Your $45,000 Federal Pension Really Pays ~$2,565 a Month
Last Updated: June 21, 2026 Reading Time: 8 min
OPM's retirement estimate quotes a gross annuity, and that number is what most feds anchor their retirement plan to. Then the first check arrives smaller, sometimes a lot smaller. The gap between the gross figure and what lands in your account is predictable, and once you see the math you can plan the rest of your retirement around the real number instead of the headline one.
Key Takeaways
- Plan on 62-70% of gross as your actual monthly take-home, depending on your elections.
- Four deductions drive the gap: survivor election, FEHB premiums (now after-tax), FEGLI, and federal tax withholding.
- FICA is gone in retirement, a small point in your favor (no 7.65% payroll tax on the annuity).
- Your elections control ~$940/month of the spread on a $45,000 pension, the difference between best- and worst-case choices.
- FEHB quietly costs more in retirement because the pre-tax Premium Conversion shield disappears (~$900-$1,800/yr).
Where the Money Actually Goes
OPM doesn't hand you the gross number. Before the check deposits, four lines come out, in this order:
- Survivor benefit election: 10% of gross for the full election (your spouse gets 50%), or 5% for the partial election (spouse gets 25%). This is the biggest controllable deduction.
- FEHB premium: your health plan continues into retirement, deducted straight from the annuity, now paid after-tax.
- FEGLI: life insurance, if you keep it. Basic with the 75% reduction option is free after 65; the no-reduction option keeps costing about $0.72 per $1,000 of coverage a month.
- Federal income tax withholding: about 95-98% of a FERS annuity is taxable.
What is not deducted: FICA. Social Security and Medicare payroll taxes do not come out of an OPM annuity, so that 7.65% you paid as an employee is gone in retirement.
Original Data: The Gross-to-Net Waterfall
These tables itemize each deduction by pension size. Assumptions: full survivor election, a self-plus-one mid-tier FEHB plan (~$500/month enrollee share), FEGLI Basic at the free 75% reduction, single filer with the 2026 standard deduction, no state tax shown. They are illustrative estimates, not a personalized quote.
$35,000 gross annuity ($2,917/month)
| Line | Monthly | Running net |
|---|---|---|
| Gross annuity | $2,917 | $2,917 |
| Survivor benefit (10%) | -$292 | $2,625 |
| FEHB (self-plus-one, mid-tier) | -$500 | $2,125 |
| Federal tax withholding | -$185 | ~$1,940 |
Net ≈ 67% of gross.
$45,000 gross annuity ($3,750/month)
| Line | Monthly | Running net |
|---|---|---|
| Gross annuity | $3,750 | $3,750 |
| Survivor benefit (10%) | -$375 | $3,375 |
| FEHB (self-plus-one, mid-tier) | -$500 | $2,875 |
| Federal tax withholding | -$310 | ~$2,565 |
Net ≈ 68% of gross.
$60,000 gross annuity ($5,000/month)
| Line | Monthly | Running net |
|---|---|---|
| Gross annuity | $5,000 | $5,000 |
| Survivor benefit (10%) | -$500 | $4,500 |
| FEHB (self-plus-one, mid-tier) | -$500 | $4,000 |
| Federal tax withholding | -$500 | ~$3,500 |
Net ≈ 70% of gross.
Your Elections Swing the Net by $940/Month
Most of the gross-to-net gap is inside choices you make at retirement. Here is the same $45,000 gross annuity under different elections:
| Scenario | Monthly net | % of gross |
|---|---|---|
| No survivor + self-only FEHB ($200/mo) | ~$3,120 | 83% |
| Partial survivor (5%) + self-only FEHB | ~$2,960 | 79% |
| Full survivor (10%) + self-only FEHB | ~$2,750 | 73% |
| Full survivor + self-plus-one FEHB ($500/mo) | ~$2,550 | 68% |
| Full survivor + family FEHB ($650/mo) | ~$2,380 | 63% |
| Full survivor + family FEHB + Medicare Part B ($203/mo) | ~$2,180 | 58% |
The spread from top to bottom is $940 a month on the same gross pension, a 25-point swing driven entirely by elections you control. None of that is a reason to skip the survivor benefit, which protects your spouse's income and their FEHB eligibility, but it is a reason to know the number before you build a retirement budget around the gross figure.
The FEHB Detail Nobody Mentions
As an active employee, your FEHB premium comes out pre-tax through Premium Conversion. Retirees lose that. The dollar premium is similar, but you now pay it with after-tax money, so the effective cost rises.
| Bracket | Monthly premium | Annual cost of losing pre-tax treatment |
|---|---|---|
| 12% | $300 | ~$792 |
| 22% | $500 | ~$1,320 |
It is a quiet $900-$1,800 a year that never shows up as a "deduction" because it is a tax shield disappearing rather than a line item appearing.
Build Your Real Number
Start with your gross annuity in the FERS Retirement Calculator (it uses your High-3, which you can confirm with the High-3 Calculator), then apply the waterfall above. To shrink the FEHB line, compare plans in the FEHB Premium Calculator before Open Season. And before you lock in your survivor election, read the decision mechanics, because it is nearly irrevocable once payments begin.
Frequently Asked Questions
How much of my federal pension will I actually receive each month?
Plan on roughly 62-70% of your gross annuity as net take-home, depending on your survivor election, FEHB plan, and tax situation. On a $45,000 gross annuity ($3,750/month), a full survivor election, a self-plus-one mid-tier FEHB plan, and standard federal withholding leave about $2,500-$2,600 a month. State tax can take another $50-$200.
What actually comes out of my FERS pension every month?
OPM deducts four things: your survivor benefit election (5% or 10% of gross), FEHB premiums (after-tax in retirement), any FEGLI premiums you keep, and federal income tax withholding. FICA is NOT withheld from an OPM annuity. You can also have Medicare Part B withheld if you enroll at 65.
Does the survivor benefit really reduce my check by 10%?
Yes. The full survivor election (which leaves your spouse 50% of your annuity) permanently reduces your gross annuity by 10%. On $3,750/month that is $375 a month, $4,500 a year, for life. The partial election (25% survivor benefit) costs 5%.
Is my federal pension taxable?
About 95-98% of a FERS annuity is taxable as ordinary federal income. A small tax-free slice each month returns your own after-tax contributions via the IRS Simplified Method (Pub 721). If you never file a W-4P, OPM defaults to Single with zero allowances, which often under-withholds for married retirees.
Do I pay for FEHB the same way in retirement?
The premium dollar amount is similar, but the tax treatment changes. Active employees pay FEHB pre-tax through Premium Conversion; retirees pay after-tax. Losing the pre-tax shield costs roughly $900-$1,800 a year at typical retirement brackets for a mid-tier plan.
Related Resources
- FERS Retirement Calculator: Build your gross annuity, then apply the waterfall.
- FEHB Premium Calculator: Compare plans to shrink the FEHB deduction.
- OPM Tax Information for Annuitants: Official withholding and W-4P guidance.
- IRS Publication 721: How the taxable portion of your annuity is figured.