Calculator Assumptions & Methodology

Overview

RetireCiv uses official formulas published by the Office of Personnel Management (OPM), the Internal Revenue Service (IRS), and the Social Security Administration (SSA). All calculation logic is auditable and documented on this page.

Many values — TSP contribution limits, COLA adjustments, WEP maximums — change each year. Use the Dataset Year selector above to view the assumptions for a specific year. The calculator always uses the current year's dataset by default.

Currently viewing: 2026 assumptions

Roth catch-up mandate effective 2026: employees with prior-year FICA wages exceeding $150,000 (COLA-indexed per IRS Notice 2025-67) must make all catch-up contributions on a Roth basis. In-plan Roth conversions now available in TSP.

Tax treatment — all figures are gross (pre-tax)

Every income number RetireCiv produces is displayed as a gross, pre-tax amount. No federal or state income tax is applied, and Social Security benefits are not reduced by the 50%/85% provisional-income taxation rule. Apply your own effective tax rate when comparing projected income to post-tax living expenses.

TSP Contribution Limits

The IRS sets annual contribution limits for the Thrift Savings Plan under IRC §402(g) and §414(v). Limits are indexed for inflation and updated each November for the following year.

Standard Employee Contribution Limit

$24,500/year

Catch-Up Contribution (Age 50+)

$8,000/year

Enhanced Catch-Up (Ages 60–63, SECURE 2.0)

$11,250/year

Total Maximum (with standard catch-up)

$32,500/year

Total Maximum (with enhanced catch-up, ages 60–63)

$35,750/year

Pay Periods Per Year

Max Per Paycheck (Standard)

~$942/paycheck

Source: IRS Notice (annual). Enhanced catch-up for ages 60–63 established by SECURE 2.0 Act of 2022, effective Jan 1, 2025.

TSP Agency Matching

FERS employees receive both automatic agency contributions and a matching contribution based on their own contribution rate. This formula is fixed regardless of year.

Automatic Agency Contribution (regardless of employee contribution)

1% of salary

Match on First 3% Employee Contributes

100% ($1 for $1)

Match on Next 2% Employee Contributes

50% ($0.50 for $1)

Maximum Agency Contribution (employee contributes 5%+)

5% of salary

Employee contribution to capture full match

5% of salary

Important: If you contribute less than 5%, you leave agency matching on the table. At 0% contribution, you still receive the 1% automatic contribution but forfeit up to 4% in matching funds.

Source: 5 U.S.C. §8432. TSP.gov agency contribution rules.

TSP Fund Returns

RetireCiv uses long-run historical average returns for each TSP fund as the default projection assumption. These are configurable in the calculator. They do not guarantee future performance.

G Fund — Government Securities Investment

~2.5%

Backed by US Treasuries; uniquely cannot lose value day-to-day

F Fund — Fixed Income Index

~3.5%

Tracks the Bloomberg US Aggregate Bond Index. Long-run historical average ~3.5%; recent 10-year average ~1.8% due to 2022 bond correction. RetireCiv uses the long-run figure for planning.

C Fund — Common Stock Index

~10.0%

Tracks the S&P 500

S Fund — Small Capitalization Stock Index

~11.0%

Tracks the Dow Jones US Completion TSM Index

I Fund — International Stock Index

~7.0%

Tracks the MSCI EAFE Index (developed international markets)

Source: TSP.gov historical returns. Long-run averages — actual annual returns fluctuate significantly.

TSP Withdrawal Rules

The IRS imposes a 10% early withdrawal penalty on most TSP distributions before age 59½. Several exceptions apply for federal employees.

Standard IRS Penalty-Free Age

59½

Applies to all taxpayers

Rule of 55 — FERS employees

Age 55

No penalty if you separate from federal service in or after the year you turn 55

Rule of 50 — Special Provision (LEO/FF/ATC)

Age 50

Applies to special provision employees who separate at or after age 50

SECURE 2.0 §329 — Public Safety (any age)

Any age with 25+ yrs

Effective Dec 29, 2022. Public safety employees (LEO, FF, ATC, CPO) who retire at any age with 25+ years of qualifying public safety service are exempt from the 10% penalty

Early Withdrawal Penalty (IRS)

10%

Applied to distributions before penalty-free age unless exception applies

Required Minimum Distribution (RMD) start age

Age 73

SECURE 2.0 Act — rises to 75 for individuals turning 74 in 2033 or later

RMD calculation method

IRS Uniform Lifetime Table

Treasury Reg. §1.401(a)(9)-9(c), T.D. 9930. RetireCiv enforces the RMD floor in drawdown — the retiree always withdraws at least the table amount once age ≥ 73, even if not needed for expenses.

TSP contribution timing (projections)

End of month

Monthly contributions are added after each month’s return is applied, mirroring actual payroll deposits. Prior end-of-period modeling is corrected.

SEPP (Substantially Equal Periodic Payments) / 72(t): If you need TSP income before the Rule of 55 age, you may establish SEPP using IRS-approved methods. RetireCiv calculates SEPP amounts using the Fixed Amortization Method:

Annual SEPP = Balance × [r(1+r)ⁿ] / [(1+r)ⁿ - 1]

where r = the greater of 5% or 120% of the federal mid-term AFR (per IRS Notice 2022-6), n = IRS single life expectancy from § 1.401(a)(9)-9(b) 2022-updated table (36.2 years at age 50, 31.6 at age 55, 27.1 at age 60)

Source: IRC §72(t)(2)(A)(iv); IRS Notice 2022-6 (supersedes Rev. Rul. 2002-62); IRS T.D. 9930 (2022 life expectancy tables).

FERS Annuity Formulas

The FERS annuity is calculated as: High-3 Salary × Multiplier × Years of Service (including sick leave credit).

Standard Multiplier

1.0% per year

Applies to most FERS employees at retirement

Enhanced Multiplier

1.1% per year

Requires age 62+ AND 20+ years of service at retirement

Special Provision — First 20 years (LEO/FF/ATC)

1.7% per year

Special Provision — Years beyond 20

1.0% per year

High-3 Salary is the average of your highest three consecutive years of basic pay. For most employees, this is the final three years of service.

Sick Leave Service Credit: Unused sick leave is converted to additional service credit at the rate of 174 hours = 1 month. This credit is added before applying the annuity formula.

Sick leave conversion rate

174 hours = 1 month

Hours per work year (OPM standard)

2,087 hours

Source: OPM FERS Handbook, Chapter 50. 5 CFR §842.305.

Retirement Eligibility

FERS retirement eligibility depends on age and years of creditable civilian service. The following eligibility types are modeled:

Eligibility type

Age reduction

1.1% multiplier

SRS eligible

Age 62 with 5+ years

None

Yes (if 20+ years)

Age 60 with 20+ years

None

Yes

MRA with 30+ years

None

Yes

MRA+10 (10–29 years)

5% per year under 62

Special Provision

None

No (own formula)

Yes

VERA

None

Yes (deferred to MRA if pre-MRA)

Source: 5 U.S.C. §8412; OPM FERS Handbook Chapter 40.

Minimum Retirement Age

Your Minimum Retirement Age (MRA) is determined by birth year. It ranges from 55 to 57 and is fixed at retirement — it does not change after you are hired.

Birth Year

MRA

Before 1948

1948

55 years, 2 months

1949

55 years, 4 months

1950

55 years, 6 months

1951

55 years, 8 months

1952

55 years, 10 months

1953–1964

1965

56 years, 2 months

1966

56 years, 4 months

1967

56 years, 6 months

1968

56 years, 8 months

1969

56 years, 10 months

1970 and later

Source: 5 U.S.C. §8412(h); OPM FERS Handbook Chapter 40.

Survivor Benefit Elections

At retirement, FERS employees elect a survivor annuity level. This election is irrevocable after 18 months post-retirement and directly reduces the retiree's gross annuity.

Full (50%) Survivor Benefit — pension reduction

10% of gross annuity

Partial (25%) Survivor Benefit — pension reduction

5% of gross annuity

No Survivor Benefit — pension reduction

Insurable Interest election reduction (non-spouse)

10–40% (age-dependent)

Source: 5 CFR §843.310–§843.320; OPM FERS Handbook Chapter 70.

Special Provisions (LEO / Firefighter / ATC)

Law Enforcement Officers (LEO), Firefighters, and Air Traffic Controllers (ATC) are covered under special FERS provisions with different eligibility ages, retirement formulas, and TSP withdrawal rules.

Mandatory Retirement Age (LEO/FF)

Age 57

Mandatory Retirement Age (ATC)

Age 56

Minimum Retirement Eligibility — Age + Service

Age 50 with 20 years OR any age with 25 years

Annuity Multiplier — First 20 Years

1.7% per year

Annuity Multiplier — Years Beyond 20

1.0% per year

No age reduction at mandatory retirement

Correct — no 5%/year reduction

TSP Rule of 50 (penalty-free withdrawal)

Age 50

Applies if separated from service at 50+

Source: 5 U.S.C. §8412(d); 5 CFR §842.802–§842.812.

Voluntary Early Retirement Authority (VERA)

VERA allows agencies to offer early retirement during workforce restructuring, downsizing, or reorganization. It is only available when your agency has received OPM authorization.

Track 1 — Age + Service

Age 50+ with 20+ years

Track 2 — Service Only

Any age with 25+ years

Age Reduction (MRA+10 5% penalty)

None — VERA carries no age reduction

SRS Eligibility

Yes (unlike MRA+10)

SRS Start Age

Later of actual retirement age or MRA

Enhanced 1.1% Multiplier

No — requires age 62+

VERA is only available during agency-authorized windows. You cannot elect VERA on your own — your agency must offer it. The calculator models VERA separately from standard MRA+10 to correctly apply the SRS and no-reduction rules.

Source: 5 CFR §842.213; OPM VERA/VSIP guidance.

Leave Calculations

Both sick leave and annual leave affect your retirement benefit — sick leave through service credit, and annual leave through a lump-sum payout at separation.

Sick Leave — Hours per Month of Service Credit

174 hours = 1 month

Sick Leave — Hours per Year of Service Credit

2,087 hours = 1 year

Annual Leave Payout — Hourly Rate

Annual salary ÷ 2,087

Hourly rate multiplied by unused annual leave hours at separation

Annual Leave Accrual — Category 1 (0–3 years)

4 hours per pay period (13 days/year)

Annual Leave Accrual — Category 2 (3–15 years)

6 hours per pay period (20 days/year)

Annual Leave Accrual — Category 3 (15+ years)

8 hours per pay period (26 days/year)

Source: 5 U.S.C. §6303; OPM leave policy. Sick leave credit: 5 CFR §630.209.

Special Retirement Supplement (SRS)

The SRS is a bridge payment that approximates the Social Security benefit a FERS retiree earned during federal service. It is paid from retirement until age 62, when Social Security begins.

SRS Formula

SS benefit at 62 × (FERS years ÷ 40)

SRS Start

Date of retirement (or MRA if deferred under VERA)

VERA retirees who leave before MRA must defer SRS to MRA per 5 CFR §842.505 — enforced in calculations.

SRS End

Age 62

Earnings Test (2024)

$22,320/year — SRS reduced $1 for every $2 over limit

Earnings Test (2025)

$23,400/year (SSA COLA adjustment)

Earnings Test (2026)

$24,480/year (SSA COLA adjustment)

Earnings test applied in projections

Yes — when user provides expected earned income

5 U.S.C. §8421a. RetireCiv reduces projected SRS by $1 for every $2 of user-entered earned income above the annual SSA exempt amount.

Subject to FERS COLA

No — SRS is not adjusted for inflation

Available to MRA+10 retirees

No — MRA+10 is NOT eligible for SRS

Source: 5 U.S.C. §8421, §8421a; 5 CFR §842.505; OPM FERS Handbook Chapter 51.

WEP & GPO

WEP and GPO fully repealed — retroactive to January 2024

The Social Security Fairness Act (Public Law 118-273) was signed into law on January 5, 2025, repealing both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The repeal is retroactive to benefits payable for January 2024 and later — December 2023 was the last month WEP/GPO applied. SSA began sending retroactive lump-sum payments on February 25, 2025, averaging approximately $6,710 per recipient. As of mid-2025, over $17 billion in retroactive payments had been distributed.

Because the repeal is retroactive to January 2024, no new WEP or GPO reductions apply for any year from 2024 onward. The 2024 dataset below shows the last historical WEP maximum for reference only.

WEP Maximum Reduction (2024 — final year)

$587/month

SSA Program Explainer: WEP, ELY 2024. Repeal retroactive to Jan 2024 — no new reductions apply.

WEP Exemption (historical)

30+ years of substantial SS-covered earnings

GPO Offset Rate (historical, pre-2024)

2/3 of government pension

WEP/GPO status 2024 onward

Repealed — not applied

Social Security Fairness Act, P.L. 118-273, signed Jan 5, 2025

Retroactive payments

~$6,710 average lump sum

SSA sent payments starting Feb 25, 2025. Check SSA.gov for your payment status.

Source: Public Law 118-273 (Social Security Fairness Act); SSA WEP/GPO guidance archive.

Monte Carlo Simulation Assumptions

RetireCiv's Monte Carlo engine runs 10,000 independent lifecycle trials per scenario (accumulation → drawdown), each sampling independent economic conditions. Returns and inflation are drawn monthly, so every trial is exposed to within-year sequence-of-returns risk.

Number of trials

10,000

Pre-retirement portfolio return

7% annual mean, 12% std dev

Growth-oriented allocation (equity-heavy, e.g., TSP L 2040+). Sampled monthly at mean/12 and std/√12 to preserve annualized parameters while capturing monthly sequence risk.

Post-retirement portfolio return

4% annual mean, 6% std dev

Conservative allocation (bond-heavy, e.g., TSP L Income). Same monthly aggregation.

Inflation rate

2.4% mean, 1.2% std dev

SSA 2024 Trustees Report ultimate long-run CPI-W projection. Drawn per simulated year, clamped at ≥ −2% to prevent runaway deflation.

FERS COLA

Diet-COLA tiered rule applied to per-year CPI draw

5 U.S.C. §8462(b): if CPI ≥ 3% → COLA = CPI − 1%; 2%–3% → 2%; < 2% → full CPI. Regular FERS receives no COLA until age 62; special-provision (LEO/FF/ATC) and disability retirees begin COLA at retirement.

Social Security & VA COLA

Per-year CPI draw, floored at 0%

CPI-W pass-through with SSA’s statutory 0% floor (benefits do not decrease in deflationary years).

Other pension COLA

0% by default (user-overridable)

Most private, state, and military pensions have no COLA. Users with a COLA-bearing pension can supply a rate.

RMD floor

Enforced from age 73

IRS Uniform Lifetime Table (Treasury Reg. §1.401(a)(9)-9(c)). Drawdown withdraws at least the RMD amount from age 73 onward, even if expenses would not require it.

SRS earnings test

Applied when user supplies expected earned income

5 U.S.C. §8421a — SRS reduced $1 per $2 of earned income above the annual SSA exempt amount.

Default planning horizon

Age 100

Conservative default; configurable downward

Random number method

Box-Muller transform with u₁ ≥ EPSILON clamp

Guards against log(0) → -Infinity edge case that would contaminate a draw with NaN.

Reproducibility

Optional 32-bit seed (Mulberry32 PRNG)

When a seed is supplied via simulationParams.seed, all 10,000 iterations share a deterministic sequence. Omit the seed for production runs backed by Math.random.

Market returns vs. inflation

Nominal returns, inflation separate

PRE/POST_RETIREMENT_PARAMS are nominal. Inflation is drawn independently per year and applied to expenses, COLAs, and actual-expense inflation using the same within-year draw.

Source: 5 U.S.C. §8462(b), §8421a; IRC §401(a)(9); Treasury Reg. §1.401(a)(9)-9(c); SSA 2024 OASDI Trustees Report. RetireCiv calculation engine calibrated to historical TSP fund and US CPI data.

General Constants

The following fixed values are used throughout all calculations and do not change year over year.

OPM standard work hours per year

2,087 hours

Pay periods per year (federal biweekly)

Sick leave hours per month of service credit

174 hours

MRA+10 age reduction rate

5% per year under age 62

TSP early withdrawal penalty

10%

FERS standard contribution rate (employee)

0.8% of salary (pre-2013 hires)

Varies by entry year: 0.8% / 3.1% / 4.4%

FERS employee contribution rate (2013+ hires)

3.1% of salary

FERS employee contribution rate (2014+ hires)

4.4% of salary

Source: OPM FERS Handbook; IRS Publication 721; 5 CFR various.

Disclaimer

The assumptions and calculation methodologies documented on this page are based on federal statutes, regulations, and official guidance from OPM, IRS, and SSA as of the selected dataset year. They are provided for educational and planning purposes only.

Actual retirement benefits are determined by OPM at the time of retirement and may differ from estimates due to legislative changes, individual service history, agency determinations, or factors not captured by this calculator. All figures are estimates.

This tool does not constitute financial, legal, or tax advice. We recommend consulting a qualified federal benefits counselor, licensed financial advisor, or OPM retirement specialist before making any retirement decisions.