As employees of the Federal Aviation Administration, air traffic controllers (ATC) get access to the same general retirement benefits as other federal employees. Specifically, any civilian air traffic controller hired after 1987 is a part of the Federal Employees Retirement System (FERS). The retirement system is a three-tier plan that includes Social Security, a pension called the Basic Benefit Plan, and a 401(k)-like Thrift Savings Plan.
Basic Benefit Plan
The federal Basic Benefit Plan is a pension that gets calculated relative to your pay. The government takes the average income you earned during your highest-paid three years of service – usually your last three – and uses it as a base for your pension. It gives you 1.7 percent of that pay per year of service up to 20 years and 1 percent for every additional year of service over 20.
For example, if you served 25 years and had a high pay of $80,000, you would get 34 percent of it for your first 20 years, plus 5 percent for your last five. That would give you a pension of $31,200, or 39 percent of your pay.
Thrift Savings Plan
The Thrift Savings Plan is a tax-deferred savings account where you can invest your money in a choice of funds. You automatically get one percent of your income deposited for you as a part of your federal retirement benefits. The government also matches any additional income that you put in.
The Internal Revenue Service limits contributions to as much as $58,000 per year, including matching and automatic contributions. That gets reduced by what you put into your Roth retirement accounts, if anything. However, you can generally put in only $19,500 of your own money. But if you are 50 years or older, you can add another $6,500 as your catch-up contribution. These limits apply to the 2021 tax year.
Social Security Benefits
Under the Federal Employees Retirement System, you also get to participate in the Social Security program. Every paycheck will have money deducted to fund Social Security. When you reach the retirement age, you can collect a Social Security check for the rest of your life. However, you must earn at least 40 social credits over a minimum ten-year period to qualify for Social Security retirement.
However, the 40 social credits are only meant to determine your eligibility for retirement benefits. But they have no impact on what you will get as your final air traffic controller Social Security supplement during retirement.
After you retire, Social Security will calculate your benefits based on the average indexed monthly earnings you earned over your highest-paying 35 years during which you worked. The result is what you will begin getting if you retire at full retirement age, usually 65 years or older, depending on when you were born.
Retirement Age and Requirements
Your ability to collect your retirement benefits depends on your age and the type of benefit you are collecting. Assuming that you have at least 20 years of service, the Federal Aviation Administration states that you become eligible to retire at 50 years. But the FAA ATC retirement rules also say that you can retire at any age, even earlier, if you have at least 25 years of service.
It is also worth noting that air traffic controllers are in a special group whose mandatory retirement age is 56 years. These are particular limits set for air traffic controller retirement.
While you are waiting to get old enough to start collecting Social Security benefits, the government will give you a special supplement to help bridge the gap. Before reaching the minimum age of 62 that enables you to get your Social Security retirement benefits, you can still enjoy the FERS annuity payment from 56 years, which is the mandated ATC retirement age. You can also start withdrawing from your Thrift Savings Plan account without the additional early withdrawal penalty once you turn 50 years.
It helps to understand all the air traffic controller retirement benefits due to you at different ages. That way, you can plan your retirement so that you don’t have to struggle with financial issues when you reach the mandatory retirement age.
