What does a senator make in retirement?

With most Americans struggling to save for retirement, it is common to question how much elected leaders earn in retirement. Generally, there is plenty of misleading news about the benefits that members of Congress earn in retirement. Here is the truth about how much senators and members of the House receive in retirement.

Senators earn a pension of up to 80% of their final salary, and they must have completed at least five years of service to be eligible for a pension. Since senators serve a six-year term, senators who have served a full term are eligible to receive a pension. Depending on when they joined Congress, senators receive retirement benefits from the CSRS plan or FERS plan; FERS comprises social security, pension, and the Thrift Savings Plan (TSP).

How much do senators earn?

Since 2009, the Congressional salary has been $174,000 per year, while those in leadership positions earn slightly above this rate. The speaker of the House earns $223,500 per year, while party leaders of the senate and House of Representatives earn $194,400 per year.

Members of Congress have not received a salary increase since 2009. Before 2009, senators earned $169,300 per year, and this annual salary was increased to the current $174,000. Senators and members of the house also receive annual cost-of-living increases that are available to federal workers, and the increase takes effect on January 1 of the following year, unless senators vote to decline the increase.

How much do senators earn in retirement?

There is a popular rumor that senators receive their annual salary for life and that they do not pay social security taxes. However, this information is false, and it is not based on facts.

Here are the benefits that senators make in retirement:

Social security

Before 1984, members of Congress were not required to pay Social Security taxes, and were, therefore, ineligible to receive social security benefits. During this period, senators and other federal civil service employees were covered by the Civil Service Retirement Plan (CSRS).

However, an amendment to the Social Security act in 1983 made it mandatory for new federal civil employees to participate in Social Security. The amendments also made it mandatory for members of Congress to pay social security taxes effective January 1, 1984. When the Federal Employees Retirement System (FERS) was established in 1986, Congressmen were automatically enrolled in the new plan and became eligible to receive pensions from FERS.

Additionally, the vice president earns a pension based on their role as President of the Senate and their cumulative years of public service. Members of Congress receive a pension depending on their age at retirement, years of service, and when they joined Congress. The maximum pension a senator can receive is 80% of their final salary.

FERS Retirement

Members of Congress elected into office since 1984 are automatically enrolled in a FERS retirement plan, while those elected before 1984 were covered under the CSRS plan. CSRS participants had the option of keeping CSRS or moving to the FERS retirement plan, which comprises Social Security, Thrift Savings Plan, and a basic benefit plan. Members enrolled in a FERS plan contribute 1.3% of their salary to the plan and 6.2% in Social Security taxes.

Members of Congress can start receiving a pension once they reach age 62 and at least five years of service, 50 years or older with 20 years of service, or 25 years of service regardless of their age at retirement. The amount of pension earned depends on the member’s total years of service and their high-3 average salary.

Thrift Savings Plan

Congressmen enrolled in either FERS or CSRS may choose to participate in a Thrift Savings Plan (TSP), which is similar to a 401(k) plan available to private-sector employees. TSP is available to all federal employees, and participants contribute a portion of their salary to the TSP Plan. Members covered by CSRS can contribute up to 5% of their salary, while those enrolled in a FERS plan can contribute up to 10% of their salary.                     

Can senators retire after only one term?

Members of Congress covered under the CSRS and FERS plan require at least five years of service to receive a pension. Since senators serve a six-year term, it means they would be eligible to collect a pension after completing a full six-year term.

However, members of the House of Representatives are not eligible to collect a pension after serving one term since they are up for re-election every two years. They must have at least five years of service, or three two-year terms, to receive retirement benefits for their Congressional service.

Additionally, eligible senators and members of the House of Representatives do not receive a pension equal to their full salary. By law, the pension paid to these elected leaders should not exceed 80% of their final salary.

A 2019 Congressional report disclosed that there were 617 retired Members of Congress earning a pension based on their congressional service as of October 1, 2018. 318 of the 617 retired Congressmen covered by the CSRS plan earned an average annual pension of $75,528. The other 299 members were covered by FERS and earned an average annual pension of $41,208.