Your FERS basic annuity is 1 percent of your high-3 average salary for each year of creditable service, or 1.1 percent if you retire at age 62 or later with at least 20 years of service. Your high-3 is your highest average basic pay over any three consecutive years.
Three inputs decide it: your high-3, your years and months of service, and the multiplier your age and service earn you. That is the whole formula. What makes it feel complicated is that each input carries rules of its own: which pay counts toward the high-3, which time counts as service, and which birthday changes the multiplier.
Think of the formula as a recipe with three ingredients. Get the measurements right and the result is predictable to the dollar. This guide takes each ingredient one at a time, then runs the numbers on an example you can follow with a pencil. The pension is one leg of FERS; the FERS hub shows how it fits with Social Security and the TSP.
01What is the FERS annuity formula?
The FERS annuity formula is high-3 times years of creditable service times the multiplier, where the multiplier is 1 percent, or 1.1 percent if you separate at 62 or later with at least 20 years (OPM, retrieved 2026-10-11). The result is a yearly amount before any deductions, paid to you in monthly installments.
Service is counted in full years and full months; leftover days drop off. If you have 28 years, 7 months and 19 days, the formula uses 28 years and 7 months.
Because the formula is linear, every input moves the result in proportion. One more year of service adds one more percent of your high-3. A raise that lifts your high-3 lifts every year of service at once. And crossing into the 1.1 percent multiplier raises the whole annuity by a tenth, which is why the timing of your last day can matter more than any single raise.
- The formulaHigh-3 x years of service x 1%
- At 62 with 20+ yearsThe multiplier rises to 1.1%
- High-3Highest 3 consecutive years of basic pay, locality included
- Unused sick leaveAdded to service for the computation
- Survivor electionFull costs 10%, partial costs 5%
- MRA+10 before 62Reduced 5% for each year under 62
02What counts toward your high-3?
Your high-3 is the highest average basic pay you earned over any three consecutive years of service, and it includes locality pay but generally not overtime, bonuses, cash awards or allowances (OPM, retrieved 2026-10-11). For most people that is the final three years, but it does not have to be.
If you moved to a lower-graded job late in your career, an earlier three-year stretch can still be your high-3. OPM looks at every consecutive three-year window and uses the highest one. That protects people who step down from a supervisory job before they retire.
If you work part time, the high-3 is figured on the full-time rate of your position, and the part-time schedule shows up on the service side of the formula instead. So a part-time year does not drag down your high-3; it is prorated as service.
- Counts. Base salary, locality payment, and certain special rates that are part of basic pay.
- Does not count. Overtime, bonuses, cash awards, most allowances, and most premium pay.
- Keep records. Save your SF-50s and your leave and earnings statements for your final years in one folder.
- Check for errors. A missing step increase or a wrong locality code on an SF-50 can follow you into the computation.
When your retirement application is processed, those records are what your annuity is built from. Our SF-50 guide explains how to read the form and spot problems early.
03Which years count as creditable service?
Creditable service is the time the formula multiplies, and most of it is simple: years and months in a position covered by FERS. Four kinds of time deserve a closer look because they either add to the total, shrink it, or count only after you pay.
| Kind of time | Counts toward eligibility? | Counts in the computation? | What you need to do |
|---|---|---|---|
| Unused sick leave | No | Yes, converted to time | Nothing; it is added at retirement |
| Military service after 1956 | Yes, once the deposit is paid | Yes, once the deposit is paid | Pay a deposit, generally 3% of military basic pay, before you retire |
| Part-time service | Yes, in full | Prorated by hours worked | Nothing |
| Refunded FERS service | Yes | Only if you redeposit | Repay the refund with interest |
Sources: OPM FERS computation, service credit and creditable service pages, retrieved 2026-10-11.
Unused sick leave is the friendliest of the four. Under FERS, the hours you have not used are converted to time and added to your service for the computation. They make the annuity larger; they do not help you reach eligibility sooner. Our leave guide explains the conversion.
Military service is the one with a deadline. Active-duty time after 1956 counts under FERS only if you pay a deposit, generally 3 percent of your military basic pay, before you retire (OPM, retrieved 2026-10-11). The rate was 3.25 percent for 1999 and 3.4 percent for 2000. The military buyback guide shows how to request the figures and when interest starts.
04When does the multiplier rise to 1.1 percent?
The multiplier rises to 1.1 percent if you separate at age 62 or later with at least 20 years of service (OPM, retrieved 2026-10-11). Both conditions apply: age 62 with 19 years stays at 1 percent, and 30 years at age 61 stays at 1 percent.
On a long career that tenth of a point is real money, and it applies to every year you have worked, not only the years after 62. It is one reason a benefits review usually starts with the month you plan to leave, before anything else.
The 1.1 percent multiplier is not a bonus for the last few years. It reprices your whole career, which is why one birthday can be worth more than a promotion.
05What does a worked example look like?
Here is one career figured three ways, using the formula exactly as OPM describes it.
| Scenario | Formula | Per year | Per month |
|---|---|---|---|
| Retire at 60 with 30 years | $95,000 x 30 x 1.0% | $28,500 | $2,375 |
| Same, with a full survivor election | $28,500 less 10% | $25,650 | $2,138 |
| Work to 62 with 32 years | $95,000 x 32 x 1.1% | $33,440 | $2,787 |
Figures are before taxes, health and life insurance premiums and any COLA. The third row keeps the same high-3 for simplicity; in practice two more years of raises usually lift it. Your own annuity depends on your official service and pay records.
Look at the gap between the first and third rows: $4,940 a year. Two more years of work add two more years of service, but the bigger change is the multiplier. To run your own numbers, use the FERS pension estimator, which shows the result with and without a survivor election.
Your record, not our example
Want this run on your own numbers?
A Federal Retirement Consultant (FRC) works through your own records with you 1:1. The review is free and nothing is booked until you choose a time.
06What can make the annuity smaller, or larger?
The annuity grows with more service, a higher high-3, the 1.1 percent multiplier, unused sick leave and a paid military deposit, and it shrinks with an MRA+10 age reduction, a survivor election, unpaid refunded service and part-time proration (OPM, retrieved 2026-10-11).
- Adds to it: more years and months of creditable service.
- Adds to it: a higher high-3.
- Adds to it: separating at 62 or later with 20 years, for the 1.1 percent multiplier.
- Adds to it: unused sick leave, credited in the computation.
- Adds to it: a military deposit paid before you retire.
- Takes from it: retiring at your MRA with 10 to 29 years before 62, at 5 percent less for each year under 62.
- Takes from it: a survivor election, 10 percent for full and 5 percent for partial.
- Takes from it: refunded service that is not redeposited.
- Takes from it: part-time years, prorated in the computation.
None of these is automatically right or wrong. A survivor election costs you monthly income, and it also decides what your spouse keeps: a surviving spouse can only continue FEHB coverage if they receive a survivor annuity. If you decline the survivor election and you die first, your spouse loses eligibility for federal health coverage along with the income. The survivor benefits guide walks through the choice.
07Where does the FERS supplement fit?
The FERS supplement is a separate payment, figured outside the annuity formula, for people who retire before 62 on an immediate, unreduced annuity. It approximates the Social Security benefit you earned during federal service and bridges the gap until you turn 62.
It is subject to an earnings test if you work after retiring, and it stops at 62 whether or not you claim Social Security then. The supplement is paid on top of the basic annuity, not instead of it. If you plan to leave before 62, it is often the piece that decides whether the numbers work in the years before Social Security. The supplement guide covers the computation and the earnings test.
08When can the annuity start?
The annuity can start once you meet an age and service combination: your Minimum Retirement Age with 30 years, 60 with 20, 62 with 5, or your MRA with 10 at a reduction (OPM, retrieved 2026-10-11). Your MRA depends on the year you were born. It is 55 for anyone born before 1948, rises in steps for people born between 1948 and 1969, and is 57 for anyone born in 1970 or later.
| Age | Years of service | Annuity |
|---|---|---|
| Your MRA | 30 | Unreduced |
| 60 | 20 | Unreduced |
| 62 | 5 | Unreduced (1.1% with 20+ years) |
| Your MRA | 10 | Reduced 5% per year under 62 |
Source: U.S. Office of Personnel Management, FERS eligibility, retrieved 2026-10-11.
The eligibility guide has the full MRA table and explains deferred and postponed retirement, which change when an annuity can begin if you leave early.
09What happens to the annuity after it starts?
After it starts, your annuity is paid monthly for life, is mostly taxable, and grows with cost-of-living adjustments once you qualify for them. Most regular FERS retirees do not receive COLAs until 62; disability retirees, survivor annuitants and special-provision retirees are exceptions (OPM, retrieved 2026-07-05).
FERS COLAs follow the diet-COLA rule. When inflation is under 2 percent, FERS matches the full COLA. Between 2 and 3 percent, FERS is capped at 2 percent. Above 3 percent, FERS gets the full figure minus one point. The COLA first paid in January 2026 was 2.0 percent for FERS and 2.8 percent for CSRS (OPM, retrieved 2026-07-05). The COLA guide has the full history.
On taxes, the share of each payment that returns your own after-tax retirement contributions comes back to you tax free over time; the rest is federal taxable income, and states treat federal pensions differently. The taxes guide covers withholding and state rules.
10Moving forward with your annuity numbers
The FERS formula is not a mystery. It is three numbers multiplied together. The work is in getting each number right: confirming your high-3, making sure every month of service is on the record, paying any military deposit in time, and choosing a retirement month that earns the best multiplier you can reach.
FFEBA is an education organization. If you want someone to look at your own numbers, we can match you with a Federal Retirement Consultant (FRC), a professional trained on federal benefits. The FRC designation is listed with FINRA. The first review is free, nothing is booked until you choose a time, and you are never obligated to work with anyone we introduce. Get matched with an FRC.
11Questions federal employees ask
Does overtime count toward my high-3?
Generally no. The high-3 is built from basic pay, which includes your locality payment but not overtime, bonuses, cash awards or allowances.
Does unused sick leave count?
Yes, for the computation. Under FERS, unused sick leave is converted to time and added to your service when the annuity is figured. It does not help you reach retirement eligibility.
What if I retire at 62 with fewer than 20 years?
You can retire at 62 with as little as 5 years of service and receive an unreduced annuity, but the multiplier stays at 1 percent. The 1.1 percent multiplier needs both age 62 and at least 20 years.
Is the FERS annuity taxed?
Most of it is. The share that returns your own after-tax retirement contributions comes back to you tax free over time; the rest is federal taxable income, and states treat federal pensions differently.
Do I get a COLA on my FERS annuity?
Generally not before 62. Regular FERS retirees do not receive cost-of-living adjustments until they reach age 62. Exceptions apply to disability retirees, survivor annuitants, and special provision retirees such as law enforcement officers, firefighters, and air traffic controllers.
What is the average FERS pension?
An average tells you little about your own check, because the formula depends entirely on your high-3, your years of service and your age at separation. Run your own inputs through the formula: high-3 times years times 1 percent, or 1.1 percent at 62 with 20 years.
Reviewed by the FFEBA education team. Last reviewed October 2026.
Sources
- U.S. Office of Personnel Management, FERS computation, retrieved 2026-10-11
- U.S. Office of Personnel Management, FERS eligibility, retrieved 2026-10-11
- U.S. Office of Personnel Management, FERS service credit (military deposit rates), retrieved 2026-10-11
- U.S. Office of Personnel Management, CSRS/FERS Handbook, retrieved 2026-07-05
- U.S. Office of Personnel Management, cost-of-living adjustments, retrieved 2026-07-05
- U.S. Office of Personnel Management, FEHB in retirement (survivor and FEHB link), retrieved 2026-07-05
Every government figure on this page carries its source and retrieval date. Worked examples are educational estimates on the assumptions shown, not a projection of any person's benefit. FFEBA is an education organization, not a financial advisor.
