USPS Employee Pension: Are you an employee of the United States Postal Service? If yes, the question of whether you’ll receive a pension when you retire might have crossed your mind.
Before going to the quick answer, it’s important to know that USPS jobs are classified as either “career” or “non-career.”
Career employees are those who have completed an initial probationary period and have permanent status within the Postal Service.
Non-career employees include postal support employees, city carriers, rural carriers, and some clerk positions.
So, now that we know the difference between “career” and “non-career” USPS positions, let’s get to the answer.
Keep on reading to find out whether you, as a USPS employee, will get a pension upon retirement! If yes, how much does the USPS pension pay?.
And, if not, what other benefits can you expect to receive?
Do USPS Employees Get A Pension In 2022?
Yes, as of 2022, USPS employees are eligible for a pension through the FERS system. So, if you’re a postal worker and are wondering, “Can I get a pension at 55?” the answer is yes!
The FERS plan, which is also available to employees of all other federal agencies, pays USPS workers a pension in the form of an annuity.
This is from a combination of Social Security benefits and contributions made by the USPS.
However, it’s not just based on your years at the post office; it’s also based on your highest-paid years.
The annuity is calculated by multiplying the number of years you worked at the post office, times 1 to 1.1 percent of your average high-three salary, which is the three highest paid years of employment in your career.
There are a few ways to calculate your annuity, but the most common is what we just described.
This method calculates an average of your highest-paid 36 months and multiplies it by 1.1 percent for every year you worked at the post office.
Here’s a quick example: Let’s say you worked at the post office for 30 years and had an average high-three salary of $80,000.
Your pension would be $26,400 a year or $2,200 per month ($80,000 x 30 x 1.1% = $26,400/12). So, your gross monthly pension after 30 years of service would be $2,200.
How long do you have to work for USPS to get a pension?
The minimum retirement age is 55 years in order to be eligible for the pension that USPS offers. However, this MRA is determined by the year in which the employee is born.
For example, a postal worker born before 1948 qualifies for a pension at 55 whereas a person who is born after 1948 doesn’t qualify.
Here’s a table showing the age limit for USPS pension –
| Age | Credible Civilian Service Required |
|---|---|
| 62 | 5 Years |
| 60 | 5 Yrs (With 20 Yrs of Credible Service ) |
| 55 (Born Before 1948) | 5 Yrs (With 30 Yrs of Credible Service) |
| 55 + 2 months (Born In 1948) | 5 Yrs (With 30 Yrs of Credible Service) |
| 55 + 4 months (Born In 1949) | 5 Yrs (With 30 Yrs of Credible Service) |
| 55 + 6 months (Born In 1950) | 5 Yrs (With 30 Yrs of Credible Service) |
| 55 + 8 months (Born In 1951) | 5 Yrs (With 30 Yrs of Credible Service) |
| 55 + 10 months (Born In 1952) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 (Born between 1953 & 1964) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 + 2 months (Born In 1965) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 + 4 months (Born In 1966) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 + 6 months (Born In 1967) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 + 8 months (Born In 1968) | 5 Yrs (With 30 Yrs of Credible Service) |
| 56 + 10 months (Born In 1969) | 5 Yrs (With 30 Yrs of Credible Service) |
| 57 (Born In 1970 and After) | 5 Yrs (With 30 Yrs of Credible Service) |
So, for example, let’s say that you are a 56-year-old and working for the USPS for the past 25 years.
Then, you won’t be eligible for getting the pension as you didn’t meet the 30-year credible service requirement.
This is how your age, the year in which you were born, and your USPS service play a role in your pension qualification.
Basically, the MRA is 57 years for all those USPS employees who were born in 1970 and after!
How much pension do USPS employees get?
USPS pays 1 to 1.1 percent of your highest three years’ average salary, per year of service.
So, how much an employee earns as a pension from US Postal Service depends on their highest three years’ average salary and the number of years they worked.
USPS employees under the age of 62 will receive 1 percent of their highest three-year average salary while those over 62 with 20 or more years’ experience will receive 1.1 percent per year of service.
Calculate Your USPS FERS Retirement
Calculating your retirement benefit is pretty simple. All you need to do is find out the highest salary for any three years of service and multiply it by 1 or 1.1 percent, depending on your age.
Then multiply that number by the total number of years worked at the postal service.
For example, if your highest three years’ average salary is $50,000 and you worked 22 years at the postal service, your pension would be 1.1 percent of $50,000 multiplied by 22 years or $12,100 per year.
- ==> $50,000 x 22 x 1.1%
- ==> $12,100
- ==> $1,008 per month
So, if you have a maximum of $50,000 salary and worked for 22 years then your pension would be $12,100 per year.
If you retire at age 62 or older with 20 or more years of service, that number will increase to 1.1 percent of the highest three years’ average salary, multiplied by the total number of years worked.
Can you retire from USPS after 20 years?
Yes, you can retire from USPS after 20 years of credible service. However, depending on your age, your annuity will be 1 or 1.1 percent of your high-3 salary & service years.
In case you are 60 years old with 20 years of total service and at least 5 years of credible civilian service, then the percentage will be 1%.
In case you are 62 or older with the same 20 years of credible service and at least 5 years of credible civilian service, then you will be entitled to 1.1%
Let’s say that your highest average wage was $75,000, then, you will be entitled to get a monthly gross pension of –
- ==> $75,000 x 20 x 1.1% (Age At Retirement is 62 Years)
- ==> $825 x 20
- ==> $16,500 per annum
- ==> $16500/12
- ==> $1,375
This is how it works when you retire after 20 years of credible service!
USPS Immediate Reduced Annuity
There are several reasons why an individual might choose to receive an immediate reduced annuity from the United States Postal Service (USPS).
The most common reason is that the individual has met the minimum retirement age and has at least 10 years of creditable service, including 5 years of creditable civilian service.
As per the rules set by USPS, the annuity is reduced by 5 percent per year for every year the individual is under age 62.
However, this reduction is prorated on the basis of 5/12 of 1 percent for every full month.
This means that if an individual retires at age 61 with 10 years of creditable service, their annuity would be reduced by 5 percent.
However, if they wait until they are 62 years old to retire, their annuity will not be reduced.
In case of retirement at 60 years of age or younger, the individual may still receive an immediate annuity, but it will be subject to a reduction.
The size of the reduction depends on the number of years that the individual is under the age of 62.
For example, if an individual retires at age 60 with 10 years of creditable service, their annuity would be reduced by 10 percent.
In addition to the age and service requirements, the individual must also have a valid reason for choosing an immediate reduced annuity.
Some common reasons include:
- The need for income immediately upon retirement
- To provide income for a spouse or other dependent
- To take advantage of a lower tax rate
- To minimize the effects of inflation
The decision to choose an immediate reduced annuity from USPS should not be made lightly. It is important to consider all factors carefully before making a decision.
Do postal workers qualify for Social Security?
Postal workers do receive Social Security benefits. This is because they pay into the system just like everyone else.
However, their benefits may be lower than those of other workers because their salaries are lower on average.
Nonetheless, Social Security is an important source of income for postal workers, especially in retirement.
The FERS retirement system also provides benefits to postal workers. This system includes a pension, which can provide a steady stream of income in retirement.
In addition, the FERS system covers the Thrift Savings Plan, which allows employees to contribute to their own retirement savings.
Overall, postal workers have access to two important sources of retirement income: Social Security and the FERS system. These sources of income can help to ensure a comfortable retirement for postal workers.
The Thrift Savings Plan (TSP) is retirement savings and investment plan available to federal employees and members of the uniformed services.
The TSP offers the same type of savings and tax benefits as a 401(k) plan, but it also has some unique features.
Contributions to the TSP are made with after-tax dollars, but they grow tax-deferred. This means that you won’t pay taxes on your contributions or on the earnings on your investments until you withdraw the money from your account.
Currently, postal workers can contribute up to $20,500 per year to their TSP accounts. If you’re over the age of 50, you can make catch-up contributions of up to $6,500 per year.
The money in your TSP account can be used to purchase a variety of different investment options, including stocks, bonds, and mutual funds.
You can also choose how your money is invested, and you can change your investment choices at any time.
When you retire, you can choose to receive your TSP account balance as a lump-sum payment or as a series of payments spread out over time.
You can also choose to roll over your account balance into an IRA or another qualified retirement plan.
The TSP is an important source of retirement income for postal workers. If you’re a postal worker, be sure to take advantage of this valuable benefit.
Can you make good money working for USPS?
There is no easy answer when it comes to how much money you can make working for USPS.
However, the potential for earning a good salary does exist, especially if you are willing to work hard and advance through the ranks.
It is important to keep in mind that the amount of money you make will largely depend on your position and location.
For example, positions that require more experience and responsibility, such as postal managers and supervisors, typically earn higher salaries than entry-level positions.
Similarly, USPS jobs located in major metropolitan areas tend to offer higher salaries than those in rural areas.
In general, the starting salary for most entry-level USPS positions is around $18 per hour.
With experience and/or promotions, it is possible to earn an hourly wage of $25 or more. USPS postal managers can earn salaries in excess of $100,000 per year.
As with most jobs, the amount of money you can make working for USPS will also depend on factors such as your level of experience, education, and job performance.
If you are interested in working for USPS, it is important to research the salary ranges for various positions so you have a better idea of what to expect.
You can find this information on the USPS website or by contacting your local post office.
The bottom line is that there is potential to earn a good salary working for USPS. However, the amount of money you make will largely depend on your position and location.
With experience and promotions, it is possible to earn an hourly wage of $25 or more.
Is it worth working for USPS?
USPS is a great place to work if you need a steady income and good benefits. The job is not very stressful and can be enjoyable if you have the right outlook. The hours are long, but there are plenty of opportunities for overtime.
Depending on your position, working for USPS can be a good career choice. The job is stable and has good benefits, although the pay is not always great.
The hours are often long, but there is potential for overtime. There is also a fair amount of physically demanding work, so it is not a good fit for everyone.
It’s hard for me to say if it’s worth working for USPS. It depends on what you are looking for in a job. If you need a stable income and good benefits, then it may be worth considering.
However, if you are looking for a high-paying job with little physical labor, then USPS is probably not the best option.
Some of the benefits USPS offers include health insurance, retirement savings plans, and paid vacation days.
So if those are important to you, then working for USPS may be a good fit. Just keep in mind that the pay is not always great and the hours can be long.
Benefits USPS Mail Carriers Get
The United States Postal Service (USPS) offers a variety of benefits for its mail carriers.
These benefits include sick leaves, vacation leaves, competitive compensation, and federal employee health benefits.
In addition, USPS mail carriers are also entitled to discounts from various retailers.
One of the most notable benefits that USPS mail carriers can enjoy is the competitive compensation.
Although the starting salary may not be as high as some other jobs, it is still relatively competitive. In addition, mail carriers also receive cost-of-living adjustments (COLAs) which help to ensure that their salaries keep pace with inflation.
Another great benefit of being a USPS mail carrier is the federal employee health benefits program.
This program provides comprehensive health coverage for all USPS employees, including mail carriers.
This coverage includes hospitalization, prescription drugs, and mental health services. In addition, the program also offers dental and vision coverage for all USPS employees.
Finally, USPS mail carriers are also entitled to a variety of discounts from various retailers.
These discounts include deals on 24 Hour Fitness gym memberships, pet insurance, HP products and devices, and cell phone plans.
In addition, mail carriers can also receive discounts on higher education. All of these benefits make USPS an attractive employer for many people.
Summary
The United States Postal Service (USPS) offers retirement benefits to its employees through the Federal Employees Retirement System (FERS). The amount of your pension benefit is determined by calculating your length of service and your highest three years of salary. Your time in service starts when you first become a USPS employee. So, if you’ve been working for the postal service for 20 years, your pension benefit will be based on that 20-year length of service. In addition to regular pensions, USPS employees are also eligible for Social Security. So, if you’re a USPS employee and you’re looking at retirement, you can expect to receive both a pension and Social Security.