The FERS special retirement supplement, explained

Broadly, FERS employees who retire with an immediate and unreduced annuity before reaching 62. That typically means reaching your minimum retirement age with 30 years of service, or age 60 with 20 years.

Certain special categories (law enforcement officers, firefighters, air traffic controllers) have their own rules and are generally eligible on retirement regardless of age, with different treatment of the earnings test until they reach their minimum retirement age.

People who take a deferred retirement, or who retire under MRA+10 with a reduction, generally do not receive it.

If you take another job after retiring, earned income above an annual threshold reduces the supplement, on a formula similar to the Social Security earnings test. The reduction applies the following year, based on the prior year's earnings.

The important distinction: the test applies to earned income: wages and self-employment. It does not apply to your annuity, to portfolio withdrawals, to Roth conversion income, or to rental income. Retirees who plan a second career should model this before assuming both incomes arrive intact.

The supplement ends at 62. Many retirees treat that as a prompt to claim Social Security immediately, because that is when the bridge income stops.

That instinct is worth examining rather than following. Claiming at 62 permanently reduces your benefit, and the years between 62 and 70 are frequently the best Roth conversion window a federal retiree has. Bridging that gap from the portfolio instead, and converting while brackets are low, often produces a better lifetime result, particularly for the higher earner in a married couple.