Originally aired on KAOX, KID, KNRS, and KSL

How to Calculate Your FERS Pension: A Step-by-Step Guide for 2026

Published: April 24, 2026 Author: Mike Stevens, Capital Wealth

If you're a federal employee nearing retirement, few numbers matter more than your FERS annuity. Your pension determines your baseline retirement income for the rest of your life — yet many federal employees reach their retirement date without ever running the math themselves.

The good news: the FERS formula is public, transparent, and straightforward. In this guide, we'll walk you through exactly how to calculate your FERS pension using the same rules OPM uses, with 2026 salary examples so you can follow along with your own numbers.

If you'd rather skip the math, our FERS Retirement Calculator does all four steps below automatically.

The FERS Pension Formula

Every FERS annuity starts with the same equation:

Annual Pension = High-3 Average Salary × Years of Creditable Service × Multiplier

Three variables. That's it. But each one has nuances that can move your annual pension by thousands of dollars, and every federal employee should understand how each piece works before setting a retirement date.

Step 1: Calculate Your High-3 Average Salary

Your high-3 is the highest average basic pay you earned during any 36 consecutive months of federal service. For most federal employees, that's the final three years before retirement — but not always.

What counts:

• Base salary
• Locality pay

What does not count:

• Overtime
• Bonuses and awards
• Premium pay
• Cash incentives

Important: If you took a lower-paying position late in your career — for example, stepping down from a GS-14 supervisory role to a GS-13 to reduce stress before retirement — OPM looks at every possible 36-month window in your career history and uses whichever one produces the highest average. Your high-3 might come from an earlier period.

Example

A GS-13 Step 10 in Washington, DC earning $138,620 in 2024, $143,770 in 2025, and $148,920 in 2026 has a high-3 of:

($138,620 + $143,770 + $148,920) ÷ 3 = $143,770

Step 2: Add Up Your Creditable Service

Your creditable service includes every period of federal civilian employment covered by FERS deductions, plus several additions most employees forget to count:

• All time in FERS-covered positions where retirement deductions were withheld
• Military service (if you complete a military service deposit, often called a "buyback")
• Unused sick leave, converted to additional service credit at retirement
• Certain periods of temporary or intermittent federal employment, if deposits are made

The Sick Leave Bonus

This is the most commonly missed part of the calculation. OPM converts unused sick leave into additional creditable service at a rate of 2,087 hours per year.

Unlike annual leave — which is paid out as a lump sum when you retire — sick leave directly increases your pension for the rest of your life. Over a 25-year retirement, 1,000 unused hours can be worth $15,000 to $30,000 in additional lifetime pension, depending on salary and multiplier.

Step 3: Determine Your Multiplier

The multiplier depends on your age at retirement and your employee category.

1% — Standard Multiplier

Applies to most FERS employees who retire:

• Before age 62, regardless of years of service
• At age 62 or later with fewer than 20 years of service

1.1% — Enhanced Multiplier

Applies if you retire at age 62 or later with at least 20 years of creditable service. This represents a 10% increase over the standard multiplier.

Critical detail: You must actually be 62 at the time of retirement. If you retire at 61 and turn 62 a month later, you do not get the 1.1% multiplier. This is one of the most consequential retirement-date decisions a federal employee will make.

1.7%/1% — Special Category Multiplier

Law enforcement officers, firefighters, and air traffic controllers receive 1.7% for their first 20 years of covered service, then 1% for years beyond 20. This recognizes the demanding nature of these positions and their earlier mandatory retirement age.

Step 4: Run the Formula

Now you have everything you need. Multiply the three variables together.

Worked Example: GS-13 Retiring at 62

• High-3: $143,770
• Creditable Service: 28 years + 1,800 hours sick leave = 28.86 years
• Multiplier: 1.1% (age 62 with 20+ years)

$143,770 × 28.86 × 1.1% = $45,632 per year ($3,803 per month)

Worked Example: GS-12 Retiring at MRA + 30

• High-3: $101,200
• Creditable Service: 30 years + 1,200 hours sick leave = 30.57 years
• Multiplier: 1% (under age 62)

$101,200 × 30.57 × 1% = $30,937 per year ($2,578 per month)

Worked Example: Law Enforcement Officer Retiring at 50

• High-3: $112,500
• Creditable Service: 22 years (first 20 at 1.7%, next 2 at 1%)
• First 20 years: $112,500 × 20 × 1.7% = $38,250
• Years 21-22: $112,500 × 2 × 1% = $2,250

Total: $40,500 per year ($3,375 per month)

What the Formula Does Not Include

Your FERS pension is only one of three legs of the federal retirement stool. Your actual retirement income will also include:

• Social Security — starting at age 62 or later
• TSP withdrawals — your federal Thrift Savings Plan
• FERS Supplement — for employees who retire before age 62 with either MRA+30 or age 60+20
• Survivor benefit reduction — 5% (25% spouse benefit) or 10% (50% spouse benefit), if elected

Retiring too early, too late, or with the wrong survivor election can change your lifetime retirement income by hundreds of thousands of dollars. A complete federal retirement analysis looks at all of these income sources together, along with FEHB continuation, tax considerations, and required minimum distributions.

Run Your Own Numbers

You now have everything you need to calculate your FERS pension by hand — or you can let our FERS Retirement Calculator do it for you in under 60 seconds. Enter your high-3, years of service, sick leave balance, and planned retirement age, and you'll see your estimated annual and monthly pension, along with the impact of different survivor benefit elections.

For deeper guidance on choosing your retirement date, read our FERS Retirement planning page or schedule a federal retirement analysis with our team. We specialize in helping federal employees maximize their pension, coordinate TSP withdrawals, and time Social Security for optimal lifetime income.