How We Calculate Your Numbers
Every projection is traceable to a published government formula. This page documents the models, assumptions, and validation processes behind every number FedVetRetirement produces.
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Income sources modeled
12+
Deduction categories
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Deterministic test cases
OPM · SSA · IRS · VA
Formula sources
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What We Model
DocumentedFedVetRetirement™ models retirement income projections for federal employees who are also military veterans. The platform integrates multiple income sources and deduction categories to produce a comprehensive year-by-year retirement forecast.
Income sources modeled include: FERS Basic Annuity (immediate, early, and deferred), Social Security benefits (retired worker, spousal, and survivor), VA Disability Compensation, FEGLI life insurance, TSP and IRA withdrawals (including Roth conversions), and Health Savings Account (HSA) balances.
Deductions modeled include: federal and state income taxes, FEHB and TRICARE premiums, FERS survivor benefit election cost reductions, Medicare Part B/D premiums, and FEGLI premium costs.
The projection engine calculates net after-tax, after-deduction income for each year from your planned retirement date through your life expectancy (and your spouse's life expectancy, if applicable).
FERS Pension Calculation
DocumentedThe FERS Basic Annuity is calculated using the OPM formula: High-3 Average Salary × Years of Creditable Service × Multiplier. The multiplier is 1% for most retirees, or 1.1% if the retiree is age 62 or older with at least 20 years of service.
Military service buyback is included in creditable service calculations when indicated. The system accounts for fractional years and months of service.
For early retirement (MRA+10), a 5% per year reduction is applied for each year the retiree is under age 62, unless the retiree has 30+ years of service.
Survivor benefit elections reduce the gross annuity. A full survivor election (50% of unreduced annuity to the surviving spouse) reduces the retiree's annuity by approximately 10%. A partial survivor election (25%) reduces it by approximately 5%.
COLA Assumptions
DocumentedCost-of-Living Adjustments (COLAs) are applied annually to both FERS pensions and Social Security benefits, but they use different formulas.
FERS COLA: For retirees under age 62, no COLA is applied until age 62 (for FERS). Once eligible, if the CPI increase is 2% or less, the full amount is applied. If between 2% and 3%, a 2% COLA is applied. If above 3%, the COLA is CPI minus 1 percentage point. Our default FERS COLA assumption is 2.0% per year, based on historical averages.
Social Security COLA: Social Security benefits receive the full CPI-W adjustment each year. Our default SS COLA assumption is 2.5% per year, reflecting the historical average since 1975.
VA Disability COLA: VA compensation receives the same annual COLA as Social Security. We apply the same rate used for Social Security projections.
Users can customize COLA rates in their scenarios to model optimistic, pessimistic, or alternative inflation environments. The COLA Simulator analysis tool allows side-by-side comparison of different COLA scenarios.
Tax Methodology
DocumentedFederal income taxes are calculated using current tax brackets and standard deductions. The system applies progressive marginal tax rates to total taxable income, including pension income, Social Security benefits (up to 85% taxable based on combined income thresholds), and retirement account withdrawals.
State income taxes are modeled using simplified effective rates based on the retirement state. Some states fully exempt federal pensions, military retirement, or Social Security from state income tax. The system accounts for these exemptions when the user specifies their retirement state.
Tax calculations use simplified effective rates and do not model itemized deductions, tax credits (such as the Earned Income Credit or Child Tax Credit), Alternative Minimum Tax, Net Investment Income Tax, or changes in tax law over time.
VA Disability Compensation is modeled as tax-free income at both the federal and state level, consistent with current law.
Roth conversions and Roth withdrawals are modeled as tax-free distributions in retirement, while traditional IRA/TSP withdrawals are fully taxable as ordinary income.
Healthcare Modeling
DocumentedHealthcare costs are modeled based on the retiree's coverage elections. The system supports FEHB (Federal Employees Health Benefits), TRICARE (for military retirees), CHAMPVA (for qualifying VA beneficiaries), and Medicare coverage.
FEHB premiums are modeled based on current Self, Self Plus One, and Family plan rates. In retirement, the government continues to pay approximately 72% of the weighted average premium, and the retiree pays the remainder. FEHB premiums are assumed to increase at a healthcare inflation rate (default 5% per year).
TRICARE: For military retirees eligible for TRICARE, significantly lower premium costs are modeled. TRICARE for Life (available at age 65 with Medicare Part B enrollment) provides comprehensive coverage at minimal out-of-pocket cost.
Medicare: At age 65, Medicare Part B premiums are added. Income-Related Monthly Adjustment Amounts (IRMAA) are modeled for higher-income retirees. Medicare Part D (prescription drug) premiums are also included when applicable.
The Healthcare Timeline Report provides a year-by-year view of coverage transitions and estimated premium costs through the projection period.
CHAMPVA Healthcare Modeling
DocumentedCHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) is a distinct healthcare benefit — it is NOT TRICARE and does not share TRICARE logic or cost structures.
Eligibility: CHAMPVA covers spouses, dependent children, surviving spouses, and surviving children of veterans rated Permanent & Total (P&T) service-connected by the VA. A standard 100% VA rating or TDIU without the P&T designation does not qualify. Beneficiaries who are TRICARE-eligible are explicitly excluded from CHAMPVA.
Cost Structure (Primary Payer): CHAMPVA charges no premium. The beneficiary pays a $50 individual (or $100 family) annual deductible, then 25% coinsurance on covered services. Annual out-of-pocket costs are capped at $3,000 per household. The system models deductible + coinsurance against the user's expected annual medical spend, capped at $3,000.
Meds by Mail: The VA Meds by Mail program ships maintenance medications to CHAMPVA beneficiaries at no cost when no other Rx coverage exists. When active and no separate Rx coverage is present, prescription out-of-pocket is modeled at $0.
Medicare Coordination: When the CHAMPVA beneficiary is Medicare-eligible, enrollment in both Medicare Part A and Part B is required. CHAMPVA becomes secondary payer after Medicare, significantly reducing out-of-pocket costs. Important: CHAMPVA does NOT cover Medicare Part B premiums — those remain a separate annual expense modeled independently.
Secondary Payer Behavior: When the beneficiary has other health insurance (FEHB, employer plan, private, etc.) or Medicare Part B, CHAMPVA acts as secondary payer. The system models a conservative non-zero residual out-of-pocket ($600/year default) rather than assuming $0, reflecting claims that may not be fully covered by either insurer.
Override Option: Users who know their exact CHAMPVA out-of-pocket costs can enter an annual override value, bypassing the deductible + coinsurance formula entirely.
Coverage Labels: Projections display "CHAMPVA (Primary)", "CHAMPVA + Medicare", or "Other Insurance + CHAMPVA Secondary" based on the coordination scenario elected.
Survivor Benefits Methodology
DocumentedSurvivor benefit modeling projects the income available to a surviving spouse after the primary retiree's death. This is a critical planning consideration for married federal retirees.
FERS Survivor Annuity: If the retiree elected survivor benefits, the surviving spouse receives either 25% or 50% of the retiree's unreduced annuity (before survivor election reduction). This annuity is eligible for COLA adjustments.
Social Security Survivor Benefits: The surviving spouse is eligible for 100% of the deceased spouse's Social Security benefit (if higher than their own benefit), subject to age-based reductions if claimed before FRA.
VA Dependency and Indemnity Compensation (DIC): If the veteran's death is service-connected, or if the veteran was rated totally disabled for a specified period before death, the surviving spouse may be eligible for DIC. The current base DIC rate is modeled with annual COLA adjustments.
The Survivor Shock Analysis compares joint retirement income to projected survivor income, showing the percentage income drop and identifying potential gaps that may require additional planning (life insurance, savings, etc.).
Retirement Accounts & Withdrawals
DocumentedThe system models TSP (Thrift Savings Plan), traditional IRA, Roth IRA, and Roth TSP balances. Accounts grow at a user-specified rate of return (default 6% per year) and are drawn down using either a fixed withdrawal strategy or Required Minimum Distribution (RMD) schedules.
RMDs are calculated using the IRS Uniform Lifetime Table, beginning at age 73 (under current SECURE 2.0 Act rules). The system ensures that modeled withdrawals meet or exceed RMD requirements in each applicable year.
Roth accounts are modeled separately from traditional accounts. Roth withdrawals are tax-free (assuming the 5-year rule and age 59½ requirements are met), while traditional account withdrawals are fully taxable as ordinary income.
The Withdrawal Optimizer analyzes the sequence and timing of withdrawals across account types to minimize lifetime tax burden, considering tax bracket management and Roth conversion opportunities.
FEGLI Life Insurance
DocumentedFederal Employees' Group Life Insurance (FEGLI) is modeled for Basic coverage and Optional coverages (Options A, B, and C). Premium costs increase significantly at ages 50, 55, 60, and 65+.
Basic coverage: In retirement, Basic coverage can be continued with a 75% reduction (free after age 65), 50% reduction, or no reduction. Post-65 premiums vary based on the reduction election.
The system models the trade-off between maintaining FEGLI coverage (with increasing premiums) versus alternative strategies such as self-insuring with retirement savings.
Scenario Range (Income Timeline)
DocumentedThe Income Timeline chart displays a shaded scenario range alongside your expected projection. This range is a DETERMINISTIC SCENARIO RANGE — it is not a Monte Carlo simulation, and it does not represent a probability of success or failure.
The range is produced by running the same projection engine three times on your saved scenario, varying four documented sensitivity inputs: investment return rate, Social Security / VA COLA, FERS pension COLA, and healthcare inflation. No new assumptions are introduced.
Less-favorable edge (lower bound): investment return 4%, SS/VA COLA 1.5%, pension COLA 1%, healthcare inflation 7%. These values correspond to the low/pessimistic variations documented in the Sensitivity Analysis.
More-favorable edge (upper bound): investment return 8%, SS/VA COLA 3.5%, pension COLA 3%, healthcare inflation 3%. These values correspond to the high/optimistic variations documented in the Sensitivity Analysis.
The expected line (your current projection) sits within the shaded band. Because each run uses the full engine on your real saved scenario — including your actual FERS service, Social Security earnings record, VA rating, TSP balance, tax settings, and life expectancy — the band reflects genuine variability, not a scaled percentage.
The band is read-only and does not mutate your saved scenario. Toggle it off with the "Hide range" button on the chart if you prefer the uncluttered view.
Optimization & Analysis Caveats
DocumentedThe analysis engines (Gap Analysis, Bridge Years, Strategy Optimizer, Risk Dashboard, Date Finder, Sensitivity Analysis, Coach Insights) use the projection engine's output as their foundation. They apply additional heuristics and scoring algorithms to produce recommendations.
The Strategy Optimizer compares different retirement timing and benefit election combinations. It uses total lifetime net income as the primary optimization metric, but does not account for subjective factors like quality of life, health status, or career satisfaction.
The Risk Dashboard assigns scores based on quantifiable factors (income replacement ratio, survivor benefit adequacy, healthcare coverage gaps, account depletion risk). Risk scores are relative indicators and should not be interpreted as actuarial assessments.
Bridge Years analysis identifies the gap between retirement and Social Security/Medicare eligibility. It estimates the additional savings needed to maintain income during this period, using simplified drawdown assumptions.
Sensitivity Analysis shows how changes in key variables (COLA rates, investment returns, life expectancy, healthcare inflation) affect outcomes. These are linear sensitivity tests and do not model correlated risks or tail events.
All optimization results are estimates based on the inputs and assumptions provided. They should be used as planning guides, not as definitive financial advice.
How Validation Works
DocumentedFedVetRetirement uses a rules-based calculation engine built on published retirement formulas for FERS, TSP, and military retirement. Every core formula is documented and traceable.
We validate the engine using deterministic golden test cases — scenarios with exact known inputs and exact expected outputs. These include FERS multiplier edge cases (1.0% vs 1.1%), all five TSP contribution tiers, active duty military pensions (High-3 and BRS), reserve retirement point conversions, combined income stacks, and gap detection scenarios.
Cross-output reconciliation confirms that key values are consistent across the results page, PDF reports, and Excel exports. No unexplained deltas are allowed between outputs.
A dedicated Calculation Audit Mode (available to administrators) can run all deterministic tests at any time and export results as JSON, CSV, or a human-readable HTML report. The final status clearly states PASS, PASS WITH WARNINGS, or FAIL WITH DEFECTS.
Complex scenarios involving survivor elections, special retirement provisions, CHAMPVA, or advanced TSP strategies may require additional user verification or professional review, even when base formulas pass all deterministic tests.
Limits of the Model
DocumentedAll estimates depend on the inputs you provide. Inaccurate salary, service year, or benefit data will produce inaccurate projections. Always verify key figures against your official records (OPM, TSP, SSA, VA, DFAS).
Laws, benefit structures, and tax brackets can change. This tool models current rules and does not predict future legislative changes to FERS, Social Security, TSP contribution limits, military retirement, or tax law.
Military and federal retirement interactions can be fact-specific. CRDP/CRSC elections, military service buyback credits, SBP elections, and concurrent receipt rules depend on individual service records and may require HR or benefits counselor review.
Taxes, survivor elections, deposits for prior service, and special retirement provisions (LEO, FF, ATC, CSRS Offset) involve nuances that may not be fully captured for every individual situation.
This tool is for planning and educational purposes. It is not a substitute for official benefit statements, professional financial advice, or determinations made by OPM, TSP, DFAS, SSA, or the VA.
General Disclaimer
DocumentedFedVetRetirement™ provides estimates for educational and planning purposes only. The projections generated by this tool are not guarantees of future income, benefits, or tax obligations.
This tool does not constitute legal, tax, investment, or financial advice. Laws, regulations, benefit structures, tax brackets, and COLA rates can and do change over time. Projections are based on current rules and user-specified assumptions.
Federal retirement benefits are governed by OPM regulations, and individual eligibility may vary based on specific employment history, military service records, and other factors not fully captured by this tool.
Social Security benefit estimates should be verified against your official Social Security Statement (available at ssa.gov). VA benefit eligibility and ratings are determined by the Department of Veterans Affairs.
Users should consult with qualified financial planners, tax professionals, and benefits counselors before making retirement decisions. The creators of FedVetRetirement™ accept no liability for decisions made based on projections from this tool.
Data entered into FedVetRetirement™ is stored securely and used solely for generating your retirement projections. See our Privacy Policy for details on data handling practices.
Last updated: July 2026. Methodology updates as new features are released.
Social Security Modeling
DocumentedSocial Security benefits are modeled based on the user's estimated Primary Insurance Amount (PIA) at Full Retirement Age (FRA). Users input their estimated benefit amount, which is then adjusted based on their chosen claiming age.
Early claiming (age 62-FRA): Benefits are permanently reduced. The reduction is 5/9 of 1% per month for the first 36 months before FRA, and 5/12 of 1% for each additional month.
Delayed claiming (FRA-70): Benefits receive Delayed Retirement Credits of 8% per year (2/3 of 1% per month) for each year past FRA up to age 70.
Spousal benefits: The system models spousal Social Security benefits, including the option to receive the higher of the spouse's own benefit or 50% of the primary earner's PIA. Survivor Social Security benefits (up to 100% of the deceased spouse's benefit) are modeled in survivor scenarios.
The Social Security Optimizer analyzes claiming ages from 62 to 70 to identify the strategy that maximizes lifetime benefits based on your life expectancy.