the last years most. If Nadia leaves before her MRA, she gets a [deferred annuity](https://www.opm.gov/retirement-center/fers-information/types-of-retirement/). It’s based on her salary when she left, it doesn’t grow with inflation while she waits, and she can’t collect it without a reduction until 62, or 60 if she has at least 20 years. Here’s what it would be worth when it starts, in today’s dollars:

| Nadia leaves at | Years of service | Annuity when it starts, today’s dollars | FEHB in retirement |
| --- | --- | --- | --- |
| 45 | 19 | $13,564 at 62 | No |
| 50 | 24 | $21,073 at 60 | No |
| 57 | 31 | $36,580 at 57 | Yes |

Leaving at 45 costs her 63% of the pension’s value, and she waits five extra years for what’s left. It also costs her the health plan: OPM says deferred annuitants can’t re-enroll in FEHB. To keep it, you need to retire on an immediate annuity, MRA+10 included, and have been [covered by FEHB for the five years](https://www.opm.gov/healthcare-insurance/life-events/retirement/im-thinking-about-retiring/) right before your annuity starts. Health insurance for the years before Medicare can easily cost more than the pension is worth; our post on [health insurance before 65](https://mycoastfire.com/blog/coast-fire-health-insurance-before-65) has the numbers.

If you want out before your MRA, run the calculator with the deferred annuity instead of the full one, and add the cost of buying your own coverage. The difference between the two Coast FIRE numbers is what leaving costs you. The same logic applies to [teachers](https://mycoastfire.com/blog/coast-fire-for-teachers), whose pensions are back-loaded in much the same way.

## The FERS supplement is a bonus, not a plan

If you retire on an immediate, unreduced annuity before 62 (MRA with 30 years, or 60 with 20), you also get the FERS annuity supplement until 62. It’s meant to stand in for Social Security until you can claim it, and it’s roughly your estimated Social Security benefit at 62 times your years of FERS service divided by 40. MRA+10 retirees and deferred annuitants don’t get it.

There’s an earnings test. If you work after retiring, the supplement is [reduced by $1 for every $2](https://www.opm.gov/retirement-center/fers-information/types-of-retirement/) you earn above the Social Security limit, which is $24,480 in 2026. A retired fed who takes a full-time job at 57 may lose most of it.

I left the supplement out of Nadia’s numbers on purpose. The House version of the 2025 budget bill would have ended it for many future retirees. That provision was [dropped before the bill became law](https://www.govexec.com/pay-benefits/2026/09/your-federal-benefits-changed-year-heres-what-know/416199/), but it’s been proposed before and probably will be again. Count it as margin.

## Never coast below the 5% TSP match

Under FERS your agency puts [1% of your basic pay](https://www.tsp.gov/what-is-contribution/) into the TSP whether you contribute or not, then matches your first 3% dollar for dollar and the next 2% at 50 cents on the dollar. Contribute 5% and you get 5% from the agency. The automatic 1% vests after three years of service for most employees.

Coast FIRE says you can stop saving, but I wouldn’t stop at the TSP. The 4% match is a 100% return the day you contribute, and no other decision in this post pays that well. What Coast FIRE frees you from is everything above 5%.

For reference, the 2026 TSP limit is $24,500, with an extra $8,000 at 50 and up and $11,250 at ages 60 to 63. Starting this year, if your FICA wages from your agency topped $150,000 last year, catch-up contributions have to go in as Roth.

## Questions people ask

### Can I stop contributing to the TSP once I reach Coast FIRE?

I'd keep contributing at least 5% of basic pay. Your agency adds 1% automatically and matches up to another 4% when you put in 5%, so dropping below that gives up free money. Everything above 5% is what you can stop.

### Do I keep FEHB if I leave federal service before retirement?

Not with a deferred annuity. OPM says deferred annuitants can't re-enroll in FEHB. To carry it into retirement you generally need to retire on an immediate annuity (including MRA+10) after 5 years of continuous FEHB coverage right before retiring. If you leave at or after your MRA with 10 years and postpone the annuity, you can re-enroll when it starts if you had FEHB for the 5 years before you separated.

### Does the FERS supplement have an earnings limit?

Yes. Before 62, the supplement is cut by $1 for every $2 you earn from work above the Social Security earnings limit, which is $24,480 in 2026. Your FERS annuity itself isn't affected.

### What is my FERS minimum retirement age?

It's 57 if you were born in 1970 or later and 56 if you were born from 1953 through 1964. For birth years 1965 to 1969 it rises in steps between the two.

## Keep reading

-   [Coast FIRE for teachersAnother pension that rewards staying and punishes leaving early.](https://mycoastfire.com/blog/coast-fire-for-teachers)
-   [Coast FIRE with a military pensionHigh-3, BRS and TRICARE, for anyone who served before becoming a fed.](https://mycoastfire.com/blog/coast-fire-military)
-   [Health insurance before 65What coverage costs if you leave without FEHB.](https://mycoastfire.com/blog/coast-fire-health-insurance-before-65)