How Much Will Your FERS Retirement Be? (You Might Be Surprised)

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How Much Will Your FERS Retirement Be? (You Might Be Surprised)

If you’re a FERS employee, you want to know the bottom line:

How much money will I receive in retirement?

To answer this question, we need to discuss three things.

We like to refer to these income sources as the 3-Legged Stool of retirement.

The three legs of the stool include:

  1. FERS Retirement Pension (FERS)
  2. Social Security
  3. Thrift Savings Plan (TSP)

Together, these will make up the majority of your income sources in retirement. We’ll take a deeper dive into each one of the legs of the stool, but first, let’s discuss your retirement eligibility.

When can I retire as a FERS employee?

As a FERS employee, you must reach certain age requirements and also have enough creditable service to retire. For a full, immediate FERS retirement, see the table below for eligibility.


You need reach your MRA (minimum retirement age) and have 30 years of service OR be age 60 with 20 years of service OR age 62 with 5 years of service. You can also retire under an MRA+10 years of service provision with a reduced pension, but we won’t go into detail on that here. If you’re wondering about your minimum retirement age — it depends on your birth year (see table below).


Leg 1: FERS Retirement Pension

Your FERS pension also known as your FERS annuity is a monthly check you’ll receive shortly after you retire from federal service. You’ve been paying into FERS every pay period during federal employment (you can see the deduction on the line item labeled “Retire 8” on your federal paystub). Typically, it’s 0.8% of basic pay. Although, how much you’ve paid into FERS doesn’t matter because the pension you’ll receive is not based on that amount.

How Much Will I Receive For My FERS Pension?

We can calculate your FERS pension using three things:

-High-3 Salary

-Years of Creditable Service

-Pension Multiplier

High-3 Salary: this is the highest average basic pay you earned during any 3 consecutive years of service. For most feds, this will be your last three years of service, but could be from an earlier period if you earned more in prior federal working years. One thing to note….basic pay includes shift rates and locality pay but it does not include overtime, bonuses, etc.

Years of Creditable Service: this include years of federal covered service, or service where your pay was subject to FERS retirement deductions. This is typically career or career conditional service. If you have unused sick leave, you may use this towards your FERS pension computation as well.

Pension Multiplier: if retiring under at age 61 or younger, your pension multiplier will be 1%. If you retire at age 62 and have at least 20 years of service, your pension multiplier will be 1.1%.

We can calculate your FERS pension by multiplying these three components together.

You can read more about this topic and the most common mistakes people make in our earlier blog post.

FERS Pension Example

Let’s put these numbers into practice.

For example, Michael, a postal employee, is age 65 with 20 years of service. He has a High-3 of $80,000.

How much will his FERS pension be?

$80,000 x 20 x 1.1% = $17,600 annually or $1,467 monthly.

Gross vs. Net FERS Pension

In the example above, we calculated Michael’s gross pension amount. But it’s important to remember the difference between gross and net. The net number is the number Michael will actually take home each month. We have to subtract items from the gross amount including taxes, survivor annuity costs, health insurance premiums, FEGLI + others depending on your situation. As you’re planning, be sure to take these into consideration and plan around your net amount.

Leg 2: Social Security

Most FERS employees been paying approximately 6.2% of basic pay into Social Security during federal employment. You become eligible to start receiving Social Security benefits starting at age 62.

How Much Will I Receive From Social Security?

Social Security benefit amounts largely depend on your working years and how much you earned during your employment history. Any other non-federal jobs you’ve and paid into Social Security will also be taken into consideration. We won’t go into all the details on how to calculate your social security benefit as your estimated benefit amounts are readily available on Social Security’s Website. Create an account and get estimated amounts for age 62, full retirement, and age 70. If you’re age 60 and over, you’ve probably been mailed an estimated statement by the Social Security office — they stopped mailing statements out to anyone under age 60 unless specifically requested.

Many people like to run a “break-even” analysis to determine the claiming strategy that makes the most sense, depending on how long they think they’ll live. You can do so with many calculators available for free online.

FERS Special Retirement Supplement (SRS) If Retiring Before 62

As you know by now, FERS employees are eligible to retire prior to age 62 (if you reach your MRA with 30 years service or age 60 with 20 years of service). When doing so, you are eligible for a FERS SRS. This supplement is an additional monthly check that you can receive up until age 62. Ultimately, the purpose of this check is to bridge the gap between when you retire on a full, immediate retirement and when you’re eligible for Social Security.

The actual calculation can be complicated, but for our purposes, we’ll use a high level formula to give you a good estimate.

Years of Creditable Service divided by 40 multiplied by Your Age 62 Social Security Benefit = FERS Special Retirement Supplement. Again, you will receive this amount up until the time you turn age 62 and become Social Security eligible.

Leg 3: Thrift Savings Plan (TSP)

The TSP is a tax-deferred savings and investment plan offered by the federal government. It’s similar to and provides many of the same advantages as private 401(k) plans. If you’ve been contributing to this plan you know your agency matches the first 3% of your salary contributions dollar for dollar and the next 2% is matched 50 cents per dollar contributed.

Your FERS pension and Social Security amounts are defined benefit amounts, meaning you’ll receive a set amount each month. Your TSP is a defined contribution plan, and the withdrawals and how much you’ll receive depend on 1) how much you’ve contributed 2) how well the underlying investments have performed 3) how much you want to withdraw each month.

We’ve went into more detail on the TSP in another blog post.

Schedule your FREE federal benefits review and retirement analysis here.

For more information, you can contact your friends at GPIS by calling 866-201-7829 or by sending an e-mail to

-Sam Wiss, Retirement Income Certified Professional (RICP ®)


We are here to help. Our goal is to provide you with the knowledge and tools to make educated decisions when it comes to your benefits and retirement. Contact us today!

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