Starting salary
The model starts with your current basic pay including locality. For GS employees, this is usually the annual salary shown on your SF-50 or pay stub after locality is included. Overtime, awards, and bonuses are not part of the basic salary projection because they generally do not count toward high-3.
Annual pay raise assumption
Each year, salary grows by the pay raise percentage you choose. This is a planning assumption, not a prediction. A conservative scenario may use 2%, while a more optimistic scenario may use higher pay growth. The goal is not to forecast Congress perfectly; it is to stress-test retirement outcomes under reasonable assumptions.
WGI step progression
If you enter grade and step, the tool can approximate within-grade increases. GS employees generally advance from steps 1 to 4 after 52-week waits, steps 4 to 7 after 104-week waits, and steps 7 to 10 after 156-week waits, assuming acceptable performance.
| Step range | Waiting period | Planning effect |
|---|---|---|
| 1?2?3?4 | 52 weeks | Fast early progression |
| 4?5?6?7 | 104 weeks | Moderate progression |
| 7?8?9?10 | 156 weeks | Slow late progression |
| 10 | Terminal | No further WGI |
WGI matters most for employees not already at step 10. A GS-13 step 3 has several expected step increases ahead. A GS-14 step 10 has no further within-grade increases unless promoted or moved to another pay system.
Locality pay
Current locality is embedded in the salary you enter. If you plan to move to a different locality before retirement, salary projection becomes more complex. A higher locality can raise high-3 if it occurs during the final 36 months. A lower locality can make an earlier 36-month period your true high-3.
High-3 impact
Projected salary feeds the high-3 calculation. HighThree approximates high-3 as the average of the best recent salary years in the projected path. This is close for steadily rising full-time careers. It may be less accurate for part-time work, downgrades, or unusual pay histories.
Limitations
The model does not predict promotions automatically. If you expect a promotion, update your salary assumptions or run a separate scenario. It also does not model special salary rates, law enforcement premium rules, or part-time proration in full detail. For unusual careers, use the model as a planning approximation and compare it to agency retirement estimates.
Promotion scenarios
Promotions are one of the biggest reasons to run multiple salary scenarios. A move from GS-13 to GS-14 late in a career can raise current salary, future TSP contributions, agency match, and high-3. But the timing matters. A promotion one month before retirement has little effect on high-3. A promotion three years before retirement can fully flow into the 36-month average.
Because promotions are not automatic, HighThree does not assume them. That keeps the default model conservative. If you are on a clear career ladder or have a high-confidence promotion path, run one baseline scenario without promotion and one upside scenario with the higher salary. The gap between those outputs shows how much of your retirement forecast depends on career advancement rather than standard pay progression.
Step 10 and plateau risk
Employees at step 10 can hit a salary plateau if they remain in the same grade. Annual pay raises may continue, but within-grade increases stop. This can flatten projected high-3 growth compared with employees still moving through steps. A step-10 employee who expects no promotion should be cautious about assuming salary growth beyond government-wide raises and locality changes.
Plateau risk matters for younger employees too. If you will reach step 10 long before retirement, later high-3 growth may depend on promotion, locality, or annual raises. Modeling a constant raise percentage is useful, but it may hide the difference between step-driven growth and policy-driven raises.
Why salary projection affects break-even
Break-even calculations compare a federal stay path with a private-sector departure path. If federal salary is projected to rise, the lost pension and TSP match also rise. A higher future high-3 increases the value of staying. That means salary projection assumptions can materially change the private-sector premium needed to leave whole.
For example, an employee expecting a promotion in two years may need a larger private offer today than an employee with no expected promotion. Leaving before the promotion gives up not only the higher salary but also its effect on high-3 and pension value.