The average federal retirement pay varies significantly depending on the specific retirement system an individual is covered under. The two primary federal retirement systems are the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS).
Average Monthly Annuity Payments
As of recent data, the average monthly annuity payments for federal retirees are as follows:
| Retirement System | Average Monthly Annuity Payment |
|---|---|
| FERS | $2,126 |
| CSRS | $5,447 |
It is important to note that these figures represent the average monthly annuity payment and do not include additional income sources such as Social Security benefits or distributions from the Thrift Savings Plan (TSP). Federal employees often supplement their basic annuity with income from these other sources.
Understanding the Difference Between CSRS and FERS
The significant difference in average payments between CSRS and FERS is due to the structure of the retirement systems:
- Civil Service Retirement System (CSRS): This system, established in 1920, was the primary retirement plan for federal employees until 1987. CSRS is a defined benefit plan that generally does not include Social Security as a component of the retirement benefits. Therefore, CSRS retirees receive a larger annuity payment directly from the government, as they typically do not contribute to or receive Social Security benefits from their federal employment.
- Federal Employees Retirement System (FERS): Enacted in 1987, FERS is a three-tiered retirement plan that includes:
- A Basic Benefit Plan (a defined benefit annuity similar to CSRS, but smaller)
- Social Security benefits
- The Thrift Savings Plan (TSP), a defined contribution plan similar to a 401(k)
Under FERS, the government annuity is generally lower than CSRS because it is designed to be one part of a comprehensive retirement package that also includes Social Security and the TSP, to which both employees and the government contribute.
Understanding these distinctions is crucial when looking at "average federal retirement pay," as the overall retirement income for a FERS retiree, including Social Security and TSP withdrawals, can be comparable to or exceed a CSRS retiree's total income, even with a lower basic annuity.
