FERS Supplement Earnings Limit 2026: How Much You Can Earn Before It's Reduced

Enduring Insights · Federal Retirement · 2026

If you're a federal employee planning to retire before 62, the FERS Annuity Supplement can be one of the most valuable — and most misunderstood — parts of your retirement. It bridges the income gap between the day you retire and the day you become eligible for Social Security. But it comes with a catch that surprises a lot of retirees: an earnings limit.

What is the FERS Supplement?

The FERS Annuity Supplement (sometimes called the "Special Retirement Supplement") is a monthly payment that approximates the Social Security benefit you earned during your federal career. It's paid on top of your FERS pension and continues until the month you turn 62 — the earliest age you could claim Social Security.

You generally qualify if you retire with an immediate, unreduced annuity before 62. In practice that usually means retiring at your Minimum Retirement Age (MRA) with 30 years of service, or at age 60 with 20 years. (If you retire under MRA+10, you typically do not get the supplement.)

The 2026 earnings limit is $24,480

Once you start receiving the supplement, it's subject to the same earnings test as Social Security. For 2026, the annual earnings limit is $24,480. If you earn more than that from work, your supplement is reduced by $1 for every $2 you earn above the limit.

Example (illustrative): Say your supplement is about $1,100 a month and you take a part-time job that pays $32,000. That's about $7,520 over the $24,480 limit. At $1 reduced for every $2 over, that's roughly a $3,760 reduction in your supplement for the year.

What counts — and what doesn't

Counts toward the limit (earned income): W-2 wages from a job, and net self-employment / 1099 income.

Does NOT count: TSP withdrawals, your FERS pension, rental income, and investment income, dividends, and interest.

So a retiree who lives on their pension plus TSP withdrawals — and doesn't go back to work — generally isn't affected by the earnings limit at all.

The timing surprise

The reduction usually isn't immediate. OPM typically asks about your prior-year earnings after the fact, then reconciles and reduces your future supplement payments. That delay is why some retirees are caught off guard by a smaller check a year later.

Model it before you decide

The takeaway isn't "don't work in retirement." It's that the FERS Supplement is conditional, and if any part of your plan includes earned income before 62, you should model the supplement and the earnings test together. The Federal Retirement Readiness Kit includes a FERS pension and supplement estimator built on verified 2026 figures.

Free download: Grab the Federal Retirement Countdown Checklist — the milestone steps to take at 5 years out, 1 year out, and 90 days before you retire.

Educational resource only, not financial, tax, or legal advice. Figures verified July 2026 against OPM and SSA. Confirm your situation with OPM and a qualified professional.