How to Calculate GS Retirement
Calculating your GS retirement benefits can be a complex process, but it’s an essential step for any federal employee to ensure they understand their financial future. The General Schedule (GS) retirement system is a defined benefit plan that provides a pension to federal employees upon retirement. Here’s a step-by-step guide on how to calculate your GS retirement benefits.
1. Determine Your High-3 Salary
The first step in calculating your GS retirement benefits is to determine your High-3 salary. This is the average of your highest three consecutive years of basic pay, excluding any overtime, bonuses, or other nontaxable compensation. To calculate your High-3 salary, follow these steps:
– Gather your pay stubs or W-2 forms for the past three years.
– Add up your basic pay for each of the three years.
– Divide the total by three to find your average annual basic pay.
– Multiply the average annual basic pay by 12 to get your High-3 salary.
2. Determine Your Retirement Age
Your retirement age depends on when you were born and when you plan to retire. The General Schedule retirement age is typically 65, but it can be earlier or later depending on your birth year and the year you plan to retire. You can use the following table to determine your retirement age:
| Birth Year | Retirement Age |
|————|—————-|
| Before 1943 | 65 |
| 1943-1954 | 62 |
| 1955-1960 | 63 |
| 1961-1964 | 64 |
| 1965-1969 | 65 |
| 1970-1974 | 66 |
| 1975-1978 | 67 |
| 1979-1983 | 68 |
| 1984 and later | 69 |
3. Calculate Your Retirement Annuity
Once you have your High-3 salary and retirement age, you can calculate your retirement annuity. The formula for calculating your annuity is as follows:
Annuity = (High-3 Salary x Percentage) x Number of Years of Service
The percentage is based on your years of service and can vary. Here’s a general guide:
– 0-5 years: 1%
– 5-10 years: 1.5%
– 10-15 years: 2%
– 15-20 years: 2.5%
– 20-25 years: 3%
– 25-30 years: 3.5%
– 30+ years: 3.75%
4. Consider Your Social Security Benefits
In addition to your GS retirement benefits, you may also be eligible for Social Security benefits. Be sure to calculate your Social Security benefits as well, as they can significantly impact your overall retirement income. You can use the Social Security Administration’s online calculator to estimate your benefits.
5. Consult with a Financial Advisor
Calculating your GS retirement benefits can be overwhelming, especially if you have many years of service or if your retirement date is approaching. Consider consulting with a financial advisor who specializes in federal employee retirement planning. They can help you understand your options and ensure you’re on track for a comfortable retirement.
By following these steps, you can calculate your GS retirement benefits and plan for a secure financial future. Remember, the earlier you start planning, the better prepared you’ll be for retirement.
