Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Laboring Another Day

According to the Labor Department, the annual Labor Day holiday "constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity and well-being of our country."

As this holiday approaches, I thought I'd share an example of how your retirement will increase as you labor longer in your federal career.

The reason is that the value of your "high-three" average salary -- which helps determine your benefit, whether you're in the Civil Service Retirement System or the Federal Employees Retirement System -- continues to increase little by little as you keep working. Think of it this way: Every day you work, you are substituting that day's salary for the pay rate that was in effect three years ago. In addition, every 30 days or so, you are adding another month of service to the computation of your basic retirement benefit.

For those who receive matching Thrift Savings Plan contributions, they also continue to increase as you extend your career -- as do Social Security benefits.

How much of a difference can sticking around make? Let's look at a couple of examples.

Fred (FERS) Frieda (CSRS)
Length of Service High-Three
Basic Benefit Basic Benefit
Retire on Sept. 30, 2007 30 years $57,598 $17,279/Yr.
Work 3 more months 30.25 years $58,139 $17,587/Yr.
Work 6 more months 30.5 years $58,594 $17,871/Yr.
Work another year 31 years $59,523 $18,452/Yr.

By the way, this example assumes that Fred is under age 62. If he were 62 or older, his benefit would be 10 percent higher. And I realize that unless Fred had some years of military service, it is unlikely that he would have 30 years of FERS service by Sept. 30, 2007, since FERS hasn't been around that long.

In addition to the increase in the basic benefit, Frieda and Fred would be able to continue to contribute to their TSP accounts and, in Fred's case, receive matching contributions from his agency. If he stays another year, he could receive $3,070 in additional matching contributions plus the ability to save up to the IRS tax deferral limit for each year. The limit on tax-deferred contributions in 2007 is $15,500 and an additional $5,000 in catch-up contributions if you are at least 50 years old.

Since FERS employees also contribute to Social Security, another year of earned income would increase Fred's Social Security retirement or his FERS Special Supplement by around $25 per month.

If you want to review the rules for computing a CSRS or FERS retirement benefit in more detail, check out these columns from earlier this year:

Finally, lest you get the wrong idea, I am very much in favor of the concept of retirement. Some employees I've talked to over the years say they are loathe to make the decision to actually retire because they know they'll miss out on increased benefits if they leave. The only problem is that the longer you stay, the less time you'll have in the post-retirement phase of your life.

Whatever your position on staying vs. getting out as soon as you can, we've got a holiday weekend coming up. So take a break if you can, and enjoy at least a few days off.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.