Because FERS is a retirement system that includes Social Security, if you retire before age 62, you’ll be entitled to the special retirement supplement, unless you are retiring under the MRA+10 provision. Image: LDprod/Shutterstock.com
It’s time to get back to basics. Many of you have asked me how your retirement will be calculated when you retire. One good reason for asking is that you want to know how much money you’ll be entitled to before you make the plunge. With that in mind, I’ll now go over the rules governing the computation of CSRS and FERS annuities for most federal employees. I’ll start with CSRS because even if there are fewer of you left in the federal service, your computation is the simplest to describe.
Eligibility rules
Under CSRS, you can retire immediately if you are at least 55 years old and have 30 years of service, 60 with 20 years of service or 62 with 5. If your agency is authorized to offer you early retirement, you can retire at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, your annuity will be reduced by 1/6 of 1 percent for each month you are under age 55. That’s 2 percent per year.
Under FERS, you can retire immediately at your minimum retirement age (MRA) with 30 years of service, age 60 with 20 years of service or age 62 with 5, You can also retire at your MRA with at least 10 years of service but fewer than 30. However, if you retire under the MRA+10 provision and have fewer than 20 years of service, your annuity will be reduced by 5 percent for every year you are under age 62, age 60 if you have at least 20 years of service.
Just as is true of CSRS, if your agency offers you an early retirement opportunity, you can do that at age 50 with 20 years of service or, if you have 25 years of service, at any age. However, and here’s the good news, unlike CSRS retirees there wouldn’t be any age penalty.
CSRS computation
Here’s the formula used to compute a CSRS annuity:
1.5% x your high-3 x 5 years of service, plus
1.75% x your high-3 x 5 years of service, plus
2% x your high-3 x all remaining years and full months of service
This formula generates the basic annuity amount, which cannot exceed 80 percent of your average high-3 salary. However, the good news is that unused sick leave isn’t included in that 80 percent limitation.
FERS computation
Here’s the formula used to compute a FERS annuity:
.01 x your high-3 x all years of service
Note: If you are age 62 and have at least 20 years of service, use this formula:
.011 x your high-3 x all years of service
*FERS and CSRS calculator: See your Annuity Estimate in seconds.
The special retirement supplement
Because FERS is a retirement system that includes Social Security, if you retire before age 62, you’ll be entitled to the special retirement supplement, unless you are retiring under the MRA+10 provision.
The SRS approximates the amount of Social Security benefit you earned while a FERS employee. It doesn’t include other periods of Social Security service, including active duty service in the armed forces, even if you have made a deposit to get credit for that time.
A word about special category employees
Law enforcement officers, firefighters and air traffic controllers may retire at age 50 with 20 years of covered service. All special category employees receive an enhanced benefit for which they contribute more to the retirement system through payroll deductions.
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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See also,
Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025
The Best Ages for Federal Employees to Retire
Alternative Federal Retirement Options; With Chart
Primer: Early out, buyout, reduction in force (RIF)
Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process