Federal Phased Retirement

In many industries, phased retirement programs are now being used that can allow employees who are approaching retirement age to continue working, but with a reduced workload, while they transition into full-time retirement. The Federal Employees Retirement System (FERS) has begun to offer a phased retirement program to its employees.

With the phased retirement program, full-time employees will be able to work part-time schedules, while starting to draw on their retirement benefits. In doing so, those who are “phasing out” will also be able to mentor current employees with their knowledge, while at the same time preparing themselves for retirement. This option also allows these individuals to essentially keep a portion of their retirement annuity for the time when they entire into full retirement.

When an employee elects the phased retirement option, he or she will be considered as “partially” retired, and will start to receive approximately half of their annuity. They will work at 50 percent, or on a part-time status, and will receive approximately one-half of their pay. Twenty percent of their working time must, however, be spent in mentoring activities.

Regarding TSP considerations the employee is still considered working and can continue to contribute and receive matching contributions but cannot access the post service withdrawal options until fully retired.

For the purpose of the phased retirement program, mentoring is considered to be a “process that focuses on providing guidance, direction, and career advice.” This can provide an opportunity for problem solving and goal achievement for both the current employees, as well as for the retiree.

Some of the activities that can meet the mentoring requirement include the transfer of particular knowledge, the management of knowledge, succession planning, and even career development for the employees.

Who is Eligible to Participate in the Phased Retirement Program?

In order to be eligible to participate in the phased retirement program, you must meet the following criteria:

  • You must have been a full-time employee for at least the three years prior to entering into the phased retirement program;
  • You must be eligible for immediate retirement as per either of the following:
  • FERS: You must have met your minimum retirement age and have at least 30 years of service, or be at least age 60 and have a minimum of 20 years of service;
  • CSRS: You must be at least age 55 and have 30 years of service, or be at least age 60 and have a minimum of 20 years of service.

There are certain employees who are specifically excluded from the phased retirement program. These include:

  • Law Enforcement Officers
  • Fire Fighters
  • Air Traffic Controllers
  • Nuclear Materials Couriers
  • Capital Police and Supreme Court Police
  • Some Customs and Border Protection Officers

Those employees who wish to participate in the phased retirement program are required to pay all civilian deposits, military deposits, and redeposits prior to beginning the program.


Kevin O’Leary is a Federal retirement expert who works out of his Southern California office, but helps federal employee clients throughout the country.  Kevin O’Leary is a regular contributor to PSRetirement.com and Kevin O’Leary is highly sought after speaker and advisor on federal retirement benefits.

You can reach Kevin O’Leary

[email protected]

Gov EB Network

30300 Point Marina

Canyon Lake, CA 92587


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