FERS and Your Future Retirement: How Much Will You Receive After Retirement?

How much will you receive in retirement income when you retire? Here are some examples that will demonstrate how your retirement income is calculated.

If you are a federal employee under the FERS system, how much will your receive for your retirement income?

For a Federal employee in the FERS system, the main components of your retirement income will be as follows:

The Annuity

  • The supplement to the annuity – until age 62
  • Thrift Savings Plan balance
  • Social Security – starting at age 62.

The purpose of this article is to provide you with calculations based on typical examples in order to help your plan for your future retirement. I have omitted Social Security in the calculation because employees already receive annual estimates of this amount.

To use this chart, select the high-three and years service closest to what you expect you will have when you retire. The amount shown is the annuity you will have earned for this combination of years and your high-three average salary.


<— Years Service —->
 High Three 20  27  35
 $50,000  $10,000  $13,500  $17,500
 76,000  15,200  20,520  26,600
 105,000  21,000  28,350  36,750
 135,000  27,000  36,450  47,250

Before age 62, a retiring federal employee must have at least 20 years service, even with VERA (early out). An exception is MRA+: must be at least the minimum required age (56 or more) with at least 10 years service. A penalty of 5% for each year under age 62 applies to MRA+ retirements. (See Future Retirees: Do You  Know Your MRA?)

Annuity: AGE 62+

<— Years Service —->
 High Three 5  20  27 35
 $50,000  $2,500  $11,000  $14,850  $19,250
 76,000  3,800  16,270  22,572  29,260
 105,000  5,250  23,100  31,185  40,425
 135,000  6,750  29,700  40,095  51,975

For retirement at age 62+ with 20+ years, the annuity is 10% more.

Annuity supplement.   If all your earnings have been under the FERS system, and none of your FERS earnings were prior to age 22, then you can divide the age-62 Social Security estimated benefit by 40 and multiply the result by years of FERS service. However, the Social Security annual estimate assumes you will work until age 62.   An estimate based on an estimate is not generally the most accurate, dependable method.

Or, as an alternative, just multiply your years of service (your FERS service, not your military service) by 40. For example, with 24 years of FERS service the supplement would be about (24 * 40), or $960 – more for higher grade employees and less for others.

Thrift savings. For all employees, 1% of your salary is automatically contributed by your agency. In addition, up to 3% of the amount contributed by the employee is matched dollar for dollar by the agency, while for an amount above 3%, the amount the agency will match is one half of the employee’s contribution.

In each column below, there is a range of potential money available to you through your Thrift Savings Plan that you will be able to use for financial support during your retirement. The first figure is the final amount, This assumes a 2% growth rate, compounded annually. The second number is for a growth rate of 13%. It is likely the actual result will fall between these two extremes.

The Thrift Savings Plan offers many options for handling your nest egg.  You can take it all out in a lump sum, buy a two-life annuity from an insurance company, specify how much you would like to withdraw each  month on a continuing basis, etc. There are tax implications, of course.  And there is a federal requirement for starting withdrawals at a certain age, and in a certain minimum amount.

Because the process is intricate, and so much is at stake, you may want the advice of an financial counselor.

TSP Nest Egg

<— Years Service —->
Bi-weekly Deposit 5  20  27 35
 $20  $2,760 – 3,812  $12,890 – 47,588  $18,750 – 118,068  $26,522 – 321,384
 175  10,352 – 14,281  112,756 – 416,200  164,035 – 1,032,649  232,026 – 2,810,831
 325  44,855 – 61,879  209,421 – 772,932  304,634 – 1,917,754  430,904 – 5,220,054
 700  96,609 – 133,275  451,058 – 1,664,764  656,134 – 4,130,515  928,099 – 11,243,110


The following annuities are not covered in this article:

  • “special” category employees, such as law enforcement, fire fighter, and air traffic controllers. These employees can retire earlier at a higher percent of high-three, and pay more into the retirement fund.
  • CSRS, CSRS offset, and FERS transfer. CSRS figures will be covered in a future article.
  • Congressional annuities. Members of congress pay more into the retirement fund and receive a proportionately higher benefit.
  • Central Intelligence Agency Retirement and Disability Fund

About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.