CSRS Retirement: The Complete Guide to Your Annuity, Offset, and the WEP/GPO Repeal

The Civil Service Retirement System covers roughly 700,000 active federal employees — those hired before 1984, a shrinking group now largely in their late 50s and 60s. CSRS produces some of the largest federal annuities in the system, but also carries complexity that generalist advisors routinely miss: the tiered formula, the CSRS Offset mechanics, the survivor election cost math, and the 2025 repeal of WEP and GPO that changed the SS calculus for virtually every CSRS employee. This guide covers all of it.

CSRS annuity formula

Your CSRS annuity is a function of two variables: your high-3 average salary and your total years of creditable service. The formula uses a tiered accrual rate:¹

• 1.5% per year for the first 5 years of service
• 1.75% per year for years 6–10
• 2% per year for every year beyond 10

The maximum annuity is 80% of your high-3, which requires approximately 41 years 11 months of service. Most CSRS employees retire well before that ceiling.

Worked example: 35 years of service

Note that 66.25% of high-3 is well above what a FERS employee with the same years would receive (35 × 1% = 35%). This is the central trade-off: CSRS employees pay more (7% of basic pay vs. 4.4% for most FERS employees) but accumulate a far larger annuity.

Sick leave credit

Unused sick leave at retirement converts to additional service credit at the same rate: 174 hours = 1 month, 2,087 hours = 1 year. Only full months count — partial months are dropped. Credit applies to annuity computation but not to retirement eligibility thresholds.¹

An employee with 800 hours of unused sick leave adds 4 months and 18 days (4 full months credited) of service to the calculation. At a high-3 of $145,000, 4 additional months at 2% = 0.67% × $145,000 = $971/year in additional annuity.

Retirement eligibility

CSRS voluntary retirement requires one of the following age-and-service combinations:²

Unlike FERS, CSRS has no Minimum Retirement Age (MRA) concept and no FERS supplement — Social Security coordination is handled entirely through the Offset mechanism (covered below) or through your personal SS record.

CSRS COLA

CSRS retirees receive full CPI-based cost-of-living adjustments each January, regardless of age at retirement. The 2026 CSRS COLA was 2.8%, effective December 1, 2025, reflected in January 2026 payments.³ FERS retirees under 62 receive no COLA; FERS retirees 62+ receive CPI minus 1 percentage point (subject to minimum rules). For a career employee projecting 20+ years of retirement, this compounding difference is substantial.

Survivor annuity election

At retirement you elect whether to provide a survivor annuity for your spouse. The decision is irreversible after the election period closes.

• Full survivor annuity: Your spouse receives 55% of your pre-reduction annuity for life. Cost to you: a reduction of 2.5% of the first $3,600 of your annual annuity plus 10% of the amount exceeding $3,600.⁴
• Partial survivor annuity: You choose any amount from $1 up to the full amount. The reduction scales proportionally based on the chosen base.
• No survivor annuity: Your full annuity during your lifetime; your spouse receives nothing from OPM after your death. Requires your spouse's written, notarized consent.

Worked example: full survivor cost

Employee gross annuity: $96,063/year

• Reduction: (2.5% × $3,600) + (10% × $92,463) = $90 + $9,246 = $9,336/year ($778/month)
• Employee receives: $96,063 − $9,336 = $86,727/year
• Surviving spouse receives: 55% × $96,063 = $52,835/year (inflation-adjusted by CPI annually)

The survivor annuity is valuable and inflation-protected — a lifetime income stream for a spouse who may outlive you by 20-30 years. But the cost is significant: $9,336/year in forgone annuity. Comparing this cost against a term or permanent life insurance alternative (similar to the FERS survivor annuity analysis) is one of the most consequential decisions at retirement.

CSRS and the Thrift Savings Plan

CSRS employees are eligible to contribute to the TSP. What they do not receive is the agency automatic 1% contribution or matching contributions up to 4% that FERS employees get. Every dollar in your TSP balance is your own contribution (plus earnings).

Despite the lack of matching, many CSRS employees approaching retirement have meaningful TSP balances. The calculus is the same as for FERS: traditional TSP reduces taxable income now, Roth TSP gives tax-free growth. For a CSRS retiree with a $96,000 annuity subject to ordinary income tax plus Social Security (see below), the traditional vs. Roth TSP decision depends on your expected tax bracket in retirement.

CSRS Voluntary Contributions Program (VCP)

One CSRS-exclusive benefit with no FERS equivalent: you can make additional after-tax contributions to OPM's Voluntary Contributions (VC) account of up to 10% of your total career basic pay, in multiples of $25.⁵ The account earns interest (4.25% in 2026).³

At retirement, you can:

• Take a lump sum — your contributions plus interest, tax-free on the return of contributions (already after-tax). Interest portion is taxable.
• Convert to additional annuity — each $100 in VC account balance converts to $7 in additional annual annuity ($1/month per $100), adjusted for age. These amounts are not subject to the 80% cap on your basic annuity.

A CSRS employee who contributed $50,000 to VC over a career could convert that to roughly $3,500/year in additional annuity. For those who maximized contributions, the VCP can add meaningfully to retirement income. It's largely underused because it's not well publicized.

CSRS Offset: what it is and how it works

If you were hired after December 31, 1983, or if you had a qualifying break in federal service, you may be a CSRS Offset employee. This is not a penalty — it's a hybrid arrangement that matters significantly at age 62.

What CSRS Offset means while working

• You contribute approximately 0.8% of basic pay to CSRS (rather than the full 7%), plus 6.2% to Social Security — roughly the same total as regular CSRS
• Your agency also pays the employer SS portion (6.2%) on your behalf
• Your CSRS annuity is calculated using the same 1.5/1.75/2% tiered formula as regular CSRS

The offset at age 62

When you reach age 62 (or become eligible for Social Security if earlier), OPM reduces your CSRS annuity by the Social Security benefit attributable to your CSRS Offset federal service.⁶ Simultaneously, you can begin collecting that Social Security benefit.

The key insight: the total monthly income (OPM annuity + SS check) is roughly unchanged. The offset simply splits the payment between two payers — OPM and SSA.

Example: CSRS Offset employee with a $8,005/month annuity. At 62, SS benefit attributable to CSRS Offset service = $2,100/month. After offset: OPM pays $5,905/month, SSA pays $2,100/month, total = $8,005/month.

Where it gets complex: you also have a choice about when to file for SS. Filing at 62 accepts a permanent SS reduction. Filing at 67–70 captures delayed retirement credits (8%/year after FRA). But the CSRS Offset to your annuity kicks in at 62 regardless — you can't avoid the annuity reduction by not filing for SS.

The WEP and GPO repeal — what it means for CSRS employees

The Social Security Fairness Act, signed January 5, 2025 and effective retroactively to January 2024, repealed both the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).⁷ This is the most significant change for CSRS employees in a generation.

Who is affected

CSRS employees' federal service is not covered by Social Security — you do not pay SS taxes on federal wages (pure CSRS). But many CSRS employees have Social Security credits from:

• Work before entering federal service (private sector, military, state/local)
• Part-time private-sector jobs held concurrently with federal employment
• Work after leaving federal service
• Spouse's SS record (spousal or survivor benefits)

How WEP affected you (before repeal)

WEP reduced your Social Security benefit from non-federal employment if OPM determined you had a "windfall" of a pension from non-SS-covered employment (CSRS) plus SS from covered work. The maximum WEP reduction was $587/month in 2025. A CSRS employee entitled to $1,400/month in SS from 15 years of private-sector work might have received only $813/month after WEP.

How GPO affected you (before repeal)

GPO reduced spousal and survivor Social Security benefits by two-thirds of your CSRS government pension. For most CSRS retirees, this eliminated spousal SS benefits entirely. A spouse entitled to $1,800/month in SS spousal benefits would have received zero if the CSRS retiree's pension exceeded $2,700/month (2/3 × $2,700 = $1,800).

What changed in January 2025

• WEP is repealed. You now receive your full SS benefit from any non-federal covered work — no reduction for holding a CSRS pension.
• GPO is repealed. Spouses and surviving spouses now receive their full Social Security spousal or survivor benefits, unreduced by the government pension offset.
• Retroactive to January 2024. SSA has been paying increased benefits and lump-sum retroactive payments to affected workers since February 2025.

Dollar impact

For a CSRS retiree with 15 years of pre-federal private-sector earnings:

• Pre-2025: SS benefit of perhaps $1,400/month reduced by WEP to ~$813/month
• Post-repeal: full $1,400/month (retroactive from January 2024)
• Annual difference: ~$7,000/year, for life, with COLA

For a CSRS retiree's surviving spouse who was previously GPO-eliminated:

• Pre-2025: $0/month in survivor SS benefits if CSRS pension was large enough
• Post-repeal: up to 100% of the deceased worker's SS benefit (if higher than own SS record)
• Impact varies widely — could be $1,000–2,500/month for the rest of the survivor's life

If you have not filed for Social Security or updated your benefits, contact SSA directly. Many CSRS retirees who had WEP-reduced benefits or zero spousal SS have not yet claimed their newly restored benefits.

CSRS Offset and the WEP repeal

CSRS Offset is a different mechanism than WEP. Because CSRS Offset employees do pay Social Security taxes on their federal wages, the SS benefit from that federal service period was calculated using normal SS rules — WEP applied to any SS from other non-covered employment they had separately. The CSRS Offset annuity reduction (at age 62) remains in effect; WEP repeal affects any separately held SS credits from non-federal work.

Additionally, GPO repeal benefits CSRS Offset employees' spouses in the same way as pure CSRS retirees — their spousal and survivor SS benefits are no longer reduced by the CSRS Offset pension.

Key differences: CSRS vs FERS

Common planning mistakes for CSRS employees

Not claiming newly restored Social Security benefits

Many CSRS retirees who received WEP-reduced SS or had GPO eliminate spousal SS have not contacted SSA to update their benefit. If you retired before 2025 and had WEP or GPO reduce your benefits, contact SSA at 1-800-772-1213 or visit ssa.gov to verify your current benefit amount reflects the repeal.

Underusing the Voluntary Contributions Program

CSRS employees within 10 years of retirement who have not maximized VC contributions may be leaving significant annuity income on the table. The VCP is interest-bearing (4.25% in 2026), tax-deferred on the earnings side, and converts favorably at retirement.

Miscalculating the survivor annuity break-even

The full survivor election costs roughly $778/month (for a $96K annuity example above). That's real money forgone. Many couples reflexively elect the full survivor without modeling whether private insurance provides better coverage at lower cost — and without factoring in the survivor's SS income from spousal benefits now fully restored after GPO repeal.

Ignoring the CSRS Offset timing decision on SS

If you're CSRS Offset, your annuity will be reduced at 62 whether or not you claim SS. But claiming SS at 70 instead of 62 adds 56% more SS benefit (8%/year delayed retirement credits × 7 years). Your OPM offset amount is locked to the SS benefit you're entitled to at 62 — it doesn't increase if you delay. So delaying SS filing while the offset is already applied gives you a higher SS check for the rest of your life.

Underestimating CSRS tax exposure

A $96,000 CSRS annuity with no private deductions makes most of your retirement income taxable. The CSRS annuity exclusion ratio (simplified method calculation) excludes a small portion based on your total contributions, but the recoverable period is typically short. An advisor can model your after-tax retirement income and TSP withdrawal strategy to minimize lifetime tax drag.

Sources

1. OPM — CSRS Computation: tiered annuity formula (1.5%/1.75%/2%), high-3 definition, sick leave credit.
2. OPM — CSRS Types of Retirement: voluntary eligibility (55/30, 60/20, 62/5), disability, deferred.
3. OPM Benefits Administration Letter 26-101 — 2026 CSRS/FERS interest rate 4.25%; 2026 CSRS COLA 2.8%.
4. OPM RI 83-7 — CSRS Retirement Facts: Computing Retirement Benefits (survivor annuity cost formula).
5. OPM RI 83-10 — CSRS Retirement Facts: Voluntary Contributions (10% of career pay limit, annuity conversion).
6. OPM FAQ — CSRS Offset benefits and the offset calculation at age 62.
7. SSA — Social Security Fairness Act: WEP and GPO repealed, effective January 2024, retroactive payments began February 2025.

Annuity formula, retirement eligibility ages, and survivor election costs verified against OPM publications as of May 2026. CSRS COLA (2.8%) and VCP interest rate (4.25%) per OPM BAL 26-101. WEP/GPO repeal per Social Security Fairness Act (P.L. 118-333), signed January 5, 2025.

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