Retirement & Financial Planning Report

Many CSRS-covered employees have reached or are about to reach a point in their careers when their basic annuities are capped by the 80 percent limit. You’ll hit that ceiling when you have 41 years and 11 months of creditable service if you are under standard CSRS coverage (earlier if some of your service was in a special category of employment allowing for faster accumulation of benefits, such as being employed by Congress).

Using the standard CSRS formula for someone whose high-3 is $60,000:


0.015 x $60,000 x 5 years = $4,500, plus
0.0175 x $60,000 x 5 years = $5,250, plus
0.02 x $60,000 x 31.917 (31 year 11 months) = $38,364
Total: $48,114

Eighty percent of your high-3 is $48,000, however.

The government continues to take retirement deductions out of your pay when you reach the maximum, but you’ll get it back one way or the other.

When you retire, OPM will offer you a choice. You can either receive a refund of your excess deductions or you can roll the money into an IRA.

There’s one more wrinkle in the law that will allow you to get an annuity that is greater than 80 percent of your high-3 –sick leave. When you meet the age and service requirements to retire, unused sick leave will be added to your actual service and included when OPM calculates your annuity. If you have accrued 2,087 hours (one year) when you retire, your annuity would be increased by 2 percent of your high-3. To figure out how many additional months you might have, divide your latest sick leave balance by 174. That’s because a month, for retirement purposes, is roughly that long.