Retirement Planning

How Much Is Your Unused Sick Leave Worth at Retirement?

Your unused sick leave adds real dollars to your FERS pension. Learn the conversion formula, calculate your value, and avoid costly mistakes before you retire.

By FedTools TeamJanuary 9, 20267 min read

Most federal employees know their unused sick leave converts to retirement credit. Few understand how much that credit is actually worth in dollars.

Here's the reality: 2,087 hours of sick leave adds 1% of your High-3 salary to your pension, every year, for life. For a GS-13 retiring with a $115,000 High-3, that's $1,150 per year, or roughly $23,000 over a 20-year retirement.

And most feds leave thousands of hours on the table.

Key Takeaways

Each 2,087 hours of sick leave adds 1% of your High-3 to your annual pension
Sick leave credit increases your pension amount but cannot help you retire earlier
Only full 30-day blocks count toward your pension (partial months are lost)
Using sick leave before retirement costs you more in lifetime pension than you gain in paid time off

The Sick Leave Conversion Formula

OPM uses a straightforward formula to convert your sick leave hours to service credit:

Hours ÷ 5.797 = Days of Service Credit

Or, to think about it in years:

2,087 hours = 1 full year of service credit

This credit gets added to your total years of service when calculating your pension. It doesn't help you retire earlier (you still need actual service time for eligibility), but it directly increases your monthly annuity.

What Your Sick Leave Is Actually Worth

Let's put real dollar amounts on the table. The FERS pension formula is:

High-3 × Years of Service × Multiplier (1% or 1.1%)

Each year of sick leave credit adds another 1% (or 1.1%) of your High-3 to your annual pension. Here's what that looks like:

Sick Leave Hours	Service Credit	Annual Pension Boost*	20-Year Value*
500 hours	~3 months	+$288/year	$5,760
1,000 hours	~6 months	+$575/year	$11,500
1,500 hours	~9 months	+$863/year	$17,260
2,087 hours	1 year	+$1,150/year	$23,000
2,500 hours	~14 months	+$1,380/year	$27,600

*Based on $115,000 High-3 salary with 1% multiplier. Your actual value depends on your salary.

The math is clear: A federal employee who retires with 2,000+ hours of sick leave is looking at an extra $20,000 or more over a typical retirement. That's real money, and it compounds if you factor in COLA adjustments.

The 30-Day Block Rule You Need to Know

Here's where some feds lose money without realizing it.

Sick leave credit only counts in full 30-day blocks. Any days beyond a complete month are lost. They don't round up.

Example:

97 days of credit = only 90 days counted (3 months)
The remaining 7 days? Gone.

This means your retirement timing matters. If you're sitting at 93 days of credit and could push to 120 by working a few more weeks, that extra month of credit might be worth it.

The Rule Most Feds Get Wrong

Sick leave credit counts toward your pension calculation but NOT toward eligibility requirements.

What does that mean practically?

You need 5, 10, 20, or 30 years of actual service to qualify for retirement
Sick leave cannot push you over these thresholds
But once you're eligible, sick leave increases how much you receive

If you have 29 years and 6 months of actual service plus 1,000 hours of sick leave, you don't have "30 years" for eligibility purposes. You still need 6 more months of actual work. But when you do retire, your pension calculation includes those sick leave hours.

The Costly Mistake: Burning Sick Leave Before Retirement

Some employees take the "use it or lose it" approach to sick leave in their final year. They figure they'll never need it again, so why not take a few long weekends or schedule those medical appointments they've been putting off?

This is a math problem, and the math doesn't favor using it.

The comparison:

Using 100 hours of sick leave gives you approximately $4,800 in paid time off (at a GS-13 salary).

Those same 100 hours, converted to pension credit, add roughly $55 per year to your pension. Over 20 years of retirement, that's $1,100. Over 30 years, it's $1,650.

Seems like the paid time off wins, right?

Not quite. Here's what changes the math:

Your pension is guaranteed for life. If you live 25+ years in retirement, the pension value wins.
COLA adjustments. Your pension increases with inflation. That $55/year grows over time.
Survivor benefits. If you elect survivor coverage, your spouse keeps receiving that extra amount.

For most federal employees, especially those expecting a long retirement, saving sick leave beats using it.

When It Might Make Sense to Use Sick Leave

There are legitimate exceptions:

Serious medical need: If you have a health condition requiring treatment, take care of it
Mental health: Burnout before retirement is real, and your wellbeing matters
Very short expected retirement: If health concerns suggest a shorter retirement horizon

But using sick leave for convenience, to extend vacation, or because "I earned it" leaves money on the table.

Your Sick Leave Strategy for Retirement

Here's a practical approach:

If you're 5+ years from retirement:

Build your balance aggressively
Use sick leave only for actual illness
Track your hours quarterly

If you're 1-2 years from retirement:

Calculate your current balance using the formula above
Identify if you're close to a 30-day threshold
Consider whether a few extra weeks of work could push you into the next month of credit

If you're in your final year:

Resist the urge to burn hours
Schedule necessary medical appointments but don't manufacture reasons to use leave
Run the numbers on your specific situation

Calculate Your FERS Pension

Your sick leave is just one piece of your retirement calculation. The bigger picture includes your High-3 salary, total years of service, survivor benefit elections, and retirement age.

Use our free FERS Retirement Calculator to see your complete pension estimate. Enter your High-3, years of service, and retirement details to see what you'll receive monthly.

Frequently Asked Questions

How is sick leave converted to retirement credit in FERS?

Unused sick leave hours are divided by 5.797 to get days of credit, then converted to months and years. 2,087 hours equals one full year of service credit added to your pension calculation.

Does sick leave help me retire earlier?

No. Sick leave credit only increases your pension amount. It cannot be used to meet eligibility requirements like the 5, 10, 20, or 30-year service thresholds. You need actual creditable service for that.

What happens to sick leave days under 30?

Only full 30-day blocks count toward your pension. Extra days beyond a complete month are lost. For example, 97 days converts to only 90 days (3 months) of credit.

How much does one year of sick leave add to my FERS pension?

One year of sick leave (2,087 hours) adds 1% of your High-3 salary to your annual pension. If you're retiring at age 62 or older with 20+ years of service, the multiplier increases to 1.1%, making that year of sick leave worth 10% more.

Should I use sick leave before retirement or save it?

Save it if possible. Each hour of sick leave adds lifetime pension value. The math favors saving: 100 hours of sick leave adds roughly $55/year to your pension, which compounds to $1,100+ over a 20-year retirement, and potentially more with COLA adjustments and survivor benefits.

Does this apply to CSRS employees too?

Yes. Unused sick leave conversion applies to both FERS and CSRS employees. The conversion formula (2,087 hours = 1 year) is the same, though the pension multipliers differ between the two systems.