IRS employees, like most civilian federal employees, are covered under the Federal Employee Retirement System (FERS), which is a retirement plan that pays a pension based on a retiree's highest average salary period and the amount of time he worked for the federal government. While not as generous as the military's half-pay at 20 years retirement, it is still a generous retirement program that pays a substantial amount.
IRS retirement benefits are based on the retiree's "high-3" salary from when he or she was working. This is the average of the three highest consecutive years' salary. For the majority of people, this will be the last three years of employment, but exceptions do exist, so it is best for potential retirees to be sure of which three years are most advantageous to them before they start calculating.
Under 62, Under 20
To get the full benefits of federal retirement, employees need to have worked for 20 years or more and be over the age of 62 when they retire. They must fufill both of these factors to receive the full benefits.
However, if they do not fit both conditions they still receive some benefits. Employees under the age of 62 and/or with less than 20 years of service calculate their pensions by multiplying the amount of years they worked for the IRS by 1%. This becomes a percentage, which they then multiply their "high-3" by.
So, if someone worked for the IRS for 10 years and decided to retire at 65 with a high-three average of $100,000, then her pension would be $10,000 a year (1% x 10 x 100,000).
Over 62, Over 20
People who work for the IRS for longer than 20 years and are over the age of 62 when they retire receive more generous pension benefits. Instead of multiplying their time in the IRS by 1%, they can multiply it by 1.1%, which yields a fairly substantial difference over time.
So, if someone decided to retire at the age of 65 with 20 years of service and a high-three of $100,000, then his pension would be $22,000 a year (1.1% x 20 x 100,000).
Sam Grover began writing in 2005, also having worked as a behavior therapist and teacher. His work has appeared in New Zealand publications "Critic" and "Logic," where he covered political and educational issues. Grover graduated from the University of Otago with a Bachelor of Arts in history.