Turning 62 as a FERS retiree: the supplement ends, the COLA starts
Sixty-two is the busiest birthday in a federal retirement. On the same date, an income stream you have relied on for up to five years disappears, an inflation adjustment you have never received becomes payable, and a decision worth six figures over a lifetime lands on your desk with no deadline attached and no one to remind you. Two of those things happen whether you act or not. One of them happens only if you do something — and doing the obvious thing is frequently the expensive choice.
1. Four things happen at once
| What | When | Automatic? | Direction |
|---|---|---|---|
| FERS Special Retirement Supplement stops | End of the month you turn 62 | Yes | Income down |
| COLA eligibility begins | First payable in the January after your 62nd birthday | Yes | Income up, modestly |
| Social Security becomes claimable | The month after you turn 62, at the earliest | No — you must apply | Your choice |
| The 1.1% multiplier window closes | Already closed if you have retired | n/a | Only relevant if still working |
The asymmetry is what causes trouble. The loss is automatic and immediate. The replacement is optional, requires an application, and comes at a permanent discount if you take it now. A retiree who does nothing sees income fall and nothing arrive to replace it.
2. The supplement ends — exactly when and how
The FERS Special Retirement Supplement is paid to retirees who left on an immediate, unreduced annuity: MRA with 30 years, age 60 with 20, or under VERA or discontinued service retirement once they reach MRA. It approximates the Social Security benefit you earned during federal service, computed as your estimated benefit at 62 multiplied by your years of FERS service divided by 40.
It terminates at the end of the month in which you reach 62. Not on your birthday, not at the end of the year, and not when you start Social Security. If your birthday is March 14, the March payment is your last one, and the April annuity payment arrives smaller.
Example: $2,000/mo estimate × (30 ÷ 40) = $1,500/mo, or $18,000/yr — gone at 62
Two properties surprise people. The supplement never received a COLA, so it has been losing value the whole time it was paid. And it was subject to the Social Security earnings test after you reached MRA: $1 withheld for every $2 of wages above the annual exempt amount, $24,480 in 2026. If you have been working part-time, your supplement may already have been reduced, which makes the cliff at 62 smaller than the full figure suggests. Investment income, TSP withdrawals, and your annuity itself never counted.
3. Your first COLA
Regular FERS retirees receive no cost-of-living adjustment until 62. Disability and survivor annuitants are the exceptions; CSRS and CSRS Offset retirees get COLAs at any age. So for a retiree who left at 57, the annuity that has been arriving for five years has been fixed in nominal dollars the entire time — and at 3% inflation, it has lost about 14% of its purchasing power.
At 62 that stops. The first COLA appears in the January payment following your birthday, and it is prorated if your eligibility began partway through the year: one-twelfth of the adjustment for each month you were 62 before December 1. Turn 62 in August 2027 and you receive 4/12 of the 2028 COLA in January 2028; turn 62 in January 2027 and you receive 11/12.
Then there is the FERS reduction. Under 5 U.S.C. 8462, FERS annuitants get the full CPI-W increase only up to 2%; between 2% and 3% they get 2%; above 3% they get the increase minus one point. The running 2027 figure illustrates it: a 3.3% CSRS and Social Security COLA is a 2.3% FERS COLA. The long-run cost of that gap is quantified in diet-COLA erosion.
On a $38,000 annuity, a 2.3% COLA is $874 a year. A supplement of $1,500 a month is $18,000 a year. The adjustment that starts is roughly 5% of the income that stops. Anyone treating the COLA as the offsetting event has the scale wrong by a factor of twenty.
4. The gap nobody plans for
Put the numbers together for a representative retiree: left at 57 with 30 years, $38,000 annuity, $1,500 monthly supplement, full Social Security benefit of $2,400 at 67.
| Age | Annuity | Supplement | Social Security | Total |
|---|---|---|---|---|
| 57–61 | $38,000 | $18,000 | — | $56,000 |
| 62, does nothing | $38,000 | $0 | $0 | $38,000 |
| 62, claims immediately | $38,000 | $0 | $20,160 | $58,160 |
| 62, bridges from TSP to 70 | $38,000 | $0 | $0 (TSP covers ~$20,000) | ~$58,000 |
| 70, having bridged | $38,000 + COLAs | $0 | $35,712 | $73,712 + COLAs |
Row two is what happens by default: a 32% income cut on a birthday. Row three restores the income and costs 30% of the Social Security benefit forever. Row four costs the same in the near term but ends with an inflation-indexed, survivor-protected income roughly $15,500 a year higher, for life. That is the decision, and it has to be made before the supplement stops, not after.
5. The Social Security decision
With a full retirement age of 67, claiming at 62 pays 70% of your full benefit; at 67, 100%; at 70, 124%. The age-70 check is about 77% larger than the age-62 check, permanently, and every COLA applies to the larger base. For a married couple, the higher earner’s benefit becomes the survivor benefit, so the claim age sets the income of whichever spouse lives longer.
The case for claiming at 62 anyway is real in three situations: your health or family history points to a shorter life and you are single or the lower earner; your TSP cannot fund the gap without dropping below a prudent reserve; or you have minor or disabled children who can draw benefits on your record only once you claim. Outside those, the arithmetic favors waiting, and it favors it more for a federal retiree than for most people, because the pension provides a floor that makes waiting affordable.
The mechanics of funding the wait are in using your TSP to bridge to 70, which includes a calculator for your own numbers. The couples version, including which spouse should claim early, is in the couples claiming strategy. And note that partial waiting counts: every month of delay earns credit, so if a full bridge to 70 is not fundable, a bridge to 65 or 67 still captures most of the benefit.
One federal-specific note. Since the Social Security Fairness Act took effect for 2024 benefits, the Windfall Elimination Provision and Government Pension Offset no longer apply, so CSRS retirees and their spouses now receive full benefits. If you shelved the claiming question years ago because WEP made it moot, it is worth reopening. See the WEP/GPO repeal.
6. Taxes change too
Turning 62 reshuffles your tax picture in ways worth anticipating.
The supplement was fully taxable ordinary income; it is gone. Social Security, if you claim, is taxable only up to 85% and only above the provisional-income thresholds of $25,000 single and $32,000 joint — unindexed since 1984, which is why so many retirees cross them. And the years between retirement and claiming, when your annuity may be your only substantial taxable income, are the cheapest Roth conversion window you will ever have. Bridging with the TSP extends that window; claiming at 62 closes it early by stacking Social Security on top of the annuity.
One more clock starts quietly at 62: IRMAA uses a two-year lookback, so the income in your 63rd tax year determines the Medicare surcharge you pay at 65. A large Roth conversion done at 63 shows up as a higher Part B premium at 65. Plan conversions to finish by 62 if you can, or size them against the threshold two years out.
7. If you are still working at 62
Everything above assumes you have already retired. If you are still on the rolls at 62, the birthday means something different and mostly better.
The 1.1% multiplier. Retiring at 62 or later with 20 or more years of creditable service raises your multiplier from 1.0% to 1.1% on every year of service — a permanent 10% increase in the annuity. On a $110,000 high-3 with 25 years, that is the difference between $27,500 and $30,250 a year. If you are at 62 with 19 years, one more year is worth several thousand dollars annually for life. The full stay-or-go math, including how the 2027 pay freeze affects it, is in retire now or wait.
No supplement. Retiring at 62 or later means the supplement never applies, so the cliff in section 4 is not part of your picture at all.
COLA from day one. Retiring at or after 62 means your annuity is COLA-eligible immediately, prorated in the first year.
Social Security stays optional. Working does not force you to claim, and if you do claim before full retirement age while working, the earnings test applies. Most people in this position should not claim while drawing a salary.
8. Month-by-month, the year you turn 62
- 12 months before: pull your Social Security statement at ssa.gov and note the benefit at 62, 67, and 70. If married, pull both.
- 9 months before: decide the claiming age. Model the TSP bridge if you are delaying; size the G Fund reserve for the bridge years.
- 6 months before: rework the household budget for the post-supplement income. Know the exact monthly number that disappears.
- 4 months before: if claiming at 62, apply. SSA accepts applications up to four months ahead and benefits can begin the month after you turn 62.
- 3 months before: if bridging, set up or increase the TSP installment to start the month after the supplement ends, and confirm the money is in the G Fund.
- Birth month: the last supplement payment. Verify it on your annuity statement.
- Month after: confirm the smaller annuity payment matches your expectation. If it does not, contact OPM before assuming it is correct.
- Review withholding. Income has changed; the withholding election on your annuity probably should too.
- The following January: confirm your first COLA appears, prorated correctly.
- Age 63 tax year: size any Roth conversion against the IRMAA threshold that will apply at 65.
9. Frequently asked questions
What changes when a FERS retiree turns 62?
Four things at once. The FERS Special Retirement Supplement stops at the end of the month you reach 62, whether or not you claim Social Security. You become eligible for cost-of-living adjustments on your annuity for the first time, with the first one arriving in the January payment after your birthday. You become eligible to claim Social Security, at 70 percent of your full benefit if you claim right away. And if you were still working and had 20 or more years of service, retiring at 62 or later would have earned the 1.1 percent multiplier.
Does the FERS supplement automatically turn into Social Security?
No, and this is the most expensive misunderstanding at 62. The supplement stops on its own. Social Security starts only if you apply for it, and applying at 62 locks in a permanent reduction of 30 percent for anyone with a full retirement age of 67. Many retirees assume the switchover is automatic, do nothing, and discover a gap in their income; others claim early purely to fill the gap without checking whether their TSP could cover it instead.
Do FERS retirees get a COLA before 62?
Generally no. Regular FERS retirees receive no cost-of-living adjustment until age 62; the exceptions are disability annuitants and survivor annuitants, who receive COLAs at any age. CSRS and CSRS Offset retirees receive COLAs immediately regardless of age. The first FERS COLA is prorated if your annuity began during the preceding year, at one-twelfth for each month it was in pay before December 1.
Should I claim Social Security at 62 to replace the supplement?
Usually not, if you have other resources. Claiming at 62 pays 70 percent of your full benefit for life, against 100 percent at 67 and 124 percent at 70, and every future cost-of-living adjustment applies to that smaller base. For a married couple, the higher earner’s benefit also becomes the survivor benefit, so an early claim reduces the survivor’s income for decades. Using TSP withdrawals to bridge the gap is often worth far more than the years of early payments.
Does the earnings test still apply after 62?
It applies differently. The FERS supplement was subject to the Social Security earnings test once you reached your minimum retirement age, and it ends at 62 regardless. If you then claim Social Security before full retirement age and keep working, the earnings test applies to those benefits: $1 withheld for every $2 above the annual limit, $24,480 in 2026. If you do not claim, you can earn any amount without affecting the benefit you will eventually receive.
- OPM, FERS annuity supplement: eligibility, computation, termination at 62, and the earnings test
- OPM, cost-of-living adjustments and the age-62 rule for FERS
- 5 U.S.C. 8462, FERS cost-of-living adjustments and the reduced formula
- 5 U.S.C. 8415, FERS annuity computation and the 1.1% multiplier
- SSA, early retirement benefit reduction by claiming age
- SSA, retirement earnings test exempt amounts
- SSA, taxation of benefits and the provisional-income thresholds