Deferred retirement
A deferred FERS retirement applies when you leave federal service with at least 5 years of creditable civilian service before you are eligible for an immediate annuity. You do not receive any annuity during the gap period. The annuity begins at an unreduced age: 62 (with fewer than 20 years), age 60 (with 20 or more years), or your MRA (with 30 or more years). No FEHB is available during the gap, and the FERS Annuity Supplement is not paid under a deferred retirement.
Your High-3 salary is frozen at the date of separation. Future pay raises — general schedule increases, locality adjustments, promotions — do not affect your eventual annuity calculation.
Postponed (MRA+10) retirement
An MRA+10 retirement applies if you separate at or after your Minimum Retirement Age with 10 to 29 years of creditable service. You are immediately eligible for an annuity, but it carries a 5% reduction for each year it begins before age 62. By postponing the annuity start date — not claiming it immediately — you shrink or eliminate that reduction.
The most important advantage of the postponed path over deferred: when you elect to begin your postponed annuity, you can reinstate FEHB health coverage — provided you had at least 5 years of continuous enrollment before separating. This is typically the decisive factor.
The FEHB difference
Health coverage is often the deciding factor between these two paths. A deferred retiree has no path to FEHB in retirement — they permanently forfeited the right when they separated without meeting the immediate annuity requirement. A postponed retiree preserves the option: as long as they had 5 years of enrollment before separation, FEHB resumes when the postponed annuity begins.
For someone separating in their 50s with 12–15 years of service, the difference between deferred and postponed can mean the difference between buying health insurance on the private market for 7–10 years versus having FEHB resume at the postponed annuity start date.
The age reduction
The MRA+10 reduction is 5% per year the annuity begins before age 62. Starting at 60 means a 10% permanent reduction to your lifetime annuity. Starting at 57 means a 25% reduction. Postponing two more years from 60 to 62 eliminates the reduction entirely — at the cost of two years of foregone income. Whether that trade-off is favorable depends on your health, other income sources, and how long you expect to receive the annuity.