FERS Basic Annuity Calculation
Separate retirement basic pay from overtime.
Estimated reading time: 1 minute
FERS retirement calculations use qualifying basic pay, not every dollar on a pay statement.
A fictional employee separates at age 62 with exactly 20 verified years of full-time creditable FERS service for an ordinary immediate, non-disability retirement. No special occupational formula, CSRS component or service adjustment applies.
Records establish the highest consecutive three-year period as 2023–2025. Basic pay remained constant within each full year: $80,000, $85,000 and $90,000. Each year also included $10,000 overtime; no other pay components apply.
OPM’s computation guidance excludes overtime from this basic-pay average. The high-three is ($80,000+$85,000+$90,000)÷3=$85,000, not the $95,000 average including overtime.
Age 62 with 20 years selects 1.1% per service year. Initial annual basic annuity is $85,000×20×1.1%=$18,700. Including overtime would incorrectly produce $20,900.
This is the gross starting calculation before survivor-election reductions, deductions or later adjustments—not take-home income. The example does not establish service credit, retirement eligibility or a recommended retirement date.
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Compare two taxable-benefit calculations.
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Retirement Formula: From Indexed Total
Follow two rounding stages.