If you were hired into federal civilian service after 1983, your retirement runs on the Federal Employees Retirement System, and understanding how the Federal Employees Retirement System works comes down to three moving parts: a defined-benefit pension based on your salary and years of service, Social Security you pay into through regular payroll taxes, and the Thrift Savings Plan with agency matching. What you actually receive depends on the age and service combination you hit when you separate, the elections you make on the way out, and how consistently you contributed to the TSP along the way.1Social Security Administration. Federal Employees’ Retirement System Act of 1986
The Three Parts, Together
The pension (the FERS “basic benefit”) is the piece OPM administers and pays for life. Social Security works the same way it does for any private-sector worker, because FERS employees pay the standard payroll tax. The TSP is your own account, funded by your contributions plus agency money, and you decide how it’s invested and how it’s paid out.2Ronald Reagan Presidential Library & Museum. Statement on Signing the Federal Employees’ Retirement System Act of 1986
Employees hired before 2013 contribute 0.8% of basic pay toward the pension, those hired during 2013 pay 3.1%, and those hired on or after January 1, 2014, pay 4.4%. The higher rates don’t buy a bigger benefit; the annuity formula is the same for all three groups.
When You Can Retire
Every FERS retirement pathway starts from your Minimum Retirement Age, which depends on when you were born:3U.S. Office of Personnel Management. FERS Information – Eligibility
- Born before 1948: 55
- Born 1948–1952: 55 plus 2 months for each year after 1947
- Born 1953–1964: 56
- Born 1965–1969: 56 plus 2 months for each year after 1964
- Born 1970 or later: 57
Hitting MRA is only step one. The baseline for any FERS annuity is at least five years of creditable civilian service.4Office of the Law Revision Counsel. 5 USC 8410 – Eligibility for Annuity From there, the combination you meet at separation decides which door you walk through.
Immediate Retirement
An unreduced annuity that starts within 30 days of separation. You qualify with MRA and 30 years of service, age 60 and 20 years, or age 62 and 5 years.5Office of the Law Revision Counsel. 5 USC 8412 – Immediate Retirement The age-62-with-5-years path is unreduced but produces a smaller monthly check because the service count is small.
MRA+10
If you’re at your MRA with 10 to 29 years of service, you can retire immediately, but your annuity is permanently reduced by 5% for each year you’re under 62.6U.S. Office of Personnel Management. Types of Retirement Retiring at 57 means a 25% cut for life. You can postpone the start date to reduce or eliminate that penalty, but you’ll get no payments during the gap. MRA+10 retirees also don’t qualify for the Special Retirement Supplement.
Deferred Retirement
Leave federal service before you qualify for an immediate annuity, and you can still claim a deferred annuity at age 62 with no reduction, as long as you had at least five years of creditable civilian service. One warning: if you withdraw your retirement contributions on your way out, you forfeit the deferred annuity.
Disability Retirement
Available after 18 months of creditable civilian service if a medical condition expected to last at least a year prevents you from performing your job and your agency can’t reasonably accommodate you.7eCFR. 5 CFR Part 844 – Federal Employees’ Retirement System – Disability Retirement OPM requires medical documentation for both findings.
Law Enforcement, Firefighters, and Air Traffic Controllers
These employees can retire unreduced at age 50 with 20 years of covered service, or at any age with 25 years. They face a mandatory retirement age of 57 once they have 20 years, get a higher annuity multiplier, and receive COLAs before age 62.
How the Pension Is Calculated
Two numbers drive your annuity: your high-three average salary and your years of creditable service. The high-three is the highest basic pay you earned over any three consecutive years, which is usually your last three but doesn’t have to be.8U.S. Office of Personnel Management. FERS Information – Computation
The formula is 1% of your high-three multiplied by years and months of service. If you retire at 62 or later with at least 20 years, the multiplier rises to 1.1%. An employee with a $100,000 high-three and 30 years of service receives $30,000 a year at the 1% rate, or $33,000 at 1.1%.
Unused sick leave gets added to your service time for the computation (not for eligibility). Roughly 2,087 hours equals one additional year of credit in the formula.
The Special Retirement Supplement
Retire before 62 through certain pathways and OPM pays a monthly supplement that approximates the Social Security benefit you can’t yet collect. You qualify if you retire at MRA with 30 years, at 60 with 20 years, or under the special provisions for law enforcement, firefighters, and air traffic controllers. You don’t qualify under MRA+10, deferred retirement, disability retirement, or any retirement at 62 or later.9U.S. Office of Personnel Management. CSRS and FERS Handbook – Chapter 51: Retiree Annuity Supplement
OPM estimates what your full-career Social Security benefit would be, then multiplies it by your FERS civilian years divided by 40. The supplement doesn’t get COLAs, and it stops at the end of the month you turn 62. It’s also subject to a Social Security-style earnings test: in 2026, wages above $24,480 reduce the supplement by $1 for every $2 earned.10Social Security Administration. Exempt Amounts Under the Earnings Test Second-career income catches a lot of early retirees off guard here.
COLAs on the Pension
FERS COLAs are calculated on a “diet” formula that pays less than the full CPI increase in higher-inflation years:11U.S. Office of Personnel Management. How is the Cost-of-Living Adjustment (COLA) Determined?
- CPI increase of 2% or less: COLA equals the full CPI increase
- CPI increase between 2% and 3%: COLA is capped at 2%
- CPI increase above 3%: COLA equals CPI minus 1 percentage point
Most FERS retirees don’t receive COLAs at all until age 62. Exceptions are disability retirees (after the first year), special-category retirees, and anyone whose annuity includes a CSRS component.12U.S. Office of Personnel Management. Information for FERS Annuitants
The Thrift Savings Plan
For most FERS employees who contribute steadily, the TSP ends up being the largest retirement asset. It functions like a 401(k), with traditional (tax-deferred) and Roth (tax-free growth) options.
Every FERS employee gets an automatic agency contribution of 1% of basic pay, even without contributing. Your agency also matches your own contributions dollar-for-dollar on the first 3% of pay and 50 cents on the dollar for the next 2%. Contribute at least 5% and you capture the full match; contribute less and you’re leaving money behind.13Thrift Savings Plan (TSP). Contribution Types
The 2026 IRS elective deferral limit is $24,500 across traditional and Roth TSP combined. Participants 50 or older can add $8,000 in catch-up contributions, and those turning 60 through 63 during 2026 get a higher catch-up limit of $11,250.14Thrift Savings Plan (TSP). Contribution Limits
After you separate, you can take a partial withdrawal of at least $1,000, cash out the full balance, set up installment payments (fixed dollar amounts of at least $25 or amounts based on IRS life expectancy tables), or use at least $3,500 to buy a life annuity from the TSP’s vendor.15Thrift Savings Plan (TSP). Withdrawals in Retirement These can be combined.
Decisions You Lock In at Retirement
Survivor Benefits
If you’re married, you’re required to provide a full survivor annuity unless your spouse consents in writing to less. A full survivor benefit pays your surviving spouse 50% of your unreduced annuity and reduces your monthly payment by 10% for life. A partial election pays 25% to your survivor and reduces your check by 5%.16U.S. Office of Personnel Management. How Is the Reduction Calculated?17U.S. Office of Personnel Management. How Is the Amount of My Benefits as a Surviving Spouse Determined? The election is permanent.
Health Insurance
You can carry FEHB coverage into retirement only if you retire on an immediate annuity and were continuously enrolled in FEHB for the five years immediately before retirement (or since your first opportunity to enroll, if that was less than five years earlier).18U.S. Office of Personnel Management. Insurance FAQs – Health The government keeps paying its share of the premium. A single pay period without coverage during that five-year window can cost you retiree FEHB eligibility. OPM grants waivers case by case, but there’s no guarantee.
Military Service Buyback
Prior active-duty military time can count toward your FERS annuity if you make a deposit equal to 3% of your military basic pay for that period.19U.S. Office of Personnel Management. Service Credit You have a two-year interest-free window from your entry into federal civilian service. After that, interest compounds annually at a variable rate, and waiting can add thousands of dollars to the cost.20U.S. Office of Personnel Management. Military Deposits
Applying and Getting Paid
Start gathering documents six to twelve months before your target date. The main form is SF 3107, the Application for Immediate Retirement, where you enter personal information, direct-deposit details, and your binding survivor election.21U.S. Office of Personnel Management. Application for Immediate Retirement You’ll also need certified records of your federal service and, if applicable, your DD Form 214 for military credit.
Your agency HR office verifies service dates and salary, then forwards the package to OPM for adjudication.22Office of Personnel Management. OPM Retirement Quick Guide While your case is pending, OPM authorizes interim payments of roughly 60% to 80% of your estimated net annuity. As of early 2026, OPM reports authorizing interim pay within about 8 days of receiving a complete application, with average processing for immediate retirements running about 71 days.23U.S. Office of Personnel Management. Retirement Processing Times Total time from separation to final payment can stretch three to five months. Any shortfall between interim payments and the finalized annuity is paid retroactively.
FERS annuity payments are subject to federal income tax. If you don’t specify otherwise, OPM defaults to single status with zero allowances, which often overwithholds.24U.S. Office of Personnel Management. Tax Information for Annuitants You can change it through OPM’s Retirement Services Online portal, by phone at 1-888-767-6738, or by mailing a W-4P. Several states fully exempt federal pension income; others exempt part of it. Check yours before your first payment lands.