What does the break-even calculator measure?

It calculates the extra annual gross salary a private-sector job must pay � on top of your federal salary � to compensate for the FERS pension and FEHB retiree health subsidy you would lose by leaving federal service early. It intentionally excludes TSP match and Social Security, which are commonly available at private jobs.

Why does the break-even premium rise as I get closer to retirement?

Each year you stay, your deferred pension grows so the total benefit loss shrinks � but the number of years you have to save for that loss shrinks faster. A smaller gap crammed into fewer years means a higher annual savings requirement. FEHB is all-or-nothing regardless of tenure, so it must be fully replaced in whatever time remains.

How is the break-even number calculated?

The calculator values the lost pension and FEHB streams at retirement using present-value discounting, then back-solves for the flat annual pre-tax salary premium needed to accumulate that amount by retirement, invested at your private-sector return rate. Year-by-year marginal tax rates are applied during retirement.

Federal to Private Sector Break-Even Calculator � HighThree

Private Sector Break-Even

If you leave federal service before retirement, you walk away from your FERS annuity and your FEHB retiree health subsidy � the two benefits private employers cannot replicate. How much extra salary would make you whole for those, on top of a comparable private offer?

Scope note: this calculation intentionally excludes TSP agency match and Social Security. Both are routinely offered at good private jobs � double-counting them would inflate the break-even number. Compare 401(k) match and SS separately against your specific private offer.

Break-Even Results

Net extra gross salary needed per year � after FERS contribution savings ? TSP match

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� in additional annual compensation every year from your departure until your planned retirement, invested and grown at your private-sector rate, to replicate the federal benefits you walk away from.

Minimum private compensation to break even

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Your fed salary + the extra needed for lost benefits

Current fed salary at departure

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Years to grow

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Departure year

Drag the slider to see how the break-even number changes as your departure year moves earlier or later. Earlier departure = more years to replace = higher premium required.

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? Earlier�Later ?

Stay federal � Go private

What you'd receive in annual retirement income under each path.

Stay federal until retirement

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Leave at selected year, deferred pension only Not vestedFERS requires a minimum of 5 years of creditable service to qualify for a deferred annuity. With fewer than 5 years at departure, you are not vested and will not receive any deferred pension � hence $0/yr shown here.

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What you're walking away from

Present value, at the moment of departure, of the benefits lost by leaving early.

About the 401(k) match � do this comparison yourself

This is why we kept TSP match out of the break-even total.