How to Calculate Your FERS Annuity Payment

The FERS annuity formula uses your high-3 salary, years of service, and a percentage multiplier

The Federal Employees Retirement System (FERS) annuity is calculated using a straightforward formula: your highest average salary over three consecutive years, multiplied by your total years of service, multiplied by a percentage that depends on your age and service length when you retire. The Office of Personnel Management (OPM) applies this formula to produce your monthly payment.

The exact percentage you receive varies based on when you retire. If you retire at your full retirement age (which ranges from 56 to 57 depending on your birth year), you receive 1% per year of service. If you retire earlier, the percentage is lower. If you retire later, you may receive a higher percentage or a larger payment because you have more years of service to count.

You do not calculate this yourself — OPM does — but understanding the pieces helps you estimate what you might receive and know what information you need to gather.

Key Takeaways

• Your high-3 is the average of your basic salary (not bonuses or overtime) for the three highest-paid consecutive years you worked.
• The formula multiplies your high-3 by your years of service by a percentage: 1% per year if you retire at full retirement age, less if you retire earlier.
• Your full retirement age under FERS ranges from 56 to 57 depending on your birth year, and retiring before that age reduces your monthly payment.
• OPM calculates your annuity using your official personnel file, so you cannot change the result yourself, but you can request a benefit estimate to see the numbers they are using.

What your high-3 salary means and how to find it

Your high-3 is the average of your basic annual salary for the three consecutive years you earned the most. Basic salary means your regular pay — not bonuses, overtime, locality pay adjustments, or special pay. OPM looks at your official earnings record in the Federal Employees Retirement System database, not what you remember earning.

For most federal employees, the high-3 is the average of your last three years of work, because salaries usually increase over time. If you took a lower-paying position in your final years, your high-3 might come from an earlier three-year period. If you had a year with unusually high overtime or bonuses, those do not count toward the high-3 — only basic salary does.

You can see what OPM has recorded as your earnings by requesting a Federal Employee Earnings and Contributions Statement from your agency's human resources office or by logging into your account on the OPM website if your agency participates in the online system. This statement shows your basic salary for each year you have worked.

How years of service are counted

Your years of service is the total time you have worked as a federal employee under FERS, counted in whole years and months. If you have worked 22 years and 8 months, OPM counts that as 22.67 years (8 months divided by 12). Part-time work counts, but only the actual time you were employed — unpaid leave, suspension, or periods when you were not on the federal payroll do not count.

Military service before you became a federal employee can be added to your FERS service if you deposit the required amount to buy it back. This is called a military service deposit. If you served in the military and later became a federal employee, you can contact OPM or your agency's benefits office to learn the deposit amount and whether buying back that service makes financial sense for your situation.

OPM's records show your official hire date and separation date (if you have left federal service). If you believe there is an error in your service record — a gap that should not be there, or a period that was not counted — you can request a correction through your agency's human resources office, which will investigate and contact OPM if needed.

The percentage multiplier based on your retirement age

The percentage you receive depends on your age and years of service when you retire. Under FERS, your full retirement age is between 56 and 57, depending on your birth year. If you were born in 1970 or later, your full retirement age is 57. If you were born between 1948 and 1969, your full retirement age is between 56 and 57 — the exact age depends on your birth month.

If you retire at your full retirement age with at least 30 years of service, you receive 1% of your high-3 for each year of service. So 30 years of service at full retirement age = 30% of your high-3 as your annual annuity. If you have 35 years of service at full retirement age, you receive 35% of your high-3.

If you retire before your full retirement age, the percentage is reduced. The reduction is typically 5% per year for each year you retire before your full retirement age, though the exact reduction depends on how many years of service you have. If you retire after your full retirement age, you do not receive a bonus percentage — instead, your payment is larger because you have more years of service to multiply.

The complete FERS annuity formula with an example

The formula is: High-3 × Years of Service × Percentage = Annual Annuity. Your monthly payment is your annual annuity divided by 12.

Here is a concrete example. Suppose your high-3 salary is $80,000, you have 32 years of service, and you retire at your full retirement age of 57. The calculation is:

$80,000 × 32 × 0.01 = $25,600 per year, or about $2,133 per month.

Now suppose you retire at age 55 instead, which is two years before your full retirement age. Your years of service and high-3 are the same, but the percentage is reduced by 5% per year early, so 10% total. Your percentage becomes 0.01 − 0.001 = 0.009 (roughly). The calculation becomes:

$80,000 × 32 × 0.009 = $23,040 per year, or about $1,920 per month.

The difference between retiring two years early and retiring at full retirement age is about $213 per month in this example. The exact reduction percentage varies by your specific situation, so OPM will calculate the precise amount when you submit your retirement process.

How to request a benefit estimate from OPM

You do not have to wait until you retire to see what OPM calculates. You can request a FERS Benefit Estimate from the Office of Personnel Management. This estimate shows OPM's calculation of your annuity based on your current service record and salary history, assuming you retire on a specific date you choose.

To request an estimate, contact your agency's benefits office or visit the OPM website. You will need to provide your birth date, current position, and the retirement date you want to use for the estimate. OPM will send you a statement showing your high-3, years of service, the percentage they will explore, and your projected monthly and annual payment.

The estimate is based on the information in your official file as of the date you request it. If you receive a raise, earn additional years of service, or change positions before you actually retire, your final annuity will be different. Estimates are useful for planning, but they are not final until OPM processes your actual retirement process.

What happens to your annuity after you retire

Once you retire and OPM approves your process, your annuity is set based on the formula applied on your retirement date. Your monthly payment does not change based on your high-3 or years of service anymore — those numbers are locked in.

Your annuity does increase each year for cost-of-living adjustments (COLA). These adjustments are tied to inflation and are applied to all FERS retirees in January. The adjustment percentage varies each year based on the Consumer Price Index. This means your purchasing power is protected against inflation, but the base calculation (high-3 × years of service × percentage) never changes.

If you have a survivor, your annuity may be reduced if you elected a survivor benefit option when you retired. These options allow your spouse or designated beneficiary to receive a portion of your annuity after you die, which means your monthly payment during retirement is lower than it would be if you took the full annuity with no survivor benefit.

Frequently Asked Questions

Does overtime or bonuses count toward my high-3?

No. Only your basic annual salary counts toward your high-3. Overtime, bonuses, shift differentials, and special pay are excluded. OPM uses only the regular salary shown in your official personnel file.

Can I buy back military service to increase my annuity?

Yes, if you served in the military before becoming a federal employee. You can make a deposit to buy back that service, which increases your years of service and therefore your annuity. Contact your agency's benefits office for the deposit amount and important date — you usually have a limited time after you become a federal employee to make this purchase.

What if I think OPM made an error in my high-3 or years of service?

Request a Federal Employee Earnings and Contributions Statement from your agency's human resources office to verify the numbers OPM is using. If you find an error, ask your HR office to submit a correction request to OPM. OPM will investigate and update your record if the error is confirmed.

Does my annuity increase if I work longer after reaching full retirement age?

Your monthly percentage does not increase, but your annuity grows because you have more years of service to multiply. If you work three additional years, you add three more years to the service count, which increases your total annuity even though the percentage stays at 1% per year.

How often does my annuity payment change after I retire?

Your base annuity amount (the result of the formula) never changes. Your payment increases each January for cost-of-living adjustments based on inflation. If you elected a survivor benefit, your payment was already reduced to account for that, and it stays reduced throughout your retirement.