Your Federal
Annuity — explained.
Your retirement annuity is a defined benefit — a monthly payment for life determined by your retirement system, years of service, and high-3 average salary. This page covers how it works, what to expect when you retire, how it's taxed, and how to manage it as an annuitant.
Your annuity —
the defined benefit.
Your federal retirement annuity is a defined benefit plan — a guaranteed monthly payment for life, regardless of market conditions. It's determined by your retirement system (CSRS or FERS), your years of creditable service, your high-3 average salary, unused sick leave, and your survivor election.
All FERS and some CSRS retirees are also eligible to collect a Social Security benefit — and TSP participants can supplement retirement income through various withdrawal options. Your total retirement income picture is the combination of all of these.
The difference in annuity rates between FERS and CSRS is significant and by design — FERS employees contribute less to the Basic Benefit Plan but also receive Social Security and agency TSP matching that CSRS employees do not. The total retirement income for a well-prepared FERS employee should be comparable, but the sources are different.
The average FERS retiree after 25 years receives 25% of their high-3. The average CSRS retiree after the same service receives 46%.
FERS Annuity
Federal Employees Retirement System
CSRS Annuity
Civil Service Retirement System
What to expect
when your first check arrives.
Your first retirement check should arrive on or about the first of the month following your separation. For example, retiring by no later than January 3rd means your first check arrives around February 1st.
Interim checks — expect 70–80% at first
For several months after you retire, OPM issues interim checks at approximately 70–80% of your actual monthly annuity while they verify your retirement calculations. This is normal — once OPM finalizes your records, full payments begin retroactively.
Your leave sell-back (accumulated annual leave) is paid in a separate check, typically within 6–8 weeks.
Your CSA/CSF retirement account number
When you begin receiving your regular retirement check, OPM will send a pamphlet outlining your personal retirement plan — benefit elections, contact information, your "CSA" (Civil Service Annuity) or "CSF" (Civil Service survivors) retirement account number, and survivor information. Keep this booklet with your estate plan. Your retirement number is required for all correspondence with OPM.
OPM Online Services for annuitants
Manage your retirement account online at servicesonline.opm.gov. You'll need your CSA or CSF claim number and your OPM-issued PIN. If you don't have a PIN, call 1 (888) 767-6738 to request one.
Tax considerations
Taxes can be significant in retirement. You will receive a tax-free recovery of your contributions to both CSRS and FERS — but the majority of your annuity is taxable as ordinary income.
The Simplified Method for annuity taxation
If your annuity started after November 18, 1996, you must use the IRS Simplified Method to determine the taxable and tax-free portions of each payment. This method spreads your after-tax contributions across your expected payments over your lifetime. The tax-free portion gradually depletes until your entire contribution basis has been recovered — after which all payments are fully taxable.
See IRS Publication 721 — Tax Guide to U.S. Civil Service Retirement Benefits — for the complete methodology.
State tax exemptions
Where you live in retirement affects how much of your annuity you keep. Ten states fully exempt federal annuities from state income tax, and nine states have no state income tax at all — a potential savings of 4–8% per year.
Full federal annuity exemption
10 states — entire annuity exempt from state income tax
- Alabama
- Hawaii
- Illinois
- Kansas
- Louisiana
- Massachusetts
- Michigan
- Mississippi
- New York
- Pennsylvania
Four additional states (NC, KY, OR, WI) have partial exemptions with specific conditions based on service dates.
No state income tax
9 states — no personal income tax of any kind
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Always check other taxes in these states (property tax, sales tax) before making a relocation decision.
Survivor benefits & remarriage rules
If you marry after retirement
You can elect a reduced annuity to provide a survivor annuity for a new spouse — but this election must be made within two years of the date of your marriage. Missing this window permanently forfeits the ability to provide that coverage.
If a surviving spouse remarries
A survivor annuity continues until the surviving spouse dies — or remarries before age 55. Exception: If the widow or widower remarries before age 55 but was married to the original annuitant for at least 30 years, the survivor annuity is not terminated by the remarriage.
Calculators
& resources.
Annuity calculators, IRS tax guidance, pay scales, and tools for planning your retirement date and income.