FERS disability retirement is based on age, service, high-3 basic pay and applicable offsets. Compare gross benefits with actual take-home income; eligibility for other benefits and work capacity cannot be assumed.
Which calculation applies?
For an applicant under 62 who is not eligible for immediate voluntary retirement, the first 12 months generally use 60% of high-3 minus 100% of the Social Security disability benefit for overlapping entitlement months. After those 12 months, the formula generally uses 40% of high-3 minus 60% of SSDI. OPM pays the earned annuity instead if it is larger.
| Period | Gross illustration with $100,000 high-3 and no SSDI offset |
|---|---|
| First 12 months | $60,000 yearly; $5,000 monthly |
| After first 12 months, before age-62 recomputation | $40,000 yearly; about $3,333.33 monthly, before applicable COLAs |
These figures exclude taxes, insurance premiums, survivor reductions and other adjustments. They are not payment quotes.
Important exceptions
If you are 62 or older at retirement, or meet the age and service requirements for an immediate voluntary retirement, OPM uses the earned-annuity computation. Special-category service and any CSRS component can affect the calculation. A person paid an earned-rate disability annuity because of immediate-retirement eligibility does not receive the same age-62 recomputation described below.
What happens at 62?
For a qualifying under-62 disability annuity, OPM recomputes the benefit using actual service plus time on the disability annuity and a high-3 adjusted by applicable FERS COLAs. The regular formula generally uses 1% per year if total service is below 20 years and 1.1% if it is at least 20; enhanced service may receive different treatment. This is a recalculation, not a promised increase.
COLAs and SSDI
COLAs are not payable in the first 12 months when the benefit uses the 60% calculation. Different rules apply to earned-rate cases. The SSDI offset applies for concurrent entitlement, including retroactive awards that can create an OPM overpayment. Notify OPM of an SSA award and retain funds until the adjustment is resolved. Filing for SSDI is a separate procedural requirement; do not treat the under-62 offset rule as a blanket age-based waiver of filing evidence. Section 844.201(b) permits an official SSA statement of noninsured status instead.
Insurance and other income
Eligible retirees can continue FEHB and FEGLI under their respective continuation rules. Premiums, coverage elections and taxes affect net income; active-employee and retiree deductions should not be assumed identical. VA disability compensation is generally a separate benefit, but VA individual-unemployability benefits and SSDI have their own work rules. Eligibility and payments from those programs are determined by their administering agencies.
Work after retirement
While subject to the FERS earnings test, reaching at least 80% of the current basic pay of the former position in wages and self-employment income establishes restored earning capacity. It is an annual test, not a monthly allowance. Termination generally takes effect June 30 of the following year. The FERS earnings restriction ends at age 60, but other programs may still restrict work. Federal reemployment and medical recovery also have separate rules.
Do not budget around a hypothetical maximum income stack or an amount just below a ceiling. Use OPM's actual computation, the position's current basic pay, your realistic capacity for work and each program's rules.
Discuss your questions
TFDR describes a $75, one-hour educational consultation on a pay-as-you-go basis. Booking and payments remain disabled on this staging site. TFDR does not represent applicants before OPM or handle appeals.