What Is FERS Retirement and How Does It Work?

The Federal Employees Retirement System, known as FERS, is the retirement plan covering most civilian federal workers hired after December 31, 1986. FERS retirement gives you three separate income sources in retirement: a government pension based on your years of service and salary, Social Security, and a Thrift Savings Plan account that works much like a 401(k). How much you collect and when you can start depends on your age at separation, how long you worked, and the choices you made about saving along the way.¹

Enrollment is automatic for eligible employees. You don’t opt in the way you might with a private employer’s plan; if you took a permanent federal civilian job after 1986, you’re in FERS.²

The Three Parts That Make Up Your Retirement Income

FERS is built to stack three income streams on top of each other. Miss one and the picture of your retirement is incomplete.

The Basic Benefit (Your Pension)

This is a defined benefit administered by the Office of Personnel Management. You get a guaranteed monthly payment for life based on a formula, not on how investments performed. The formula uses your years of service and your highest three consecutive years of basic pay, and it’s covered in detail further down.

Social Security

FERS employees pay the standard 6.2% Social Security tax and earn Social Security credits the same way private-sector workers do. You collect Social Security on top of your FERS pension starting as early as age 62. This is a major difference from the older Civil Service Retirement System that FERS replaced, where employees did not participate in Social Security at all.

Thrift Savings Plan

The TSP is a defined contribution account similar to a 401(k).³ You decide how much to contribute and how to invest it. The government adds money two ways. Your agency automatically deposits 1% of your basic pay into your TSP whether you contribute or not. Then it matches your own contributions dollar-for-dollar on the first 3% of pay, plus 50 cents on the dollar for the next 2%. Contribute at least 5% of your basic pay and you capture the full match, for a combined 5% government contribution.

For 2026, you can make regular elective deferrals of up to $24,500.⁴ If you turn 50 or older during the year, catch-up contributions of up to $8,000 bring the total to $32,500. Under a SECURE 2.0 provision, participants who turn 60, 61, 62, or 63 during 2026 get an enhanced catch-up of $11,250, for a total of $35,750. Contributions can be traditional pre-tax or Roth after-tax.

What You Pay In

Every FERS employee contributes a percentage of basic pay to the pension fund each pay period. The rate depends on when you were first hired:

Hired before January 1, 2013: 0.8% of basic pay
Hired during 2013 (FERS-RAE): 3.1% of basic pay
Hired on or after January 1, 2014 (FERS-FRAE): 4.4% of basic pay⁵

Law enforcement officers, firefighters, and air traffic controllers pay an additional 0.5% above these rates. Contributions come out of pre-tax pay automatically. The pension formula and eligibility rules are identical across all three hire-date categories; only the payroll deduction changes.⁶

When You Can Retire

FERS retirement eligibility depends on two things: your age and your years of creditable service. The system uses a Minimum Retirement Age, or MRA, that ranges from 55 to 57 depending on your birth year.⁷ For most current employees, the MRA is 56 or 57. Anyone born in 1970 or later has an MRA of 57.

Immediate Retirement

An immediate annuity begins within 30 days of separation. You qualify through any of these combinations:⁸

Age 62 with at least 5 years of service
Age 60 with at least 20 years of service
MRA with at least 30 years of service

MRA+10 Early Retirement

You can retire at your MRA with as few as 10 years of service, but the annuity is permanently reduced by 5% for every year you are under age 62 when payments start.⁹ A 56-year-old taking this option locks in a 30% cut that never goes away. There is a workaround: separate at your MRA but postpone the start of payments. Delay long enough to meet the age-60-with-20 or MRA-with-30 combination and the reduction disappears.¹⁰ The cost of postponement is that you lose FEHB coverage during the wait, though temporary continuation is available for up to 18 months at full cost.

Deferred Retirement If You Leave Early

Leave federal service before qualifying for an immediate annuity and you don’t necessarily lose your pension. With at least 5 years of creditable civilian service, you can claim a deferred annuity starting at age 62.¹¹ With at least 10 years of service, you can claim as early as your MRA, though the same 5%-per-year age reduction applies. A trap to know about: if you withdraw your FERS contributions on the way out, you forfeit the deferred annuity unless you later return to federal service and redeposit the money with interest.

Involuntary Separation

If your agency separates you through a reduction in force, you can retire earlier than the voluntary rules allow. The thresholds are age 50 with 20 years of service, or any age with 25 years. Turn down a reasonable alternative position from your agency and you lose this eligibility.

How Your Pension Is Calculated

The pension formula multiplies three numbers: your high-3 average pay, a percentage multiplier, and your years of creditable service.¹²

Your high-3 is the highest average basic pay you earned during any three consecutive years of service. Basic pay includes salary, locality adjustments, and shift differentials, but not overtime, bonuses, or awards. For most people the high-3 period covers the final three years of work, when pay peaks.

The multiplier is:

1% of high-3 per year of service, standard
1.1% of high-3 per year of service if you retire at age 62 or later with at least 20 years of service

Take an employee with 30 years of service and a high-3 of $100,000. Retire at 62 and the pension is $100,000 × 1.1% × 30 = $33,000 a year, or $2,750 a month. Retire at 60 with the same service and salary and the multiplier drops to 1%, producing $30,000 a year. Waiting to 62 is worth roughly 10% more pension for life.

Unused sick leave adds to your service time for the calculation, though it can’t be used to meet the minimum service required for eligibility. About 2,087 hours of unused sick leave translates into one additional year of service credit in the formula.¹³

The Special Retirement Supplement

Retire before age 62 with an immediate, unreduced FERS annuity and you also receive a Special Retirement Supplement. This monthly payment fills the gap between your retirement date and age 62, when Social Security first becomes available.¹⁴ The amount approximates what Social Security would pay you for your FERS-covered years alone. It ends at 62 whether you file for Social Security then or not.

You qualify by retiring at MRA with 30 years, at 60 with 20 years, or under the special-category rules. MRA+10 retirees do not get the supplement.

The supplement is subject to the same earnings test as Social Security. Work in retirement and earn more than the Social Security exempt amount and the supplement is reduced by $1 for every $2 you earn over the limit. It can be reduced to zero without touching your basic FERS pension.

Cost-of-Living Adjustments in Retirement

FERS pensions are indexed to inflation, but the formula is less generous than the one used for Social Security or CSRS. Most FERS retirees receive no cost-of-living adjustment at all until age 62.¹⁵ Special-category retirees and disability retirees are exceptions and get COLAs earlier.

Once you qualify, the COLA works this way:¹⁶

CPI increase of 2% or less: you get the full CPI figure
CPI increase between 2% and 3%: you get exactly 2%
CPI increase above 3%: you get CPI minus 1 percentage point

In high-inflation years, FERS retirees fall a step behind Social Security recipients and CSRS retirees. Over a long retirement, small annual shortfalls compound into a real loss of purchasing power, which is why the TSP side of the plan matters so much.

Special Rules for Law Enforcement, Firefighters, and Air Traffic Controllers

Law enforcement officers, firefighters, air traffic controllers, nuclear materials couriers, and customs and border protection officers retire under a different set of rules. They can retire at age 50 with 20 years of covered service, or at any age with 25 years. Air traffic controllers face mandatory retirement at age 56 unless they entered the role after age 31, in which case they must retire after 20 years of service.

The annuity formula is also enhanced. The first 20 years of covered service are calculated at 1.7% of the high-3 rather than 1%, with years beyond 20 at the standard 1% rate. An air traffic controller with 25 years and a $120,000 high-3 would receive ($120,000 × 1.7% × 20) + ($120,000 × 1% × 5) = $46,800 a year, meaningfully more than a standard FERS employee with identical salary and tenure.

Military Service Credit

Active-duty military service performed after 1956 can count toward your FERS retirement, but only if you make a deposit. The deposit is 3% of your military basic pay for the service period, plus interest if you don’t pay within three years of being hired as a civilian.¹⁷ Skip the deposit and your military years still count for eligibility, but they drop out of the annuity calculation when you hit age 62 and become eligible for Social Security. That produces a sudden, permanent cut in your pension check. Paying the deposit avoids this, and paying it early keeps the interest down.

Survivor, Disability, and Insurance Protections

FERS provides several safety nets that go beyond the retirement annuity itself.

If you die while employed with at least 18 months of civilian service, your spouse receives 50% of your final salary (or high-3, if higher) plus a one-time payment of $43,800.53 for deaths on or after December 1, 2025.¹⁸ With at least 10 years of service, your spouse also receives a continuing annuity equal to 50% of your earned pension. For retirees, the default election is a survivor annuity of 50% of your unreduced pension, funded by a reduction in your own monthly check. A 25% option is available, and you can waive coverage entirely only with your spouse’s written consent. The election is made at retirement and is generally irreversible.¹⁹

Disability retirement is available with as little as 18 months of creditable civilian service if you become unable to perform your duties because of a condition expected to last at least a year. You must also apply for Social Security disability benefits and show that your agency can’t reassign you to a comparable vacant position. The benefit starts at 60% of your high-3 in year one, drops to 40% until age 62, and then converts to a regular FERS annuity as if you had kept working during the disability period.²⁰

Federal Employees Health Benefits (FEHB) coverage can continue into retirement, but only if you were continuously enrolled for the five years of service immediately before you retire.²¹ Voluntarily canceling FEHB even briefly resets that clock, which catches out employees who dropped coverage for a stretch and didn’t realize what they were giving up. Once you retire and stay enrolled, the government keeps paying the same share of your premium it paid while you were working. Federal Employees’ Group Life Insurance can also continue, with cost and coverage changing as you age. Keeping FEHB into retirement is one of the more valuable pieces of the FERS package, particularly in the years before Medicare eligibility at 65.

1
OPM.gov. Federal Employees Retirement System (An Overview of Your Benefits) RI 90-1
2
Office of the Law Revision Counsel. 5 USC 8402 – Federal Employees Retirement System; Exclusions
3
The Thrift Savings Plan (TSP). About the Thrift Savings Plan (TSP)
4
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living
5
The White House. Section 32 – Personnel Compensation, Benefits, and Related Costs
6
U.S. Customs and Border Protection. Federal Employee Retirement System (FERS)
7
U.S. Office of Personnel Management. Eligibility
8
Office of the Law Revision Counsel. 5 USC 8412 – Immediate Retirement
9
U.S. Office of Personnel Management (OPM). What Is a Minimum Retirement Age (MRA) Plus 10 Annuity Under the Federal Employees Retirement System (FERS)
10
U.S. Office of Personnel Management. What Happens if I Postpone the Minimum Retirement Age (MRA) Plus 10 Annuity
11
OPM.gov. Types of Retirement
12
U.S. Office of Personnel Management. Computation
13
U.S. Office of Personnel Management. Creditable Service
14
OPM.gov. Chapter 51 – Retiree Annuity Supplement
15
U.S. Office of Personnel Management. Learn More About Cost-of-Living Adjustments (COLA)
16
U.S. Office of Personnel Management. How Is the Cost-of-Living Adjustment (COLA) Determined
17
U.S. Office of Personnel Management. Service Credit
18
U.S. Office of Personnel Management. Survivors
19
Office of the Law Revision Counsel. 5 USC 8442 – Rights of a Widow or Widower
20
Office of the Law Revision Counsel. 5 USC 8451 – Disability Retirement
21
U.S. Office of Personnel Management. Insurance FAQs