How FERS retirement works comes down to three income streams stacked together: a government pension called the Basic Benefit, Social Security, and a personal investment account called the Thrift Savings Plan. Federal civilian employees hired after 1983 are generally covered by the Federal Employees Retirement System, and what you ultimately collect depends on your years of service, your salary near the end of your career, the age at which you retire, and how much you save in the TSP along the way.
The Pension: What You Pay In and What You Get Back
The Basic Benefit is a traditional monthly annuity paid for life once you retire. You pay a small percentage of your basic pay into it every pay period, your agency contributes as well, and OPM manages the fund. Your share depends on when you were first hired: 0.8% for most employees hired before 2013, roughly 3.1% to 3.3% for those hired during 2013, and 4.4% for those hired in 2014 or later. All three groups earn the same benefit under the same formula. These contributions come on top of the 6.2% Social Security tax and 1.45% Medicare tax.
The formula itself has two inputs: your high-3 average salary and your years of creditable service.1Office of the Law Revision Counsel. 5 USC 8415 – Computation of Basic Annuity Your high-3 is the highest average of your basic pay over any three consecutive years — usually the last three before retirement.2Office of the Law Revision Counsel. 5 USC 8401 – Definitions Basic pay includes locality pay but excludes overtime, bonuses, and awards.
The standard multiplier is 1% per year of service. Twenty-five years at a $100,000 high-3 produces a $25,000 annual pension. A higher multiplier of 1.1% applies if you retire at 62 or later with at least 20 years of service, turning that same 25-year example into $27,500.
Two adjustments can quietly change the total. Unused sick leave at retirement converts to additional months of service in the formula, using a 2,087-hour work year as the conversion basis.3U.S. Office of Personnel Management. Creditable Service Sick leave can only pad the multiplier — it can’t be used to meet eligibility thresholds and doesn’t affect the high-3. Military service can also count, but only if you make a deposit equal to 3% of your military basic pay for each period served, plus interest that begins two years after your first FERS-covered hire. The 2026 interest rate on unpaid military deposits is 4.25%, compounded annually.4U.S. Office of Personnel Management. Benefits Administration Letter 26-301
Social Security
FERS employees pay into Social Security the same way private-sector workers do and earn the same credits. If you leave federal service, those credits go with you. You can claim benefits starting at 62 with a reduction, or wait until your full Social Security retirement age for the full amount. This is a real difference from the older Civil Service Retirement System, which did not include Social Security coverage.
The Thrift Savings Plan
The TSP is the piece of FERS you actively control, and it functions much like a 401(k). Your agency deposits an amount equal to 1% of your basic pay into your TSP every pay period whether or not you contribute anything yourself.5The Thrift Savings Plan (TSP). Contribution Types If you do contribute, your agency matches dollar-for-dollar on the first 3% of pay, then 50 cents on the dollar for the next 2%.6U.S. Government Publishing Office. Benefits – New Employees – Thrift Savings Plan Contributing 5% of your pay gets you the full 5% agency match. Contributing less means leaving money behind that will never be recovered.
For 2026, you can contribute up to $24,500 of your own pay, split between traditional (pre-tax) and Roth (after-tax) as you like. Catch-up contributions of $8,000 are available at age 50 or older, with a higher $11,250 catch-up limit for anyone who turns 60, 61, 62, or 63 during the year.7Thrift Savings Plan (TSP). 2026 TSP Contribution Limits Agency automatic and matching contributions do not count against these limits.
Once you separate from service, you can take partial withdrawals (minimum $1,000), set up monthly, quarterly, or annual installment payments, purchase a life annuity through the TSP’s vendor (minimum $3,500), take the entire balance, or combine these options.8Thrift Savings Plan (TSP). Withdrawals in Retirement Installments keep your money invested and can be adjusted over time. A TSP annuity purchase locks in guaranteed lifetime payments but can’t be changed once processed.
When You Can Retire With a Full Pension
FERS offers three main pathways to an immediate, unreduced annuity:9Office of the Law Revision Counsel. 5 USC 8412 – Immediate Retirement
- Your Minimum Retirement Age with 30 years of service.
- Age 60 with 20 years of service.
- Age 62 with 5 years of service.
Your MRA depends on your birth year. It is 55 for anyone born before 1948, rises gradually for 1948 through 1952 births, holds at 56 for 1953 through 1964, rises again for 1965 through 1969, and reaches 57 for anyone born in 1970 or later.10U.S. Office of Personnel Management. Eligibility Five years of civilian service is the vesting point — reach that and you have a pension entitlement, though age 62 is the earliest you can start collecting without a reduction on that minimum service.
The MRA+10 Option
If you reach your MRA with at least 10 years of service but fewer than 30, you can retire immediately, but your annuity is permanently reduced by 5% for each year you are under 62. Retiring at 56 with an MRA of 56 means a 30% permanent cut. You can shrink or eliminate that reduction by postponing the start of your annuity payments until closer to 62, but you receive no pension income during the postponement.
Deferred Retirement
If you leave federal service before meeting any immediate-retirement criteria but have at least five years of civilian service, you can claim a deferred annuity later. With 5 to 9 years, payments start at 62. With 10 or more years, you can begin at your MRA, subject to the same 5%-per-year reduction if you start before 62.11U.S. Office of Personnel Management. Types of Retirement Fewer than five years means no pension, though you can leave your contributions with OPM in case you return to federal service.
The Special Retirement Supplement
If you retire before 62 on an immediate, unreduced annuity — meaning MRA with 30 years, age 60 with 20 years, or certain special-provision retirements — FERS pays a temporary supplement designed to approximate the Social Security benefit you can’t yet collect.12Office of the Law Revision Counsel. 5 USC 8421 – Alternative Entitlement to Annuity Supplements OPM estimates your Social Security benefit at 62, then multiplies it by your FERS years divided by 40. Thirty years of service against a $2,000 estimated Social Security benefit produces a supplement of about $1,500.
The supplement is subject to an earnings test. For 2026, wages or self-employment above $24,480 reduce the supplement by $1 for every $2 earned over the limit. Passive income like TSP withdrawals, dividends, and rent does not count. The supplement ends the month before you turn 62, whether or not you claim Social Security at that point.
Cost-of-Living Adjustments
FERS pensions receive annual COLAs with two important limits. First, COLAs generally don’t begin until you reach 62, even if you retired years earlier.13Office of the Law Revision Counsel. 5 USC 8462 – Cost-of-Living Adjustments A pension that starts at 56 stays flat in nominal terms for six years while inflation chips away at it. Disability retirees and survivor annuitants are the main exceptions.
Second, the FERS COLA is capped when inflation runs high:14U.S. Office of Personnel Management. How Is the Cost-of-Living Adjustment (COLA) Determined?
- CPI of 2% or less: your pension gets the full CPI increase.
- CPI between 2% and 3%: your COLA is capped at 2%.
- CPI above 3%: your COLA equals CPI minus 1 percentage point.
In a 5% inflation year, your FERS pension rises 4%. Over a long retirement, those shortfalls compound, which is part of why a well-funded TSP matters — the investment side isn’t subject to the same cap.
Decisions You Lock In at Retirement
Two elections at retirement are hard or impossible to undo later. The first is the survivor annuity. You can provide your spouse with a full survivor benefit worth 50% of your unreduced pension, a partial benefit of 25%, or none at all. The 50% election permanently reduces your own monthly annuity by 10%; the 25% election reduces it by 5%. A married retiree who wants less than the full 50% survivor benefit needs written spousal consent. The reduction to your annuity generally continues for life even if your spouse dies first, unless you formally request removal.
The second is Federal Employees Health Benefits coverage. To carry FEHB into retirement, you must have been continuously enrolled in any FEHB plan for the five years immediately before your retirement date, or since your first opportunity to enroll if that period is shorter.15Office of the Law Revision Counsel. 5 USC 8905 – Election of Coverage A gap in that five-year window can disqualify you from retiree health coverage entirely, so check your enrollment history well before you file.
How You Apply
FERS employees apply for immediate retirement using Standard Form 3107, available from your agency’s HR office or OPM.16U.S. Office of Personnel Management. Application for Immediate Retirement (Federal Employees Retirement System) The form captures your service history, survivor election, insurance enrollments, and payment preferences. If you’re crediting military service, bring a DD-214 for each period of active duty. Current employees submit through their agency’s HR office, which verifies service and insurance before forwarding the package to OPM. Separated employees mail it to OPM directly.
Once OPM has your file, you begin receiving interim annuity payments — typically 60% to 80% of your estimated net annuity — while your case is finalized.17U.S. Office of Personnel Management. Retirement Quick Guide The interim period can run several months. When adjudication is complete, OPM issues a lump-sum payment covering the gap between interim payments and your final annuity, and your regular monthly annuity begins.