Question 1

What is FERS and how does it work?

Accepted Answer

The Federal Employees Retirement System (FERS) is a three-tiered retirement plan for federal civilian employees hired after 1983. It consists of: 1) FERS Basic Benefit (pension annuity), 2) Social Security benefits, and 3) Thrift Savings Plan (TSP). The FERS annuity provides a guaranteed monthly pension based on your years of service and high-3 average salary.

Question 2

How do you calculate FERS annuity?

Accepted Answer

FERS annuity calculation: Basic formula is 1% × high-3 average salary × years of creditable service. If you retire at age 62 or older with 20+ years of service, the multiplier increases to 1.1%. For example, 30 years of service with $100,000 high-3 salary at age 62 = $100,000 × 30 × 1.1% = $33,000 annual annuity ($2,750/month).

Question 3

What is the high-3 average salary?

Accepted Answer

The high-3 average salary is the average of your highest 3 consecutive years of basic pay during your federal career. This is the salary figure used in the FERS annuity calculation. It typically includes your base salary but excludes bonuses, overtime, and locality pay adjustments unless they're part of your basic pay rate.

Question 4

What is the FERS Special Retirement Supplement?

Accepted Answer

The FERS Special Retirement Supplement (SRS) is a temporary benefit paid to eligible FERS retirees who retire before age 62. It approximates the Social Security benefit you earned during your federal service and continues until you turn 62 (when you become eligible for Social Security). You must retire under immediate retirement provisions with 30 years of service, or at your Minimum Retirement Age (MRA) with 30 years.

Question 5

At what age can federal employees retire under FERS?

Accepted Answer

FERS retirement eligibility depends on age and service: Immediate retirement at age 62 with 5 years of service, age 60 with 20 years, or Minimum Retirement Age (MRA, 55-57) with 30 years. Early retirement is available at age 50 with 20 years or any age with 25 years (for certain situations). MRA with 10 years allows deferred retirement. Law enforcement and special provisions have different rules.

Question 6

How much pension do federal employees get?

Accepted Answer

FERS pension amount varies based on service and salary. With 30 years of service and $100,000 high-3 salary, expect $30,000-$33,000 annually (1-1.1% formula). This represents about 30-33% replacement of pre-retirement income from the pension alone. When combined with Social Security (estimated 30-40%) and TSP withdrawals, total retirement income typically replaces 60-80% of pre-retirement earnings.

Question 7

Can you retire from federal service after 20 years?

Accepted Answer

Yes, you can retire with an immediate FERS annuity after 20 years of service if you're at least age 60. You can also retire at age 50 with 20 years under early retirement provisions (voluntary or involuntary separation). However, retiring before your Minimum Retirement Age with fewer than 30 years means no Special Retirement Supplement, and retiring before age 62 means COLA adjustments don't begin until 62.

Question 8

Is FERS annuity taxable?

Accepted Answer

Yes, FERS annuity payments are subject to federal income tax and possibly state income tax (depending on your state). However, a small portion representing your after-tax contributions to FERS is not taxable. You can elect federal tax withholding from your annuity payments. The taxable portion is reported on Form 1099-R, and you'll receive this annually from OPM.

Question 9

What happens to FERS if you leave federal service early?

Accepted Answer

If you leave federal service before retirement eligibility, you have options: 1) Withdraw your FERS contributions (forfeiting future pension rights), 2) Leave contributions in the system for a deferred retirement (if you have 5+ years of service), or 3) Transfer to another federal agency. Deferred retirement means you receive a reduced pension when you reach retirement age, but you forfeit the Special Retirement Supplement.

Question 10

How does FERS compare to the old CSRS system?

Accepted Answer

CSRS (Civil Service Retirement System) for pre-1984 hires offers higher pension benefits (1.5-2% per year) but no Social Security. FERS provides lower pension (1-1.1% per year) but includes Social Security and TSP matching (up to 5%). CSRS typically yields 56-80% salary replacement from pension alone, while FERS pension provides 30-40%, requiring TSP and Social Security to reach similar total replacement rates.

FERS Annuity Calculator - Federal Employee Retirement Calculator

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