FERS retirement pays from three sources: a defined benefit pension, the Thrift Savings Plan with an agency match up to 5%, and Social Security funded by the 6.2% payroll tax.
Key Takeaways
- FERS combines three parts: the FERS basic pension, the Thrift Savings Plan (TSP), and Social Security, and it took effect in 1987 to replace CSRS.
- The FERS pension formula is high-3 average salary times years of service times a 1.0% multiplier, rising to 1.1% at age 62 or later with at least 20 years.
- The government adds up to 5% to the TSP: an automatic 1% plus a match of up to another 4% when you contribute at least 5%.
- FERS allows an unreduced pension at age 62 with 5 years, age 60 with 20 years, or at your MRA (55 to 57) with 30 years.
- FERS employees pay the 6.2% Social Security payroll tax, and full retirement age is 67 for those born in 1960 or later.
- For 2026, the TSP elective deferral limit is $24,500, with an $8,000 age-50 catch-up and an $11,250 super catch-up for ages 60 to 63.
- Required minimum distributions begin at age 73 (age 75 for those born in 1960 or later), so the years before then can be a lower-tax conversion window.
FERS by the Numbers (2026)
Figures reflect 2026 FERS rules; the TSP deferral limit is from IRS Notice 2025-67.
FERS retirement is the Federal Employees Retirement System, and it pays you from three sources: a defined benefit pension, the Thrift Savings Plan (TSP), and Social Security. Understanding how the three parts fit together tells you not only how much income you will have, but when to convert Traditional TSP money to Roth at a lower tax cost.
FERS retirement rests on three parts: the FERS basic pension (a monthly annuity based on your salary and years of service), the Thrift Savings Plan with an agency match up to 5% of pay, and Social Security. These three legs replace a large share of a federal employee’s income, and the low-income years right after you retire are often a low-tax window to convert pre-tax TSP money to Roth.
What is FERS (the Federal Employees Retirement System)?
FERS is the retirement program for most civilian federal employees hired after 1983. Congress created it under the Federal Employees’ Retirement System Act of 1986, and it took effect in 1987 to replace the older Civil Service Retirement System (CSRS). FERS is often called a three legged stool because it combines a pension, the TSP, and Social Security into one plan.
Under CSRS, federal workers earned a large pension but paid no Social Security tax on their wages. FERS split retirement across three parts so no single source carries the full load, and every FERS employee pays the 6.2% Social Security tax and earns full credits. The Office of Personnel Management (OPM) administers the pension, the Federal Retirement Thrift Investment Board runs the Thrift Savings Plan, and the Social Security Administration handles the third leg. Because the three legs are taxed and timed differently, FERS gives a federal employee real control over taxable income in retirement.
The three parts of FERS retirement
The three parts of FERS retirement are the FERS basic pension (a monthly annuity from OPM), the Thrift Savings Plan (a defined contribution account with a match up to 5%), and Social Security (earned through the 6.2% payroll tax). One leg is guaranteed for life, one is money you invest and control, and one is a government benefit indexed to inflation.
Part 1: Your FERS basic pension (the annuity)
The FERS basic benefit is a defined benefit pension paid monthly for life once you meet the age and service rules. You fund part of it through a payroll contribution set by your hire date, and the government funds the rest. A fixed formula sets the amount, not market returns, so it does not move with investments. Most FERS retirees also receive a cost of living adjustment starting at 62.
Part 2: The Thrift Savings Plan (TSP) and the 5% match
The TSP is the federal version of a 401(k). You contribute from each paycheck into a Traditional (pre-tax) or Roth (after-tax) account, and your agency adds money on top: an automatic 1% of salary plus a match of up to another 4%. The Traditional TSP balance is pre-tax money taxed as ordinary income at withdrawal, the bucket many federal employees consider converting to Roth.
Part 3: Social Security
FERS employees pay the 6.2% Social Security payroll tax and earn full benefits, unlike most CSRS workers. Benefits can start as early as 62, though waiting to full retirement age (67 for those born in 1960 or later) or to 70 produces a larger monthly check. Because Social Security rarely starts the moment a fed retires, a gap often opens between the retirement date and the age this third leg turns on.
How is the FERS pension calculated?
The FERS pension formula is high-3 average salary multiplied by years of creditable service multiplied by a multiplier of 1.0%. The multiplier rises to 1.1% if you retire at age 62 or later with at least 20 years of service. Your high-3 is the average of your highest 36 consecutive months of basic pay, which is usually your last three years.
A worked example: your high-3 salary is $100,000 and you retire at 63 with 25 years. Past 62 with 20 or more years, you use the 1.1% multiplier: $100,000 x 25 x 1.1% = $27,500 per year, about $2,292 per month before deductions. Retiring before 62 or with fewer than 20 years applies the 1.0% multiplier: $100,000 x 25 x 1.0% = $25,000 per year.
That figure is your gross annuity. Your net check is smaller after a survivor benefit election (commonly a 10% reduction for a spousal survivor annuity), tax withholding, and FEHB premiums. The pension is almost entirely taxable as ordinary income, so its size shapes how much room you have for Roth conversions each year.
When can you retire under FERS? (MRA and eligibility)
FERS lets you retire with a full, unreduced pension at age 62 with 5 years of service, age 60 with 20 years, or at your Minimum Retirement Age (MRA) with 30 years. You can also retire early under the MRA+10 provision (MRA with at least 10 years), but that annuity is reduced by 5% for every year you are under age 62.
The MRA table by birth year (55 to 57)
Your Minimum Retirement Age (MRA) is set by your birth year and falls between 55 and 57. It is the earliest age you can retire under FERS, provided you have enough years of creditable service. The table below shows how the MRA steps up from 55 for those born before 1948 to 57 for anyone born in 1970 or later.
| Year of birth | Minimum Retirement Age (MRA) |
|---|---|
| Before 1948 | 55 |
| 1948 to 1952 | 55 plus 2 to 10 months |
| 1953 to 1964 | 56 |
| 1965 to 1969 | 56 plus 2 to 10 months |
| 1970 and later | 57 |
Age 62/5, 60/20, MRA/30, and MRA+10
FERS pairs an age with required years of creditable service, shown in the table below. The MRA+10 option lets you leave earlier, but each year under 62 cuts the annuity by 5%, so retiring five years early reduces the pension by roughly 25%. The unreduced paths carry no such penalty.
| Age | Years of service | Result |
|---|---|---|
| 62 | 5 | Immediate, unreduced pension |
| 60 | 20 | Immediate, unreduced pension |
| MRA (55 to 57) | 30 | Immediate, unreduced pension |
| MRA (55 to 57) | 10 to 29 | Reduced 5% per year under age 62 (MRA+10) |
How much does the government match in your TSP?
The government matches your TSP contributions up to 5% of salary. Your agency automatically contributes 1% of pay, matches dollar for dollar on the first 3% you contribute, and adds 50 cents on the dollar for the next 2%. Many federal employees aim to contribute at least 5% of their own pay to capture the full 5% match.
The math: automatic 1%, a full 3% match, and half of the next 2% (equal to 1%) totals 5% from the agency when you put in 5%. For 2026, the IRS elective deferral limit for the TSP is $24,500. Those age 50 to 59 or 64 and over can add an $8,000 catch-up, and ages 60 to 63 can use a SECURE 2.0 “super catch-up” of $11,250.
You choose between Traditional TSP (pre-tax now, taxed at withdrawal) and Roth TSP (after-tax now, tax-free later). Most federal careers build a large Traditional TSP balance, because pre-tax contributing lowers taxable income during high-earning years. That pre-tax balance is exactly what a well-timed Roth conversion strategy addresses, a topic we cover in TSP Roth conversions for federal employees.
| Your contribution | Agency automatic | Agency match | Total agency |
|---|---|---|---|
| 0% | 1% | 0% | 1% |
| 3% | 1% | 3% | 4% |
| 5% or more | 1% | 4% | 5% |
Do FERS employees get Social Security, and what is the FERS Supplement?
Yes. FERS employees pay the 6.2% Social Security payroll tax and earn full Social Security benefits. If you retire before age 62 with an immediate, unreduced annuity, FERS also pays a Special Retirement Supplement that approximates the Social Security you earned as a federal employee, bridging the income gap until Social Security itself can begin at 62.
The FERS Special Retirement Supplement is a monthly payment that stops the month you turn 62, whether or not you claim Social Security then. It is earnings-tested: earn more than the annual Social Security earnings limit and the supplement drops by $1 for every $2 over the limit. Retirees under MRA+10, and most who leave with a deferred pension, do not receive it. The supplement matters for tax planning because it keeps the pre-62 years distinctly low-income: you live on the pension plus the supplement while neither Social Security nor RMDs has started, which creates the conversion window below.
The overlooked move: timing Roth conversions of your TSP in low-income years
The overlooked FERS move is converting Traditional TSP or IRA money to Roth during the low-income years between your retirement date and age 73. In that window your taxable income is often just the pension and the FERS Supplement, before Social Security and Required Minimum Distributions push you into higher brackets. Converting then can fill up the lower tax brackets at a much smaller tax cost.
Why the years before age 62 are a low-tax conversion window
Between retirement and age 62, a FERS retiree with an immediate annuity typically lives on two income streams: the pension and the FERS Supplement. Social Security has not begun, and there is no requirement to draw the TSP yet. For 2026, a married couple filing jointly stays in the 12% bracket up to $100,800 of taxable income, with a $32,200 standard deduction. A modest pension leaves room in the lower brackets for a Roth conversion.
Converting Traditional TSP and IRA money to Roth before RMDs at 73
A Roth conversion moves money from a Traditional (pre-tax) account into a Roth account, adding the converted amount to that year’s taxable income as ordinary income. The aim is to convert while your bracket is low. Under SECURE 2.0, Required Minimum Distributions begin at age 73 (age 75 for those born in 1960 or later, first affecting the 2035 tax year). A conversion is taxable, uncapped, and irreversible, and you cannot convert an RMD.
A simple example of a fed converting in the gap years
Consider a married FERS retiree who leaves at 57 with a $28,000 pension and a $12,000 FERS Supplement, for $40,000 of income. After the 2026 standard deduction of $32,200, taxable income is about $7,800. Because the 22% joint bracket does not start until $100,800, this couple could convert roughly $93,000 of Traditional TSP to Roth and remain in the 12% bracket. Our how much to convert to Roth guide explains how to size each year.
Putting the three parts together: an example FERS retirement income plan
A complete FERS income plan layers the three legs over time: the pension and FERS Supplement start at retirement, Social Security is added at 62 or later, and the TSP funds RMDs at 73. The pre-62 years are the planned Roth conversion window. See our overview of Roth conversion planning and our resources for federal employees.
| Life stage | Income sources active | Tax planning focus |
|---|---|---|
| MRA to 61 | Pension plus FERS Supplement | Lowest brackets: convert Traditional TSP to Roth |
| 62 to 72 | Pension plus Social Security (supplement ends) | Finish conversions before RMDs; watch IRMAA |
| 73 and up | Pension, Social Security, TSP RMDs | Manage RMDs; earlier conversions reduce them |
Medicare Part B premiums use a two year income lookback (IRMAA applies above $109,000 of MAGI single or $218,000 joint in 2026), so the last conversion year that does not raise a premium is age 62, one more reason many feds front-load conversions into the pre-62 window.
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Q3 Advisors is a registered investment adviser focused on retirement tax planning. This page is educational and is not advice; consult a qualified professional.
Frequently asked questions
What are the three parts of FERS retirement?
The three parts of FERS retirement are the FERS basic pension (a monthly annuity from OPM based on salary and years of service), the Thrift Savings Plan (a defined contribution account with an agency match up to 5%), and Social Security (earned through the 6.2% payroll tax). This is why FERS is called a three legged stool.
How is the FERS pension calculated?
The FERS pension equals your high-3 average salary multiplied by your years of creditable service multiplied by 1.0%. The multiplier rises to 1.1% if you retire at age 62 or later with at least 20 years of service. For example, a $100,000 high-3 with 25 years at 1.1% produces $27,500 per year before deductions.
How many years do you need to retire under FERS?
You need at least 5 years of creditable civilian service to qualify for a FERS pension at age 62. Other paths include 20 years at age 60, 30 years at your MRA, and the MRA+10 option (10 years at your MRA), which reduces the annuity 5% for each year you are under age 62.
What is the FERS minimum retirement age (MRA)?
Your MRA is the earliest age you can retire under FERS and is set by your birth year. It is 55 for those born before 1948, rises gradually to 56 for birth years 1953 to 1964, and reaches 57 for anyone born in 1970 or later. You still need enough years of service to retire at your MRA.
How much does the government match in the TSP?
The government matches up to 5% of your salary in the TSP. Your agency automatically adds 1% of pay, matches your contributions dollar for dollar on the first 3%, and adds 50 cents per dollar on the next 2%. Contributing at least 5% of your own pay secures the full 5% agency match.
Do FERS employees get Social Security?
Yes. FERS employees pay the 6.2% Social Security payroll tax and earn full benefits, a key difference from the older CSRS system. Social Security can begin as early as age 62, and FERS may pay a Special Retirement Supplement to bridge the gap for those who retire before 62 with an immediate annuity.
What is the FERS Special Retirement Supplement?
The FERS Special Retirement Supplement is a monthly payment that approximates the Social Security you earned as a federal employee. It goes to those who retire before age 62 with an immediate, unreduced annuity and stops the month you turn 62. It is earnings-tested, reduced by $1 for every $2 you earn above the annual Social Security earnings limit.
When should federal employees do a Roth conversion?
Many federal employees convert Traditional TSP or IRA money to Roth during the low-income years between retirement and age 73, when only the pension and FERS Supplement are flowing. Social Security and RMDs have not yet started, so converting then can fill the lower brackets at a smaller tax cost. Each conversion is taxable and due by December 31.
This article is educational and is not investment, tax, or legal advice. Q3 Advisors is a registered investment adviser; registration does not imply a certain level of skill or training. Figures reflect 2026 rules and may change. Roth conversions, pension elections, and retirement timing depend on your full situation, so consult a qualified professional and review our Form ADV before acting. Craig Wear, CFP®, reviewed this content.
