Believe it or not, the amount of retirement income you receive from your FERS annuity (pension), Social Security and Thrift Savings Plan (TSP) is within your control when you take advantage of strategies that can help maximize each one.
3 Ways To Maximize Your FERS Pension
- Work Longer To Increase Your High-3 Salary: Since your High-3 salary is weighted by years of creditable service, working an extra year or two can boost the amount of your monthly pension.
- Take Advantage Of The FERS 10% Bonus: If you’re open to working longer, the FERS 10% bonus is another strategy for increasing your pension. When you retire at age 62 (or older) with at least 20 years of creditable service, your annuity is calculated at a higher 1.1% formula. This works out to a 10% bump in your monthly benefit for the rest of your life. Add to this, age 62 is when you become eligible for Cost-of-Living Adjustments (COLAs) under FERS.
- Save Up Unused Sick Leave: Although unused sick leave cannot make you eligible for an immediate retirement, it can be used to calculate the amount of your pension. Unused sick leave is counted as creditable service to increase your pension after you meet the age and service requirements for an immediate FERS annuity.
“When you add in compound interest, the TSP 5% agency match is free money.”
2 Ways To Increase Your TSP Nest Egg
- Get The TSP 5% Agency Match: As a FERS employee, your agency matches up to 5% of your TSP contribution each pay period. The first 3% is matched dollar-for-dollar. The next 2% is matched at 50 cents on the dollar. This is in addition to the automatic 1% of your pay that your agency contributes to your TSP. When you add in compound interest, the TSP 5% agency match is free money.
- Take Advantage Of TSP Catch-Up Contributions: You can make TSP Catch-Up Contributions in addition to your regular contributions if you’re age 50 or older, or turning 50 during the calendar year – even if you turn 50 on December 31st. For 2024, the limit for regular TSP contributions is $23,000 while the Catch-Up Contribution limit is $7,500.
Maximize Your Social Security Benefit
When you delay filing beyond your Full Retirement Age (FRA), you earn credits that increase your benefit by 8% per year up until age 70. Even better — your benefit is indexed for a cost of living adjustment (COLA) for each year you wait. Learn more here.
Be pro-active – ask an FRC® trained advisor about other strategies that can help you plan a financially-secure, federal retirement.
