The FERS annuity formula multiplies your high-3 average salary by your years of service by 1% (or 1.1% after age 62)

The Federal Employees Retirement System (FERS) annuity is calculated using a single formula that applies to almost all federal employees. The formula is: High-3 Average Salary × Years of Creditable Service × 1% (or 1.1%). This means your monthly payment depends on three numbers: what you earned in your highest-paid three years, how long you worked for the federal government, and your age when you retire.

The 1% multiplier applies if you retire before age 62. If you retire at 62 or later with at least 20 years of service, the multiplier increases to 1.1%. This is the only adjustment in the formula itself — there are no bonuses for working longer or penalties for retiring early, as long as you meet the age and service requirements to receive an annuity at all.

The calculation is straightforward once you have the three numbers. Most federal employees can find their high-3 average and years of service on their most recent Leave and Earnings Statement (LES) or through the Employee Express system. The Office of Personnel Management (OPM) publishes the exact formula in its FERS handbook, and you can request a detailed estimate from your agency's human resources office.

Key Takeaways

  • Your FERS annuity is calculated by multiplying your high-3 average salary by your years of service by either 1% or 1.1%, depending on your age at retirement.
  • The high-3 average is the mean of your salary in the three highest-paid consecutive years you worked, and it includes basic pay only — not bonuses, overtime, or differentials.
  • Years of creditable service include all time you worked as a federal employee, plus any military service you bought back, but not unpaid leave or breaks in service.
  • You can request a detailed annuity estimate from your agency's human resources office or check your Employee Express account for your current high-3 and service credit.
  • The 1.1% multiplier applies only if you retire at age 62 or later with at least 20 years of service; otherwise the multiplier is 1%.

Understanding your high-3 average salary

The high-3 average is the arithmetic mean of your basic pay during the three consecutive calendar years in which you earned the most money. It does not include bonuses, overtime, locality pay adjustments, or any other form of compensation — only your base salary for the position you held.

For most federal employees, the high-3 is calculated from the three years when ready before retirement. However, if you were promoted or received significant raises near the end of your career, your high-3 may span different years. Your agency's human resources office can tell you which three years are being used in your calculation.

If you took unpaid leave, were on furlough, or had a break in service, those periods do not reduce your high-3 — the calculation uses only the years you were actually paid. If you worked part-time at any point, your salary for those years is included as you actually earned it, not adjusted to full-time equivalent.

Counting your years of creditable service

Years of creditable service include every year you worked as a federal employee under FERS, plus any military service you bought back by making a deposit to the FERS fund. One year of service equals 12 months of employment, whether you worked full-time or part-time. If you worked part-time, each month counts as a full month toward your service total.

Periods when you were on paid leave — vacation, sick leave, or administrative leave — count as service. Periods of unpaid leave, furlough, or breaks between jobs do not count unless you later buy them back. If you transferred from the Civil Service Retirement System (CSRS) to FERS, your CSRS service does not count toward your FERS annuity unless you made a deposit to cover it.

Military service counts only if you made a deposit to FERS to buy it back. The amount you owe is calculated by OPM and is usually several thousand dollars. You can pay it in a lump sum or through payroll deduction. If you do not buy back your military service, those years do not appear in your FERS annuity calculation.

Working through the calculation step by step

Start by gathering three pieces of information: your high-3 average salary, your years of creditable service, and your age at the time you plan to retire. You can find your high-3 and service credit on your most recent Leave and Earnings Statement or by logging into Employee Express.

Next, determine which multiplier applies. If you will be 62 or older when your annuity begins and you have at least 20 years of service, use 1.1%. Otherwise, use 1%. Then multiply: High-3 × Years of Service × Multiplier. Divide the result by 12 to convert the annual amount to a monthly payment.

Example: If your high-3 is $80,000, you have 25 years of service, and you are retiring at age 63, the calculation is: $80,000 × 25 × 1.1% = $22,000 per year, or about $1,833 per month. If you were retiring at age 60 with the same high-3 and service, it would be: $80,000 × 25 × 1% = $20,000 per year, or about $1,667 per month.

What the high-3 does and does not include

The high-3 includes only your basic salary — the pay rate for your position grade and step. It does not include locality pay, which is an adjustment added to base pay depending on where you work. It does not include overtime, night differential, Sunday premium, or any other special pay. Bonuses, awards, and performance pay do not count.

If you received a promotion during your high-3 years, your salary is calculated at the rate you actually earned in each year. If you were promoted in year two of your high-3, years one and two use different salary amounts. The high-3 is the average of these three years of actual basic pay, not an estimate or projection.

If you are unsure whether a particular form of pay is included in your high-3, ask your agency's human resources office to show you the three years being used and the salary amounts for each. They can provide a written breakdown that shows exactly what is and is not included.

Requesting an official annuity estimate from OPM or your agency

You do not have to calculate your annuity yourself. Your agency's human resources office can provide a detailed estimate that shows your high-3, your years of service, and your projected monthly payment. This estimate is based on your actual records and is the most reliable way to know what to expect.

To request an estimate, contact your agency's benefits office or retirement specialist. Many agencies allow you to request an estimate through their employee portal or by submitting a form. OPM also publishes a worksheet on its website that walks through the calculation, though it is not a substitute for an official estimate from your agency.

If you are within a few years of retirement, your agency may offer a pre-retirement counseling session that includes a detailed annuity estimate. This is a good time to ask questions about how your high-3 was calculated, whether you have any unpaid military service deposits, and what your payment will be under different retirement dates.

How FERS annuity differs from CSRS and other federal retirement plans

FERS is one of three main federal retirement systems. CSRS (Civil Service Retirement System) uses a different formula: 1.5% for the first 5 years of service, then 1.75% for service beyond 5 years. CSRS employees who retire at age 55 with 30 years of service receive a higher percentage of their high-3 than FERS employees in the same situation.

Most federal employees hired after 1984 are in FERS. Employees hired before 1984 may be in CSRS. A small number of employees are in the Federal Employees Health Benefits Program (FEHB) or other specialized systems. If you are unsure which system you are in, check your Leave and Earnings Statement or ask your human resources office.

FERS also includes Social Security and a Thrift Savings Plan (TSP) component, whereas CSRS does not. Your total federal retirement income comes from all three sources under FERS, but only from your annuity under CSRS. This is why a FERS annuity may appear lower than a CSRS annuity at first glance — the total retirement package is different.

Frequently Asked Questions

Does my locality pay count toward my high-3?

No. Locality pay is an adjustment to your base salary depending on where you work, but it is not included in the high-3 calculation. Only your basic pay for your position grade and step counts. If you are unsure whether a particular payment is locality pay, your human resources office can clarify.

What happens to my annuity calculation if I take unpaid leave before I retire?

Unpaid leave does not reduce your high-3 or your years of service. Your high-3 is based on the salary you actually earned in your three highest-paid years, and unpaid leave is straightforward not counted as service time. If you take a long unpaid leave near retirement, it does not change your annuity.

Can I buy back military service to increase my FERS annuity?

Yes. If you have military service before you became a federal employee, you can make a deposit to FERS to buy it back. OPM calculates the amount owed based on your military service dates. Once you pay the deposit, those years count toward your years of creditable service and increase your annuity.

If I retire at 60 instead of 62, how much less will my annuity be?

Your annuity will be 2% less per year of service. The multiplier drops from 1.1% to 1%, which is a 0.1 percentage point reduction. For every year of service you have, your total annuity is 0.1% lower. With 25 years of service, retiring at 60 instead of 62 reduces your annuity by 2.5%.

Where can I find my high-3 average and years of service?

Check your most recent Leave and Earnings Statement (LES), which your agency sends to you regularly. You can also log into Employee Express, the federal government's employee benefits portal, where your high-3 and service credit are displayed. If you cannot find this information, contact your agency's human resources or benefits office.