the foreign Service journal
On Life after the foreign service
John K. Naland’s 29-year Foreign Service career in-
cluded an assignment as director of the Office of Retire-
ment, as well as tours in Colombia, Mexico and Iraq.
He twice served as president of the American Foreign
Service Association and is currently president of the Foreign ServiceYouth Foundation. This is an updated version of an article that first appeared in the September 2007 Foreign Service Journal .
ho in their late 20s to
early 50s, preoccupied
with the demands of
work, family and daily
life, has time to plan
for a retirement that is
many years away? The
answer is that we all
had better make time
for that if we want to be well-positioned to enjoy life after the
I know you’re all busy, so here is a quick guide for early- and
mid-career employees who realize that retirement planning is
important, but have not yet gotten started.
Show Me the Money
Many Foreign Service members have only a vague idea of
what makes up their retirement package. That, obviously, makes
it impossible to do even basic planning. So here is an overview.
Life after the Foreign Service begins with planning. Here’s how to get started.
By John K . Naland
This article focuses on those of us who joined after 1983 and
are thus enrolled in the “new” Foreign Service Pension System.
Employees who fall under the “old” Foreign Service Retirement
and Disability System should consult the Department of State
Office of Retirement website(https://RNet.state.gov
) for infor-
mation on that plan.
Once FSPS participants qualify for retirement, here is what
Our annuity is based on our “high three” average
salary and years of service. The salary is calculated by adding
average basic pay (determined by multiplying each salary by the
number of days that it was in effect) for our three highest-paid
consecutive years and then dividing by three. Basic pay includes
regular pay, domestic locality pay and overseas virtual locality
pay, but excludes allowances, differentials and overtime.
This “high three” salary is then multiplied by 1.7 percent
for each of the first 20 years of service, plus 1 percent for each
additional year. For example, an employee retiring with 25 years
of service and a “high three” salary of $100,000 would qualify for
an annual annuity of $39,000. That amount, however, provides
no benefits to a surviving spouse after the annuitant’s death.
Providing the maximum survivor benefits reduces the annuity by
10 percent to $35,100.
FSPS members pay into Social Security
throughout their careers and thus qualify for Social Security
benefits, which can begin as early as age 62 for those willing to take
reduced payments in return for a longer benefit period. However,