How to build a bigger and better federal retirement?

Federal Benefit Advisory

Who doesn’t want a bigger retirement? Surprisingly, many federal employees work in positions with dead ends in terms of raises, promotion or other incomes that can have a positive effect on the retirement income.

First, let’s look at influences of the retirement annuity (pension)

  • Time of service: 

The basic qualifications for a regular federal employee, full and immediate retirement:

  • MRA with 30 years of service.
  • Age 60 with 20 years of service
  • Age 65 with 5 years of service
  • MRA (or older) with 10 years of service for early retirement. An immediate but reduced retirement annuity, or delay retirement until age 62 to receive a full retirement. (special provision not included in this article)
  • The value of your TSP.
  • Benefits choices upon retirement.

Next, let’s look at the Regular FERS retirement calculation:

Age 61 and under:

  • H-3 X 1.0% X years of service.


$75,000.00 X 1.0%X30= $22,500.00 annual/$1,875.00 per month.

  • Age 62 or greater (with 20 years or more) H-3X 1.10% X years of service. By waiting for age 62 and 20 years or move, can pay much more dividends, permanently.


$75,000.00 X 1.10% X 30 = $24,750.00 annual / $2,062.00 per month.

Next, let us look at components of your federal salary:

  • Salary or hourly.
  • Location (if any)

Of course, you pay is what it is, right? Yes, however, if one is looking to increase the FERS retirement annuity, you can take steps to increase your working income (not always easy)

  • Location is part of your salary and is used to determine the highest consistent highest three years of salary.
  • Your job/position:

Jobs with your agency and outside your agency are competitive. If you are aware of promotion opportunities, which you can apply for, would you do it? Would you take a job in another city or state? Another agency? Are you willing to go to college nights or online to grab that promotion?

Many federal employees of high and high paying positions began at the bottom levels.

  • TSP, can gain but can lose:
    • Manage your TSP account to prevent losses.
    • Make as great a contribution to your TSP that you can:
    • 2024 allowable contributions:

TSP contribution limit for 2024 is $23,000 for employee contributions, and $69,000 for the combined employee and employer contributions. If you’re age 50 or older, you’re eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,500.

  • Turning your TSP into guaranteed income while preserving principal will bring many years of good sleep, in your retirement.
  • Look at all options when choosing retirement benefits:


The 50% spousal benefit comes with a cost reduction of 10% from your retirement annuity. This is not required. Many couples with two retirements choose not to leave a survivor benefit. If a survivor benefit is needed, consider this; 10% contribution, we’ll use $400.00 per month, in 30 years is a contribution of $144,000.00. If your spouse, the intended beneficiary of this benefit, passes first, gone is your $144,000.00. In many cases, the same cost can bring a higher benefit, and a change of beneficiary if your spouse dies first, thorough the use of private life insurance, designed to mimic the federal benefit.

  • FEGLI:

If you have a permanent need for FEGLI, which lasts for the remainder of your life, you will cancel FEGLI at some point. Fact: FEGLI is expensive for the retiree. Again, this is where your planner or advisor can make the cost fit the benefit, permanently.

  • Retirement after age 62 offers a second benefit:

COLA in retirement is awarded only to those aged 62 or greater.  A retirement at MRA (we’ll say age 57) means to COL in retirement for 5 years. Putting in the extra years and age 62 will allow for working years COLA, then immediate receipt of COLA in retirement.

  • Delay drawing Social Security until your Full Retirement Age, somewhere (based on year of birth) age 66 to 67.
    • Age 62 drawing Social Security will draw 75% of the full amount and is affected for life.
    • Drawing Social Security at Full Retirement Age is 100%.
    • Drawing Social Security at age 70 is 125% of Full Retirement Age.
  • Adding Military service to your Comp Time:
    • Active duty only.
      • U.S. Military grads can us the 4 years, even if you are retired.
      • Reservists can use Boot Camp (Basic Training) and advanced training, as well as training summer camp, if done prior to FERS service.
  • Where do you begin?
    • Begin today, take your full budget of all expenses and all incomes. Then budget again with your projected retirement annuity income.
      • Begin your pro-active plans for retirement, even if you have 20 years to go.

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