Private Sector Break-Even

If you leave federal service before retirement, you walk away from your FERS annuity and your FEHB retiree health subsidy — the two benefits private employers cannot replicate. How much extra salary would make you whole for those, on top of a comparable private offer?

Scope note: this calculation intentionally excludes TSP agency match and Social Security. Both are routinely offered at good private jobs — double-counting them would inflate the break-even number. Compare 401(k) match and SS separately against your specific private offer.

Drag the slider to explore

Net extra gross salary needed per year — after FERS contribution savings

—

— in additional annual compensation every year from your departure until your planned retirement, invested and grown at your private-sector rate, to replicate the federal benefits you walk away from.

Total required private salary

—

Current fed salary at departure

—

Years to grow

—

Departure year

Drag the slider to see how the break-even number changes.

— —

———

Stay federal · Go private

What you'd receive in annual retirement income under each path.

Stay federal until retirement

—

Leave at selected year, deferred pension only

—

What you're walking away from

Present value, at the moment of departure, of the benefits lost by leaving early.

About the 401(k) match — do this comparison yourself

This is why we kept TSP match out of the break-even total.

How this number was derived

Scenario source

Loaded from your estimator scenario.

Edit career inputs →

Break-even assumptions

Private investment return

Discount rate

Life expectancy

yrs

COLA / inflation

Tax treatment

Federal brackets are inflated year-by-year from 2025 using a chained-CPI approximation, so your pension's effective tax rate evolves realistically across retirement. State tax is held real-constant.

Filing status in retirement Determines which bracket table applies.

Other retirement income

Today's-dollar annual SS + TSP draws (approx). Pushes pension into higher brackets.

State of residence in retirement Sets the state portion of your retirement tax.

State retirement tax rate

Auto-filled from state selection; override to match your own tax projection.

FEHB annual subsidy value

Employer contribution portion of health premium.

Working-years tax rate

Marginal rate applied to gross up the extra private salary into after-tax savings.

Assumed private 401(k) match

For the comparison note only — does not change the break-even number. Federal agency match is 5%.

FERS employee contribution rate

Auto-filled from your SCD date. Override for LEO/FF/ATC or if your actual rate differs.

Not financial advice. Estimates only. Always consult a qualified advisor and your agency HR for decisions about retirement.