Phased retirement: who qualifies and what it costs
Phased retirement lets you work half-time while drawing half your FERS annuity, with at least a fifth of your hours spent mentoring. It is narrower than most people expect. Only employees already eligible to retire at their minimum retirement age with 30 years, or at 60 with 20 years, can elect it, and the agency has to agree.
6 min read · By RetireCiv Editorial · Updated August 1, 2026
Who can actually elect phased retirement?
Fewer people than assume they can. Phased retirement is open only to employees who are already eligible for an immediate, unreduced annuity by one of two specific routes, and being eligible to retire in some other way does not count.
The two routes are your minimum retirement age with 30 years of service, or age 60 with 20 years. The statute names those two paths and no others).
That exclusion catches people out. Retiring at 62 with at least 5 years is a perfectly ordinary FERS retirement, and so is MRA+10, but neither one opens the door to phasing. A 62-year-old with seven years of service can retire outright and still cannot phase.
There is a second requirement that is easy to miss. You must have worked full-time for at least the three years immediately before you elect, so a stretch of part-time work late in your career can disqualify you on its own.
Which retirement eligibility opens phased retirement
| Your eligibility | Can you phase? |
|---|---|
| MRA with 30 years | Yes |
| Age 60 with 20 years | Yes |
| Age 62 with 5 years | No |
| MRA with 10 years | No |
Am I eligible for phased retirement?
Only if you could retire right now with an immediate annuity at your minimum retirement age with 30 years of service, or at age 60 with 20 years. You also need three years of full-time work immediately beforehand. Retiring at 62 with 5 years, or under MRA+10, does not qualify you no matter how close to retirement you are.
Can my agency turn down my phased retirement request?
Yes. The law requires the concurrence of the head of your employing agency, so approval is a decision your agency makes rather than a benefit you can claim. Agencies can decline, and some do not offer phased retirement at all. Meeting every eligibility rule gets you to the point of asking, not to an answer.
What does phased retirement actually look like?
You work half. The regulation sets your schedule at one-half the hours you would have worked full-time, so this is not a schedule you negotiate down to a third or up to three-quarters.
You draw half. Your working percentage and your phased retirement percentage always add to 100, so working half-time pays half the annuity you would have received had you retired outright, on top of your half-time salary.
At least a fifth of your working hours have to be mentoring. That is a floor on how you spend the time, not a change of job title, and you keep doing your actual work with the rest of the hours.
You also keep earning. Phased retirement is still federal employment, so the years you spend in it continue to count toward the annuity you eventually collect in full.
How much do you get paid in phased retirement?
Half your salary plus half your annuity. Because you work half-time, you earn half of your regular pay, and because your phased retirement percentage is the other half, you draw half the annuity you had earned. The two halves are calculated separately, and the total is usually more than half your old take-home pay.
What is the mentoring requirement?
At least 20 percent of the hours you work as a phased retiree must be spent mentoring. It applies to your hours rather than your position, so you are still doing your regular job for the remaining time. The requirement exists because the point of the program is passing knowledge to the people who will replace you.
What does phased retirement cost you?
The biggest cost is one people rarely see coming. A phased retiree is not eligible for the annuity supplement), the payment that normally bridges an early FERS retiree from their retirement date to age 62.
Think about who that hits. Anyone phasing under the minimum retirement age route is by definition under 62, which is exactly the group the supplement was built for. Phasing does not delay it. It forgoes it for the whole phased period.
Your insurance, on the other hand, is protected unusually well. For health benefits you are treated as a full-time employee, and for life insurance you are treated as still earning your full-time salary, so your FEGLI coverage does not shrink along with your paycheck.
None of this is a recommendation either way. Whether the trade works depends on how long you would phase, how much supplement you would give up, and what the half-time salary does to your household budget.
Do you get the FERS annuity supplement in phased retirement?
No. The law specifically excludes phased retirees from the annuity supplement. This matters most for anyone phasing at their minimum retirement age with 30 years, because they are under 62 and would otherwise be collecting it. You become eligible for the supplement only once you fully retire, if you still qualify at that point.
What happens to my FEHB and FEGLI during phased retirement?
Both are protected. For health benefits you are deemed a full-time employee, so your FEHB continues on the same terms rather than being prorated. For life insurance you are deemed to be receiving full-time basic pay, which means your FEGLI premiums and coverage are figured on your full salary, not on your reduced half-time pay.
What happens when you fully retire?
Your annuity gets rebuilt rather than simply resumed. When you separate for good, the two pieces combine into what the law calls a composite retirement annuity.
The first piece is the phased annuity you were already drawing, carried forward with the cost-of-living adjustments it received along the way. The second piece covers the phased period itself, computed on your full-time-equivalent annuity and scaled by the share of time you were working.
Your unused sick leave waits for this moment. It is credited when you separate for full retirement, not when you enter phased status, so time spent phasing does not cash it in early.
Any survivor election you make reduces the composite annuity once it is assembled. And phasing is not a one-way door: with your agency's authorization you can end phased employment and go back to regular status instead.
What is a composite retirement annuity?
It is the annuity you receive after fully retiring from phased status. It adds the phased annuity you had been drawing, including its cost-of-living increases, to a second amount covering your phased service, based on your full-time-equivalent annuity and the share of time you worked. Any survivor election reduces the combined result.
Can I go back to full-time after starting phased retirement?
Yes, with your agency's authorization. The regulations let a phased retiree end phased employment and return to regular employment status, so the decision is reversible in principle. Because it needs agency agreement again, treat the possibility as a conversation to have with your agency rather than a switch you control on your own.
Does phased retirement change my retirement application?
You go through the process twice. Electing phased retirement is its own application, and fully retiring later means filing the retirement paperwork again to convert to a composite annuity. Your HR office handles the phased election, so start there rather than sending anything directly to OPM.