FERS Disability Retirement Calculator

1. Months 1 to 12: 60% of high-3 minus 100% of your Social Security disability benefit, for each month you are entitled to it. The period ends at the end of the 12th month that begins on or after your annuity start date (5 U.S.C. 8452(a)(1)(A)).
2. After month 12: 40% of high-3 minus 60% of your Social Security disability benefit. The offset can never take the annuity below zero.
3. Earned annuity floor: 1% of high-3 x years and months of service (1.1% if you are 62 or older with 20 years). You are paid whichever is larger, the 60% / 40% amount or the earned annuity, which has no age reduction and no Social Security offset (5 U.S.C. 8452(d)).
4. Survivor election: 10% (full) or 5% (partial) is taken from the annuity after the Social Security offset, and recalculated each time the annuity changes (Handbook 61B2.1-5).
5. Round: OPM divides the annual amount by 12 and drops the cents.
6. At 62: the annuity is recomputed (see below) and the Social Security offset stops.

OPM Handbook example 9: Stephen Innis, with a $5,000 a year Social Security disability benefit

Stephen, born 7-22-1948, has civilian service from 8-1-1987 to 12-6-1999 (12 years 4 months 6 days), a high-3 of $28,258 and elects a full survivor annuity. His SSDI is assumed to be $5,000 a year. The Handbook (chapter 61, subchapter 61C, FERS Example 9) gives these annual amounts:

The earned annuity is smaller in both periods, so the 60% / 40% amounts are paid. At 62 the Handbook adds Stephen's 10 years 7 months 15 days on the rolls to his 12 years 4 months 6 days, for 22 years 11 months. That is over 20 years, so the 1.1% factor (.252083) applies. The survivor annuity is $296 a month.

FERS disability retirement and SSDI are linked. OPM requires you to apply to SSA for disability benefits, and dismisses your FERS application if the SSA claim is withdrawn. The offset applies to any month you are entitled to the SSA disability benefit under section 223 of the Social Security Act (5 U.S.C. 8452(a)(2)).

• Approved: enter the monthly benefit from your SSA award letter. The calculator subtracts 100% of it from the 60% annuity and 60% of it from the 40% annuity.
• Applied (pending): no offset yet. The calculator shows the annuity without it and what you would get if SSA approves at the amount you enter. Back pay from SSA can cover months OPM paid in full, which can lead to an overpayment; see the SSDI back pay calculator for the SSA side.
• Denied or not entitled: no offset.

SSDI larger than the annuity: the offset stops at zero, never negative, and the earned annuity is paid instead if it is more than zero. For example, with a $40,000 high-3 and 25 years of service the earned annuity is $10,000 a year; if your SSDI is $24,000 a year, the 60% amount ($24,000 less $24,000) is zero and the earned annuity is paid. By statute the Social Security amount used in the offset is raised by the FERS COLAs after the first 12 months (5 U.S.C. 8452(a)(2)(B)), not by SSA's own COLAs; the calculator uses the amount you enter for every month and leaves out COLAs on both sides of the offset.

Some applicants skip the 60% / 40% formula and get the regular FERS annuity (1% x high-3 x service, 1.1% if 62 or older with 20 years) with no age reduction and no Social Security offset (Handbook 61B2.1-4; 5 U.S.C. 8452(c)): anyone who is 62 or older on the last day of service, or who already meets MRA + 30 years or age 60 + 20 years. OPM's Example 12 (Amy Mitchell, age 62 years 6 months, 4 years 3 months of service, high-3 $25,352) pays $89 a month: $25,352 x .042500 = $1,077.46 a year. Someone with only MRA + 10 years is still in the 60% / 40% group, with the earned annuity as a floor. In Example 8 (Ruth Castillo, age 30, 4 years 6 months, no SSDI) the earned annuity is only $128 a month against $1,707 under the 60% formula, so the 60% formula is paid.

Sick leave: OPM credits unused sick leave in a disability annuity by separation date: none before October 28, 2009, 50% of the hours through December 31, 2013, and 100% from January 1, 2014 (Handbook 60B4; 5 U.S.C. 8415(m)(2)). The credit is converted with OPM's 2,087-hour chart (this calculator applies the 50% to the hours before the chart). It adds to the earned annuity and to the age-62 recomputation, does not change the 60% / 40% amounts, and does not count toward the 18 months of service you need to qualify. For the earned annuity at 62 or older, sick leave counts toward the 20 years for the 1.1% factor (OPM BAL 18-103). For the age-62 recomputation no OPM source says whether it does, so the calculator uses 1% and shows the 1.1% figure as an unconfirmed alternative when sick leave would reach 20 years.

On your 62nd birthday OPM redetermines the annuity (5 U.S.C. 8452(b)). It equals the regular FERS annuity you would have had if you had kept working until the day before you turned 62: your creditable service plus all the time on the disability rolls, with the high-3 raised by every FERS COLA that took effect while you were on the rolls, whether or not your annuity received it. The 1.1% factor applies if actual service plus the time on the rolls is 20 years or more (OPM's wording on its types-of-retirement page). Time off the rolls (after recovery, for example) is not counted.

OPM's Example 8 (Ruth Castillo, born 6-9-1965, retired at 30 years 2 months 25 days) adds 31 years 9 months 5 days on the rolls to 4 years 6 months 25 days of service for 36 years 4 months and a factor of .399667, which gives $1,137 a month with a full survivor election. OPM's Handbook uses the retirement-date high-3 because future COLAs are unknown. The calculator lets you assume a yearly CPI-W increase, applies the FERS COLA rule from the FERS COLA page (below 2% as is, 2% when CPI-W is 2% to 3%, and CPI-W minus 1 point above 3%) to each December 1, and states the assumption next to the result. The assumed COLAs are an estimate, not an OPM figure.

Taxes: the IRS treats your disability annuity as wages until you reach your minimum retirement age. After that it is taxed like a pension and you recover your contributions tax free (IRS Publication 721, Part III). Your SSDI is taxed separately; see the taxable Social Security benefits calculator.

COLAs: at the 60% rate none during the first 12 months, then the FERS COLA applies to the 40% annuity (5 U.S.C. 8452(a)(1)(B)); if you are 62 or older, or meet MRA + 30 or age 60 + 20, every COLA after the start date is payable, the first prorated; and an earned annuity paid as the floor gets COLAs from the start date (Handbook 61B2.1-6 A; 8452(d)(2)). Supplement: disability retirees do not get the FERS annuity supplement. Earning capacity: before 60, the annuity ends if your yearly income from work reaches 80% of the current pay of your old position (5 U.S.C. 8455); this page does not model that.

Your TSP account is separate from the annuity: see the TSP calculator. For a regular, non-disability retirement, use the FERS retirement calculator.

The engine reproduces, step by step, the FERS examples in OPM Handbook chapter 61: Example 7 (average salary with under 3 years of service, $39,023), Example 8 ($1,707 / $1,138 / $1,137 a month), Example 9 with the Social Security offset ($896 / $622 / $534), Example 12 ($89) and the Michelle example in 61B2.1-3. Examples 10, 11 and 13 cover FERS transferees with a CSRS component, which this calculator does not handle.

Out of scope, not approximated:

• CSRS component (transferees) and CSRS Offset
• Law enforcement officers, firefighters, air traffic controllers, CBP officers, Capitol and Supreme Court Police (OPM uses an enhanced computation, BAL 10-105)
• Military service deposits, part-time service, refunded or nondeduction service
• Estimating your SSDI benefit, SSA's own offsets, or workers' compensation (FECA) interaction
• Whether OPM will approve your claim: that depends on medical evidence and your agency's accommodation efforts
• Taxes, FEHB premiums and FEGLI