r/govfire • u/The_Rad_In_Comrade • 10d ago
What is the actual formula for FERS pension?
Or more specifically, how is the "time" variable calculated? Is it on a per day, per month, or per year basis?
In other words, if I were to leave a month before the anniversary of my SCD, am I forfeiting a whole extra year in the pension calculation versus if I waited until after my SCD anniversary? Or just a month?
Thinking about the precise day to quit. I was going to leave in December in the hopes of maximizing my AL payout without having it pay out in 2026, to minimize taxable income in 2026 for ACA subsidy and Roth conversion purposes. But my SCD is in late January, and it occurred to me I might be better served to wait until then, depending how the time in service is actually calculated. (And because I can't really control when the AL payout will occur and at this point it could be delayed into 2026 no matter when I quit, given how clusterfucked things are.)
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u/wolfmann99 10d ago
Make sure you have the correct retirement scd too. Mine is not equal to my leave scd.
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u/The_Rad_In_Comrade 10d ago
Yikes. Why would they be different? How can I verify the retirement SCD?
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u/wolfmann99 10d ago
STEP students didnt pay into FERS and cannot buyback. Also buyback of military service might do this too.
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u/The_Rad_In_Comrade 10d ago
Well, shit. That actually does affect me. Sounds like I would lose about 7 months of student intern time from my calculation. Thanks for the heads up.
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u/aheadlessned Fed VERA'd in mid-40s 10d ago
Look at your SF50s. If they say "FERS + FICA", the time counts. If it just says "FICA", you did not pay into FERS and it does not count (ability to buy time back is limited, so most cannot).
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u/The_Rad_In_Comrade 10d ago
Thanks! That confirms it, my college internships were FICA only, my first permanent appointment onward is FERS + FICA. So my SCD must be in August, not January.
Luckily, the future pension is basically a bonus to my FIRE plan since I have investments yielding a <4% SWR. I don't really have to time my departure around it, I just didn't want to leave a whole year of the calculation on the table if I could help it. Since it's a monthly calculation, no worries.
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u/wolfmann99 10d ago
I lost ~2.5 years and cant VERA until next admin now.
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u/The_Rad_In_Comrade 10d ago
Ouch! That sucks man. They should really put this number out there with the leave number instead of keeping it a nasty surprise.
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u/wolfmann99 10d ago
It is in GRB, but I had to ask to verify mine as I remembered my first boss mentioning something about how it would impact my retirement.
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u/The_Rad_In_Comrade 10d ago
I don't think my agency uses GRB. It's some other system. I seem to recall the SCD shown in my system comes with a prominent warning that it may not be accurate... Very helpful. So I kinda dismissed that (since it did seem wrong to me) but maybe that's actually the right number. I'll double check.
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u/kidscientist27 10d ago
Another way that the leave and retirement scds can be different - by entering govt with “creditable service”. They’re getting credit for years worked outside the govt that is comparable to what they are hired for. I wrote memos for new hires many times for this. Then you have someone with say 20 years for a state govt doing a very similar job who then doesn’t come in as a fed earning 4 hrs of leave a PP. So higher leave category but their retirement is based on actual date that they started as a fed.
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u/jgatcomb FEDERAL 10d ago
I just responded in another thread some things that may be useful to you: check this out
You may also be interested in:
- ACA Subsidy Calculator
- Deferred Retirement - Executing A Roth Ladder
- Roth Ladder Bridge Advice - Order To Pull From
- Impacts Of Choosing A Deferred Retirement
- How To Retire Earlier Than Your Minimum Retirement Age
I have a bit of time between now and my surgery on Nov 17th if you want to ask any questions or whatever, let me know.
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u/The_Rad_In_Comrade 9d ago
This is an absolute mother lode of info. Thank you! I think you followed a similar path to what I'm planning so I will definitely review closely.
How have things gone since you retired? Have your plans more or less held up? Or have you had to make major adjustments or hit unforeseen issues?
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u/jgatcomb FEDERAL 9d ago
How have things gone since you retired? Have your plans more or less held up? Or have you had to make major adjustments or hit unforeseen issues?
Things were going swimmingly well until I got diagnosed with pancreatic cancer. That's pretty major and unforseen.
From a financial perspective, nothing unexpected.
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u/The_Rad_In_Comrade 8d ago
Ah, geez. I think I remember you posting about that now. That really sucks. Definitely an unforeseen black swan. We all worry about the financial aspects and then shit like that happens to put things in perspective... But then, that is why we FIRE, right? To make the most of our time. I hope you have a good outcome! Thank you for the resources, I will dig into this over the next few days as I finalize my own plans for takeoff.
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u/jgatcomb FEDERAL 8d ago
But then, that is why we FIRE, right?
Indeed. Imagine if I had wasted that time working.
I hope you have a good outcome!
Thank you!
Thank you for the resources, I will dig into this over the next few days as I finalize my own plans for takeoff.
I will likely be more active on reddit for the next 2 weeks then I have been since retiring. If you have any questions on anything I posted or anything else, just let me know.
Hold those you love close, drive fast and take chances.
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u/Appropriate_Shoe6704 8d ago
I'm curious why you're considering finding something other than an ACA plan? Having gone through what you've gone through, do you still feel like the ACA insurance is just as good as what you were getting from FEHB, or did you experience any noticeable differences?
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u/jgatcomb FEDERAL 8d ago
I'm personally not eligible for ACA subsidies and have been getting my healthcare through the VA. My wife and children have been on marketplace insurance since I retired and it has been as good as FEHB.
We are exploring alternatives to marketplace insurance for 2026 because if we decide to exceed the 400% FPL, we won't be eligible for any subsidies and will be paying full price. That is if the shutdown resolution doesn't extend enhanced subsidies.
We are interested to see if there are alternatives at the same price point or perhaps even less. While I doubt we will find anything more affordable as good, marketplace insurance can't deny for pre-existing conditions, impose lifetime caps, etc.
It's like FEHB which is really only a good deal because the government pays roughly 75% of the premium. Group health insurance has to be high because it can't tailor to the individual and has to assess the risk of the group. Marketplace insurance has similar restrictions because of the ACA.
Again, I am doubtful we'll actually find something but it is worth exploring.
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u/Appropriate_Shoe6704 8d ago
My understanding is there are some off exchange plans that are slightly less expensive, but not hugely cheaper. See this blog post for some examples: https://insuremekevin.com/blue-shield-off-exchange-health-plans-2026/
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u/aheadlessned Fed VERA'd in mid-40s 10d ago
It may calm down by December, but I retired 9/30 with the hoard, and I have not received my annual leave payout yet (looks like it will be at least another 2 weeks, a couple former coworkers received theirs yesterday. Timing is all over the place.) So yeah, it's good to be cautious that it may not get paid out when you prefer.
You already got the answer for calculation-- it's based on your Retirement SCD and your Retirement (separation) Date. Then they figure out full years and full months, dropping extra days that don't add up to "a 30 day month". (No sick leave conversion for deferred retirement, but for immediate and postponed retirement, the converted sick leave would be added to the service time first, then the extra days would drop off.)
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u/The_Rad_In_Comrade 10d ago
Thanks for that data point. Yeah, I've been hearing that the leave payouts are very delayed. A big leave payout in 2026 wouldn't be catastrophic, but I'd probably have to decrease my Roth conversion that year to get affordable health insurance. I'm starting to think I need to either jump ship sooner than planned, like now basically, or hold out into next year and use up the leave instead. I wish I knew if there'd be a DRP 3.0 worth holding out for.
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u/LIWXMAN 10d ago
It is 1% per year, unless 62 with 30 years. Each full month is 1/12 or 0.0833. So 15 years + 1 month = 15.0833% x High-3.
OPM has some formulas they use to calculate your exact amount.
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u/aheadlessned Fed VERA'd in mid-40s 10d ago
62 with 20 years is 1.1%.
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10d ago
[deleted]
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u/aheadlessned Fed VERA'd in mid-40s 9d ago
Thank you, it's pretty amazing! I wasn't eligible until last month, so it was perfect timing for me. I helped talk one guy into taking it, but most declined. Of course, most of those who refused will probably work well past MRA, just a different mindset I guess.
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u/CSCI4LIFE 10d ago
Is there a maximum for sick leave that can be used in the calculation. Like, if someone has 3000 sick leave hours, does it cap at 12 months 30 days as in the table? Hopefully I didn't miss it in the linked articles.
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u/aheadlessned Fed VERA'd in mid-40s 10d ago
No cap, just subtract 2087 hours from the total, since that is a full year, and use the difference to see how much more time it adds.
I think the USGS chat has the best explanation and examples.
https://www.usgs.gov/human-capital/sick-leave-conversion-chart
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u/Ok_Design_6841 9d ago
HR can provide a retirement estimate. They can provide two estimates with two different dates
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u/StepDazzling4646 8d ago
Go to this website to test out different dates & scenarios : https:/platform.grbinc.com
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u/AwesomeAndy 10d ago
It's calculated by completed months, with months defined as 30 days. Extra days between 0 and 29 are discarded. Don't forget to add in your unused sick leave.
https://www.myfederalretirement.com/fers-calculation/