Picatinny Arsenal and Federal Service: GS-14, GS-15, and Long-Service FERS

North Jersey specifics

Pay at the top, and what the annuity is built on

Morris County is in the New York-Newark locality pay area, where the 2026 General Schedule carries a 37.95% locality payment. GS-14 step 10 is $192,694. GS-15 is capped from step 5 upward at $197,200, the rate for Level IV of the Executive Schedule, so a GS-15 at step 7 and one at step 10 earn the same and build the same high-3. Senior Executive Service pay for 2026 runs from $151,661 to $209,600, or $228,000 in an agency with a certified performance system.

The basic annuity is the high-3 average salary multiplied by years of service and by 1% a year, or 1.1% a year if you separate at 62 or later with at least 20 years. At a high-3 of $197,200 and 30 years, separating at 61 pays $59,160; separating at 62 pays $65,076. That is $5,916 a year for life, for a few more months of work, and it applies to every year of service, not only the years after 62. Unused sick leave counts in full toward the computation, though never toward eligibility, and the Office of Personnel Management confirms that sick leave credit which lifts service from just under 20 years to 20 or more triggers the 1.1% rate for a retiree who is 62.

The Thrift Savings Plan at $1 million and above

For 2026 the elective deferral limit is $24,500, the catch-up is $8,000 at 50 or older and $11,250 in the years you turn 60 through 63, and the annual additions limit across your contributions and the agency’s is $72,000. Since January 1, 2026, catch-up contributions must be Roth if your prior-year FICA wages exceeded $150,000, which describes most GS-14s and every GS-15 at Picatinny; the traditional pre-tax maximum stays available, the catch-up on top of it does not.

At separation the account can stay where it is. Withdrawals can be taken as installments (monthly, quarterly or annually, a fixed dollar amount or life-expectancy based), as partial distributions of at least $1,000, or as a TSP annuity purchase with a $3,500 minimum that cannot be changed or cancelled once made. Separating in or after the year you turn 55 removes the 10% early withdrawal tax on TSP payments (50 for federal law enforcement and firefighters), which is what makes a retirement at 57 with 30 years workable without touching the annuity supplement’s earnings test. Required minimum distributions begin at 73, or 75 for anyone born in 1960 or later; on a $1.5 million balance the first required withdrawal is roughly $56,600 of ordinary income on top of an annuity that is already five figures a month, and the year the withdrawals begin is a decision, not an accident.

The survivor election, priced

A full survivor annuity pays your spouse 50% of the unreduced annuity and costs 10% of yours; the partial election pays 25% and costs 5%. On a $65,076 annuity the full election costs $6,508 a year and buys $32,538 a year for the survivor, for life, with cost-of-living adjustments. The election also decides whether your spouse keeps Federal Employees Health Benefits coverage after your death: a surviving spouse continues FEHB only if a survivor annuity or basic employee death benefit is payable and you were enrolled in Self Plus One or Self and Family at death. For a two-income household where the spouse has a corporate 401(k) and no retiree medical, the health coverage can be the larger reason to elect the survivor benefit.

The last year: annual leave, Medicare, and the FEHB decision at 65

Annual leave is paid out in a lump sum at separation, at your hourly rate, and it is taxable wages on the W-2. The carryover ceiling is 30 days (240 hours) for most employees stationed in the United States and 90 days for the Senior Executive Service and senior-level positions. At the GS-15 cap the hourly rate is about $94.49, so 240 hours is $22,678 landing in the separation year on top of salary; an SES member at the ceiling receives three times that. The year you separate is the year that payment, the final salary and any TSP withdrawal are stacked, and it is the year that sets the Medicare Part B premium two years later.

At 65, FEHB coverage continues whether or not you enroll in Medicare Part B. Enrolling is a choice: the Part B premium is income-related, and higher-income beneficiaries receive a smaller government subsidy, while some FEHB plans waive their copayments, coinsurance and deductibles for services Part B covers. Declining Part B and enrolling later carries a 10% premium penalty for each 12 months you could have had it, unless you enroll in a special enrollment period after leaving active employment. Run the two premiums against your plan’s Part B waivers before 65, not after.

Rather go through this with your own numbers? We can cover it in a short conversation, at no charge and with no obligation. Book your Retirement Review

New Jersey tax: the annuity, the TSP, and the $150,000 cliff

New Jersey taxes federal civil service pensions like any other pension and does not tax Social Security. Your FERS contributions were included in New Jersey wages when made, so they come back tax-free under the Three-Year Rule or the General Rule; the Office of Personnel Management does not compute the New Jersey figure, so keep the contribution total from your final statement. The TSP is treated differently from a private 401(k): the Division of Taxation states that New Jersey does not allow contributions to Federal Thrift Savings Funds to be excluded from wages, so your traditional TSP contributions were taxed by the state when made and the distributions carry New Jersey basis. Keep the running total of traditional contributions from every year’s W-2, because no one else will have it at retirement.

The retirement income exclusion is worth up to $100,000 on a joint return at $100,000 or less of total income, shrinks between $100,001 and $150,000, and disappears above $150,000, judged on total income for the year, not pension income. A $65,000 FERS annuity plus $60,000 of TSP withdrawals plus a spouse’s $40,000 pension is $165,000 and no exclusion; the same household spacing the TSP withdrawals differently keeps 25% of the pension excluded. Social Security does not count toward the total, which makes the claiming date one of the levers.

How FERS works

The reference material: MRA, the four routes, the supplement, and the rules for everyone

What follows applies to every FERS employee at Picatinny: which system you are in, the three parts, the Minimum Retirement Age, the immediate retirement routes and the MRA plus 10 trap, the annuity supplement and its earnings test, the 1.1% multiplier, the five-year health insurance rule, the survivor election, deferred retirement and the TSP match. The decisions above are made on top of it.

First, confirm which system you are actually in

Federal service is not one category, and the answer is on your SF-50 rather than in your memory.

• FERS. Anyone who first entered covered federal service on or after January 1, 1987 is under FERS. That is nearly everyone still working today.
• CSRS. Closed to new entrants since January 1, 1987. A small number of long-tenured employees remain, and their rules are entirely different from what follows on this page.
• FERS special provisions. Federal law enforcement officers, firefighters, and air traffic controllers retire under different ages and a richer formula. Picatinny has a Directorate of Emergency Services with federal police and a federal fire department, so this genuinely applies to some people here. Check the retirement coverage code on your SF-50 rather than assuming.

You have three parts, not one

FERS is deliberately built as three layers: the FERS basic annuity, the Thrift Savings Plan, and Social Security.

That last one deserves emphasis, because federal employees are often told they are in a special system outside Social Security. Under FERS you are not. You pay Social Security taxes on your federal earnings and you earn Social Security credits in the ordinary way. Some other federal-adjacent systems, notably Railroad Retirement, genuinely do replace Social Security. FERS does not.

The practical consequence is that your retirement income has three moving parts with three different eligibility ages, and they do not have to start on the same day.

Your Minimum Retirement Age depends on the year you were born

The FERS retirement rules key off your Minimum Retirement Age, or MRA, rather than a fixed number.

If you were born	Your MRA is
Before 1948	55
1948 through 1952	55 plus two months for each year after 1948
1953 through 1964	56
1965 through 1969	56 plus two months for each year after 1964
1970 or later	57

If you were born in 1970 or later, your MRA is 57.

There are four ways to retire immediately, and one of them is penalized

Age	Years of service	Reduction
62	5	None
60	20	None
MRA	30	None
MRA	10	Yes. See below.

An immediate annuity is one that begins within 30 days of separation. Two additional routes exist if Picatinny goes through a reduction in force or a major reorganization: early optional retirement under a Voluntary Early Retirement Authority, and discontinued service retirement for an involuntary separation. Both require age 50 with 20 years, or any age with 25 years.

MRA plus 10 is the trap, and postponing can be the answer

If you retire at your MRA with at least 10 years but fewer than 30, your annuity is reduced by 5% for every year you are under 62. At an MRA of 57 that is a permanent 25% cut.

You do not have to accept it. You can separate now and postpone the start of the annuity to any date between your MRA and two days before your 62nd birthday, which reduces or eliminates the age reduction. If you have 20 years of service and start the annuity at 60, the reduction disappears entirely.

Postponing also preserves something that deferring destroys. A postponed retiree can re-enroll in the Federal Employees Health Benefits program and Federal Employees Group Life Insurance when the annuity begins, with the government resuming its share of the premium. In the gap you can carry coverage temporarily at full cost plus an administrative fee.

The FERS Annuity Supplement, and who does not get it

If you retire before 62 with an unreduced immediate annuity, FERS pays a supplement that approximates the Social Security benefit you earned through federal service. Roughly, it is your estimated age-62 Social Security benefit multiplied by your years of FERS service divided by 40.

It stops the month you turn 62, whether or not you claim Social Security then. It is also subject to an earnings test: earn above the Social Security annual limit for people under full retirement age, which is $24,480 in 2026, and the supplement is reduced by $1 for every $2 over the limit. Only earned income counts.

Four groups do not receive it at all: anyone retiring under MRA plus 10, disability retirees, deferred retirees, and anyone who retires at 62 or later. The MRA plus 10 exclusion surprises people, because it compounds the age reduction already described.

Law enforcement, firefighter, and air traffic controller retirees are exempt from the earnings test until they reach their MRA, which makes a second career between 50 and 57 considerably more valuable for them.

The 1.1% multiplier, and why one more year can be worth 10%

The basic annuity uses your high-3 average salary, which is the highest average basic pay over any three consecutive years of service, not necessarily the last three.

• 1% per year of service if you retire under age 62, or at 62 or later with fewer than 20 years.
• 1.1% per year of service if you are 62 or older at separation with 20 or more years.

Read that carefully. The higher multiplier applies to every year of service, not only to the years after 62. Someone with 30 years who separates at 61 receives 30%. The same person separating at 62 receives 33%. That is a permanent 10% increase to the annuity for a few additional months of work, and it is the single largest timing decision on this page.

Health insurance in retirement: the five-year rule

To carry Federal Employees Health Benefits coverage into retirement you must have been enrolled for the five years of service immediately before retiring, or since your first opportunity to enroll if that is shorter, and you must be enrolled on the day you retire.

Time covered under TRICARE counts toward the five years. At an Army installation that matters, because military retirees and reservists working as civilians can often use TRICARE time to close the gap.

The survivor election also decides your spouse’s health insurance

You may elect a full survivor annuity of 50% of your unreduced basic annuity, or a partial one of 25%. A married employee receives the full election by default unless the spouse consents in writing to less.

The reason to think hard about this is not only the income. If you elect no survivor annuity, your surviving spouse cannot continue Federal Employees Health Benefits coverage after your death. Declining the survivor benefit to keep a larger monthly check also ends your spouse’s access to the health plan, permanently.

If you leave federal service before you are eligible

A deferred annuity is available at 62 with five years of creditable civilian service, or at your MRA with 10 years, reduced by 5% for each year under 62.

The deferred route carries a hard consequence that the postponed route does not. A deferred retiree cannot re-enroll in health, life, dental, or vision coverage at any point. Deferred retirees also receive no annuity supplement. If you are separating with at least 10 years and have reached your MRA, understand which of the two you are choosing before you sign anything.

The TSP match

Your agency contributes an amount equal to 1% of your basic pay whether or not you contribute anything. On top of that, the first 3% you contribute is matched dollar for dollar, and the next 2% is matched at 50 cents on the dollar.

Contribute 5% and you receive 5% back: the automatic 1% plus a 4% match, for a total of 10% of basic pay going into the account. Contribute less than 5% and you are declining part of your pay.

For 2026 the elective deferral limit is $24,500. Catch-up contributions are $8,000 for ages 50 through 59 and 64 and over, and $11,250 for those turning 60 through 63 during the year. Beginning January 1, 2026, catch-up contributions must be made as Roth if your prior-year FICA wages exceeded the applicable threshold.

Your own contributions and the matching contributions are yours immediately. Only the automatic 1% carries a vesting requirement, which is three years of service for most FERS employees.