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The State of Civil Service Retirement: CSRS and FERS

How optimistic are you about your retirement? Small steps can help allay your fears of the future.

If you love statistics like I do, you will find the following information interesting. In the 2021 Federal Employee Benefits Survey, over 70% of participants reported that the availability of FEHB, TSP, and a retirement annuity influenced their decision to take a job with the federal government to a “great” or “moderate” extent, suggesting employees place a great deal of value on these programs when considering their career paths and planning. 

The same is true when looking at the impact of these three programs on retaining current employees, with an even higher percentage of participants (over three-quarters) reporting FEHB, TSP, and a retirement annuity influenced them to remain in a job with the federal government to a “great” or “moderate” extent. 

The Office of Personnel Management administers the following Earned Benefits Trust Funds: 

  • FEHB – Federal Employees Health Benefits Fund (health insurance for 8.1 million employees, retirees, and eligible family members); 
  • FEGLI – Federal Employees’ Life Insurance Fund (life insurance coverage for 4.3 million employees and retirees); 
  • CSRDF – Civil Service Retirement and Disability Fund (retirement benefits for 2.8 million federal employees); and 
  • PSRHB – Postal Service Retiree Health Benefits Fund (established by Congress in 2006, it is a dedicated fund for retiree health care benefits for the Postal Service). 

OPM also manages the risk reserve account for the federal Fllexible Spending Account program. These trust funds are among the largest held by the U.S. government.

In December, the Congressional Research Service summarized some recent trends for the Federal Employees Retirement System. Here are some numbers from the FY2022 CRS report: 

1) Retirement coverage of current civilian federal employees: 

  • FERS:  98.4% (2,788,000) 
  • CSRS 1.6% (44,000) 

2) Number of annuitants:  

  • 2022:  2,226,760 employee annuitants 
  • 2022:  475,562 survivor annuitants 
  • 56%of total:  CSRS 
  • 44% of total:  FERS   

3) 1970:  962,000 combined employee and survivor annuitants 

4) Top five states where 1/3 of all federal annuitants live: 

  • California:  210,967 
  • Florida:  200,896 
  • Texas:  186,884 
  • Maryland:  169,637 
  • Virginia:  150,604  

5) The five states with the lowest number of federal annuitants: 

  • Vermont:  5,042 
  • Wyoming:  6,645 
  • North Dakota:  6,973 
  • Rhode Island:  7,579 
  • Alaska:  9,011 

6) Number of retirees who live in U.S. Territories and other countries:  35,283 (1.3% of the total) 

7) 62.3:  The average age at retirement 

  • 65.6:  CSRS 
  • 61.9:  FERS 

8) 26.1:  The average length of service at retirement 

  • 39.2:  CSRS 
  • 23.6:  FERS 

9) 114,505:  The number of retirements in FY2022 

  • 11,119:  CSRS 
  • 103,386:  FERS 

10) The average monthly annuity payment (does not include income from Social Security or Thrift Savings Plan): 

  • FERS:  $2,126  
  • CSRS:  $5,447 
  • Balance of the Civil Service Retirement and Disability Fund, AKA, the Civil Service Trust Fund: 
  • 1990:  $238 billion 
  • 2022:  $1.1 trillion 
  • An increase of 372% over 32 years  

11) Age of current federal employees: 

  • CSRS: all are age 55 or older 
  • CSRS:  91% are age 60 or older 
  • FERS: 32% are age 55 or older 
  • FERS:  15% are age 60 or older 
  • FERS:  42.1% younger than age 45 

The 2024 Retirement Confidence Survey is the longest-running survey of its kind, measuring American worker and retiree confidence (not necessarily federal employees) about retirement, and is conducted by the Employee Benefit Research Institute and Greenwald Research. The survey included 2,521 Americans, all age 25 or older, who were surveyed online Jan. 2 through Jan. 31, 2024. The survey included 1,255 workers and 1,266 retirees – this year included an oversample of 721 completed surveys among military individuals (298 workers and 423 retirees).  Here are a few results from this survey: 

  • 85% of respondents with a retirement plan said they have saved for retirement. 
  • 20% of respondents without a retirement plan said they have saved for retirement.   
  • 95.6% of FERS employees save at least 5% of their basic pay in the Thrift Savings Plan* 
  • 52% of workers without a retirement plan have less than $1,000 in savings and investments. 
  • 46% of workers with a retirement plan saved $250,000 or more. 
  • 52% of those surveyed have tried to calculate how much money they will need to have saved so that they can live comfortably in retirement 
    • 59% of those with a retirement plan have done so 
    • 15% of those without a retirement plan have done so 
  • 78% of the retirees agree they can spend money how they want, within reason   
  • 31% of the retirees agree they spend less than they could because they would like to leave a legacy inheritance 
  • 42% of the retirees found health care and dental expenses in retirement were higher than expected 
  • 45% of the retirees spend to support or help a family member 
  • 75% of workers expect that they will work for pay after retirement 
  • 30% of retirees reported that they work for pay in retirement with only 3% working full time 
  • 9% of workers reported they never plan to retire 

* TSP Participant Activity Report, February 2024  

How optimistic are you about your retirement? Are you thinking about how you might draw down your Thrift Savings Plan investments? Are you fearful about the prospect of retirement or are you looking forward to living with some degree of financial freedom? If you’re leaning toward the pessimistic side, try these exercises: 

Instead of thinking you’ll need to work “forever,” figure out what your finances will look like if you work two more years or until age 62.  

Instead of saying, “I will never save enough to retire,” try to save 1% more of your salary than you’re saving now, re-amortize your TSP loan if you have one to pay it off earlier and set aside an emergency fund. 

Instead of thinking that retirement is too complicated, attend a pre-retirement training event to learn a few things more than you know today. 

Instead of being anxious about future “what-if” situations, prepare for them by having a plan B (and C or D, too). 

These kinds of small steps can help allay your fears of the future.