Calculating federal disability retirement benefits for federal employees

The Federal Employees Retirement System (FERS) is one of two federal government personnel systems.

Congress created FERS in 1986 to replace the Civil Service Retirement System (CSRS), which had been around since 1920. FERS applies to all employees who joined the federal service on and after January 1, 1987.

Consequently, almost all federal employees fall under FERS. However, you may not know how to calculate your FERS retirement benefits. 

The good news is that you can follow a simple formula when calculating your FERS retirement benefits. There is no need to buy a fancy federal disability retirement calculator online. Read on to learn more about this formula and how it applies to you. If you have more questions, contact one of our capable federal disability retirement attorneys today. 

Call (800) 801-0598 or send us an online message to get started. 

How to Calculate FERS Disability Retirement Pay?

To calculate your benefits, the FERS retirement benefits formula requires three factors:

  • Your age,
  • Your years of service, and
  • Your highest salary. 

For the purposes of this FERS calculation, your highest salary is your average for the three consecutive years—usually your final three years—during which your salary was the highest. This is called the “high-three” salary. For instance, if you made $80,000 in 2018, $100,000 in 2019, and $120,000 in 2020, your high-three salary would be $100,000.

Next, let’s discuss how age factors in. There is only one question: are you at least 62 years old? If you are younger than 62, your disability retirement benefits will be 60% of your high-three salary minus the pay you receive from social security during the first year you are on disability retirement. After that, you will receive 40% of your high-three salary minus 60% of whatever social security benefits you receive until you turn 62.

Once you are older than 62, your pay is determined by your years of service and your high-three salary. If you have fewer than 20 years of federal service, your disability benefits will equal 1.0% of your high-three salary times your years of service. If you have more than 20 years of federal service, you will multiply 1.1% of your high-three salary by your years of service. 

Federal Employee Pension Calculator and Work Examples

Now that we have an idea of the several factors that compose the FERS disability pension calculator, we can visualize it this way:

(Years of Service) x (High-Three Salary) x (1% or 1.1%) = Annual Pension

Let’s actually apply the formula in a few examples. 

Federal Employee Disability Retirement Pay Calculation Examples #1 and #2:

how to calculate FERS retirement

Let’s say you are 62, your high-three salary is $100,000, and you have served in the government for only 10 years.

One percent of $100,000 is $1,000. And $1,000 times 10 (for your 10 years of service) will equal $10,000.

If we plug this into our calculator, it would look like this:

10 x $100,000 x 1.0% = $10,000

This means you can expect to receive $10,000 a year in disability retirement pay. 

Now let’s imagine that same situation, except you have 25 years of service. In that case, you would multiply $1,100 (1.1% of your high-three salary) by 25:

25 x $100,000 x 1.1% = $27,500

As the formula shows, you would receive $27,500 in government benefits. 

Federal Employee Disability Retirement Pay Calculation Examples #3 and 4:

Let’s use one more example to show how we can calculate your FERS disability retirement pay with this formula. For this scenario, we’ll assume you are 48. Your salary for the past three years was $100,000, $120,000, and $140,000.

You have 28 years of service in the federal government. If we add up the three figures and divide them by three to calculate your high-three salary, we’ll get a result of $120,000. With those figures, we can calculate your annual disability retirement pay as follows:

28 x $120,000 x 1% = $33,600

So your disability retirement pay each month would be $3,360.

If you were able to wait fourteen more years and retire at age 62, you would receive quite a bit more:

42 x $120,000 x 1.1% = $55,440

On a month-to-month basis, you can expect to receive $4,620.

When you have a disability that is seriously impacting your life, it can feel like disability retirement is your only option. However, you may also be able to benefit from other legal possibilities like reasonable accommodation.

Gross vs. Net Income

It’s vital to remember that these figures are only gross numbers. That means you can expect to receive significantly less after deductions. You can expect to pay approximately 25% of your disability pay in taxes. You should also subtract 10 to 20% for healthcare insurance and life insurance premiums.

If we apply these numbers to the annual pension of $55,440 (from our last example), you could expect to receive approximately $2,500 to $3,000 every month. Depending on your health insurance choices and other variables, you may receive slightly more or less than these rough figures. Still, you’ll need to plan accordingly. 

Questions about your federal disability retirement pay? Request a consultation online Or, call our office at (800) 801-0598

How Can an Attorney Help Me with My Federal Disability Retirement?

There are actually quite a few ways that an experienced attorney can help you. 

Consider just these few:

  • They can confirm eligibility requirements. An attorney can help you understand if you meet the necessary criteria to qualify for FERS disability retirement.
  • They can gather and organize critical documentation. With an attorney on your side, it’s easier to gather appropriate medical records, performance evaluations, and other necessary documents to support your case.
  • They can help you prepare your application. An attorney can ensure your application is accurate, complete, and presented in the most favorable light, increasing your chances of approval. They can also ensure that your agency does not make silly mistakes that lower your annual pension amount. 
  • They can represent you during the application process. If needed, an attorney can communicate with the Office of Personnel Management (OPM) on your behalf, handling any inquiries or requests for additional information.
  • They can take the lead with legal appeals. If your application is denied, an attorney can help you appeal the decision.

An attorney can provide other services as well. Consequently, they are truly an invaluable resource. 

Have More Questions About How to Calculate Your FERS Retirement? Contact Us Today

Although you now know how to calculate your FERS retirement, there are still plenty of other issues surrounding federal disability retirement. Whatever those questions, we are happy to help. And if you need assistance working with your employer for a third party, we can provide you the representation you deserve. 

We’re not like any other firm. Our FERS disability attorneys have decades of collective experience helping employees with their federal retirement. Our objective is to make the process as easy for you as possible. 

Even if your appeal is denied for some reason, we are more than happy to assist you with any appeals you might want to make. Give us a call today at (800) 801-0598 to get a case evaluation of your federal disability retirement application. You can also contact us online or fill out the form below to get started.