To calculate your FERS retirement annuity, multiply your High-3 average salary by your years of creditable service, then multiply by 1% — or by 1.1% if you retire at age 62 or later with at least 20 years of service. That single equation produces your gross yearly annuity. Everything else in the calculation is either an input (High-3, service time) or a subtraction (early-retirement penalty, survivor election, taxes, insurance premiums).
The Core Formula
High-3 average salary × years of creditable service × multiplier = annual annuity.1U.S. Office of Personnel Management. FERS Information – Computation
Divide the result by 12 for the gross monthly figure. That number is what your annuity starts at before any reductions come out. The three inputs each require some work to pin down accurately, and small errors in any of them compound over a long retirement.
Finding Your High-3 Average Salary
Your High-3 is the highest average basic pay you earned during any three consecutive years of federal service. For most retirees those are the final three years, but if you moved to a lower-graded position late in your career, an earlier three-year window may produce a higher number. Check both.
Basic pay includes your General Schedule salary, locality pay, and any other pay from which retirement deductions were withheld, such as shift differentials. It does not include overtime, bonuses, or most special allowances.1U.S. Office of Personnel Management. FERS Information – Computation
To reconstruct the number, pull your Standard Form 50 (SF-50) notifications from your electronic Official Personnel Folder. Each SF-50 documents the grade, step, and total salary tied to a personnel action, so lining them up in sequence gives you every pay rate and the date each rate started and ended.2U.S. Government Publishing Office. Guide to Understanding Your Notification of Personnel Action Form, SF-50 Weight each rate by the number of days it was in effect during the 36-month window, sum those weighted amounts, and divide by three.
Counting Your Creditable Service
Add up total years, months, and days from your federal hire date to your retirement date. Three adjustments affect the total.
Leave without pay. Up to six months of LWOP in a calendar year counts in full. Anything beyond six months in a single calendar year receives no credit, so subtract that excess time from your total.3U.S. Office of Personnel Management. Effect of Extended Leave Without Pay (LWOP) on Federal Benefits and Programs
Unused sick leave. Your sick leave balance at retirement converts to additional service credit using OPM’s 2,087-hour work-year table, where roughly 174 hours equals one additional month of service.4United States Office of Personnel Management. Retirement Facts 8 – Credit for Unused Sick Leave This converted time raises your annuity, but it cannot be used to meet the minimum service requirement for retirement eligibility. If you need 30 years to retire at your MRA, a sick leave balance will not get you there.
Military service buyback. Active-duty military service performed before your civilian career can be credited if you make a deposit to OPM equal to 3% of your military base pay for each period of active duty. Pay it within roughly three years of your FERS-covered hire date and no interest accrues; after that, interest compounds annually. Skipping the buyback means those years never enter your annuity formula.
Which Multiplier Applies
Most FERS retirees use a 1% multiplier. If you separate at age 62 or later with at least 20 years of creditable service, the multiplier increases to 1.1%.5Office of the Law Revision Counsel. 5 USC 8415 – Computation of Basic Annuity
The extra tenth of a percent compounds across every year of service. On a $90,000 High-3 with 25 years, it adds $2,250 a year for life.
Law enforcement officers, firefighters, and air traffic controllers use a different formula: 1.7% for the first 20 years, then 1% for each year beyond that.5Office of the Law Revision Counsel. 5 USC 8415 – Computation of Basic Annuity If you are not in one of those categories, the standard 1% or 1.1% applies.
Two Worked Examples
Assume you are 60, have 25 years and 6 months of creditable service (sick leave included), and your High-3 is $92,000. You are under 62, so the 1% multiplier applies:
$92,000 × 25.5 × 0.01 = $23,460 per year, or $1,955 per month gross.
Now assume you wait until 62 with 27.5 years of service. You cross the 62-with-20 threshold, so the multiplier rises to 1.1%:
$92,000 × 27.5 × 0.011 = $27,830 per year, or about $2,319 per month gross.
Two extra service years plus the higher multiplier produce $4,370 more per year. Over 25 years of retirement that gap grows substantially.
Reductions That Cut Your Annuity
The MRA+10 Age Penalty
If you retire at your Minimum Retirement Age with at least 10 but fewer than 30 years of service, your annuity is permanently reduced by 5% for every year you are under 62 at retirement, prorated to 5/12 of one percent per month.6U.S. Office of Personnel Management. What Is a Minimum Retirement Age (MRA) Plus 10 Annuity Under FERS A 57-year-old retiring with 15 years faces a 25% cut for life.
You can eliminate the reduction by postponing the start of your annuity: to age 60 if you have at least 20 years of service, or to age 62 regardless of service length.7U.S. Office of Personnel Management. Eligibility You receive no annuity payments during the postponement.
Survivor Benefit Election
A full survivor annuity pays your spouse 50% of your unreduced annuity after your death and costs you a 10% reduction while you are alive. A partial survivor annuity pays 25% and costs 5%.8U.S. Office of Personnel Management. How Is the Reduction Calculated Married retirees default to the full survivor benefit unless the spouse consents in writing to less.
Applying Reductions in Order
Reductions stack. Start with the gross annuity, apply the MRA+10 age penalty first, then take the survivor reduction off what remains.
Take the $23,460 gross annuity from the first example. If that retiree were 57 (five years under 62) with a full survivor election, the sequence would be:
- $23,460 − 25% ($5,865) = $17,595
- $17,595 − 10% ($1,760) = $15,835 per year
That drops the monthly figure from $1,955 gross to about $1,320.
Add the Special Retirement Supplement If You Qualify
If you retire before age 62 on an immediate, unreduced annuity — meaning MRA+30 or age 60 with 20 years — you also receive a Special Retirement Supplement that approximates the Social Security benefit earned during your federal career. The rough formula is (FERS service years ÷ 40) × your estimated Social Security benefit at 62. Only actual FERS service years count; sick leave conversions and military buyback time are excluded.
The supplement ends the month you turn 62 and is subject to a Social Security-style earnings test. In 2026, the exempt earnings amount is $24,480, and $1 is withheld from the supplement for every $2 you earn above that.9Social Security Administration. Exempt Amounts Under the Earnings Test A second career at high pay can wipe out the supplement.
What You Actually Take Home
Federal Tax on the Annuity
Most of your annuity is taxable, but a small portion is not. Your after-tax contributions during your career (0.8% of basic pay if hired before 2013, 3.1% if hired in 2013, 4.4% if hired in 2014 or later) come back to you tax-free over a fixed number of monthly payments.
The IRS Simplified Method in Publication 721 sets the divisor by your age at retirement. Between ages 61 and 65 without a survivor annuity, the divisor is 260; with a survivor election, it is based on the combined ages of you and your spouse.10Internal Revenue Service. Publication 721 – Tax Guide to U.S. Civil Service Retirement Benefits Divide your total after-tax contributions by that number to get the monthly tax-free amount. Contributions of $45,000 with a divisor of 260 produce a $173.08 monthly exclusion. Once you have fully recovered your contributions, the entire annuity becomes taxable.
Health and Life Insurance Deductions
If you carried Federal Employees Health Benefits coverage for the five years immediately before retirement, you can keep it as a retiree. The government continues to pay the same share it did during your career — the lesser of 72% of the weighted-average premium or 75% of your specific plan’s premium. In 2026 the maximum government contribution is $703.65 per month for self-only and $1,685.73 for self-and-family coverage.11U.S. Office of Personnel Management. Premiums Your share comes directly out of your annuity before it reaches your account.
Federal Employees Group Life Insurance premiums also come out of the annuity, and they rise sharply after age 65 unless you elected a reduction option (75%, 50%, or no reduction) before retirement. Between FEHB and FEGLI, insurance can pull several hundred dollars a month from your gross annuity.
Are You Eligible for an Immediate Annuity
The calculation only pays out when you actually qualify. FERS offers four paths to an immediate annuity:
- MRA with 30 years of service, unreduced
- Age 60 with 20 years, unreduced
- Age 62 with 5 years, unreduced
- MRA with 10 years, reduced by 5% for each year under 62
Your MRA is 57 if you were born in 1970 or later, 56 if born between 1953 and 1964, with lower MRAs down to 55 for earlier birth years.7U.S. Office of Personnel Management. Eligibility
If you leave federal service before hitting any of these, you may still qualify for a deferred annuity starting at 62 (or at your MRA with a reduction), provided you completed at least five years of creditable civilian service and left your retirement contributions in the system.7U.S. Office of Personnel Management. Eligibility The same formula applies; only the start date changes.
Verify Every Input Before You File
The formula is simple. The inputs are not. A single miscounted year of service or an SF-50 you missed can shift your annuity by thousands of dollars a year, and the reduction, once locked in, follows you for life. Before filing your retirement paperwork, request a formal annuity estimate from your agency’s human resources office and cross-check the High-3, total service, sick leave hours, and any military deposit against your own SF-50s and Leave and Earnings Statements. Fixing an error now costs a phone call. Fixing one after you retire is much harder.