Federal employees retiring under FERS have three income sources: your FERS annuity (based on years of service and High-3 salary), Social Security, and your Thrift Savings Plan (TSP). The TSP annuity option — converting your TSP balance to a lifetime income stream through MetLife — is based on the TSP annuity interest rate, which changes monthly. In 2026, the TSP annuity rate has ranged between 3.8% and 4.6%. Federal employees must elect survivor benefits, TSP withdrawal strategy, and FERS supplement timing before separating from service — these decisions are largely irreversible.
Free calculators and rate trackers for FERS and CSRS federal employees.
Enter your High-3 salary, years of service, and retirement age. Get your exact monthly FERS pension plus a TSP vs. SPIA income comparison — in under 60 seconds. Includes the 1.1% 62-and-20 rule and sick leave credit.
Live TSP annuity rates vs. commercial SPIA payout rates. See how much more you could receive monthly by shopping outside the TSP MetLife annuity. Rates updated monthly — timestamped to the day.
FERS employees get full Social Security. Find your breakeven age between claiming at 62 vs. 67 vs. 70 — and how the FERS supplement interacts with your Social Security strategy.
Keep your TSP or roll it to an IRA? Run a side-by-side comparison of TSP withdrawal flexibility, FEHB implications, tax treatment, RMD rules, and investment options for your specific balance and income needs.
Monthly snapshot report: current TSP annuity rate, 12-month historical range, payout comparison for $200K–$600K balances at ages 60–70, and the breakeven analysis for rolling out of the TSP annuity. Updated first of each month.
The Federal Employees Retirement System (FERS) replaced the older Civil Service Retirement System (CSRS) for employees hired after December 31, 1986. Unlike CSRS, which was a single high-benefit pension, FERS intentionally spreads your retirement income across three pillars:
Monthly pension based on your High-3 salary and years of creditable service. Multiplier: 1.0% (or 1.1% at 62 with 20+ years). Paid for life.
FERS employees earn full Social Security benefits. Eligible at 62 (reduced) or full retirement age (66–67). The FERS Supplement bridges the gap before 62.
The federal 401(k). The government matches up to 5% of your salary in contributions. Your TSP grows tax-deferred. You control withdrawals in retirement.
| FERS Annuity ($95,000 × 30 × 1.0% ÷ 12) | $2,375/mo |
| TSP Income (4% on $400,000 balance) | $1,333/mo |
| FERS Supplement (bridge to age 62) | ~$850/mo |
| Total income until age 62 | $4,558/mo |
At age 62, FERS Supplement ends but Social Security begins (est. $1,400–$2,000/mo depending on earnings record). TSP income continues or is annuitized. Numbers approximate — use the FERS Annuity Calculator for your exact estimate.
The FERS annuity formula is: High-3 Average Salary × Years of Creditable Service × Multiplier. The multiplier is 1.0% for most retirees, rising to 1.1% if you retire at age 62 or older with 20 or more years of service — a 10% permanent boost to every year of service. Unused sick leave at 174 hours per month is credited as additional service, so 2,000 hours of unused sick leave adds nearly 11.5 months to your annuity calculation.
When you separate from federal service, you can convert your TSP balance into a lifetime income stream by purchasing a TSP annuity through MetLife, the TSP's designated annuity provider. The payout is determined by the TSP annuity interest rate, which is set monthly and reflects current 10-year Treasury yields.
The TSP annuity interest rate is published monthly on TSP.gov. MetLife calculates your monthly payment using this rate, your TSP balance, your age at purchase, and the annuity type (single life, joint life, cost-of-living adjustment). A higher rate means a higher monthly payout for the same balance.
At 4.0% on $400,000, the TSP MetLife annuity pays approximately $1,600–$1,800/month for a 65-year-old (single life, no COLA). At the same rate, a commercial SPIA from a top-rated carrier pays approximately $2,100–$2,400/month — a difference of $400–$600/month for life. The tradeoff: commercial SPIAs do not preserve your FEHB (Federal Employees Health Benefits) eligibility, which has significant value for federal retirees who rely on FEHB coverage.
TSP annuity rates track Treasury yields. From 2010 to 2021, the rate was consistently below 2.0%, making TSP annuities unattractive relative to alternatives. The rate began rising sharply in 2022 with Federal Reserve rate hikes. In 2023–2024, rates peaked near 5.5%–6.0%, before settling in the 3.8%–4.6% range through mid-2026. Federal employees who locked in annuities at 2022–2023 peak rates received payout rates far above the current market.
If you were hired before January 1, 1984 and did not switch to FERS during the 1987 open enrollment, you may still be under CSRS. CSRS Offset applies to employees who were rehired after a break of more than 1 year on or after January 1, 1984.
| Feature | FERS | CSRS |
|---|---|---|
| Pension Multiplier | 1.0% (1.1% at 62+/20 yrs) | 1.5% to 2.0% (tiered by service length) |
| Maximum Pension | ~33% of High-3 at 30 years (1.0%) | 80% of High-3 at 42 years |
| Social Security | Yes — full SS eligibility and benefits | No — CSRS did not pay into SS (except CSRS Offset) |
| TSP Employer Match | Up to 5% of salary (1% auto + 4% match) | No matching contributions |
| FERS Supplement | Yes — bridges to SS eligibility at 62 | No — not applicable |
| COLA in Retirement | Partial COLA (CPI minus 1%) if under 62 at separation; full at 62+ | Full COLA beginning at retirement |
| Employee Contribution | 0.8% of salary (hired before 2013); 3.1%–4.4% for newer employees | 7.0% of salary |
| Portability | Better — TSP and SS credits transfer | Poor — leaving forfeits a large portion of retirement value |
Unlike most financial decisions, federal retirement elections are largely permanent. Once you separate from service, these choices cannot be changed — making pre-retirement planning critical.
Electing the full survivor benefit (50% of your FERS annuity) costs you ~10% of your monthly pension for life. Waiving it is irrevocable after retirement — your spouse gets nothing if you die first. If you elect partial coverage (25%), the reduction is ~5%. This decision is made at separation and cannot be revisited unless your spouse pre-deceases you.
You can keep Federal Employees Health Benefits (FEHB) in retirement only if you were enrolled for the 5 consecutive years immediately before retirement. If you drop FEHB at any point in those 5 years, you cannot re-enroll in retirement. For most federal employees, FEHB is far more valuable than Medicare Advantage — the decision to maintain it is irreversible by inaction.
Once you purchase a TSP annuity, you cannot undo it — the balance is converted and gone from your TSP account. The monthly income is guaranteed for life, but you cannot access the principal for emergencies, leave it to heirs, or take it as a lump sum. Rolling to an IRA gives full flexibility, including the option to purchase a commercial SPIA with a higher payout rate later.
The FERS Supplement begins automatically when you retire before age 62 under an immediate unreduced retirement (MRA+30, age 60+20, or age 62+5). It cannot be deferred or increased — it pays approximately your earned Social Security benefit until age 62, then stops. Earned income above $23,400 (2026 limit) reduces it $1 for every $2 earned. Post-retirement employment affects this payment, not your FERS annuity.
While not unique to federal employees, SS timing is especially consequential for FERS retirees because the FERS Supplement ends at exactly 62 — creating an income cliff if you don't coordinate. Claiming at 62 gives reduced benefits (25% less for life vs. FRA). Delaying to 70 gives 8%/year credits beyond FRA. The breakeven between 62 and 70 is approximately age 80–82. Married FERS retirees may optimize by having one spouse claim early and the other delay.
The FERS Supplement (also called the Special Retirement Supplement or SRS) is one of the least-understood benefits in the federal retirement system. It bridges the income gap between your early retirement date and age 62, when Social Security begins.
The FERS Supplement approximates the Social Security benefit you earned during FERS-covered federal service. The OPM formula: (Estimated SS benefit at 62) × (FERS creditable service ÷ 40). Example: If your estimated SS benefit at 62 is $2,000/month and you have 30 years of FERS service, your Supplement is $2,000 × (30/40) = $1,500/month.
The FERS Supplement stops the month you turn 62 — regardless of whether you claim Social Security. It also reduces dollar-for-dollar if you earn above the Social Security earnings limit (approximately $23,400 in 2026). A retiree earning $43,400 from post-retirement employment would have their Supplement reduced by $10,000 annually, or roughly $833/month. Unlike the FERS annuity, the Supplement is not subject to COLA adjustments.
Connect with advisors who specialize in FERS benefit optimization — survivor benefit analysis, TSP withdrawal strategy, FEHB vs. Medicare, and FERS Supplement coordination. Free matching, no obligation.
Current TSP annuity rate, 12-month historical range, payout comparison at $200K–$600K for ages 60–70, and the breakeven analysis for rolling out of the TSP annuity vs. buying a commercial SPIA. Updated the 1st of each month.
Compare commercial SPIA rates vs. the TSP MetLife annuity. A-rated carriers, free quotes, no obligation. Most federal employees add $400–$900/month by shopping outside the TSP annuity.
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