The U.S. Postal Service is covered, as are all federal nonmilitary agencies, under the Federal Employment Retirement System (FERS), which pays all of its employees a pension in accordance with how much they were paid during their career, what kind of work they did, and how long they worked for the federal government.
FERS does not pay enough of a pension to equal a postal employee's working income. This means employees need to use their Social Security and private plans to amass a good retirement income for themselves.
Calculate the average of your three highest-paid consecutive years. For most, this will be your last three years, but exceptions do exist, so look carefully through your salary information.
Multiply your three-year average by 1 percent for each year of service if you are retiring after less than 20 years. So, if you worked for 10 years and your three-year high average was $30,000 a year, then your FERS earnings will be 10 percent (1 percent x 10 years) of that average--$3,000 a year.
Multiply your three-year average by 1.1 percent for each year of service if you worked for 20 years or more and are more than 62 years old. So, if you are 64 years old and worked for 20 years with a three-year high average of $30,000 a year, then your annual pension payment will be 22 percent of $30,000 (20 years x 1.1 percent). This is $6,600 a year.
Try to get a promotion for a few years to increase your retirement payments. Joining the Postal Service at 42 will allow you to get your 20 years in and still get full retirement benefits, which could be a good option for someone seeking a midlife career change.
Be careful to calculate correctly, as this benefit represents a substantial part of your financial future, and a miscalculation could throw off your retirement planning.