Misunderstandings Regarding Retirement Benefits Provided by the Federal Government
In the approaching retirement years, federal employees face a multitude of decisions that can significantly impact their financial well-being. Here's a breakdown of some key aspects to consider.
Upon retiring, employees transition into the status of annuitants, at which point the government covers approximately 72% of the FEHB premium. This means that when planning their budget for retirement, federal employees need to factor in how their Thrift Savings Plan (TSP) will bridge the gap between their pension, Social Security, and the monthly cost of their intended lifestyle during retirement.
Under certain eligibility requirements, federal employees can continue their Federal Employee Health Benefits (FEHB) coverage into retirement. These requirements include enrollment in FEHB for at least five consecutive years leading up to, and having coverage on, the retirement date. Qualified spouses, dependent children, and children with disabilities can be covered without meeting the five-year rule for FEHB continuation into retirement.
Retirees will need to make decisions about survivor's benefits on their retirement application. Each option for survivor's benefits comes with a cost, in the form of a monthly percentage deducted from the overall pension.
The TSP offers different ways to withdraw: partial, full, installment, or annuity. It's recommended that any federal employee within the retirement horizon transfer some or all of their TSP balance into an IRA or Roth IRA in the private sector.
Federal employees need to understand their FEGLI plan to maximise benefits in retirement. Basic FEGLI insurance costs between $10-$30 per pay period, but the price increases dramatically in retirement.
Retirees can enrol in Medicare parts A and B, offering nearly comprehensive coverage, with Medicare as the primary payer and FEHB as secondary.
The Office of Personnel Management (OPM) is anticipating a doubling of the retirement application backlog due to an increasing number of federal employees opting into the Voluntary Early Retirement Authority (VERA) and the deferred resignation program (DRP). To gain a better understanding of retirement qualification guidelines, FERS/CSRS pension, Special Retirement Supplement, survivor benefits, FEHB (Health Benefits), FEGLI (Life Insurance), Social Security Maximization, and the latest government downsizing updates, consider attending a Lunch & Learn event on Tues., Sept. 30 at 12:30 pm ET or Thurs., Oct. 2 at 6:30 pm ET. Registration for the event can be done through the provided link.
In light of the complexities involved in planning for retirement, it's advisable for prospective retirees and their spouses to speak with a federal retirement consultant to consider the holistic picture of their assets, income, needs, budget, life insurance, and any additional financial obligations.
Please note that this website is not intended for users located within the European Economic Area. Copyright © 2025 for the platform, all rights reserved. Common fact distortions by federal employees about retirement often involve fake enforcement notices or false claims tied to workplace behaviour threatening fines or career consequences, which are actually scams exploiting official-looking communications. Understanding actual retirement regulations and verifying official sources helps avoid falling for these forgeries.
For more information, click the 'READ MORE' link.
Read also:
- Unchecked carbon emissions could potentially lead the world to revert to coal usage, according to a knowledgeable source.
- Discusses Rasmus Sojmark's thoughts on the Legends Charity Game before SBC Summit
- Stone mining has transformed the once renowned 'Sada Pathor' into a desolate, post-apocalyptic landscape.
- The Developmental Journey of Digital Supply Chains
