FERS retirement rests on 3 legs, and every figure below was verified on 10 September 2026 against the OPM computation page and the plan’s own fee and price files. The Federal Employees Retirement System gives you a defined benefit annuity, a Thrift Savings Plan account, and Social Security, which is a structure almost no private employer still offers.
Understanding which of the 3 you control matters more than any single number in this page, because it decides how large the decisions in front of you actually are.
How is a FERS pension calculated?
OPM computes the basic annuity from length of service and high-3 average salary, where high-3 is the highest average basic pay earned during any 3 consecutive years of service. Basic pay includes shift rates and anything else retirement deductions come out of, and excludes overtime and bonuses.
The multiplier has 2 settings. Separating under age 62, or at 62 or older with fewer than 20 years of service, earns 1% of high-3 for each year. Separating at 62 or older with 20 years or more earns 1.1%.
Per year of service, standard
At 62 with 20+ years
A year more, on $100,000 and 30 years
That 0.1 percentage point is worth more than it looks. On a $100,000 high-3 with 30 years of creditable service, the standard computation gives $30,000 a year and the enhanced one gives $33,000, a difference of $3,000 every year for the rest of your life and 10% more pension in total. Somebody who separates at 61 with 20 years in has given that up permanently for the sake of a few months.
Special provision employees are computed differently again, earning 1.7% of high-3 for each of the first 20 years and 1% for service beyond that, which reflects the mandatory earlier retirement those roles carry.
The TSP leg is the only one you can move, and where it can go depends on what the custodian accepts and charges.
See which custodians take a TSPWhat each leg actually does
The annuity is inflation-adjusted, paid for life, and computed by a formula you cannot influence beyond working longer or earning more. Social Security works on its own formula and is likewise outside your control. Between them they cover a floor.
The TSP is the leg where decisions have consequences. It is the only one with an investment choice, the only one with a balance, and the only one that can be moved. The 5 funds charged between 0.034% and 0.051% for 2025, and what they returned after inflation ranged from 0.43% a year in the G Fund to 8.51% in the C Fund over the same window.
That spread is the whole argument for paying attention to the TSP leg rather than treating it as a savings account attached to the pension.
What the pension would cost to buy
The annuity has no balance and no statement, which is why most federal employees never think of it as an asset with a size. It has one.
A $30,000 annual income drawn from a portfolio at a 4% withdrawal rate would require roughly $750,000 of capital. That figure is arithmetic on an assumption rather than a forecast, the 4% is a widely used rule of thumb rather than a guarantee, and a real annuity purchase would cost more again because the FERS annuity is indexed and most purchased ones are not.
The point is the order of magnitude. Somebody weighing what to do with a $100,000 TSP balance, while holding a pension whose equivalent capital value is several times that, is making a decision about the smaller part of their retirement. That is worth knowing before anyone describes the TSP balance as their nest egg.
Only 1 leg is portable
The basic annuity cannot be rolled over, sold, borrowed against or moved, and Social Security cannot be either. Whatever anyone proposes to do with your federal retirement, they are proposing to do it with the TSP balance and nothing else.
Right-sizing that is worth doing before any decision. A federal employee with a $30,000 annuity and Social Security on top has 2 inflation-adjusted income streams for life that no market can take away, and the TSP sits on top of that floor rather than being the floor. The same balance in the hands of somebody with no pension is doing an entirely different job and should probably be invested differently.
Anyone pitching a rollover on the grounds that your retirement is exposed to a market crash is describing a situation that does not match a FERS participant’s actual position, and the 2 legs they left out are the reason.
What moving the TSP leg actually involves
If the TSP balance is going somewhere, the mechanics are worth knowing before the sales conversation rather than during it. A direct rollover sends the money from the plan straight to the receiving custodian with no tax withheld. An indirect rollover pays you first, withholding applies, and the full original amount has to be redeposited inside 60 days out of your own pocket.
Once the balance lands in a self-directed IRA holding metal, a different cost structure applies. The purity rules in section 408(m) govern what bullion qualifies, it has to sit at an approved depository rather than at home, and the custodian fee plus the storage fee together commonly run several hundred dollars a year regardless of balance. On top of that sits the premium over spot on the first purchase and the dealer’s bid on the way out, neither of which appears on any fee schedule.
Against 0.034% to 0.051% inside the plan, that is the comparison to make, and it is a comparison about 1 leg of 3 rather than about your retirement.
If the TSP leg is the one being moved, what section 408(m) permits on the other side is on TSP to gold IRA.
Our read
The multiplier point is the one with money attached. If you are within reach of 62 with 20 years of service, the arithmetic on staying is 10% more pension for life, and no investment decision available to you inside or outside the TSP reliably beats that.
On the TSP leg itself, the honest position is that the fee structure is the best available anywhere and the G Fund’s real return of 0.43% a year is the reason not to leave the balance sitting there by default. Those are 2 separate facts and they point in different directions, which is why the answer is usually about allocation rather than about location.