If you are a federal civilian employee planning for retirement, it must be on your mind how to calculate federal retirement payment amount.  Federal Employees Retirement System (FERS) is a defined benefit program.  It means that after your retirement, you will receive a fixed monthly pension for the rest of your life.

Before you can calculate the amount of your federal retirement, you need to have these two pieces of information:

• High- three salary
• Duration of creditable service

Knowing how to calculate federal retirement and finding out how much money you can expect, will help you plan your retirement.

1. Figure out your High-three average salary.  It is your highest average basic pay during any three consecutive years. These three consecutive years are normally the last three years of service because pay normally increases with the length of the service.  Please note that the basic pay includes the basic salary and shift rate and it does not include overtime or bonuses.
2. Calculate the duration of your creditable service. Use your service computation date (SCD) to calculate the years of creditable service. SCD can be found on form SF50 (the Standard Federal form for Notification of Personnel Action).  Count the number of years, months and days of service and then convert those into years of creditable service by using the Federal Retirement Time Factor Table.
3. Compute the amount of federal retirement annuity/pension. It is calculated by multiplying together, the high-three salary, years of creditable service and the multiplier. For most people, the multiplier is 1%; however for people who retire at age 62 or over with at least 20 years of service, it is 1.1%.  For example, if your high-three salary is \$60000, years of creditable service are 20, then your federal retirement annuity/pension would be:

\$60000*20*1% = \$12000 per year

Word of Caution:

In certain instances your FERS benefits payment can be reduced, so learning about those would be of benefit to you.  If you make any of the following choices, there will be a reduction in your FERS basic annuity:

• If you have less than 30 years of service and retire before the age of 62, your federal retirement annuity/pension will be reduced by 5% for every year of service short of 62
• If you choose survivor benefits, you pension will be reduced depending upon the type of survivor benefit chosen.  For ‘full’ survivor benefits it will be reduced by 10% and for ‘reduced’ survivor benefits, 5% will be deducted from your monthly payment.