Your FERS pension is actually pretty simple.
There are only 3 things that go into it so if you increase any one of those 3 things then you’ll have more income in retirement.
Here are some of the most common strategies to increase your pension.
The 3 Big Ones
Here are the only things that matter when trying to increase your pension:
Years of Service
High-3
Multiplier
Check out this article if you want to know how your pension calculation works.
Years of Service
There are two ways to increase your years of service.
Number one, you can actually work longer.
Number two, you can save up sick leave.
Any unused sick leave you have at retirement will increase your years of service to increase your pension.
This article goes in depth about how much sick leave you need to make a meaningful difference.
High-3
Your high-3 is your average annual salary you were paid during the 3 highest earnings years of your career.
For example, if you highest earning years were:
2021: $95,000
2022: $100,000
2023: $105,000
Then your high three would be $100,000 (the average of all three).
There are 3 main ways to increase your high three.
You can work longer to get more step increases and pay raises.
You can also try to get high paying positions.
You can also move to a high locality pay location (ie California) for three years because locality pay is included in your high-3.
Multiplier
For traditional FERS your multiplier is almost always 1%.
The only time it’s not 1% is when someone retires at age 62 or later with at least 20 years. In that case the multiplier would be 1.1% (which means your pension will be 10% higher!).
So the only way to increase your multiplier is to work until 62 and have at least 20 years.
If you are relatively close to this milestone then it may be worth pushing a little longer to get it.
Limited Control
Under FERS, working longer will always increase your pension but there will come a point where enough is enough and you’ll want to retire.
That is why it is so important to also maximize your other retirement income sources like your TSP and Social Security.
Check out this article about how to invest your TSP in retirement.
