Annuity based on disability


Q. The Social Security Administration is going to pay me $2,800 a month and FERS disability is $1,550 a month. I do not understand how to apply the formula: “For the first 12 months on FERS disability retirement, a retiree receives 60 percent of his high-3 average salary, minus 100 percent of any Social Security disability benefit. After the first 12 months, he’ll receive 40 percent of his high-3, minus 60 percent of any Social Security disability benefit.”
Could you give an example using my numbers of approximately what I would receive the first year and the second? I am under 62.

A. Understanding the formula is easy once you understand that the Social Security disability benefit is a constant. The only variable is the FERS disability annuity and how much if any of it you’ll receive. In your case, during the first year you’ll receive the Social Security benefit of $2,800 because it is greater than the FERS annuity of $1,550 and, thus cancels it out. Beginning with the second year and, for convenience, using the same base numbers, you will receive a Social Security benefit of $1,680, which is greater than the $620 you would receive in your FERS annuity.


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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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