High-3 Salary for FERS Retirement
Everything you need to know about your High-3 average salary—the most important factor in determining your FERS pension.
What is High-3 Salary?
Your High-3 average salary is the highest average basic pay you earned during any 3 consecutive years (36 consecutive months) of federal service. It's the foundation of your FERS pension calculation.
High-3 = Highest 3-Year Average Basic Pay
What Counts in High-3?
✓ INCLUDED
- Base salary (GS grade + step)
- Locality pay adjustments
- Special salary rates (for certain occupations)
- Within-grade increases (step increases)
- Promotions and pay raises
✗ EXCLUDED
- Bonuses and awards
- Overtime pay (with rare exceptions)
- Holiday pay
- Travel allowances and reimbursements
- Clothing allowances
- Recruitment or retention bonuses
- Civilian personnel advisory fees
- Post differential pay
How to Calculate High-3
The formula is simple:
High-3 = (Year 1 Salary + Year 2 Salary + Year 3 Salary) ÷ 3
Step-by-Step Example
Maria's Final 5 Years of Service:
| Year | Annual Salary | Notes |
|---|---|---|
| Year -4 | $70,000 | |
| Year -3 | $72,500 | Step increase |
| Year -2 | $76,000 | Promotion ✓ |
| Year -1 | $79,500 | Step increase ✓ |
| Final Year | $82,000 | Retirement year ✓ |
High-3 Calculation:
($76,000 + $79,500 + $82,000) ÷ 3
= $237,500 ÷ 3
= $79,167
Strategies to Maximize Your High-3
1. Time Your Retirement Carefully
Retire AFTER receiving a promotion or step increase, not before. Even waiting a few months can significantly impact your High-3.
2. Pursue Promotions in Final Years
A promotion in your last 3-5 years has maximum impact on your High-3. Consider taking on additional responsibilities or applying for higher-grade positions.
3. Work in High Locality Pay Areas
If possible, work remotely from or transfer to a high locality pay area in your final years. For example, Washington DC locality pay is ~30% higher than the base rate.
4. Avoid Unpaid Leave
Unpaid leave (LWOP) can reduce your High-3 if it occurs during your highest-paying years. Minimize unpaid time off in your final 3 years.
5. Understand Special Provisions
Certain positions (like law enforcement with overtime) may have special High-3 calculations. Check with your HR office if this applies to you.
Common Questions About High-3
Yes! Locality pay adjustments ARE included in your High-3 calculation. This is why working in high locality pay areas (like Washington DC, San Francisco, or New York) can significantly boost your pension, even if you retire elsewhere.
Your High-3 uses the highest 3 consecutive years, not necessarily your final 3 years. If you had higher earnings earlier in your career (e.g., due to a demotion or reduced hours), OPM will use those higher years instead.
Yes. If you believe OPM made an error in calculating your High-3, you can request a reconsideration. Provide documentation of your actual earnings (SF-50s, LES statements) to support your case. You have 30 days from receiving your retirement decision to request reconsideration.
OPM calculates your High-3 once when you retire. It's based on your actual earnings history as recorded in your official personnel file. There's no annual recalculation—it's a one-time determination at retirement.