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Federal Retirement
How Do I Calculate FERS Retirement

Figuring out how to calculate FERS retirement can require some work. But luckily, we can help with calculating this for you.

A FERS disability retirement calculator is exactly what it sounds like.

It is a tool you can use to calculate the amount of payment you will receive if you retire due to a disability.

Of course, this calculator tool is applicable only if you are a federal employee retiring through the FERS disability retirement program. 

For immediate assistance, please don’t hesitate to contact or call (833) 833-3529 to reach our experienced FERS disability lawyers.

How Do I Calculate FERS Retirement?

A FERS disability retirement pay calculator works just as any other calculator does. You give the calculator a set of inputs and parameters, and the calculator gives you an answer.

The output could be your annual payment (referred to as an annuity).

Or it could be your monthly or weekly payment. On the other hand, your output could be the total amount of money you will receive over X amount of time (36 months, 20 years, etc).

It all depends on what you ask the calculator to give as its output. It is up to you. 

Many of the calculations depend on your high-3 salary. OPM defines your high-3 as the highest average basic pay you earned during any 3 consecutive years of service. Your basic pay is your basic salary paid for your position.

This includes salary increases for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. Further, if one’s total service was less than 3 years, the average salary is figured by averaging basic pay during all periods of creditable Federal service.

The best way to find your high-3 average salary is to get a FERS benefit to estimate from your Agency. This report will show the official figures that will be sent to OPM. 

While the OPM website does not have a specific calculator webtool, they publish information on how they make the calculations online.

Here, we summarize those guidelines.

FERS Disability Computation If You Have Reached the Age of Retirement

If you are age 62 or older when you retire due to a disability, the following FERS calculation applies.

The calculation also applies if you meet the age and service requirement for immediate voluntary retirement and suffer from a disability.

This calculation is known as an “earned” annuity since you have otherwise met the qualifications for retirement benefits. ‘

The calculation goes one of two ways.

If you are 62 or older when you retire and have less than 20 years of service with the federal government, or are under 62 years old but qualify for immediate voluntary retirement, your annuity calculation will be 1% of your high-3 average salary for each year of service.

Thus, if you serve eighteen years, your annuity is 18% of your high-3 average salary.

Your high-3 average salary is the highest average basic pay (minus overtime) you receive for three consecutive years during your employment.

If your salary tops out at $65,000 for three years, that’s your high-3 salary.

If your annual salary was $55,000 three years before your disability, then $65,000 per year for only two years before the disability, your high-3 average salary is the average of $55,000, $65,000, and $65,000.

If you are 62 years old or more and have at least 20 years of service to the federal government, your annuity calculation is different.

Your annuity calculation is 1.1% of your high-3 average salary for each year of service.

So if you have 20 years of service at this point, your annuity is 22% of your high-3 average salary.

Because the calculations for disability retirement for someone 62 years old or older are the same as regular voluntary retirement, it generally does not make sense to apply for FERS disability if you are at least 62 years old. 

FERS Disability Computation If You Have Not Reached the Age of Retirement

For these calculations, the assumption is that you are under the age of 62 at the time of retirement and not eligible for voluntary retirement at that time.

There are three tiers given:

  • The first 12 months of receiving FERS disability payments;
  • After the first 12 months of receiving FERS disability payments; and
  • Once you reach age 62 (at this time, OPM will recalculate your annuity to match a regular FERS retirement annuity).

For the first 12 months, your annuity calculation will be as follows: Your base annuity is 60% of your high-3 salary.

If you receive social security, the total amount of your social security payment is subtracted from your FERS annuity as a 100% offset.

If your “earned” FERS annuity is greater than this amount, your earned annuity will be your annuity payment.

After the first 12 months, before you reach age 62, your base annuity calculation will be reduced to 40% of your high-3 year salary.

If you receive social security, 60% of that amount will be drawn from your annuity.

Just like the first 12 months, your “earned” annuity will be your annuity payment if that amount is greater than the base annuity (minus the social security offset).

Once you reach age 62, FERS will recalculate your annuity from that point on.

It will be the annuity you would have had if you were able to work until the day before you turn 62 and retired under FERS. In other words, the computation reverts to the one we outlined above.

What Are Disability Annuity Reductions?

In some situations, your disability annuity can be reduced due to elections made during the application process.

The main situation where this happens is when you are married and have a survivor benefit election.

Unless your spouse consents to you electing a smaller than “full” survivor annuity (which you establish at the beginning of your employment term), your annuity faces a reduction of either 5% or 10%. If you elect survivor benefits that are 50% of your benefit, a reduction of 10% occurs.

On the other hand, if you elect survivor benefits of 25%, a 5% reduction occurs. Other reasons for a reduction in your annuity include when you choose to retain health benefits (FEHB) or life insurance (FEGLI). 

Cost-of-Living Annuity Increases

After age 62, you are automatically eligible for an annual cost-of-living increase. The rate can vary and is published by the federal government annually. In 2021, the increase will be 1.3%.

You can use this number as a benchmark to estimate potential future cost-of-living increases. Certain classes of federal employees are eligible for the cost-of-living increase even if they retire before age 62 (law enforcement, air traffic controllers, and firefighters). 

In addition, if you retire on disability and are not yet 62 years old, you are eligible for the cost-of-living increase. The exception to this rule applies only if you are currently receiving a disability retirement annuity that is 60% of your high-3 average salary. Typically, that is only the first 12 months of your disability retirement period.  

When Do Disability Annuities Start and Stop?

Once approved, FERS Disability commences at the earlier of your last day of pay (LDOP) or your date of separation. If, for example, your LDOP was 8 months prior to your approval date, you would receive 8 months of your high-3 x 60% as a lump sum payment, and then continue to receive 60% of your high-3 for the next 4 months, after which time the annuity would reduce to 40% as shown above. In other words, the 12 month 60% period begins with your annuity commencement date. 

Once on the retirement roles, there are four situations that will cause your disability annuity payments to stop. First, if you are re-employed by the federal government at any time, your annuity payments may stop.

Situations that cause the annuity to stop or continue once re-employed by the federal government are complex, and a competent federal employment attorney should be consulted. Second, your annuity payments will also stop if you die.

Partial annuity payments will continue after you pass away if you have set aside a survivor’s annuity with FERS. Third, your disability annuities will cease if you recover from your disability. If you recover from your disability, you must report it to FERS and OPM. 

Finally, your disability annuities will stop if you restore your earning capacity. This applies even if your disability remains. You may wonder, How does the federal government calculate this? Consider the following: you take a FERS disability retirement.

With your continued disability, you find other work. Maybe you start a small business. No matter the job you do, if you start to earn more than 80% of what your federal position currently pays, you will no longer be eligible for FERS retirement disability annuities.

Do You Need Help With Your FERS Disability Claim?

If you have questions about calculating FERS disability retirement pay, or need help with your FERS disability claim, contact the Law Office of Aaron D. Wersing, PLLC, or call us at (833) 833-3529. Federal employment law is our firm’s primary focus. Our attorneys have years of experience and have helped hundreds of federal employees with FERS disability claims.

Drawing on our experience, we can help guide you through the process from start to finish, including calculating your benefits, and appeals such as a reconsideration or MSPB hearing. Most importantly, we will be your advocate the entire way through. Give us a call for a free consultation.

Author Photo

Aaron Wersing, Attorney at Law

Aaron Wersing is the founder of the Law Office of Aaron D. Wersing. Mr. Wersing graduated from the Georgia State University College of Law with a Doctorate in Jurisprudence and was the recipient of the CALI Excellence for the Future Award. Mr. Wersing previously attended the University of Georgia, where he received a Bachelor of Business Administration degree in Accounting. Mr. Wersing is an active member of his local community. Mr. Wersing acts as a volunteer attorney with Houston Volunteer Lawyers, the pro bono legal aid organization of the Houston Bar Association. He is also a member of professional legal organizations such as the National Employment Lawyers Association and the American Inns of Court. To reach Aaron for a free consultation, please call him at (833) 833-3529.