How Your Federal Retirement Income is Designed – Are You on Track?

Hi Friends, Mike Lanway here with AllAboutFERS.com

Today I want to talk about something every FERS employee should understand, even if it sounds simple: where your retirement income is supposed to come from and what that means for your future comfort. It’s built around replacing about 70–80% of your salary when you retire—but only if everything comes together just right.

Your Retirement Pie: How Each Piece Fits

Let’s break it down plainly, in real-life terms:

1. FERS Basic Annuity

Think of this as your federal “pension.” If you spend 30 years in service and retire before age 62, that annuity is designed to replace around 30% of your High-3 average salary.

2. Social Security

This benefit kicks in as another substantial piece of your income—typically estimated at 33–40%, depending on your work history and earnings pattern, and it could be significantly less if you take prior to age 67.

3. TSP (Thrift Savings Plan)

This is your savings portion, so for a FERS employee retiring before age 62 after a 30-year career, you may need 7-17% of your income to come from TSP to end up at 70-80% of Hi-3 pay average that TSP L Fund design intends to help you achieve. 

Ask Yourself: Is 70–80% Enough?

Maybe it is. If you’re debt-free, healthy, and ready to downsize, it might feel perfect. But for many, stepping down to 70% isn’t an easy transition.

If you expect travel, healthcare needs, debt, or family support, you might find that gap leaves you short of your comfort zone. That’s why it’s essential to know what your TSP alone will be adding—and whether that will land you at 70%, or leave you chasing 80% or more.

Why It Matters Now

Understanding this breakdown isn’t just about numbers. It’s about clarity, control, and planning ahead. Once you know what your TSP needs to do, you can adjust:

• Your TSP contributions
• Your investment choices
• Your other savings or work timeline
  

The sooner you understand your retirement trajectory, the more time you have to shape it.

Your Next Move

Start by asking yourself: “Is replacing 70–80% of my salary enough to meet my retirement goals?”

If the answer is no, don’t panic. Instead, let it guide a thoughtful plan. Explore ways to boost your income, tweak your TSP allocations, or tweak your retirement timeline.

And if you’d like help mapping it out, we’re right here. Visit AllAboutFERS.com, where we explain these concepts in everyday language and help you turn numbers into clarity.

You’ve built your career carefully—your retirement deserves the same care.

Take care,

Mike Lanway