Methodology

We compare two full career paths over the same years, from your current age to the federal retirement age you pick.

• Stay: federal salary through your retirement age, the FERS pension you'd earn by staying, and the TSP employer contribution (default 5%: the 1% automatic plus up to 4% matching).
• Leave now: tech cash pay and vested equity over the same years, a private employer retirement contribution, and the deferred FERS pension you've already earned, if you're eligible and leave your contributions in place.

We never compare pension income alone against years of tech salary. Salary is on both sides.

Every number is in today's dollars, which takes inflation out of the comparison. Growth rates (salary, tech pay, equity) are real rates, meaning growth above inflation. The defaults are 0%.

Money you receive later is worth less than money today, so each year's value is discounted back to today at a real discount rate (default 3%). Adding these up gives each path's present value. Change the rate under Advanced assumptions to see how sensitive the result is.

Inflation (default 2.5%) is still used in two places where FERS isn't fully protected from it. A deferred annuity is calculated from your High-3 in dollars at separation and isn't adjusted before it starts, so it loses real value while you wait. After payments begin, FERS cost-of-living raises follow the "diet COLA": full inflation up to 2%, capped at 2% when inflation is between 2% and 3%, and inflation minus 1 point above 3%. Regular FERS retirees get no COLA before 62. (OPM: COLAs)

Your Minimum Retirement Age (MRA) comes from your birth year: 55 if born before 1948, rising 2 months a year to 56 for 1953 to 1964, then rising 2 months a year to 57 for 1970 and later. (OPM: eligibility and MRA table)

We check your proposed retirement age and projected service against the regular FERS immediate retirement rules:

• Age 62 with at least 5 years
• Age 60 with at least 20 years
• MRA with at least 30 years
• MRA with at least 10 years (MRA+10), reduced by 5% for each year under 62 unless you postpone the start date

By default, MRA+10 starts right away with the reduction. You can switch on "Postpone an MRA+10 annuity" to start at 60 (with 20+ years) or 62 with no reduction. The postponed amount is still fixed in dollars at separation. (OPM: types of retirement)

If your proposed age and service don't qualify for an immediate annuity, the calculator says so and never shows an unreduced pension. It then values the stay path as leaving at that age with a deferred annuity, if you'd have 5 or more years.

The annuity is multiplier x years of service x High-3. The multiplier is 1.0%, or 1.1% if you're 62 or older at separation with at least 20 years. (OPM: computation) If you enter a real federal salary growth rate, we project your High-3 from your final three salaries. We never go below the High-3 you entered.

Leaving does not automatically forfeit a vested pension. With at least 5 years of creditable civilian service, if you leave your FERS contributions in place, you're entitled to a deferred annuity. The "Assume I leave my FERS contributions in place" box is on by default. Unchecking it models withdrawing your contributions, which gives up the annuity.

We start the deferred annuity at the earliest age it's unreduced:

• 30 or more years: your MRA
• 20 to 29 years: age 60
• 5 to 19 years: age 62

With 10 or more years you could start earlier, at your MRA, but the annuity would be reduced by 5% for each year under 62. The calculator doesn't model that earlier start. Someone who leaves before 62 gets the 1.0% multiplier.

Example: age 38, 12 years served, High-3 of $150,000. Leaving now keeps 1% x 12 x $150,000 = $18,000 a year starting at 62, before inflation adjustments.

A four-year RSU grant isn't yours the day you sign. The calculator asks for annual vested equity compensation: the value that actually vests in a typical year. If you leave before a grant vests, the unvested part is usually gone.

Equity appreciation raises the value of shares when they vest. We don't assume you hold every share and compound it for decades.

Startup equity counts as $0 until you deliberately turn on an exit scenario. Most startup equity never turns into cash, so a big exit is never the default.

• Cash floor (conservative): equity counted at its value when it vests, with 0% appreciation. Startup exits are never counted.
• Expected: your equity with a conservative real appreciation rate (default 2%). Any startup exit you enabled is counted, which makes the result speculative.
• Upside (speculative): a higher appreciation rate you choose (default 6%) plus any startup exit you enabled.

Break-even is the average annual tech compensation (cash plus realized equity, in today's dollars) that makes the leave path's present value equal the stay path's. We keep your mix of cash and equity and scale the whole package up or down until the two paths match. The private retirement contribution scales with the cash. If you enter no tech pay, we solve for an all-cash offer.

If you enter exactly the break-even amount, the difference comes out at about zero. Within about 10% either way, the money roughly washes out, and factors like the work itself, job security and FEHB in retirement matter more.

These can move the result, sometimes a lot. Weigh them for your own situation:

• Taxes. Salary, pension and equity are taxed differently and at different times.
• FERS annuity supplement. Paid to some immediate retirees before 62. Not included.
• Social Security. Depends on your full earnings record on both paths.
• FEHB and FEGLI in retirement. Keeping health coverage generally requires an immediate annuity or a postponed MRA+10 annuity, not a deferred one. This can be worth a lot.
• Survivor benefit reductions. Electing a survivor annuity reduces your own payment.
• Unused sick leave. Counts toward service for an immediate retirement, not for a deferred one. Not added here.
• Existing TSP and 401(k) balances, investment returns, job loss, layoffs, and equity that never vests.
• Special-category employees, CSRS, military buybacks, part-time service and other unusual histories. These need individual review.