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When Should You Apply for Social Security Retirement Benefits?

This is the first blog in our 3-part series: What FERS Retirees Should Know Before Starting Social Security Retirement Benefits & TSP Withdrawals

3LeggedStool-Retirement-FedEmpAre you ready to retire? If you are a FERS employee, you probably know that your retirement income is structured like a three-legged stool with these components:

  1. FERS Annuity / Pension
  2. Social Security
  3. Thrift Savings Plan (TSP)

How these three pieces fit together to provide you with the income you need is very important. Once you retire your annuity is paid monthly starting the second month after retirement. However, it’s entirely up to you when you begin to withdraw from your TSP and when to begin Social Security Benefits.

There’s a lot to consider when deciding the best time to start collecting Social Security Benefits. People wonder if they should apply right away and collect as much money as soon as possible or wait until age 66 or 70 to get a higher lifetime benefit.

In some respects, it’s a math problem. You can get a lower monthly payment for a longer period or a higher payment for a shorter period of time. The decision would be much simpler if you only knew exactly how long you were going to live.

While going through this analysis, Clint Eastwood might ask, “Do you feel lucky?” If you feel lucky with respect to a long life, claiming Social Security later may seem like the best option. In reality, longevity is only one of many factors in this complex decision.

Differences in Retirement Benefits Can Be Substantial

The first step in the Social Security analysis is to find out approximately how much income you would receive at different ages. Social Security mails you an estimate once a year if you’re approaching retirement age, but you can also obtain an estimate at any time from Social Security at: It’s simple to do and only takes a few minutes.

The following chart provides an estimate for a hypothetical worker and illustrates how the monthly benefit can differ based on age and yearly earnings.


Monthly Benefit



66 (full retirement)




If the worker waits until full retirement age (FRA) his or her benefit will be about 47% higher than at 62 (the earliest opportunity), whereas waiting until age 70 nearly doubles the age 62 benefit. For each year the worker delays filing, the benefit grows by approximately 8%. It’s worth noting that the Social Security retirement benefit does not grow after age 70, so there’s no reason to delay benefits after that age.

The Benefit That is Surprisingly Unknown by Many FERS Employees

A special benefit called the Special Retirement Supplement, or FERS Supplement, exists for FERS employees who retire prior to age 62. The primary purpose of this benefit is to bridge the income gap of eligible FERS employees until they can begin Social Security at age 62.

Remember, your retirement benefits under FERS are like a three-legged stool. Many FERS employees have met the requirements for their Minimum Retirement Age (MRA) at age 55, 56 or 57. In other words, as a FERS employee they are eligible to retire with a full Immediate Annuity because they meet the necessary years of service requirements described earlier. However, the minimum age to begin Social Security is 62, so what can be done to bridge the income gap between retirement and when your Social Security begins?

The FERS Supplement was designed to fill this gap until you are eligible for Social Security. This is a unique benefit not available in the private sector or to CSRS employees.

Eligibility for the FERS Supplement

It’s important to understand that not all FERS employees are eligible for this benefit. It’s available for a normal, immediate retirement only. A deferred retirement or early retirement (MRA+10) will not qualify.

This is another way of saying that you must meet your MRA with 30 years of service, or age 60 with 20 years of service. You can also qualify for a normal immediate retirement at age 62 with 5 years of service, but the FERS Supplement ends at age 62 anyway, so the benefit would no longer be available.

How Working Affects Social Security Benefits

Another aspect of Social Security planning is the opportunity to collect benefits while still working. If you are working prior to full retirement age, some of your benefits may be withheld.

For 2021, the maximum amount you can earn before benefits are withheld is $18,960. For every $2 you earn over $18,960, $1 in benefits will be withheld. A special rule applies if you are receiving benefits in the year you reach full retirement age: your monthly benefit will be reduced by $1 for every $3 you earn above $50,520. After you pass full retirement age, you can continue to collect benefits without reduction no matter how much income you receive.

With Social Security, as well as retirement planning in general, there is no “one-size-fits-all” solution. Variables to be considered include current and anticipated cash needs, other sources of retirement income, whether you plan to work after you begin benefits, and what the advantage of delaying the start of Social Security would be.

Continue reading our series with Part 2:

The Purpose of a Thrift Savings Plan & The Rule of 55

When you work with any of the advisors at Medallion Financial Group, you will get help charting a course through the complex world of wealth management and tax planning. We work together to build a dedicated, long-term, and disciplined approach that is tailored to your unique needs and objectives.

See If You Are Ready To Retire!

About the Authors

John and Laura Stohlman have been working with clients to help them achieve retirement success since 1987. Both John and Laura have the following designations: Certified Financial Planner (CFP®) and Chartered Federal Employee Benefits Consultant (ChFEBC®).

For over 30 years, federal employee retirement planning has been a key focus of Medallion Financial Group. We recognize that FERS retirement benefits have extra layers of complexity, such as the Thrift Savings Plan (TSP), 401K, Pension plan, FEGLI and more. It’s easy to get lost in a sea of bad advice when so few people understand the basics. We help with the basics and beyond to enable our clients to get the education and advice they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.