What Federal Employees With a FERS Pension Are Getting Wrong About Their TSP

Snippet of Article: "...The FERS basic annuity formula pays 1% of your high-3 average salary for each year of service, or 1.1% for those who retire at 62 or later with at least 20 years. A federal employee with 30 years of service and a $90,000 high-3 average salary receives a pension of roughly $27,000 per year before taxes. That is 30% of pre-retirement income, not the 60%-70% many workers expect. Social Security is the second "leg" of the FERS stool. ..."

Source: finance.yahoo.com

1% vs 1.1% FERS Basic Annuity Formula,FERS,

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Assessing when you can afford to retire under the Federal Employees Retirement System

Snippet of Article: "... Suppose John will have 30 years of service this year, including six years of military service (for which he has paid a deposit) and 24 years under FERS. He's 59, so he's past the FERS minimum retirement age. If he retires with 30 years of service, his FERS basic retirement will provide 30 percent of his high-three average salary. He's been at the GS 13-10 level for the past three years. His current salary is $113,007. His retirement will be computed as: 30% x $108,027 (high-three average) = $3...Wait to retire at 62. Then his FERS benefit will be computed at 1.1 percent for every year of service, instead of 1 percent, a 10 percent increase..."

Source: www.govexec.com

How do i get the 1.1% instead of 1% for the FERS Basic Annuity Formula Computation?

The following explains the 1.1% vs 1% FERS Basic Annuity Formula Computation (opm.gov):

Under Age 62 at Separation for Retirement, OR Age 62 or Older With Less Than 20 Years of Service Formula: 1 percent of your high-3 average salary for each year of service

Age 62 or Older at Separation With 20 or More Years of Service Formula: 1.1 percent of your high-3 average salary for each year of service

Source: www.opm.gov

1% vs 1.1% FERS Basic Annuity Formula, FERS Basic Annuity Formula Computation,