Annuity calculation


Q. I have approximately 39 years of service/contributions to the CSRS pension plan, and high-3 is approximately $95,000. What is the approximate net worth of the plan? From articles I have read, calculating this can be difficult, as there are too many variables to consider. My retirement estimate given current deductions is $3650 per month.

A. Calculating the amount of your basic annuity is simple.

Here’s the formula:
.015 x your high-3 x 5 years of service, plus
.0175 x your high-3 x 5 years of service, plus
.02 x your high-3 x all remaining years and full months of service

(Note: Your high-3 is the average of your highest three consecutive years of basic pay.)

To find out your net annuity, you’ll have to subtract such things as:

  • federal taxes
  • state taxes, if any
  • FEHB premiums
  • FEGLI premiums

A little quick arithmetic shows that your unreduced annuity would be $72,765, or $6,063.75 per month. If your retirement estimate is correct, then your deductions would be $2,413.75. See if that resembles what you now have deducted from your paycheck, but on a monthly rather than biweekly basis. However, be aware that, since your annuity will be smaller than your annual pay, your taxes as a retiree will be lower.


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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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