FERS is a retirement plan consisting of three parts.
Part 1.
Is an annuity (pension if you will) based upon average highest three annual salaries as you mentioned but its capped at a maximum of 33 percent of your high 3 average salary. If you work 50 years you are not going to get 50 percent of you average high 3 salaries. You get a maximum of 33 percent.
Part 2.
Is Social Security, which is deducted from your pay check throughout your years of service like any other Social Security participant in the private sector.
Part 3.
Is a 401k plan with multiple investment options from US Treasury Bonds to an S&P 500 Index fund. Employee contributions to the 401k in effect will be matched up to 50 cent on the dollar for up to 10 percent of your pre-tax income. The rules of standard 401k’s apply to this component of ones retirement after one retires.
If you fully participate, 16.5 percent of your paycheck is applied to your Soc. Sec. and annuity before your W-2 form withholdings for taxes are pulled.
I had years wear 40 plus percent of my Gross pay was with held for taxes and Soc. Sec and retirement.
I further annually saved 10 percent of my salary and invested it because I don’t believe Social Security will be solvent and available at some point in my retirement. I doubt I’ll receive a penny of Soc. Sec. benefits when I’m eligible because it will be insolvent and planned as best as possible accordingly.
wear == where. If I could spell I’d be dangerous!
Sounds like a lot better than retirement options available to almost all private sector employees.
It might have seemed like a lot at the time but if you live long enough it will pay well.
I agree about SS probably not being there but your pension and other investment will be.
You should be celebrating not complaining. If you even work 20 years and have a 3 year average 60K that is 20K a year for life. Just out of the gate. If you maxed (as anyone should) the 401K then you should be set to retire pretty young.