Retirement pay by the numbers


Q. I am a GS-12 FERS eligible employee with five years of service and am 46. I receive a military retirement of $21,684 per year for 20 years of service and plan to work an additional 10 years until age 56, for a combined total of 40 years with (if) converted military retirement credit, which would be based solely  on your actual years of FERS service.

According to my calculations, a FERS retirement at 56 would provide $32,000 per year (40 years x .01 percent x $80,000), minus a 30 percent reduction of $9,600 due to the age penalty, leaving $22,400 yearly. Additionally, the special retirement supplement would provide an additional ~$2,000 per month ($24K per year), for a total retirement of $46,400 per year. If this calculation is correct, I estimate a retirement increase of $24,716 per year over my current military pension, which would be the correct course of action from a financial planning standpoint. Am I correct?

A. I won’t check your arithmetic. Instead, I’ll explain how your annuity would be computed using the two scenarios you laid out.

If you don’t make a deposit for your active-duty service, you would be retiring under the MRA+10 provision. As a result, your annuity would be reduced by 5/12 percent per month (5 percent per year) that you are under age 62. In addition, you wouldn’t be entitled to the special retirement supplement. No one who retires under the MRA+10 provision is.

If you make a deposit for your active-duty service and waive your military retired pay, you would have the age and service needed for an immediate, unreduced annuity. And you would receive the special retirement supplement.

The formula used is both cases would be .01 x your high-3 x all years and full months of service.


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