Here are the most important retirement rules for Foreign Service Federal Employees as well as how you can access your most important benefits like your pension and TSP.
Let’s start with when you can retire.
When Can You Retire
Your retirement eligibility rules are pretty simple. You have to meet one of the following:
-Have 20 years of service and be at least age 50
-Or have 25 years of service at any age
Note: You have to have at least 20 years of foreign service time to retire under the above rules. If you have less than 20 years of foreign service time then you fall under the normal retirement rules which you can find here.
What Do you Get for Being “Eligible” to Retire
Being eligible for retirement means that you can get a pension (monthly check) for the rest of your life as well as keep your health insurance (in most cases).
Foreign Service Forced Retirement
Because the job is so demanding, Foreign Service Federal Employees have a mandatory retirement at age 65.
How Much Will Your Pension Be
For Foreign Service officers, your pension is more generous than your fellow traditional federal employees.
You get 1.7% of your high-3 salary (we’ll define that below) for the first 20 years of service and then you get 1% for every year you have after that.
So your pension calculation is:
(Your High-3 x 20 x 1.7%)
+
(Your High-3 x (Years of Service Beyond 20) x 1%)
Foreign Service Pension Calculation Example
So if you have 25 years of service and your High-3 is 100k, your calculation would look like this:
(100k x 20 x 1.7%) = $34,000
+
(100k x 5 x 1%) =$5,000
Gross Annual Pension = $39,000
What is Your High-3?
Your high-3 salary is the first component of your pension calculation. Put simply, your high-3 is your highest average salary during 36 consecutive months of your career.
For many people, their high-3 comes from the last 3 years of their career because that is when they got paid the most. That being said, it is important to know that it doesn’t have to be the last 3 years of your career. Your high-3 will automatically be the 3 years that you had the highest pay regardless of when it occurred in your career.
Note: Your high-3 does not have to be 3 calendar years (ie January-December). For example, if you had the highest average basic pay between May 2013 and May 2016 then that is the 3 years years that will be used.
FSPS Annuity Supplement for Foreign Service Officers (Extra Monthly Income!)
I have good news for you. Under Foreign Service, you are often eligible for more money every month above and beyond your pension until age 62.
This extra income is called the FSPS Annuity Supplement.
This article goes into depth on how the FSPS Annuity Supplement works (this linked article is about the FERS Supplement for FERS Special Provisions but the rules are the same as how the FSPS Annuity Supplement works for you).
