Publisher's Perspective

In the fictional Lake Woebegone, Minn., all the children are above average. If you’ve listened to the political discourse around federal retirement, you’d think that all federal retirees live there, too.

Some federal annuitants no doubt are above national averages, in terms of retirement assets and guaranteed income. By and large—trust fund inheritors aside—that is due to decisions they have made over decades in terms of their lifestyle, and saving consistently and wisely.


It also is due to their decision to spend most of all of their careers working for an employer that for all its faults does offer a defined benefit annuity.

What is “average” of course depends on what is being measured, but it’s instructive to see how federal retirees fit in a recent study by the Employee Benefit Research Institute which concluded that there are five broad categories of retirees.

In the middle, of course, are what it called average retirees. They are characterized, for example, by having “intermediate” levels annual income—for three-fourths of them, between $40,000 and $100,000—of which defined benefit annuities play a “major role.”

Above them are “comfortable” retirees, who also are characterized by having defined benefit retirement income plus more retirement savings and other assets. Three-fourths say their retirement savings “are sufficient or even above their needs, and more than half plan to grow, maintain, or spend only a small portion of their financial assets.”

Higher still are “affluent” retirees, who have still more of all of that and a quarter of whom say their standard of living actually has increased since retirement.

Below the average category are “just getting by” retirees, most of whom rely on Social Security as a major source of income and who also have at least some personal savings to use as income. Then came “struggling” retirees, who rely even more heavily on Social Security and who expect to exhaust their personal savings in retirement—if they have any in the first place—and only a third of whom have any defined benefit income from an employer.

To listen to the various proposals that have circulated regarding federal retirement—mostly from the political right—would be to conclude that federal retirees, by virtue of their CSRS or FERS defined benefits, generally fall into the two top categories.


Let’s look at the numbers. The average monthly benefit under CSRS is about $4,000, which comes to $48,000 on an annual basis. The “median” CSRS benefit—the point where half are below and half are above—is about $3,500, $42,000 on an annual basis.

The FERS defined benefits are smaller—an average of about $1,600 monthly and a median of about $1,300, for annual figures of $19,200 and $15,600—because that program also includes Social Security as a basic element.

The average Social Security benefit is about $1,500 a month, $18,000 annually; the average for federal employees likely is higher because the federal salary average is higher than the overall national average, due mainly to differences in the nature of the work and educational levels.

Even if one wants to add in the value of federal benefits that continue into retirement—such as the value of continuing FEHB health insurance in retirement with the government continuing to pay about 70 percent of the premium—federal retirees overall are squarely in the income range that produces an “average” retirement.

Let’s look at the other characteristics of “average” retirees:


  • Slight majorities are confident that they saved enough for retirement and “tend to believe that their standard of living in retirement is unchanged from what it was during their working years.”
  • They avoid debt—less than half have credit card or car loan debt.
  • They spend frugally—for most, less than $3,000 a month on average.
  • That looks an awful lot like a profile of federal retirees.

P.S. Of the 2.2 million federal retirees, only about 36,000 live in Minnesota, much less in Lake Woebegone.

Shocker: Social Security Tax Repayment Issue Arises

Lessons Learned Growing a TSP Balance Beyond $1M

What it Takes to Be a TSP Millionaire in Today’s Dollars

Do You Really Need to Save 10X Salary for Retirement? Not if You Have a Pension

FERS Retirement Bundle: 2021 FERS Guide & TSP Handbook