Topic guide · updated 2026-07-30
Federal Employee Retirement: The Complete Money Guide
Federal retirement income is assembled from three separate systems: the FERS basic annuity, the Thrift Savings Plan, and Social Security. This pillar explains how each is computed — high-3 average salary, creditable service, the 1% and 1.1% multipliers, agency TSP money, the annuity supplement, sick-leave credit, and military service deposits.
A federal career pays you twice: once while you work, and once after. The second paycheck is assembled from three separate systems — the FERS basic annuity that OPM computes and pays for life, the Thrift Savings Plan you fund alongside your agency, and Social Security, which FERS employees pay into on the same terms as everyone else. Each has its own formula, its own eligibility clock, and its own agency of record, and the three are settled at different moments rather than in one transaction.
Almost every dollar of the FERS side traces back to two numbers: your high-3 average salary and your years of creditable service. Everything layered on top of that pair — which multiplier applies, whether an age reduction applies, whether a supplement bridges you to 62, how much unused sick leave adds, whether a military deposit was paid — is a rule that modifies one of those two inputs or the percentage they are multiplied by. Once the pair is clear, the rest of the system stops being mysterious and becomes arithmetic you can check.
This page maps the whole picture in verifiable terms and links to the calculator that performs each step. Nothing here is a determination. OPM computes your actual annuity from your documented service history at retirement, and every figure this site uses is transcribed from OPM, TSP, IRS, and DFAS publications and stamped with the date it was checked.
The three sources of federal retirement income
FERS was built as a three-part system, and each part behaves differently enough that they are worth separating in your head. The basic annuity is a defined-benefit pension: OPM computes it from a published formula and pays it monthly for life, with cost-of-living increases under the FERS rules. The Thrift Savings Plan is a defined-contribution account, so its balance is whatever your contributions, the agency money, and market returns produce — no formula fixes it in advance, and no projection of it is a promise. Social Security is the third leg, and FERS employees pay Social Security taxes throughout their federal careers and claim under the same rules as private-sector workers. CSRS, the older system that generally covers people hired before 1984, works differently again: a larger pension and, for most CSRS service, no Social Security coverage from that employment. Establishing which system covers you is the first fact to nail down, and it is recorded as a retirement plan code in box 30 of your SF-50.
Eligibility: your minimum retirement age and the service combinations
Retirement eligibility is a pair of thresholds — age and years of creditable service — and a recognized combination of both must be satisfied. Your Minimum Retirement Age is set by birth year: 55 for those born before 1948, rising in two-month steps to 56 for the 1953 through 1964 band, then again to 57 for anyone born in 1970 or later. An immediate, unreduced annuity is available at the MRA with 30 years of service, at age 60 with 20 years, or at age 62 with 5 years. Reaching the MRA with 10 to 29 years is also permitted, but that annuity is reduced for age unless its start date is postponed. Special provisions cover law enforcement officers, firefighters, and air traffic controllers, who have earlier eligibility ages, an enhanced computation, and mandatory separation rules of their own. OPM's published eligibility tables are the authority on which combination a given service record satisfies.
The annuity formula: high-3 × service × multiplier
The FERS basic annuity is a single multiplication: your high-3 average salary, times your years and months of creditable service, times a multiplier. The multiplier is 1% for most retirements. It rises to 1.1% when you are at least age 62 at separation and have at least 20 years of creditable service — both conditions together, not either one alone — which makes an identical career worth roughly ten percent more per year of service for the rest of your life. Service is counted in years and months rather than whole years, so partial years matter, and unused sick leave is converted and added to that service total before the multiplication happens. The result is an annual annuity, paid monthly, and reduced further if you elect a survivor benefit. The FERS retirement calculator on this site walks through each of those steps and shows the intermediate values instead of a single output number, so the arithmetic can be checked against your own record.
What the high-3 actually measures
The high-3 is the average of your basic pay over the highest-paid 36 consecutive months of your federal career — usually, but not necessarily, the final three years. Basic pay includes locality pay and certain shift differentials; it excludes bonuses, awards, overtime, and most premium pay, which is why a high-earning year with heavy overtime may move the figure less than expected. Because the window is 36 consecutive months rather than three calendar years, a promotion, a step increase, or a locality change partway through a year is weighted by the exact number of days each rate was in effect. That day-weighting is the usual reason a rough estimate differs from the figure OPM eventually certifies. The high-3 calculator here takes salary periods with their start and end dates and produces the weighted average the formula expects, showing how each period contributed.
MRA+10, postponed, and deferred retirement
Three similar-sounding options differ sharply in what they pay and what they preserve, and the distinction is decided by your status at separation rather than by a choice made afterwards. An MRA+10 retirement — reaching your MRA with 10 to 29 years of service — begins an immediate annuity permanently reduced by 5% for every year you are under age 62 when payments start, which works out to five-twelfths of one percent per month. A postponed retirement is the same eligibility with a deliberately later start date: the age reduction shrinks or disappears entirely, and eligibility to resume federal health and life insurance is preserved when the annuity begins. A deferred retirement applies when you separate without meeting any immediate-retirement combination; the annuity then begins at age 62, or earlier under specific age-and-service rules, and federal insurance coverage does not resume at all. Because the differences run to tens of thousands of dollars over a retirement, they are worth confirming against OPM's own publications rather than from memory.
The FERS annuity supplement
Employees who retire on an immediate, unreduced annuity before age 62 may also receive the FERS annuity supplement, commonly called the Special Retirement Supplement. OPM's estimating method takes your estimated Social Security benefit at age 62 and multiplies it by your years of civilian FERS service divided by 40, which is why military time bought back for the annuity does not raise the supplement — only civilian FERS service counts in that fraction. The supplement is subject to the Social Security annual earnings test: wages or self-employment income above the yearly limit reduce it by one dollar for every two dollars over the limit, with the reduction applied the following year. It ends at age 62 in every case, on the birthday itself, whether or not Social Security is claimed then. MRA+10 retirements do not receive the supplement at all, which is one of the sharpest financial differences between the retirement types.
The Thrift Savings Plan and the agency money
The TSP is where most of the variable money in a federal retirement lives, and its rules are unusually specific about how much of it is free. FERS participants receive an Agency Automatic contribution of 1% of basic pay every pay period whether or not they contribute anything themselves, plus matching on the first 5% of pay they do contribute: dollar-for-dollar on the first 3%, and fifty cents on the dollar for the next 2%. Contributing five percent therefore draws four percent in matching and five percent in total agency money, while contributing above five percent adds nothing further to the match. Your own contributions are bounded by the IRS elective deferral limit for the calendar year, with a separate catch-up limit from age 50 and a higher band for ages 60 through 63; agency automatic and matching money does not count against that limit. The TSP calculator here uses the verified limits for the selected year and projects the balance year by year at a growth rate you choose rather than one we assume.
Unused sick leave becomes creditable service
At retirement, unused sick leave hours are converted into additional creditable service under OPM's 2,087-hour work-year and added to the service figure in the annuity formula. One month of credit is roughly 174 hours, and OPM publishes a conversion chart that maps any hour balance to months and days of added service. The credit cannot be used to reach retirement eligibility — it does not move your earliest retirement date by one day — it only increases the service that is multiplied into the annuity once you are already eligible to retire. The effect is permanent, because that added service is multiplied by your high-3 and the applicable multiplier exactly like any other service. A large balance can be worth a meaningful annual increase for life, which is the arithmetic the sick-leave conversion calculator on this site makes visible using the same 2,087-hour rule.
Military service credit deposits
Prior active-duty military service can generally be credited toward a FERS annuity if a deposit is paid for it. The deposit is generally 3% of the military basic pay earned during the period being credited, plus interest once the initial interest-free grace period ends, and DFAS computes the exact amount from an estimated earnings request your HR office helps you submit. Each creditable year added by a deposit raises the annuity by one percent — or 1.1% where that multiplier applies — of your high-3 for life, which is the figure to weigh against the one-time cost of the deposit. Military retired pay usually must be waived to combine the service with FERS, with exceptions for reserve retirement and certain disability retired pay, so the decision is not always as simple as the arithmetic alone. The buyback explainer on this site describes the process and the documents involved, and your agency's HR office and OPM confirm what your particular record supports.
Where the official numbers come from
Every figure on these pages is transcribed from a published source and stamped with the date it was verified: OPM for the FERS rules and the General Schedule pay tables, TSP.gov for contribution and matching rules, the IRS for the annual deferral limits, and DFAS for military service deposits. The calculators here are estimators built on those published rules — they are not determinations, and no number produced on this site changes what any federal agency pays. OPM performs the official annuity computation at retirement from your documented service history, reconstructed from the SF-50 records in your electronic official personnel folder, which is why keeping your own copies of those forms is worth the small effort. Before then, your agency's retirement counselor and OPM's own publications are the sources of record for an official estimate. The official links at the end of this page go directly to those sources.
Tools in this topic
Every calculator and explainer in this cluster, each built on verified figures with its official source linked.
FERS Retirement
Estimate your FERS annuity from your high-3 average salary, creditable service years, and retirement age. Applies the 1% multiplier, the 1.1% multiplier at age 62 with 20+ years, your minimum retirement age by birth year, and the MRA+10 early-retirement reduction — with every step of the math shown.
High-3
Compute your high-3 average salary — the highest-paid 36 consecutive months of your federal career — the exact figure your FERS annuity is based on. Enter your salary history periods and get the properly weighted average, with the math shown month by month.
TSP Growth
Project your Thrift Savings Plan balance to retirement. Models your contributions, the 1% automatic agency contribution, the full match tiers (100% of the first 3%, 50% of the next 2%), annual contribution and catch-up limits from the verified IRS/TSP figures, and compound growth year by year.
TSP Loan
Estimate the payment on a TSP general-purpose or residential loan, see total interest — which you pay back into your own account at the G Fund rate — and understand the repayment term rules and what happens to an outstanding loan when you separate from federal service.
FERS Supplement
Estimate your FERS annuity supplement — the bridge payment for federal employees who retire before 62. Uses the OPM estimating formula (your age-62 Social Security benefit × FERS service ÷ 40), applies the annual earnings test, and shows exactly why the supplement ends at age 62.
Sick Leave Credit
Convert your unused sick leave hours into extra FERS service credit using OPM's 2,087-hour rule. See the added months and days of creditable service your sick leave balance buys, and roughly what that extra service is worth in annual annuity dollars.
GS Pay
Look up 2026 General Schedule pay for any grade, step, and locality. Returns the exact annual and hourly figures from the official OPM tables — base pay plus your locality percentage — for all 15 grades, 10 steps, and 58 locality areas including Rest of U.S.
Military Buyback
How the military service credit deposit ("buyback") works for FERS employees: what the deposit costs (generally 3% of military basic pay plus interest after the grace period), how bought-back years raise your FERS annuity, and how to start the process with DFAS and your HR office.
Guides
Your SF-50, Decoded — The Boxes That Decide Your Federal Retirement
The SF-50 Notification of Personnel Action is the document your FERS retirement is built from. A box-by-box tour of the fields that matter for your money: retirement coverage code, service computation date, pay plan and step, and locality — and how to spot errors early.
Your TSP Statement, Decoded — Every Line on the Quarterly Statement
A line-by-line reading of the TSP participant statement: which contributions came from you versus your agency, how to spot a shortfall in matching, what the Agency Automatic 1% vesting rule covers, why changing your investment election leaves your existing balance alone, and what the loan lines mean.
Key terms
Frequently asked questions
The basic FERS annuity is your high-3 average salary multiplied by your years and months of creditable service, multiplied by 1% — or 1.1% if you are at least age 62 at separation with at least 20 years of service. Unused sick leave is converted to extra creditable service and added before the multiplication. OPM performs the official computation at retirement.
Official sources for this topic
Every figure and rule referenced above is published by one of these agencies, and each of them — not this site — determines what is actually paid.
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