What most FERS employees want to know is: What will my annuity be when I retire? Calculating your FERS annuity starts with determining two main variables—your total years of federal service and your high-three average salary. Today, we will discuss your total years of federal service and how we use it in our FERS Annuity Calculator.
When did you begin working for the federal government?
Total years of federal service for annuity computation purposes, contrary to what it sounds like, is not necessarily how long you work for the federal government. Actually, for annuity computation, your length of service is how long you work for the federal government in a position where you are paying into the federal retirement system.
If you worked in a temporary, seasonal, or Continuity of Operations (Co-Op) position you may not have been paying into your retirement system. Also, if you had a break in service with the federal government or served military time, the day you began working for the federal government may not be the day used to calculate your actual years of service for annuity purposes. For more on service history, click here.
When will you retire?
Do you have a federal retirement date in mind? If so, you may calculate your years of service using this date. For some employees, such as Air Traffic Controllers (ATC), who are typically subject to mandatory retirement at age 56, their federal retirement date may be fairly obvious. Law Enforcement Officers (LEOs) and Firefighters (FFs) are generally required to retire at age 57. But most federal employees have some control over their retirement date.
If you already know your total years of federal service and high-three average salary, you can calculate your federal annuity by plugging those numbers into our FERS Annuity Calculator.
Three separate formulas exist for calculating a FERS annuity:
- The Standard FERS Annuity Formula
- The Enhanced FERS Annuity Formula for FERS employees who retire at age sixty-two or older with at least twenty years of service
- The Special Provisions FERS Annuity Formula for LEOs, FFs, and ATCs
| How to Calculate Your FERS Annuity | |
|---|---|
| Standard FERS Annuity Formula | High-Three X 1% X Years of Service = Annual Annuity |
| Enhanced FERS Annuity Formula | High-Three X 1.1% X Years of Service = Annual Annuity |
| Special Provisions FERS Annuity Formula | High-Three X 1.7% X 1st Twenty Years of Service = (A)
High-Three X 1% X Rest of Years of Service = (B) A + B = Special Provisions Annual Annuity |
FERS Annuity Calculator Example
Let’s consider the case of Randy, a FERS employee who hopes to retire from federal service after thirty years with the Department of Transportation (DOT). Prior to beginning his federal career, Randy served five years in the military. As Randy ponders retirement, he wants to know what effect buying back his military time would have on his annuity. Randy anticipates a high three of $100,000. Without making the deposit, Randy’s first gross monthly federal annuity check will come to $2,500 ($100,000 x 1% x 30 = $30,000 annually or $2,500 monthly).
If Randy does make the deposit, his five years of military service will be added to his total length of service. This gives him 35 years of service for annuity computation. Randy’s first gross monthly federal annuity check will be approximately $2917 ($100,000 x 1% x 35 = 35 $35,000 annually or $2,917 monthly). Although buying back his military time would increase Randy’s annuity, he has to weigh the increase in his annuity against the cost of the military deposit.
Knowing your total years of service and how they factor into your FERS annuity calculation can help you begin planning for federal retirement. To gain a general understanding of what your federal annuity may be upon retirement, check out our FERS Annuity Calculator.
