Geography and annuity calculation


Q. I am considering retiring under the FERS minimum retirement age plus-10 rule a month or so after my 60th birthday this year. We have also been considering relocating to Alabama from Chicago, where I work at a VA medical center. Does it make any financial annuity difference whether or not I retire while still living in Chicago, or if I wait until we relocate (or I transfer employment) to Alabama? I know part of my current salary is based upon my physical location, but I don’t understand how that part of my salary affects the final calculations?

A. Your annuity will be based on your highest three consecutive years (36 months) of average basic salary, which includes locality pay. Therefore, your annuity would be increased if you transferred to a locality where the pay was higher or reduced if you moved to one that was lower. The actual effect on your annuity would depend on how long you lived in the new area before retiring.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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