Part of our guide: Disability Income Insurance: Solutions, Tools and Guides →
“I had no idea. I could barely make my mortgage payment with that.” That was a federal employee’s reaction after seeing what her own disability benefit would actually pay her — a number she’d never bothered to check because she assumed her federal benefits had her covered.
Key takeaways
- Federal employees consistently overestimate what their FERS Disability Plan would actually pay them.
- More than 2.85 million federal employees are covered under FERS, and over 84% carry no supplemental coverage.
- A FERS benefit can be reduced by up to 60% further if the employee also qualifies for Social Security.
A federal employee earning $7,850 a month would net just $2,355 after tax under her FERS Disability Plan — barely enough to cover her mortgage.
The situation
Ask a federal employee whether their income is protected if they get sick or hurt, and the answer is almost always the same: “I have disability income protection through my work. I’m a federal employee, and we have great benefits.” Most conversations end right there. But most federal employees don’t actually know what their long-term disability plan would pay them if they got sick or hurt — and the federal government’s FERS Disability Plan, while real and provided at no cost, pays far less than most employees assume.
Running the numbers
We sat down with one federal employee and ran the actual math. Her current taxable monthly income was $7,850. If she became unable to work for more than a year, her FERS Disability Plan would pay her $3,140 in taxable income until age 62. After a modest combined tax rate of 25%, her net monthly income would drop to $2,355 — a fraction of what she was earning, and barely enough to cover her mortgage. And if she qualified for Social Security, her FERS benefit could be reduced by up to an additional 60% of whatever Social Security paid her.
Why this gap is so widespread
There are currently more than 2.85 million civilian federal employees covered under the FERS Disability Plan, and more than 84% of them carry no supplemental coverage at all — largely because, like this employee, they assume their federal benefits are already enough.
The solution
We work with carriers that specialize in supplemental disability coverage designed specifically for federal employees, built to close exactly this kind of gap between what FERS pays and what a federal employee’s actual income requires.
If you have clients who are federal employees and have never run this math for themselves, that’s a conversation worth having before an illness or injury forces it. We can help you show them the real numbers and design supplemental coverage that fits.
Frequently asked questions
How much does the FERS Disability Plan actually pay?
It varies by salary, but as a benchmark, one federal employee earning $7,850 a month in taxable income would receive $3,140 in taxable monthly income under FERS if disabled for more than a year — roughly $2,355 net after taxes, and potentially less if Social Security benefits reduce the FERS payment further.
Why don’t more federal employees carry supplemental disability coverage?
Most assume their federal benefits are sufficient without ever checking the actual numbers. More than 84% of the 2.85 million-plus federal employees covered under FERS carry no supplemental disability coverage at all.
Reviewed by Tim Fuller on 2026-09-23
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency) connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners — with the impaired-risk and complex-case expertise to place business other IMOs and BGAs turn away.
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