Click here to skip navigation
This website uses features which update page content based on user actions. If you are using assistive technology to view web content, please ensure your settings allow for the page content to update after initial load (this is sometimes called "forms mode"). Additionally, if you are using assistive technology and would like to be notified of items via alert boxes, please follow this link to enable alert boxes for your session profile.
An official website of the United States Government.

Frequently Asked Questions Retirement

What is an actuarial reduction?

An actuarial reduction allows you to receive benefit without having to pay an amount due in a lump sum. OPM reduces your annuity in a way that, on average, allows the Retirement Fund to recover the amount of the missing lump sum over your lifetime. The actuarial reduction becomes a permanent reduction in your benefit. The amount of the actuarial reduction depends on your age and the amount of the lump sum you would otherwise have to pay at the time you retire. To compute an actuarial reduction, OPM divides the lump sum amount by the present value factor for your age at retirement.

Unexpected Error

There was an unexpected error when performing your action.

Your error has been logged and the appropriate people notified. You may close this message and try your command again, perhaps after refreshing the page. If you continue to experience issues, please notify the site administrator.