It's time to get a good idea of what your post-retirement Social Security income will be, and what portion of your post-retirement budget it will cover. Image: Rix Pix Photography/Shutterstock.com
By: FEDweek StaffI was born in November. So, this August I received a notice from the Social Security Administration (SSA) that my new Social Security Statement (statement) was ready for me to view. Social Security updates their statements on an annual basis three months prior to the month in which your birthday occurs.
If you have a mySocialSecurity account, SSA will notify when your new statement is ready. If you don’t have an account, your statement will still be ready, though SSA won’t let you know that it is. If you haven’t set up a mySocialSecurity account, do it right away.
Your statement estimates what you will be entitled to at the time you apply for Social Security. It lists estimated benefits for ages from 62 (the youngest age at which you can apply) to 70 (the age at which Social Security retirement benefits stop increasing). It does make some assumptions that you need to take into consideration, however. It assumes that you will keep working until the specified age (62 – 70) and that you will continue to earn the same amount of money that was last reported to SSA by your agency.
If I stop working at 62, but don’t apply for Social Security until my full retirement age (FRA – 67 for those born in 1960 or later), my actual benefit will be less than what the statement says because I had no reported earnings for 5 years (62 – 67) and the statement assumed that I continued to earn the amount I had earned in the year before I stopped working.
It also doesn’t take Social Security cost-of-living-adjustments (COLAs) into account. In this case, the amount of the benefit I would receive at 67 would be higher than what I would get t 62, though its purchasing power will likely not have changed.
If you adjust for these assumptions, you’ll have a good idea of what your post-retirement Social Security income will be, and what portion of your post-retirement budget it will cover. This tells you what one part of your retirement income will be. The other parts of your retirement income will be your FERS annuity, and the withdrawals from the Thrift Savings Plan (TSP).
You can also get a good estimate of what you will be entitled to in a FERS annuity. Most agencies have retirement calculators on their Intranet that will allow you to estimate what your FERS annuity will be. FERS has formulas for determining the amount of your annuity:
For regular FERS employees:
- 1% per year times the high-three annual average salary; or
- 1.1% per year times the high-three annual average salary if age 62 or older with at least 20 years of service.
For Special Category Employees (e.g. law enforcement, firefighter, etc.)
- 1.7% times the first 20 years of qualifying special category service; and
- 1% times all other years of service, qualifying or not.
Both FERS and Social Security are formulaic. The Thrift Savings Plan is not so.
John Grobe is a retired federal employee and retired retirement educator with over 30 years of experience in helping federal employees understand their retirement.
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See also,
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FERS Retirement Guide 2025 – Your Roadmap to Maximizing Federal Retirement Benefits
