Below we will show a simplified version of how to calculate your pension and the common mistakes we see when sitting with clients. A more full-length guide on the FERS pension will be coming soon.
FERS pension calculation below:
Your high-3 salary will be the highest earning, rolling 36 months of your career. Usually, the high-3 is the last 3 years of service.
The FERS pension calculation has two different multipliers. If you retire before age 62 and with less than 20 years of service, then you will receive a 1% multiplier. If you retire at age 62 or later with 20+ years of service, then you will receive a 1.1% multiplier.
Example:
- Years of Service = 30
- High-3 = $100,000
- Retirement Age = 57
- Multiplier = 1%
Example:
- Years of Service = 30
- High-3 = $100,000
- Retirement Age = 62
- Multiplier = 1.1%
The Most Common Mistake We See – LSCD vs RSCD
Beware of using your Leave Service Computation Date (LSCD) that appears on your Leave and Earnings (LES) statement! OPM will be using your Retirement Service Computation Date (RSCD). OPM will calculate your RSCD by reviewing all your SF-50’s and finding the amount of time that you were paying into the FERS retirement system.
We see that the LSCD and RSCD are not always a perfect match and can cause a big surprise come retirement time. If you joined federal service and have not had any military time or breaks in service, then most likely your LSCD and RSCD match. However, if you have had military time or breaks in service there could be a discrepancy between the two.
Summary
If you have any questions about your FERS pension calculation or estimate, please reach out to us and we can help. Every Financial Planner at PlanWell is a Chartered Federal Employee Benefits Consultant (ChFEBC) and well versed in your federal benefits.
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we focus on retirement planning for federal employees. Learn more about our process designed for the career federal employee.
Preparing for a federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
