FERS Pension Explained.
If you are a federal employee, your FERS pension is the foundation of your retirement income — yet most federal employees reach their retirement date without ever running their own numbers. In this 92-minute masterclass, federal benefits expert Ann Werts walks through the FERS pension end to end: when you can actually retire, how OPM calculates your pension, what sick leave is worth at retirement, and how to protect your spouse with a survivor benefit.
What you’ll learn
Topics covered in the 92-minute webinar.
- The records every federal employee should be keeping — and the two times you should download your eOPF.
- The three FERS systems (original FERS, FERS-RAE, FERS-FRAE) — and why your contribution rate does not change your pension.
- When you can actually retire on a full, unreduced annuity — the MRA, age 60, and age 62 paths.
- Your options if you cannot wait — MRA + 10 (reduced) and postponed retirement (penalty-free, with trade-offs).
- How OPM calculates your pension: high-3 average salary, creditable service, the 1% vs 1.1% multiplier.
- How unused sick leave converts to creditable service — and the math that turns leftover days into another full month.
- Survivor benefits, FEHB after death, and the elections you make on your retirement paperwork.
- The best day to retire — why so many federal employees retire on December 31.
Five things worth keeping in front of you
The takeaways from 92 minutes of FERS, in plain language.
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1
Keep your own records
Download your eOPF — every SF-50 and your DD-214 — plus your Social Security statement. After you retire, HR can no longer pull these for you, and OPM uses them to calculate your years of creditable service.
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2
Know when you can retire
A full, unreduced pension takes both your Minimum Retirement Age and the service: MRA with 30 years, age 60 with 20 years, or age 62 with at least 5 years. MRA + 10 is an option, but can reduce your pension by roughly 5% per year you are under 62.
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3
The pension formula is simpler than it looks
Years of creditable service × 1% × your high-3 average salary. That 1% becomes 1.1% if you retire at 62 or later with at least 20 years of service.
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4
Your unused sick leave counts
At retirement, unused sick leave converts into extra months of creditable service and increases your pension — a benefit you never paid a premium for.
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5
Protect your spouse
If you are married, electing a survivor benefit is the only way your spouse keeps your federal health insurance after you pass away. End of the month — often December 31 — can also help you make the most of your final benefits.
Chapters
Jump to a section in the replay.
- 00:00
- Intro
- ~06:00
- Records & documents to keep
- ~13:00
- The three FERS systems
- ~20:00
- When you can retire
- ~24:00
- Early & postponed retirement (MRA+10)
- ~31:00
- Best day to retire
- ~34:00
- How the pension is calculated
- ~39:00
- Sick leave & military buyback
- ~51:00
- Survivor benefits
- ~56:00
- Q&A
Frequently asked questions
Plain-English answers to the questions federal employees ask us most.
When can I retire as a federal employee under FERS?
You need both your Minimum Retirement Age (MRA) and enough creditable service. A full, unreduced pension is available at MRA with 30 years, age 60 with 20 years, or age 62 with at least 5 years. Most employees today have an MRA of 57.
What is my Minimum Retirement Age (MRA)?
Your MRA is based on your birth year. For most federal employees retiring today it is 57. It is the earliest age you can retire, provided you also meet the service requirement.
Can I retire before I qualify for a full pension?
Yes. MRA+10 lets you retire at your MRA with at least 10 years of service, but your pension is reduced by 5% for each year you are under 62 — a permanent reduction. Alternatively, you can postpone collecting the pension to avoid the penalty.
How is my FERS pension calculated?
Annual pension = your high-3 average salary × years of creditable service × a multiplier. The multiplier is 1% — or 1.1% if you retire at 62 or later with at least 20 years of service.
What is the “high-3”?
Your highest three consecutive years of basic pay (base salary plus locality pay). It is usually your last three years. Overtime, bonuses, and awards do not count.
Does my unused sick leave count?
Yes. At retirement, unused sick leave converts into additional creditable service and increases your pension. You paid nothing for it, so any amount is a bonus.
What happens to my health insurance (FEHB) when I retire?
You can carry FEHB into retirement if you are enrolled for the five years immediately before you retire and you retire on an immediate or postponed annuity. The government continues paying its share of the premium.
Why do I need to elect a survivor benefit?
If you are married, electing a survivor benefit is the only way your spouse can keep FEHB coverage after you pass away. The full (50%) survivor benefit costs 10% of your pension; the 25% option costs 5%.
Should I buy back my military service?
If you are not receiving military retired pay, buying back active-duty time usually makes sense — the deposit is about 3% of your base military pay, and it adds to your creditable service and pension. If you already receive a military pension, it usually does not.
What is the FERS supplement?
The FERS Annuity Supplement bridges the gap between retirement and age 62 for those who retire with an immediate, unreduced annuity before 62. It approximates the Social Security you earned during federal service and is subject to an earnings test.
When is the best day to retire?
The best day is when you are eligible and ready. To maximize benefits, many retire on the last day of a month; December 31 can be advantageous if you have a large unused annual-leave balance.
What documents should I keep?
Keep your full eOPF (every SF-50 and your DD-214), annual Social Security statements, marriage certificate or divorce decree, security-clearance records, and current beneficiary forms. Download your eOPF before changing agencies and before you retire.
Which beneficiary forms matter?
SF-1152 (last paycheck), SF-2823 (FEGLI), SF-3102 (FERS contributions), and your TSP beneficiary designation at tsp.gov. Review them after any major life change.
Do the FERS hybrid systems (FERS-RAE / FERS-FRAE) get a different pension?
No. Employees hired in 2013 (RAE) and 2014 or later (FRAE) contribute more from each paycheck, but their pension is calculated with the same formula as original FERS.
Can someone check my retirement estimate for me?
Yes. Capital Wealth offers a complimentary Federal Benefit Comparison: we calculate an independent pension estimate and review it side by side with your agency’s estimate. Book a 30-minute call.
Ready to put this into a plan?
Education is the easy part — the harder part is applying it to your situation. Schedule a complimentary 30-minute call with our team. No products, no pitch — just a chance to walk through your benefits and build your personal Federal Benefit Comparison.
Schedule Your 30-Minute CallAdvisory services offered through Capital Wealth, LLC, a State of Utah Registered Investment Advisor. Insurance services offered through CWA Insurance Services, LLC.
Capital Wealth is not affiliated with or endorsed by the U.S. Government, Social Security Administration, Office of Personnel Management, or any federal agency.
This webinar is for educational purposes only and is not financial, tax, or legal advice. Capital Wealth does not guarantee any specific result or outcome.