How Will My Retirement Be Calculated?

By on January 22, 2015 in Q&A, Retirement with 1 Comment

Q: I have 30 years with the Government (non-continuous). My first 15 years were under the CSRS system. The second 15 years are under FERS. How will my retirement be calculated?

A: You will have a CSRS portion of your annuity that will be computed using CSRS rules. Your CSRS length of service (15 years is 26.25%) will be multiplied by your high three to give you the CSRS portion of your annuity.

You will also have a FERS portion of your annuity that will be computed using FERS rules. Your FERS length of service will be multiplied by your high three to give you the FERS portion of your annuity. If you are under the age of 62 when you retire, 15 years is 15%; if you are age 62 or older when you retire, 15 years is 16.5%.

The CSRS portion of your pension will receive CSRS COLAs and the FERS portion will receive FERS COLAs. A CSRS COLA is based on the full increase of the Consumer Price Index, and you will begin earning it at retirement, regardless of your age. A FERS COLA is calculated using a modified formula, and you will not begin earning it until you reach age 62. When inflation is low, as it has been over the last several years, the percentage of the COLA is generally the same for CSRS and FERS. For 2015, retirees eligible for the COLA (be they CSRS or FERS) will get a 1.7% increase in their annuities.

If you retire before you are age 62, you will be entitled to the Special Retirement Supplement on the FERS portion of your annuity.

If you have any deposit or re-deposit service, how it will be treated depends on when it occurred. Your Human Resources office will be able to provide guidance in this area, should you require it.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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