Annuity formula


Q. I’ve been with the government for 15 years. How much monthly pension will I get after retiring at 62? I make about $45,000 per year.

A. You can calculate your pension by using the following formula: .01 multiplied by the average of your highest three consecutive years of basic pay, multiplied by your years and full months of service. However, if you retire at age 62 with at least 20 years of service, the multiplier (.01) will be increased to .11.


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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


  1. I think you meant to write .011, not .11, right? Otherwise an employee making $45K retiring at 62 with 20 years would get a $99K pension.

  2. As of May 2017 I have 10 years as an DAC.
    I retired after 20 years of active military service (2006 > I did not buy back the years as related to government employment),
    due to medical reasons I will retire in 2020. how will this 10 year retirement affect my retirement pension.

    • If you are asking about the affect of a civilian annuity on your military benefit, the answer is that it won’t have any affect. As for regular civilian retirement, if you are under age 62, you’d be retiring under the MRA+10 provision. As a result, your annuity would be reduced by 5 percent (5/12 or 1 percent per month) that you are under age 62. If you are approved for disability retirement and are under age 62, the rules are different. You might want to check with your personnel office to find out what those are.

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