Why Your FERS Pension Estimate May Be Wrong in 2026: 9 Details to Check Before You Retire

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A FERS pension estimate is a projection of the annual basic annuity you may receive under stated assumptions. It's calculated under the statutory formula for FERS, the Federal Employees Retirement System, using your High-3 average basic pay, your years of creditable service, and a multiplier. OPM, the U.S. Office of Personnel Management, administers it.
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An estimate is not a guaranteed amount. The basic formula does not by itself reflect every reduction, such as survivor elections, age reductions, or court orders. It can also differ from OPM's final calculation when it relies on incomplete service records, unresolved deposits, or projected leave balances.
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A single misclassified year of service, an outdated multiplier, or an unverified Service Computation Date can materially change the projected annuity. This guide from Federal Employee Advisor Network, a retirement planning firm specializing in federal employee benefits, walks through nine details that can change your FERS pension or broader retirement-income picture before you set a retirement date.
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What a FERS Pension Estimate Actually Measures
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A FERS pension estimate measures your basic annuity under the statutory FERS formula that OPM administers: your High-3 average basic pay multiplied by your years of creditable service multiplied by a multiplier. According to OPM's FERS computation guidance, most regular FERS retirees get a 1.0% multiplier. It rises to 1.1% when you retire at age 62 or later with at least 20 years of service.
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That formula looks simple. But each of its inputs carries an assumption worth checking against your own records. The rest of this article isolates those assumptions one detail at a time.
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9 Details That Can Change Your FERS Pension or Total Retirement Income
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Below are nine details that can materially affect a FERS pension or broader federal retirement income projection. The first five can directly change your initial FERS annuity calculation. The remaining four affect your supplement, future purchasing power, savings income, or net budget rather than the basic pension formula itself.
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Each is checkable before you retire. And each is worth confirming against an official source rather than accepting a default value.
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1. The multiplier: 1.0% vs. 1.1%
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For most regular FERS employees, the standard multiplier is either 1.0% or 1.1%. According to OPM, the 1.1% multiplier generally applies when you separate for retirement at age 62 or later with at least 20 years of service. Otherwise the multiplier is 1.0%.
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That difference produces a multiplier 10% higher than the standard rate, assuming the same High-3 and creditable service. Different formulas may apply to special-category and disability retirements.
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An estimate may use the standard 1.0% multiplier even when your planned retirement date could qualify for the 1.1% multiplier. Confirm which multiplier your estimate uses. Then check whether your planned retirement date actually crosses both the age-62 and 20-year thresholds.
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2. Your High-3 average basic pay is not your final salary
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Your High-3 is your highest average basic pay during any three consecutive years of creditable service. According to OPM, for most General Schedule employees, basic pay includes locality pay. It generally excludes overtime, bonuses, awards, and other payments that are not treated as basic pay for retirement purposes.
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Some forms of pay may count as basic pay for specific employee categories, so the exact inclusions depend on your position. For employees whose basic pay rises consistently, the High-3 often comes from the final three years. But it can come from any consecutive three-year period if your pay was higher earlier.
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If your estimate uses your current gross pay rather than a true 36-month average of basic pay, the projection is likely inflated.
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3. Unused sick leave can add service credit
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Unused sick leave converts into additional creditable service under FERS. According to OPM, 2,087 hours of unused sick leave equals one year of additional service credit for annuity-computation purposes.
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Sick leave cannot establish initial retirement eligibility. It counts only in the annuity computation, not toward the age-and-service thresholds you must meet to retire.
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Unused sick leave can increase the service credit used in your annuity computation, though the final effect depends on the balance and OPM's service conversion. Preliminary estimates may exclude projected unused sick leave, or use a balance that changes before your actual retirement date.
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4. Your Service Computation Date may be wrong
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Your creditable service total depends on your Service Computation Date (SCD). An SCD error carries directly into the annuity because the formula multiplies by years of service.
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Periods of non-deduction service, temporary appointments, breaks in service, and part-time tours can all shift the number of years the formula uses. Ask HR which retirement Service Computation Date and service history they used in the estimate.
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Do not assume the leave SCD shown on one SF-50 matches the service used for retirement computation. Federal employees can have different SCDs for leave, retirement, and other purposes. Part-time service may count toward eligibility while still being prorated in the FERS annuity calculation.
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5. Bought-back military service, deposited or not
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Active-duty military service performed after December 31, 1956 generally requires a military service deposit to count toward FERS eligibility and annuity computation. You normally complete it before separation. Pre-1957 military service is generally creditable without a deposit.
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If you receive military retired pay, you may also need to waive that pay unless an exception applies. Exceptions include qualifying reserve retired pay under Chapter 1223, or retired pay based on a qualifying service-connected disability incurred in combat or caused by an instrumentality of war during a period of war.
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An estimate that includes post-1956 military time you have not actually paid for will overstate both your years of service and, potentially, your eligibility date. Confirm whether your military service deposit is complete and reflected in your record.
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6. The FERS Supplement earnings test can erase part of your income
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If you retire before age 62 on an immediate, unreduced annuity, you may receive the FERS Supplement, which approximates the Social Security benefit earned during your federal service. Employees retiring under a VERA (Voluntary Early Retirement Authority) or qualifying involuntary retirement before their MRA (Minimum Retirement Age) generally do not begin receiving it until they reach MRA.
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The supplement generally ends no later than age 62, and it may end earlier if you become entitled to Social Security benefits before then. It's subject to an annual earnings test.
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OPM applies the Social Security annual earnings-test exempt amount. For 2026, that amount is $24,480, and the FERS Supplement is reduced by $1 for every $2 of earned income above the limit.
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Only wages and self-employment income count. TSP withdrawals, pensions, and investment income do not. An estimate that shows the full supplement while you plan to keep working can be badly wrong.
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7. COLAs are smaller under FERS than you might expect
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FERS annuities receive a "diet" COLA (Cost-of-Living Adjustment), not the full inflation figure. According to OPM's cost-of-living adjustment guidance, eligible FERS annuitants received a 2.0% COLA for 2026, while CSRS annuitants received 2.8%. Most regular FERS retirees do not receive COLAs until age 62. Different rules apply to disability retirees, survivors, and certain special-category retirees such as law enforcement officers and firefighters.
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The diet-COLA formula works in tiers. A CPI increase of 2% or less passes through in full. More than 2% but no more than 3% yields 2%. More than 3% yields the CPI increase minus 1%.
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If your estimate projects future income using the full Social Security COLA rather than this reduced formula, your long-term projection is overstated. A retiree's first eligible COLA may also be prorated when the annuity has been in pay status for less than a full year. The FERS Supplement, notably, receives no COLA at all.
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8. TSP is separate from your pension, so don't blend them
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Your annuity and your TSP, or Thrift Savings Plan, the federal government's tax-advantaged retirement savings program, are two distinct income sources. Folding them together distorts retirement planning.
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How much you contribute to the TSP does not affect your basic annuity. According to TSP.gov, the 2026 employee contribution limit is $24,500. The standard age-50 catch-up limit is $8,000. Participants who turn ages 60 through 63 during 2026 may contribute a higher $11,250 catch-up amount.
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A FERS pension estimate should never fold TSP balances into the annuity figure. The two are calculated and taxed separately.
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9. FEHB eligibility rules can change your real retirement income
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Carrying FEHB, the Federal Employees Health Benefits Program, into retirement is not automatic. FEHB does not change your gross FERS pension estimate. But it's a major planning issue because losing it changes your net income.
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According to OPM's guidance on continuing FEHB into retirement, to continue coverage you generally must retire on an immediate annuity. You must also have been continuously enrolled in, or covered as a family member under, FEHB for the five years immediately before the annuity begins. If your total time is shorter, you need coverage for all services since your first opportunity to enroll.
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Time covered by TRICARE may count toward the five-year requirement, provided you are enrolled in FEHB when you retire. Limited exceptions may apply.
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A retirement-income projection that assumes continued FEHB coverage and premiums without confirming FEHB eligibility can present a healthier financial picture than reality.
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FERS Pension Estimate: Common Assumption vs. Verified Reality
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The table below compares the assumptions that produce inaccurate estimates with the verified 2026 rules from official sources.
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How to Verify Your FERS Pension Estimate Before You Retire
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Verifying your estimate is a sequential process. Each step closes one of the gaps described above. Work through the steps in order rather than checking numbers at random.
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• Request your verified Service Computation Date and full service history from your agency HR office.

• Confirm whether any required military service deposit has been paid in full and posted to your agency record.

• Pull a recent basic-pay history and calculate your true High-3 from the highest 36 consecutive months.

• Add your projected unused sick leave, converted at 2,087 hours per year of credit.

• Confirm the correct multiplier against your planned retirement age and years of service.

• Check your FEHB enrollment history against the five-year rule.

• Model the FERS Supplement earnings test if you plan to work before age 62.

Working through these steps with a retirement planning firm that specializes in federal employee benefits, such as Federal Employee Advisor Network, can surface errors before separation. At that point there may still be time to correct service records, complete deposits, or reconsider the planned retirement date.
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The Bottom Line
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A FERS pension estimate and broader federal retirement income projection are most useful when their assumptions are checked against current OPM, TSP, and SSA guidance. The first five details here, the multiplier, your High-3, your Service Computation Date, sick leave, and military deposits, can change the basic annuity itself. The remaining four, the FERS Supplement earnings test, the reduced FERS COLA, your TSP, and FEHB eligibility, shape your broader total retirement income rather than the pension formula.
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Before you commit to a retirement date, check all nine. To have your estimate reviewed against current-year rules, contact the Federal Employee Advisor Network while there's still time to correct records or reconsider your planned date.
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Frequently Asked Questions
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1. How is my FERS pension calculated?

Your FERS pension equals your High-3 average basic pay multiplied by your years of creditable service multiplied by a multiplier. According to OPM, the multiplier is 1.0% for most retirees and 1.1% if you retire at age 62 or later with at least 20 years of service. High-3 uses basic pay only.
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2. Why is my FERS pension estimate different from OPM's?

Estimates can differ because of the inputs used. A quick estimate may apply an assumed multiplier, an unverified Service Computation Date, or your final salary instead of your true High-3. OPM's official adjudication determines the payable amount from the law and your certified employment record, including sick leave and completed deposits.
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3. Does unused sick leave count toward my FERS pension?

Yes, for the annuity computation. OPM converts unused sick leave into additional service credit at 2,087 hours per year, which can increase the service used in your FERS annuity calculation. However, sick leave cannot meet the age-and-service requirements for retirement eligibility. Unlike annual leave, it is not paid out as a lump sum.
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4. How much can I earn before the FERS Supplement is reduced?

For 2026, the earnings exempt amount is $24,480, based on the Social Security Administration figure applied by OPM. Earning above that limit reduces the supplement by $1 for every $2 over the threshold. Only wages and self-employment income count. TSP withdrawals and investment income do not.
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5. Can I collect my FERS pension and Social Security at the same time?

Yes. FERS was designed as a three-part system combining the basic annuity, Social Security, and the TSP. You can receive your FERS annuity and Social Security at once, once you're eligible for each. The FERS Supplement, however, is a separate early bridge benefit. It generally ends no later than age 62, and it may end earlier if you become entitled to Social Security benefits before then.
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6. What is the FERS Supplement and who qualifies?

The FERS Annuity Supplement may be payable to employees with at least one full calendar year of FERS-covered service who retire under MRA+30, age 60 with 20 years, qualifying special provisions, a VERA, or qualifying involuntary retirement. For VERA and involuntary retirements before MRA, it generally begins at MRA. It excludes disability, deferred, and MRA+10 retirements and ends by age 62.
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Disclaimer
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This content is for general educational purposes only and should not be considered financial, legal, tax, or retirement advice. Federal retirement benefits and eligibility depend on individual circumstances and current federal rules. Verify calculations, benefit requirements, contribution limits, and retirement procedures with your agency HR office and official OPM, TSP, and Social Security Administration resources before making retirement decisions.

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