How Much Income Will You Have in Retirement?
Figuring out how much income you’ll have is a big part of the planning retirement, and there are many options available to help you do so, from online services through the OPM to financial advisors, to specialists from the agency itself.
These numbers are important to know. You don’t want to retire too early and start taking your benefits without first sufficiently saving. Otherwise, you might run out of money. But it is important to note, that even with all these tools available that are supposed to help estimate what your retirement income might be, you have to keep in mind that it is never the official number. An estimate, at the end of the day, is really just a guess.
A formula is used to determine your FERS benefits, based off of the amount of time you’ve been employed and the average of your three highest years of pay. The reason it can be complicated to estimate is because of variations in your federal employment, such as if you served in the active military, sick time you may or may not have used, or when you may have stopped and started (or even adjusted) your annuity contribution.
Unused paid time off will not be credited towards your FERS contribution, and if you’re one of the employees whose retirement package is made of up of both FERS and CSRS parts, then that’s two different accounts that money will not be credited for.
The OPM will also run your account through the Retirement Operations Center, which will then help them figure out if you need to provide them with more information, including the interim pay. When all of these elements are settled, and the OPM is happy with it, they send your paperwork to the main office where it will be reviewed for a final time before a determination as to your benefit amount is made.
Social Security is another avenue from which your retirement income will come from, and you can get an estimate as to how much your benefit will be by logging onto www.ssa.gov and filling out an account. Again, though, this is just an estimate and will not take into account any interim and pay reductions you may have due to certain provisions both from your working years in the benefits package provided by CSRS and FERS. FERS retirees can also figure out if they can collect the special retirement supplement while there.
If you are unhappy with the amount in your determination or think an error may have been made, you can make an appeal, but more often than not, these appeals stem from a misunderstanding from the retiree instead of a clerical error. Still, it never hurts to double-check and make sure everything was filled out and filed away properly.
A TSP calculator is also available for those contributing to the Thrift Savings Plan, but like the FERS estimate and the Social Security estimate, this too has to make a few assumptions in order to come up with a number and will not reflect the exact amount you will make when you start to draw from that retirement package also.
