How to make the most of FERS, Social Security and your TSP

From FY1970 to FY1985, the number of people receiving federal civil service annuities rose from fewer than 1 million to nearly 2 million, an increase of 105%. Between FY1985 and FY2022, civil service annuitants rose by 767,000, an increase of about 39%.

In FY2022, all CSRS employees were 55 or older, compared with 32% of FERS employees. 42.1% of FERS employees were younger than 45. 91% of CSRS employees were 60 or older, whereas 15% of FERS employees were in this age range.

Unlike the Social Security trust fund, which may not pay full benefits by 2034, the Civil Service Retirement and Disability Fund is in strong financial shape. At the end of FY2022, the CSRDF balance was $1.012 trillion, more than 10 times the year’s outlays, and is expected to reach $1.576 trillion by FY2032.

Agency contributions under FERS: FY2024 rates range from 16.5% to 18.4% of payroll, depending on hire date. Employee contributions vary from 0.8% to 4.4%. CSRS agency contributions equal 7% of payroll, with transfers from the Treasury general fund.

Preparing for retirement

Know the three main parts of retirement income after a federal career:

• FERS basic retirement benefit

• Social Security

• Thrift Savings Plan

Other income may include employer plans, IRAs, state or local government benefits, military service, or private pensions.

FERS basic retirement benefit

• Formula:

  • 1% × high-three average salary × years and months of creditable service

  • 1.1% × high-three average salary × years and months of creditable service for age 62+ with 20+ years of service

• High-three average salary: Highest average pay during any three consecutive years of service. Includes increases for retirement deductions. Excludes overtime, bonuses, annual leave payout, and cash awards.

• Creditable service: Includes federal covered service, pre-1989 service if a deposit is paid, unused sick leave, and generally military service if a deposit is made.

Reductions and withholdings:

• Age reduction for early retirement

• Survivor benefits election

• Alternative annuity election

• Deductions for FEHB, FEGLI, FLTCIP, FEDVIP, federal and possibly state taxes

Social Security and TSP

Check your Social Security benefits via a my Social Security account. Your Thrift Savings Plan is your main retirement investment tool. As of December 2025, 4,143,273 FERS accounts had an average balance of $216,863. 96.6% of FERS employees participate. Most receive the full 5% agency match.

TSP and SEC provide tools, webinars, and resources to manage investments, understand withdrawals, and protect financial security. Strategies include the 4% withdrawal rule, fixed-dollar withdrawals, fixed-percentage withdrawals, systematic withdrawals, and withdrawal buckets.

Other planning considerations

• Taxes on traditional TSP withdrawals and some Social Security benefits

• Health care costs, including Medicare premiums and prescription drugs

• Long-term care expenses

• Seeking professional financial advice when needed

Planning for retirement is like hiring a professional for high-risk or complex home projects. Proper preparation now can lead to a more financially secure and enjoyable retirement.