What Is The Average Federal Employee’s Retirement Income?
We live in a time where living off of Social Security just isn’t enough. Even as a federal government employee, federal annuities are far from covering the cost of simply getting by. Find out how much retirees are really making in federal employee retirement income and what you can do to live more comfortably in retirement. For more information on what federal employee benefits you may qualify for, schedule a consultation with Federal Educators today.
The Truth About What People Make With Only FERS or CSRS
The Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) both have similar formulas for how they determine a federal government employee’s retirement income. This formula factors in the number of years served and a little something called the “High-3”.
The “High-3” method takes the three years in which you’ve made your highest salary and calculates an average amount. This, alongside the number of years you have worked in federal service, are the biggest influencers in how much you will make in retirement. The only difference between CSRS and FERS payments is that the FERS program also accounts for a pension multiplier, which is typically an extra 1%.
This might seem fair on paper, but let’s take these averages in 2022:
- CSRS employees had an average monthly annuity of $5,447
- FERS employees had an average monthly annuity of $2,126
Considering rising inflation each year, this is not nearly enough to cover most expenses. How are most retirees in America getting by? We’re going to show you ways to increase your retirement income so you can enjoy your hard-earned years stress-free.
Learn more > Does Inflation Affect My Federal Employee Retirement Benefits?
The Trick As to How Retirees Are Getting By Financially
Many federal employees receive additional government employee benefits outside of the CSRS or FERS pension. Social Security and the Thrift Savings Plan (TSP) are a couple of the most common sources of retirement income, as they are easy to qualify for. The trick is to know how to maximize these federal retirement programs for the greatest outcome.
Making the most of your Thrift Savings Plan begins as soon as your career begins. The goal is to contribute as much as you can as early on as possible for compounded savings by the time you retire.
For Social Security, you earn more the longer you wait to retire. Each year you wait past your minimum retirement age will grant you higher earnings.
With both of these methods combined, your resulting retirement income will increase exponentially. Now, the thought of only making $2k-$5k a month on federal employee annuities doesn’t sound as bleak.
Our Expert Tips For Increasing Your Retirement Income
To review, we’ve compiled our most effective tips for funding your retirement income as a federal government employee:
- Start saving immediately into your career
- Prolong retirement for as long as possible
- Max out your TSP contributions
- Diversify sources of income
- Meet with a financial advisor regularly
Read more > 5 Early Career Habits For Federal Employees Looking To Retire Smoothly
It’s Never Too Late. Start Planning For Your Retirement With Federal Educators!
Act now to secure your retirement later. Reach out to Federal Educators today at (813) 568-1212 to find out what you can do to increase your federal employee retirement income. Start by requesting your free benefits analysis!