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Calculating your high-3 for federal retirement depends on whether you worked under the Federal Employees Retirement System (FERS) or if you spent time under other retirement programs.
The basic retirement annuity under FERS is equal to the (Average High-3 Salary x .017 x Years of Service through 20 years)+(High-3 Salary x .01 x Years of Service over 20)= Annual Pension Members who began congressional service before 1984 and who elected to join FERS will receive credit under FERS from January 1, 1984, forward.
The Federal Employees' Retirement System (FERS) is the retirement system for employees within the United States civil service. FERS [1] became effective January 1, 1987, to replace the Civil Service Retirement System (CSRS) and to conform federal retirement plans in line with those in the private sector. [2] FERS consists of three major components:
The locality pay adjustment is counted as part of the "high-3" salary in calculating Federal Employees Retirement System (FERS) and Civil Service Retirement System (CSRS) annuities, as well as the baseline for individuals having a percentage of salary deducted for deposit into the Thrift Savings Plan.
Some pension plans offer a hybrid option that combines the benefits of both a lump sum and an annuity. For example, you might choose to take 30 percent of your pension as a lump sum and convert ...
Rule of 25: After accounting for her Social Security and other sources of retirement income, Katie plans to spend $40,000 a year in retirement. 40,000 x 25 = $1 million, so Katie would need $1 ...
The effective date (Block 4) is important for annuity purposes (as an employee nears retirement) as it is the beginning date used to calculate how long an employee has held a particular pay rate for "high-3" purposes under either of the retirement systems (FERS or CSRS).
Social Security remains a vital component of many people’s financial plan for retirement. SmartAsset’s Social Security calculator can help you get a sense of how much your benefits will be worth.