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FERS Annuity Formula:
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The FERS (Federal Employees Retirement System) retirement annuity is a defined benefit pension that provides lifetime income to eligible federal employees upon retirement. It's calculated based on your high-3 average salary and years of creditable service.
The calculator uses the FERS annuity formula:
Where:
Explanation: The formula calculates your annual retirement benefit by multiplying your high-3 average salary by 1% for each year of service.
Details: Accurate annuity calculation is crucial for retirement planning, helping federal employees understand their expected retirement income and make informed decisions about their retirement timeline and financial future.
Tips: Enter your high-3 average salary in USD and your total years of creditable service. Both values must be positive numbers.
Q1: What is included in the high-3 average salary?
A: The high-3 average includes your basic pay from your highest 3 consecutive years of federal service. It does not include bonuses, overtime, or allowances.
Q2: Are there different multipliers for different ages?
A: Yes, employees who retire at age 62 or later with at least 20 years of service receive a 1.1% multiplier instead of 1%.
Q3: How is part-time service calculated?
A: Part-time service is credited based on the proportion of full-time hours worked, but the high-3 salary is based on the full-time equivalent rate.
Q4: What other factors affect FERS annuity?
A: Other factors include retirement age, type of retirement (optional, early, disability), and any applicable reductions for survivor benefits.
Q5: Is the FERS annuity adjusted for inflation?
A: Yes, FERS annuities receive cost-of-living adjustments (COLAs) based on the Consumer Price Index, though the timing and amount vary by retirement type and age.