Are you a federal employee who is struggling in your job due to a medical condition? You may be eligible for FERS Disability Retirement, a benefit hidden in your FERS retirement that can allow you to retire now while continuing your federal benefits and receiving a monthly income. But how much will you actually receive, and will it be enough to sustain you?
This article will breakdown how to calculate your FERS Disability Retirement and provide a disability retirement calculator so you can properly plan for your future.
What is FERS Disability Retirement?
FERS Disability Retirement, also known as Federal Disability Retirement or OPM Disability Retirement, is a retirement option for federal employees who are struggling with a disability that is preventing them from fully performing their job.
FERS Disability Retirement can provide a secure monthly income, creditable years of service, the ability to work in the private sector, and the option to maintain your health and life insurance, all without returning to work in your federal position.
You will apply for FERS Disability Retirement through the OPM who will calculate your monthly annuity based on your high 3 average.
What is the High 3 Average?
Your FERS Disability Retirement monthly annuity is based off your high 3 average that will be calculated by the OPM.
Your high 3 average is the average of your highest 36 consecutive months of basic pay. This is usually your most recent three years, but it can be any three consecutive years throughout your service.
For example, if your three highest years of basic pay were $62,000, $62,500, and $64,500, your high 3 average would be $63,000.
How much will you receive on FERS Disability Retirement?
The first year you are on FERS Disability Retirement you will receive 60% of your high 3 average, every year after that you will receive 40% of your high 3 average. You will continue receiving 40% of your high 3 average until you turn age 62.
For example, if your high 3 average is $63,000, the first year on FERS Disability Retirement, you would receive $37,800. Years 2+ you would receive $25,200.
If you add your high 3 average into the disability retirement calculator below, you will be able to see how much you could receive while on FERS Disability Retirement, or you can look at this annuity payment chart.
Disclaimer: This calculation is only an estimate. Actual calculations may vary depending on real data provided by the OPM and/or emerging case details. Additionally, this estimate is for informational purposes only and does not constitute legal advise from Harris Federal Law Firm. This estimate is intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the estimate is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. The information in this estimate is offered for general information and educational purposes.
Be Aware of this Offset
In order to apply for FERS Disability Retirement, you must also apply for Social Security Disability Insurance. You do not have to be approved for SSDI to be approved for FERS Disability Retirement, but if you are approved for SSDI there will be an offset.
If you are approved for SSDI, the first year you receive both benefits, your FERS Disability Retirement annuity will be reduced by 100% of your SSDI benefit.
After the first 12 months, your FERS Disability Retirement will be reduced by 60% of your SSDI benefit.
Receiving SSDI and FERS Disability Retirement will ultimately provide more income than receiving one benefit alone, but you will have a significantly limited ability to work in the private sector.
What Happens at 62?
Once you turn age 62, your FERS Disability Retirement will automatically be recalculated into your regular FERS retirement.
Your regular retirement pension will be recalculated based off your high 3 average and your creditable years of service which you will have continued to gain while on FERS Disability Retirement.
If you have less than 20 years of service (including years on FERS Disability Retirement) you will receive 1% of your high 3 average.
If you have more than 20 years of service (including years on FERS Disability Retirement) you will receive 1.1% of your high 3 average.
Special provisions employees gain a higher retirement at 1.7% of their high 3 average for up to 20 years of special provision service.
FERS Disability Retirement can help you reach your full retirement age, so you can maximize your benefits and your retirement pension.
We know how confusing this benefit can be, which is why we created this disability retirement calculator to help you plan for the future. We are here to help and we want to help simplify the process so you can retire NOW and get the benefits you deserve.
Schedule a FREE consultation today to learn more.