FERS retirement income comes from three sources: a pension, Social Security, and the TSP. The pension is based on years of service and the high-3 average salary, Social Security is based on career earnings like any other worker, and the TSP grows based on contributions and investment choices. Each piece works on its own rules, and a decision in one area can affect the others.
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If you're a federal employee, your retirement income doesn't come from one place. It comes from three. And a lot of people go through their entire federal career without ever getting a clear explanation of how these three pieces actually work together.
Your pension is based on how long you worked and your high-three average salary, which is based on your highest 36 consecutive months of basic pay. Social Security works the way it does for any worker, based on what you earned over your career. And the TSP is what you contributed to over the years, growing based on how it's invested.
Each of those pieces has its own rules, its own timeline, and its own set of decisions attached to it. Understanding how they fit together, and how a choice in one area can affect the others, is really the foundation of any solid retirement plan.
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