Annuity calculation


Q. I have been working with the federal government for eight years. I am vested in a retirement program. I earn $69,000 a year. How much will my retirement income be after I retire?

A. FERS employees can retire when they meet one of the following age and service combination: age 62 with five years of service; 60 with 20; at their minimum retirement age with 30; and at their MRA+10 (at least 10 years of service but fewer than 30) with a reduction of 5 percent for every year they are under age 62. MRAs range from 55 to 57, depending on your year of birth.

Now I’ll give you the formula and you can use the above options plus estimates of your highest three years of average salary and length of service to come up with some possible outcomes: 0.01 x high-3 x years and full months of service (use 0.011 if you retire at age 62 with at least 20 years of service). Obviously, the further you are from retirement, the less reliable the outcome.


About Author

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

Leave A Reply