Everything a federal employee needs to know about FERS: how the pension is calculated, when you're eligible, what TSP and FEHB mean in retirement, and how to estimate what it's all worth.
The Federal Employees Retirement System (FERS) is the retirement program covering most United States federal civilian employees. It was enacted by Congress in 1986 and took effect on January 1, 1987, replacing the older Civil Service Retirement System (CSRS) for employees hired after December 31, 1983.
Unlike CSRS, which was a single-benefit pension system, FERS was designed as a three-legged stool: a defined-benefit pension, a defined-contribution savings plan (the Thrift Savings Plan), and Social Security. The intent was to bring federal retirement benefits closer to private-sector norms while still providing a secure retirement floor.
FERS employees contribute from each paycheck toward all three pillars. The pension contribution is 4.4% of basic pay for most employees hired after 2013 (4.0% for those hired 2013, and 3.1% for those hired before 2013). TSP contributions are voluntary but come with a generous agency match. Social Security contributions follow the standard 6.2% OASDI rate up to the wage base.
You are covered by FERS if you are a permanent or part-time federal civilian employee hired after December 31, 1983, on an appointment that is not specifically excluded by law. This covers the vast majority of the current federal workforce — roughly 2.1 million employees.
Excluded from FERS: employees of the Tennessee Valley Authority, some intelligence community positions, and certain temporary or intermittent appointments. If you were hired before 1984 and never switched to FERS (the "FERS transfer" window closed in 1987), you remain under CSRS or CSRS-Offset rules.
CSRS-Offset: If you had at least 5 years of creditable civilian service before 1984 and returned to federal service after a break, you may be CSRS-Offset — covered by CSRS but also paying into Social Security. This is a hybrid that follows CSRS pension rules but offsets your CSRS benefit by the amount of Social Security you earned during those offset years.
If you're unsure, check your SF-50 (box 30 — Retirement Plan) or your agency's Employee Benefits Information System (EBIS). The code "1" means FERS; "6" means CSRS-Offset; "8" means CSRS.
FERS was deliberately designed as a three-part system so that no single source carries the full burden of your retirement income. For a typical career federal employee retiring at 62 with 30 years of service, the income split looks roughly like this:
| Source | Share of Retirement Income | Typical Annual Amount |
|---|---|---|
| FERS Pension | ~35% | $33,000 – $42,000 |
| TSP (withdrawals) | ~48% | $28,000 – $55,000 |
| Social Security | ~17% | $15,000 – $24,000 |
The pension provides a guaranteed, inflation-adjusted floor. TSP gives you growth potential and flexibility. Social Security adds a third guaranteed stream that kicks in at claim age. Together, they create a retirement income that is more resilient than any single source alone — but only if you understand how each piece works and how to maximize it.
The exact proportions vary widely based on your TSP balance, claim age for Social Security, and years of service. The FERS estimator models all three sources simultaneously for your specific career data.
Your FERS pension is calculated with a single formula:
Pension = high-3 average salary × years of creditable service × multiplier
The multiplier is normally 1.0% per year of service. But if you retire at age 62 or older with at least 20 years of service, the multiplier increases to 1.1% — a 10% bonus that can add tens of thousands of dollars over a retirement.
The high-3 average salary is the average of your highest 36 consecutive months of basic pay (including locality pay). For most employees, this is simply their final salary — but if you had a recent promotion or step increase, the high-3 may be slightly lower than your current pay.
Here's how the pension scales with years of service at two common salary levels:
| Years of Service | Multiplier | GS-12 ($105K) | GS-14 ($135K) |
|---|---|---|---|
| 10 | 1.0% | $10,500/yr | $13,500/yr |
| 15 | 1.0% | $15,750/yr | $20,250/yr |
| 20 | 1.0% | $21,000/yr | $27,000/yr |
| 25 | 1.0% | $26,250/yr | $33,750/yr |
| 30 (age 62+) | 1.1% | $34,650/yr | $44,550/yr |
Notice the jump from 25 to 30 years at the 1.1% multiplier: the pension increases by over $8,000/year for a GS-12 and over $10,000/year for a GS-14 compared to the 1.0% rate. This is why the 62+20 rule is one of the most important factors in FERS planning.
You must complete 5 years of creditable civilian service to be vested in the FERS pension. If you leave federal service before 5 years, you are not entitled to any FERS pension — the contributions you made are returned to you with interest, but you have no annuity entitlement.
After 5 years but before retirement eligibility: you have a deferred annuity. This means you can claim a pension later — but not until you reach the minimum retirement age (MRA), and the pension will be reduced if you claim it before age 62. You also lose eligibility for the FERS Annuity Supplement and for FEHB in retirement.
This is one of the most underappreciated thresholds in federal career planning. Leaving at 4 years and 11 months means you walk away with zero pension. Leaving at 5 years and 1 day means you have a deferred pension worth potentially hundreds of thousands of dollars over your lifetime.
If you have prior military service, you may be able to "buy back" that time to count toward your FERS service total — potentially pushing you over the 5-year vesting threshold even if your civilian service is shorter.
FERS has three main pathways to retirement:
| Type | Age + Service | Pension Reduction? | FEHB? | Supplement? |
|---|---|---|---|---|
| Immediate (full) | MRA + 30 yrs | No | Yes | Yes |
| Immediate (full) | Age 60 + 20 yrs | No | Yes | Yes |
| Immediate (full) | Age 62 + 5 yrs | No | Yes | No |
| MRA+10 (reduced) | MRA + 10 yrs | 5%/yr under 62 | Yes | No |
| Deferred | MRA + 5+ yrs (leave, claim later) | 5%/yr under 62 | No | No |
Immediate retirement is the gold standard: no pension reduction, FEHB continues, and you may qualify for the annuity supplement. The MRA+30 category is the most valuable — you can retire as early as age 56 (for those born before 1970) with a full pension and supplement.
MRA+10 (also called "postponed retirement") lets you retire at MRA with as few as 10 years of service, but your pension is reduced by 5% for each year you're under age 62. For someone retiring at MRA 57, that's a 25% reduction. You can postpone claiming to reduce or eliminate the penalty, but you lose FEHB coverage during the gap.
Your MRA (Minimum Retirement Age) depends on your birth year:
| Birth Year | MRA |
|---|---|
| Before 1948 | 55 |
| 1948 | 55 + 2 months |
| 1949 | 55 + 4 months |
| 1950 | 55 + 6 months |
| 1951 | 55 + 8 months |
| 1952 | 55 + 10 months |
| 1953–1964 | 56 |
| 1965–1969 | 56 + 2 months |
| 1970+ | 57 |
The FERS Annuity Supplement (officially the "FERS Special Retirement Supplement") is an additional monthly payment that approximates the Social Security benefit you'd receive at age 62. It's paid from the date you retire under an immediate, unreduced FERS annuity until the month you turn 62 — at which point it stops, and you claim your actual Social Security benefit separately.
Who qualifies: Only employees who retire under an immediate, unreduced annuity (MRA+30, age 60+20) before age 62. MRA+10 retirees and deferred annuitants do not qualify.
How it's calculated: Estimated SS at 62 × (FERS years of service ÷ 40). For example, if your projected Social Security at 62 is $24,000/year and you have 30 years of FERS service, your supplement is $24,000 × 30/40 = $18,000/year ($1,500/month).
Earnings test: If you work in retirement and earn above the Social Security annual exempt amount (~$22,320 in 2025), OPM reduces the supplement by $1 for every $2 earned above the limit. This can zero out the supplement entirely for working retirees with substantial post-retirement income.
For a deeper dive, see the FERS Annuity Supplement guide.
The Thrift Savings Plan (TSP) is the federal government's version of a 401(k). It's the part of FERS where your decisions matter most — how much you contribute, which funds you choose, and when you start withdrawing all directly affect your retirement income.
Agency match: FERS employees receive an automatic 1% agency contribution (even if you contribute nothing) plus a dollar-for-dollar match on the first 3% of your pay and a $0.50-on-the-dollar match on the next 2%. That's a total of up to 5% free money — the most common financial advice for federal employees is to contribute at least 5% to capture the full match.
2025 contribution limit: $23,500 for elective deferrals ($30,500 if age 50+, and an additional $11,250 for those age 60–63 under the SECURE 2.0 "super catch-up").
Fund choices: The TSP offers six core funds — G (government bonds), F (bond index), C (S&P 500), S (small-cap), I (international), and the L (Lifecycle) funds that automatically adjust your allocation as you approach retirement. The L funds are a reasonable default for employees who don't want to manage allocations; the C fund has historically delivered the highest long-term returns but with more volatility.
Required Minimum Distributions (RMDs): Starting at age 73 (under SECURE 2.0), you must begin withdrawing from traditional TSP balances. Roth TSP balances are exempt from RMDs during your lifetime.
The Federal Employees Health Benefits (FEHB) program covers roughly 8 million federal employees, retirees, and family members. The government pays approximately 70–75% of the premium for active employees — and that subsidy continues into retirement if you meet the eligibility rules.
The 5-year rule: To keep FEHB in retirement, you must have been enrolled in an FEHB plan (or covered as a family member) for the 5 consecutive years immediately before your retirement date. This is not 5 years total — it's the final 5 years, and they must be continuous. If you drop FEHB at any point during that window, you may lose retiree eligibility permanently.
What it's worth: The annual government subsidy for FEHB in retirement ranges from roughly $8,000 (self-only) to $15,000 (family). Over a 25-year retirement, that's $200,000–$375,000 in present value — making FEHB one of the single largest components of your total federal retirement package.
If you leave before 5 years: You cannot re-enroll in FEHB as a retiree. Ever. This is one of the most costly hidden risks of early departure from federal service. You may be eligible for Temporary Continuation of Coverage (TCC) for 18 months at 102% of the full premium, but TCC is not a bridge to retiree FEHB.
For the full breakdown, see the FEHB in Retirement guide.
Consider a GS-14 Step 10 in the Washington-Baltimore locality area with a base pay of approximately $135,000, retiring at age 62 with 30 years of FERS service:
| Component | Annual Value | Present Value (25 yrs, 4% discount) |
|---|---|---|
| FERS Pension | $44,550/yr (1.1% × 30 × $135K) | ~$700,000 |
| FEHB Subsidy | ~$12,000/yr (self+one) | ~$188,000 |
| TSP (estimated) | ~$40,000/yr withdrawal | ~$625,000 |
| Social Security (at 67) | ~$30,000/yr | ~$365,000 |
| Total estimated present value | ~$1,878,000 | |
The pension alone — a guaranteed, inflation-adjusted, lifetime annuity — is worth roughly $700,000 in present-value terms. Add the FEHB subsidy and you're approaching $900,000 before touching TSP or Social Security. This is why the break-even salary premium for leaving federal service is often $30,000–$60,000+ above the federal salary: you need to replace not just your paycheck but the entire retirement package.
These numbers are illustrative. Run your own scenario in the FERS estimator for personalized projections.
Understanding FERS is the first step. The second step is running your actual numbers. The HighThree estimator lets you enter your birth date, service computation date, salary, TSP balance, and Social Security estimate — and then projects your retirement income for every possible departure year.
You'll see your FERS pension, TSP growth, break-even salary premium, and total retirement income side by side for each year. All calculations run in your browser. Nothing is sent to any server.
Related tools:
The estimator applies every FERS rule to your specific career data.
Social Security as a FERS Employee
One of the key differences between FERS and CSRS is that FERS employees pay into Social Security (6.2% up to the wage base) and receive the full benefit. CSRS employees do not pay into Social Security for their federal service and generally cannot collect Social Security on their own federal earnings record — a significant disadvantage for career federal employees under CSRS.
When to claim: You can claim Social Security as early as 62 (reduced) or as late as 70 (increased by 8% per year past your Full Retirement Age). Your Full Retirement Age (FRA) is 67 if you were born in 1960 or later.
The break-even age for delaying from 62 to 67 is typically around 78–80. For delaying from 67 to 70, it's around 82–84. If you expect longevity, delaying is advantageous; if you need the income sooner or have health concerns, claiming earlier may be appropriate.
Windfall Elimination Provision (WEP): This provision reduces Social Security benefits for workers who have pensions from employment not covered by Social Security. Since FERS employees are covered by Social Security, WEP generally does not apply to pure FERS retirees. It may apply if you have substantial non-covered pension income from another source (e.g., a state pension from a job where you didn't pay into Social Security).