How to Calculate Your FERS Retirement Pension

Do you know how to calculate your FERS retirement pension? Here is a basic overview.

Planning for retirement can be scary. After all, most people only do it once so everyone is a newbie.

However, retirement planning doesn’t have to be complicated, and knowing what your FERS Pension is will be a great first step.

And fortunately, the calculation is really simple. 

Easy FERS Pension Calculation

This guide will be your quick and easy guide to get an estimate of your FERS pension. If you want a more in depth guide, then you’ll want to check out the full guide/calculator here

All you need to know to calculate your FERS pension is how many years of service you have and your high-3 salary.

Your high-3 salary is your average annual salary during the 3 highest paid years of your career (normally the last 3). So if your last three years you were paid $95k, $100k, and then $105k, then your high-3 would be 100k (the average). 

And for planning purposes, a rough guess for your high-3 salary is plenty. 

So if you are more than 3 years away from retirement, just use your current salary as your proxy for your high-3. 

Easy FERS Pension Calculation Examples

So let’s say you have 25 years of service and your high-3 is $100k, your annual pension would be: 

25   X   $100,000   X    1%   =     $25,000 Gross Annual Pension

As you can see, (most federal employees) get 1% of their high-3 salary for every year of service they have. 

However, there is one exception to this rule. If you retire at age 62 or later with 20+ years of service, then you get 1.1% of your high-3 for every year of service (10% raise!)

So if you met that criteria, then with the same numbers as the above example, your pension would now be: 

25   X   $100,000   X    1.1%   =     $27,500 Gross Annual Pension. 

Do This Now!

So if you haven’t already, do the math for your numbers now! Yes, I mean right now 🙂 

This is the first step in knowing what your retirement is going to look like, and even a rough estimate is way better than nothing.

It’s Simple, But…

As you can see, the pension equation is quite simple. Just easy multiplication. 

However, the fun part is knowing what is going to come out of your pension before you ever see it. So if you want the full course meal, this full article walks you through how to calculate your net pension (aka, what will actually hit your bank account every month). 

About the Author

Dallen Haws is a Financial Advisor who is dedicated to helping federal employees live their best life and plan an incredible retirement. He hosts a podcast and YouTube channel all about federal benefits and retirement. You can learn more about him at Haws Federal Advisors.