Methodology

Unfamiliar with a term? See the full glossary ?

FERS pension

In plain English: your pension equals (average of best 3 salary years) × (years worked) × (1.0% or 1.1%). A 30-year GS-14 retiring at 62 gets roughly $50,000/year for life, inflation-adjusted.

The FERS basic benefit is a lifetime annuity. The formula is simple on its face:

The multiplier is 1.0% for most retirees, stepping up to 1.1% if the employee is at least 62 years old with 20+ years of service at retirement. We apply the 1.1% bump automatically when both conditions are met at the projected retirement date.

See the detailed FERS pension formula guide →

High-3 averaging

In plain English: the pension base is the average of your three best consecutive years of salary. For most careers, that's the final three years — so a late-career promotion has an outsized, permanent effect on your pension.

High-3 is the highest consecutive 36 months of basic pay at any point in your career. For nearly all federal careers the High-3 is the final three years — pay increases monotonically through annual raises and WGI step increases. We approximate the high-3 at any year Y as the simple average of basic pay for years Y-2, Y-1, Y.

Salary projection

Year-over-year salary grows by the federal pay raise percentage you set (default 2.0% under the conservative preset). On top of that, if you entered a grade and step, WGI increases are applied. See the 2026 GS pay scale →

See the detailed salary projection and WGI methodology →

WGI step progression

Within-grade increases follow the schedule under 5 U.S.C. § 5335. Assuming an acceptable level of performance:

• Steps 1 ? 2, 2 ? 3, 3 ? 4: every 52 weeks
• Steps 4 ? 5, 5 ? 6, 6 ? 7: every 104 weeks
• Steps 7 ? 8, 8 ? 9, 9 ? 10: every 156 weeks
• Step 10 is terminal — no further WGI within the grade

The step-to-step pay difference within a GS grade is approximately 3.33% per step (spreading the ~30% step-1-to-step-10 spread evenly). Since the tool accepts your current base pay directly rather than looking it up from the GS table, the WGI calculation is applied as a relative multiplier on top of the annual pay raise.

TSP growth model

In plain English: your TSP balance grows from investment returns on the existing balance, plus your new contributions, plus the agency match (up to 5% of salary), all capped at the IRS annual limit.

Each year we compute:

The half-year growth on new contributions approximates the average timing of payroll deposits through the year. Employee contributions are capped at the IRS 402(g) limit ($23,500 in 2025), escalated each year by your chosen TSP limit growth rate. Agency match is capped at 5% of basic pay (the full FERS match: automatic 1% + matched 4%).

Break-even model

In plain English: leaving federal service costs you a lifetime pension and retiree health coverage. The break-even is the extra annual salary a private job must pay — every year until your planned retirement — to fund a private investment account that replicates those lost benefits by retirement day.

The break-even calculator asks: if you leave federal service at year Y and go to the private sector, how much extra gross salary do you need each year until your planned retirement to replicate the lifetime value of what you walked away from?

The model has four components:

1. Lost pension. Full projected pension (if you stayed) minus the deferred pension you'd be entitled to as a separated vested employee (high-3 × YOS × 1.0%, based on your salary at departure, not at planned retirement).
2. Lost agency TSP match. 5% of each year's projected salary, from departure through planned retirement, compounded at your assumed private growth rate.
3. Lost FEHB subsidy. The employer portion of health premiums in retirement, roughly $8,000/year (adjustable), inflated and discounted over your retirement horizon.
4. Back-solve the annuity. The present value of those three at departure is the required lump sum. Grown at your private rate over the years remaining until planned retirement, we solve for the annual savings that produces that future value — then gross it up for tax drag on the additional salary.

See the detailed federal employee break-even math →

Present value of lost pension

A FERS pension is COLA-adjusted, so we value it as a growing annuity. For each year t from retirement through life expectancy:

This PV is calculated at the planned retirement year, then discounted back to the departure year at the discount rate. Default inputs: discount rate 4.0%, inflation/COLA 2.5%, life expectancy 85.

See the detailed present value of FERS pension guide →

Present value — why these defaults?

In plain English: a pension paying $50K/year starting in 20 years isn't worth $50K/year in today's money — a dollar today is worth more than a dollar later. The discount rate converts future pension dollars to today's equivalent.

4% safe withdrawal rate

TSP balance is translated into "annual retirement income" using the 4% rule (Bengen, 1994; Trinity Study, 1998). This is a long-accepted heuristic for retirement drawdown over a 30-year horizon with a balanced portfolio. It's not a promise — it's a benchmark that makes the three income sources (pension, TSP, SS) comparable on an apples-to-apples annual basis.

MRA by birth year

Your Minimum Retirement Age (MRA) — the earliest you can receive an immediate FERS pension — depends on your birth year:

With 30+ YOS, you can retire at MRA with an immediate, unreduced pension. With 10–29 YOS at MRA, the MRA+10 option applies a 5%/year penalty for each year under 62 (or you can postpone to 62 to eliminate it).

FERS Annuity Supplement

This tool does not model the FERS Annuity Supplement. If you retire before 62 under a full-career retirement, your pre-62 income is understated by the amount of this supplement.

The FERS Annuity Supplement (also called the "Special Retirement Supplement") is a monthly bridge payment for FERS employees who retire before age 62. It approximates the Social Security benefit earned during federal service and is paid from retirement until the retiree turns 62.

Eligibility:

• Retire at MRA with 30+ years of service (immediate, full retirement)
• Retire at age 60 with 20+ years of service
• Certain involuntary / VERA separations
• Must retire before age 62

Amount formula (OPM approximation):

For a 30-year employee with an estimated $2,000/month SS benefit at 62, the supplement would be approximately (30 ÷ 40) × $2,000 = $1,500/month ($18,000/year). The supplement is subject to a Social Security earnings test: if post-retirement earnings exceed ~$22,320/year (2025 limit), the supplement is reduced by $1 for every $2 earned over the limit. It ends automatically at age 62 regardless of whether you claim Social Security.

Where to get your inputs

Every number the estimator needs has a definitive source:

• Service Computation Date (SCD) — Your SF-50 (Notification of Personnel Action), box 31. Request from your agency HR portal or eOPF (Electronic Official Personnel Folder). This is the most commonly entered incorrectly — it may differ from your hire date if you have military buyback or a break in service.
• Current base pay (including locality) — SF-50 block 20, or your most recent pay stub's "basic pay" line. This is your gross salary before any deductions but including locality pay.
• GS grade and step — SF-50 boxes 17 and 18 (grade) and 19 (step). Optional but improves WGI accuracy.
• TSP balance and contribution rate — Log in to TSP.gov ?. Your balance and contribution allocation are on the dashboard.
• Social Security estimate at FRA — Create a free account at SSA.gov ?. View your "estimated benefit at full retirement age" in today's dollars — enter that number in the SS field.
• FEHB plan subsidy value — Your Leave and Earnings Statement (LES) shows the employee-share biweekly premium. The government share is typically 70–75% of the total. OPM publishes full premium tables at opm.gov/healthcare-insurance ?.

What's not yet modeled — and where to learn about it

The tool delivers accurate results for the most common FERS career profile. Several scenarios are not yet modeled. If any of these materially apply to you, treat the estimator output as a starting point and consult the linked resources or your agency HR.

• CSRS or CSRS-Offset (pre-1984 hires) — different formula, no SS offset. OPM: opm.gov/retirement-center/csrs-information
• Special provisions: Law Enforcement Officer, Firefighter, Air Traffic Controller — 1.7% multiplier, lower MRA. OPM: Special retirement provisions
• Military buyback — adds creditable service but requires a deposit. OPM: Chapter 23 of CSRS/FERS Handbook
• FERS Annuity Supplement — see the section above. Understates pre-62 income for full-career MRA retirees.
• Sick leave credit — unused sick leave converts at 1 year per 2,087 hours. Can meaningfully increase pension for long-career employees who accumulate 1,000+ hours.
• Roth vs. Traditional TSP — the model treats all TSP as pre-tax. Roth withdrawals are tax-free, which changes the retirement income tax calculation.
• Part-time service proration — affects both the High-3 (lower salary base) and YOS (partial-year credit per hour worked).

Sources