How to Calculate Your FERS Annuity

As a FERS employee, you’re eligible to receive a monthly annuity amount during retirement after you meet certain requirements. Very similar to a pension, you’ll receive a specific amount for your lifetime that is calculated based on years of service and your average pay. So how is that amount calculated exactly?

First, you must meet the age requirements: your minimum retirement age (MRA) with 30 years of service, age 60 with 20 years of service, or age 62 with 5 years of service.

The FERS calculation for regular employees is simple: .01 x “high-3” (highest three years of salary) x all years and full months of service. For example, if you are 56, have 30 years of service, and your high-3 is $80,000, here is your calculation: .01 x $80,000 x 30 = $24,000.

You also have the option to elect the FERS Enhanced Benefit if you have at least 20 years of service and retire at age 62 or later. Here’s your formula: .011 x high-3 x all years and full months of service.

That little extra ‘.1’ may not look like much, but it can make a big difference! Using the same numbers as the first example, your annuity would be calculated as follows: .011 x $80,000 x 30 = $26,400. That is an extra $2,400 a year for the rest of your life!

These are just a couple FERS calculations – know that there are other scenarios on how to calculate your annuity. And, by the way, did you know that any leftover hours of actual service can be combined with any unused sick leave hours to create additional months, which will be used in your annuity computation?  Call my office at (215) 672-7676 so I can walk you through your individual situation and answer your questions.