How to Figure Your FERS Retirement Benefits

The Federal Employees Retirement System (FERS) is the primary retirement plan for most federal civilian employees who began their service after December 31, 1983. It replaced the Civil Service Retirement System (CSRS) and was designed to align federal employee benefits more closely with those in the private sector.

FERS is a multi-faceted program. The system provides benefits from various sources, each contributing to an employee’s overall retirement package.

Key Components of FERS Retirement

The FERS retirement system is composed of three components: the FERS Basic Annuity, Social Security benefits, and the Thrift Savings Plan (TSP).

The FERS Basic Annuity is a defined benefit plan, often referred to as a pension, which provides a guaranteed monthly payment for life after retirement. This component is primarily funded through contributions from the federal agency, with employees also contributing a percentage of their basic pay. The annuity provides a predictable income stream that is not subject to market fluctuations.

Federal employees under FERS are also covered by Social Security. FERS employees contribute to Social Security through payroll deductions, similar to private sector workers. This ensures that FERS retirees are eligible for Social Security benefits, including old-age, survivors, and disability insurance, based on their covered work history.

The third component is the Thrift Savings Plan (TSP), which functions as a defined contribution plan, much like a 401(k) in the private sector. Employees can contribute a portion of their salary to their TSP account, either on a pre-tax (Traditional TSP) or after-tax (Roth TSP) basis.

The federal government automatically contributes an amount equal to 1% of an employee’s basic pay to their TSP account, even if the employee does not contribute their own funds. The agency provides matching contributions on employee contributions, up to an additional 4% of basic pay, for a total potential agency contribution of 5%. These contributions are invested and grow over time.

Determining Your FERS Basic Annuity

Calculating your FERS Basic Annuity involves understanding three primary factors: your creditable service, your “High-3” average salary, and the annuity factor, also known as the multiplier.

Creditable service refers to time worked for the federal government that counts towards your FERS retirement. This generally includes federal civilian service for which retirement deductions were withheld. Periods of military service performed after 1956 can also be credited if a deposit is made for that service. This “buy-back” allows military time to be included for both retirement eligibility and annuity computation.

Unused sick leave is converted into additional creditable service for annuity computation. While it cannot be used to meet minimum service requirements for retirement eligibility, for FERS employees, 174 hours generally equate to one month of service.

To determine your total creditable service, add up all eligible periods of civilian service, bought-back military service, and converted unused sick leave. This total is then rounded down to the nearest full month for the annuity calculation. For instance, if your combined service totals 25 years, 6 months, and 15 days, your creditable service for the annuity calculation would be 25 years and 6 months.

Your “High-3” average salary is the highest average basic pay you earned during any three consecutive years of federal service. This period does not necessarily have to be your last three years of employment; it can be any 36 consecutive months where your basic pay was highest. The “High-3” includes your base salary, locality pay, and certain other types of pay for which retirement deductions are withheld, such as shift rates or special pay adjustments for specific occupations.

The “High-3” calculation specifically excludes payments for overtime, bonuses, awards, and Cost-of-Living Adjustments (COLAs). A higher “High-3” average salary translates to a larger pension benefit.

The annuity factor, or multiplier, is a percentage applied in the FERS annuity formula. For most FERS employees, this factor is 1.0%. However, if you retire at age 62 or older with at least 20 years of creditable service, the multiplier increases to 1.1%. Certain special category employees, such as law enforcement officers or firefighters, may have different multipliers, often 1.7% for their first 20 years of service and 1.0% for additional years.

The formula for calculating your annual FERS Basic Annuity is: High-3 Average Salary × Years of Creditable Service × Annuity Factor. For example, if your High-3 average salary is $80,000, and you have 30 years of creditable service: if under age 62 at retirement, your annual annuity would be $80,000 × 30 × 0.01 = $24,000. If you retired at age 62 or older, your annual annuity would be $80,000 × 30 × 0.011 = $26,400.

The Special Retirement Supplement (SRS) is an additional benefit for certain FERS retirees who retire before age 62, until they become eligible for Social Security benefits. This supplement approximates the Social Security benefit you earned during your federal service. Eligibility for the SRS typically requires retirement at your Minimum Retirement Age (MRA) with at least 30 years of service, or at age 60 with 20 years of service.

The SRS is paid by the Office of Personnel Management (OPM) and generally continues until you reach age 62. It is subject to an earnings test, similar to Social Security’s earnings limits, meaning the supplement may be reduced if your post-retirement earnings exceed a certain annual amount. For instance, in 2024, if earnings exceeded $22,320, the supplement would be reduced by $1 for every $2 earned above that limit.

Understanding FERS Retirement Eligibility

Eligibility for FERS retirement benefits depends on your age and years of creditable service. The Minimum Retirement Age (MRA) varies based on your birth year. For those born before 1948, the MRA is 55. It gradually increases for later birth years, reaching age 57 for individuals born in 1970 or later.

To qualify for an immediate and unreduced FERS annuity, you must meet one of several age and service combinations: reaching your MRA with at least 30 years of creditable service, attaining age 60 with a minimum of 20 years of service, or reaching age 62 with at least 5 years of service.

To be vested in the FERS basic annuity, meaning you have a future right to receive benefits, you must complete at least five years of creditable civilian service. This vesting period ensures that even if you leave federal service before being eligible for immediate retirement, you may still qualify for a deferred annuity later.

FERS includes provisions for other retirement types. Deferred retirement is an option if you leave federal service before meeting the age and service requirements for immediate retirement, but have completed at least five years of creditable civilian service and leave your retirement contributions in the fund. Your annuity would then begin at age 62, or at your MRA if you have at least 10 years of service. However, deferred retirees generally do not retain Federal Employees Health Benefits (FEHB) or Federal Employees’ Group Life Insurance (FEGLI) coverage in retirement.

Early voluntary retirement, often referred to as a Voluntary Early Retirement Authority (VERA) or Discontinued Service Retirement (DSR), may be offered by agencies experiencing major reorganizations or reductions in force. Under these circumstances, employees can retire as early as age 50 with 20 years of service, or at any age with 25 years of service. A key advantage of VERA/DSR is that there is no age reduction penalty applied to the annuity.

Alternatively, the MRA + 10 retirement option allows employees to retire at their MRA with at least 10, but fewer than 30, years of creditable service. This option results in a permanent reduction of 5% for each year the employee is under age 62. Also, retirees under the MRA + 10 provision are typically not eligible for the Special Retirement Supplement and do not receive Cost-of-Living Adjustments (COLAs) on their annuity until they reach age 62.

Practical Steps for Estimating Your FERS Retirement

Estimating your FERS retirement benefits requires gathering specific personal data and applying the calculation methodology. The process begins with compiling your service history and salary information, which form the basis of your FERS annuity.

To determine your creditable service, you will need to review your official personnel documents. Your Standard Form 50s (SF-50s), which are Notifications of Personnel Action, document your federal employment history. Specifically, check Box 30 on each SF-50; if it indicates FERS and FICA coverage, that period typically counts toward your retirement service. Current federal employees can often access their SF-50s through their agency’s electronic Official Personnel Folder (eOPF) system.

For a record of your creditable service, you can request a Certified Summary of Federal Service (SF 3107-1) from your agency’s Human Resources (HR) department. This document is recognized by the Office of Personnel Management (OPM) for computing your years of service. If you have former federal employment or military service, you may need to contact the National Personnel Records Center for older records or initiate a military service deposit process with your HR department.

Next, determining your “High-3” average salary involves reviewing your pay records for the 36 consecutive months where your basic pay was highest. This information can be found on your Leave and Earnings Statements (LES), which provide a bi-weekly breakdown of your pay and deductions, or on your annual W-2 Wage and Tax Statements. While your most recent three years of service often represent your highest pay, examine your entire career history for any other periods of higher earnings.

Once you have compiled your creditable service years and your “High-3” average salary, you can proceed with estimating your annuity. The OPM website offers its Federal Ballpark E$timate calculator, which provides a general projection of your FERS annuity and Thrift Savings Plan benefits. Other reputable federal employee benefit resources also provide FERS calculators that allow for detailed input of your specific data.

For those who prefer a manual calculation or wish to verify calculator results, apply the FERS annuity formula directly. Multiply your “High-3” average salary by your total years of creditable service and then by the appropriate annuity factor (1.0% for most, or 1.1% if retiring at age 62 or older with at least 20 years of service).

Annually, federal employees typically receive a Personal Benefits Statement (PBS) that provides an estimated value of their FERS benefits, including projected annuity amounts and TSP balances. Regularly checking your TSP statements will also keep you informed about your retirement savings growth and investment performance.

Seeking assistance from qualified professionals can provide personalized guidance. Your agency’s HR or benefits specialists can help you understand your specific service records and answer questions about eligibility. For more complex situations or comprehensive financial planning, consulting with OPM directly or engaging independent federal benefits consultants can offer tailored advice. You can reach OPM’s Retirement Office by phone or email for general inquiries and assistance with retirement-related matters.