If you leave before reaching normal retirement (age 62 with 6 years of service or 30 years of service regardless of age, or age 55 with 6 years of service, or 25 years of service regardless of age for Special Risk class members) and elect to begin receiving your vested benefit, it will be subject to an early-retirement reduction. Your benefit will be reduced 5% for each year your age at retirement is under your normal retirement age. For example, if you're a Regular Class member and want to retire early at age 57 with 20 years of service (5 years before age 62) and start receiving your benefit, your first year benefit will be reduced 25% (5 years x 5% = 25%).
In some circumstances taking an early, but reduced, retirement benefit may be better than deferring payout to normal retirement age because you draw more years of benefits, get more years of the 3% annual cost-of-living adjustment and are immediately eligible to receive the Health Insurance Subsidy payment. However, your benefits will generally be lower than if you were to stay working until normal retirement eligibility.
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There are no early retirement reductions. You will have access to the full value of your vested account balance when you leave FRS employment, regardless of your age when you leave.
You should consult with one of the planners at the MyFRS Financial Guidance line or a tax specialist to get an explanation of the tax implications of early retirement relevant to your personal situation (see the Taxability of Benefit section).
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