Government Executive - Pay & Benefits

Women in federal service still face retirement gaps

Tammy Flanagan — Thu, 12 Mar 2026 15:00:00 -0400

March is Women’s History Month, a time to reflect on the achievements of women who have shaped American institutions and to examine the challenges that persist today. One area where women’s contributions — and challenges — are especially visible is retirement security. For federal employees, retirement planning is built on a strong foundation through the Federal Employees Retirement System (FERS). Yet, even with this structure, women face unique hurdles that make proactive planning essential.

In 1967, President Lyndon B. Johnson signed Executive Order 11375, which added sex to other prohibited forms of discrimination in the federal government. As a result, the Civil Service Commission established the Federal Women’s Program (FWP). The program was tasked with identifying barriers that hinder hiring women and women’s career advancement in the federal government.

In 1972 the Equal Employment Opportunity Act brought federal employees fully under the equal employment opportunity provisions of the Civil Rights Act of 1964. The Equal Employment Opportunity Act required that federal agencies designate a Federal Women’s Program Manager to advise the director of equal employment opportunity on matters affecting women’s employment and advancement. It also required federal agencies to allocate sufficient resources to their Federal Women’s Programs. To help implement the portions of the Equal Employment Opportunity Act that affected its female employees, the National Archives and Records Service (NARS) created a Federal Women’s Program Committee.

I’ve had the opportunity to present retirement planning programs to a variety of groups of female federal employees. My presentations for groups of women were really no different from any other presentations I conducted. However, I noticed that there were more frequent questions about taking time out for caregiving, whether it was for young children, parents or spouses. Caregiving duties often result in changing work schedules from full time to part time.

In some cases, women have taken a break in their service history, leaving them with shorter careers resulting in smaller retirement benefits when they returned to federal service. In some cases, refunded retirement contributions needed to be paid back (with interest) to fully credit the past service.

Federal Employed Women, or FEW, is a private, nonprofit organization founded in 1968, the year after President Johnson’s executive order was signed. Today, FEW still works to end sex and gender discrimination, to encourage diversity for inclusion and equity in the workplace, and for the advancement and professional growth of women in federal service by:

encouraging diversity and equity in the workplace
enhancing career opportunities
establishing relationships with organizations to advocate the fair application of laws, policies, procedures and practices
maintaining relationships with organizations to advocate the fair application of laws, policies, procedures and practices

Groups like FEW exist to improve the quality of life for women by influencing legislative actions, committing to maintain a unified and diverse membership and providing opportunities for professional growth.

Women in Federal Law Enforcement, or WIFLE, is another such organization that stemmed from President Johnson’s efforts to remove barriers to women in government. WIFLE’s predecessor was ICWIFLE (I C WIFLE), which is the acronym for the Interagency Committee on Women in Federal Law Enforcement hosted by the departments of Justice and Treasury.

ICWIFLE was originally formed as a task force created by the Office of Personnel Management in 1978. It was charged with studying reasons for the low numbers of women entering federal law enforcement — fields that opened to women only after President Richard Nixon signed Executive Order 11478 (EO 11478) on Aug. 8, 1969.

President Nixon’s executive order provided equal opportunity to federal employment for all persons; prohibited discrimination in employment because of race, color, religion, sex, national origin, handicap or age; and promoted equal employment opportunity through a continuing affirmative program in each executive department and agency.

Women were not authorized to carry firearms, execute search warrants and make arrests until 1969, when Executive Order 11478 was signed.

Joanne Pierce Misko, a former nun who grew up in Niagara Falls, N.Y., and Susan Roley Malone, a 25‑year‑old Marine, became the first female FBI agents in 1972, followed by the first Black female FBI agent, Johnnie Mae Gibson, serving from 1976 to 1999. I had the privilege of meeting Special Agent Gibson during the time I worked at FBI headquarters in the 1980s.

In 1971 and 1972, women special agents were also hired by the U.S. Immigration and Naturalization Service, the U.S. Secret Service, the U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco and Firearms.

How women save compared to men

Despite remarkable gains in labor force participation, women’s economic well‑being continues to lag in key outcomes like median earnings and retirement security. Research shows that women hold fewer retirement assets and are more likely to be impoverished at the end of their lives than men.

Census Bureau data consistently show that women approach retirement with fewer financial resources than men. According to U.S. Census Bureau research in 2018, about 50% of women ages 55–66 have no personal retirement savings, compared with 47% of men in the same age group. Women are also less likely to have substantial savings: only 22% of women report retirement savings of $100,000 or more, compared with 30% of men.

Multiple studies indicate that women are disadvantaged across all sources of retirement assets: they tend to receive lower Social Security benefits, have lower retirement account ownership rates and lower estimated retirement account balances, and own fewer assets than men.

A study by researchers from the Center for Retirement Research at Boston College found that the lifetime earnings of mothers with one child are 28% less than the earnings of childless women, all else equal, and each additional child lowers lifetime earnings by another 3%.

When examining Social Security benefits, the study found that the “motherhood penalty” is smaller than the earnings penalty. But mothers with one child still receive 16% less in benefits than women without children, and each additional child reduces benefits by another 2%.

Other studies reinforce this trend. Research summarized by Investopedia shows that women often have less than one‑third of the median retirement savings of men, a gap driven by lower lifetime earnings, caregiving responsibilities and career interruptions.

Surveys also indicate that women report lower confidence in their ability to meet retirement goals than men, even when participating in employer‑sponsored plans.

For federal employees, the Federal Employees Retirement System helps offset some of these challenges by guaranteeing a pension. Still, differences in TSP contribution levels, investment growth and years of service can widen gaps over time if not actively managed.

Why women face greater retirement challenges

Elderly women, who comprise a growing portion of the U.S. population, have historically been at greater risk of living in poverty than elderly men.

This prompted a study by the Government Accountability Office in 2012, which found that women, on average, earn less over their lifetimes and are more likely to take time away from work to care for children or aging relatives. These interruptions reduce years of creditable service under FERS and lower total TSP contributions.

In 2020, the comptroller general of the United States, Gene Dodaro, head of GAO, testified about the unique challenges women face saving for retirement. Among those challenges, he noted that women have longer life spans, lower lifetime earnings and that they are more likely to be primary caregivers, which can limit them from maintaining paid employment.

Studies cited by retirement researchers show that women are more likely to express concern about longevity risk and health care costs in retirement. These realities make strategic retirement planning especially critical for women in federal service.

How women federal employees can prepare for retirement

While challenges exist, federal employment offers tools that women can leverage so they can prepare for retirement.

Preparation begins with understanding how each component of FERS fits together. Maximizing TSP participation is one of the most impactful steps. The federal government automatically contributes 1% of salary and matches additional employee contributions up to certain limits, making consistent contributions especially valuable over time. Ensuring at least enough contributions to receive the full match is widely recognized as a foundational strategy.

Women should also pay close attention to years of creditable service and retirement eligibility milestones. FERS retirement options depend on combinations of age and service, such as reaching the minimum retirement age with 30 years of service or age 60 with 20 years. Understanding these thresholds helps employees make informed decisions about when to retire and how long to remain in federal service.

Finally, retirement preparation extends beyond income. Evaluating health insurance continuation, survivor benefits and long‑term care considerations is particularly important for women, who statistically spend more years in retirement.

Looking forward

While FERS provides a solid framework, women still face disparities in savings, confidence and retirement readiness. By understanding the data, using federal benefits strategically and learning from the women who shaped today’s retirement landscape, women in federal service can turn structural advantages into lasting financial security.

In doing so, they continue a long tradition of women strengthening not only their own futures but the retirement systems that support generations to come.

What has Congress done and what can they do in the future to help equalize the retirement benefits for women?

Increase access to retirement plans (there are well over a dozen categories of federal workers who are excluded from FERS coverage, including temporary and term appointments and employees serving on an intermittent work schedule)
Improve tax incentives to save for retirement (IRS Retirement Savings Contributions Credit is a tax credit established to help taxpayers save for retirement and lower their tax bill. Beginning in tax year 2027, the Saver’s Credit will be replaced by the Saver’s Match, created by the SECURE 2.0 Act of 2022 for individuals meeting income and other eligibility requirements. Several provisions of SECURE 2.0 affect how participants contribute and use the TSP as well)
Expand Social Security benefits for caregivers

In 2025, Rep. Lauren Underwood, D‑Ill., and Sen. Tammy Baldwin, D‑Wis., introduced the Women’s Retirement Protection Act of 2025 (WRPA), legislation to help close the retirement gap and improve women’s financial security. There is a companion bill in the Senate, S.988, sponsored by Sen. Baldwin, D‑Wis., designed to amend the Employee Retirement Income Security Act of 1974 to provide greater spousal protection under defined contribution plans (the TSP already provides such protection by requiring spousal consent for withdrawals by FERS and uniformed services participants).

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The No. 1 thing to know entering retirement: How much are you really spending?

Austin Costello — Wed, 11 Mar 2026 07:00:00 -0400

When federal employees begin thinking about retirement, most focus first on the big questions.

When should I claim Social Security?

Should I keep Federal Employee Health Benefits or enroll in Medicare?

How much can I expect from my Federal Employee Retirement System annuity?

But there’s one question that should come before all of that.

How much am I actually spending?

Understanding how to manage your finances in retirement must start with this simple question. While it may seem basic, this step is one of the most empowering, yet often overlooked, parts of planning for your future.

Your spending habits, not your Thrift Savings Plan balance and not your annuity estimate, create the foundation of retirement income planning. Because your spending dictates how much income you’ll need, it’s necessary before you retire to determine how much you’ll withdraw from your investments. Once you know how much you’re really spending, it’s much easier to figure out how to invest your money, how much you can safely take out each year and whether your savings will last.

Why spending is so often misjudged

Many people estimate their monthly spending with a round figure, such as “probably around $5,000.” However, a closer look at bank statements, credit card records and bills often reveals that the actual amount is 20–30% higher than their initial guess. National data backs this up — according to the Bureau of Labor Statistics’ Consumer Expenditure Survey, households headed by someone age 65 or older spent an average of $60,087 in 2023, not much lower than working-age households.

It’s not that people are trying to hide anything. It's just how we are. A lot of our spending happens automatically or pops up at odd times, so it’s easy to overlook certain costs.

Insurance premiums, property taxes, vehicle repairs, vacations, gifts and subscriptions are easy to overlook. Plus, as we move toward retirement, life itself is changing. You may plan to downsize or travel more, or you may find new costs replacing old ones.

Without a true understanding of your spending, even the most detailed retirement plan can miss the mark.

Assess the situation prior to taking action

The most reliable way to find your true spending level is to track every expense for 6–12 months before retirement.

That’s long enough to capture both everyday spending and seasonal or annual expenses, everything from holiday travel to homeowners’ insurance renewals.

You can use a spreadsheet, budgeting software or simply your bank and credit card statements. Start by dividing expenses into broad categories:

Housing: mortgage or rent, property taxes, maintenance, homeowners association fees, utilities.
Transportation: car payments, fuel, insurance, repairs, rideshares.
Health care: FEHB premiums, copays, prescriptions, dental and vision.
Food: groceries, dining out, meal delivery.
Lifestyle: travel, entertainment, gifts, hobbies, charitable giving.
Other: taxes, personal care, subscriptions, miscellaneous items.

Once you’ve tracked and categorized expenses for several months, calculate your average monthly spending. Then multiply that by 12 for an annual estimate.

This is your real cost of living.

Be realistic about what will change

Many retirees assume their spending will drop dramatically once they leave work. After all, there’s no more commute, fewer dry-cleaning bills and less money spent on lunches or professional clothing.

This could all be true, but as these expenses fall off, other expenses often rise. You’ll have more free time, which can mean more travel, dining out or general spending. Health care costs tend to increase, even for those covered under FEHB or Medicare. And if you’ve been putting off home projects or bucket-list trips, the early retirement years are often when they happen.

A good rule of thumb: plan for the first few years of retirement to cost roughly the same as your final working years. You can always adjust downward once you see how your new lifestyle settles in.

Why your spending drives the whole plan

Once you have a realistic understanding of how much you spend, everything else in your financial plan comes into focus.

Your spending dictates:

How much income you’ll need each month. This includes your FERS annuity, Social Security and TSP withdrawals.
How your portfolio should be structured. The size and timing of withdrawals affect your investment mix, cash reserves and risk tolerance.
How sustainable your plan will be. If you draw more than your portfolio can reasonably sustain, even a well-funded TSP can deplete faster than expected.

If you underestimate your spending, you may overestimate how long your assets will last. For example, if you believe your annual expenses are $60,000 but they’re actually $75,000, that $15,000 gap has to come from somewhere - likely from your TSP or savings. Over 20–30 years of retirement, that difference compounds significantly.

Adjusting as life happens

Retirement isn’t a static event. It’s a new phase of life that evolves over time. Early retirement years tend to be more active (and expensive), while later years may focus more on health care or downsizing.

That’s why it’s smart to review and update your spending plan every year, especially in the first five years of retirement. Keep an eye on new expenses like spoiling grandchildren, finding new hobbies or finally booking that trip you’ve been thinking about. All of this may require you to adjust your withdrawals accordingly.

It’s important to keep an eye on rising prices. Even small increases like groceries or gas, can add up over many years. Your plan should make room for spending to go up a little bit as things get more expensive. Unfortunately, that’s just inflation.

Build a plan just for you, and your confidence

Many people resist tracking spending because it feels restrictive or annoying.

But in retirement, knowing your numbers isn’t about limitation, it’s about freedom.

When you know exactly how much you spend and how much income you have to cover it, you gain confidence and clarity. You can enjoy your retirement without worrying whether every purchase is “too much.”

Every federal employee’s financial picture is unique, but the same principle applies across the board: your spending sets the stage for everything that follows.

Before you finalize your retirement date, take the time to understand your expenses in detail. Track them. Question them. Think about how they’ll change as your lifestyle evolves.

Your spending is your foundation. It’s data, so the more information you have, the better decisions you can make to prepare for the life you want in retirement.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Austin Costello, CFP® is an LPL Financial Planner with Capital Financial Planners. If you have questions about your insurance needs or any other federal-specific financial planning question, register for a complimentary checkup. For topics covered in even greater depth, see our YouTube page.

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Travel industry rallies support for TSA staff working without pay amid concern of delays during shutdown

Eric Katz — Fri, 06 Mar 2026 15:56:00 -0500

The travel industry is imploring lawmakers to ensure on-time pay for Transportation Security Administration employees, launching a campaign on Thursday to pressure Congress into passing legislation to that effect while the partial government shutdown remains in effect.

As TSA employees have already received a partial paycheck and are preparing to miss their next one entirely, private sector operators who depend on smoothly running airports are speaking out in favor of the agency’s workforce. The Homeland Security Department shutdown is finishing its third week as congressional Democrats and the White House remain divided on the agency’s funding and how to reform its immigration enforcement crackdown.

Travel industry officials created the “Pay Federal Aviation Workers” campaign to rally support to end the shutdown and, absent that, pass various pieces of legislation that would ensure air traffic controllers and TSA staff receive on-time paychecks during funding lapses. The Federal Aviation Administration, like all agencies outside DHS, is fully funded for fiscal 2026 and air traffic controllers are therefore not impacted by the current impasse.

They also called for Customs and Border Protection officers to receive on-time pay, though most CBP employees are being paid on a normal schedule thanks to funding from the One Big Beautiful Bill Act.

Geoff Freeman, president of the U.S. Travel Association, said the “stakes are too high” to continue making TSA employees sacrifice.

“TSA officers screen nearly a billion passengers a year,” Freeman said. “With an average salary of around $35,000, these are workers who simply cannot afford to miss a paycheck. Right now, Congress is allowing them to do that work without one.”

Missed pay for TSA workers often serves as a flash point in shutdowns, as it typically causes a spike in unscheduled absences that in turn leads to longer security lines. Those delays tend to increase pressure on lawmakers to find a resolution to their standoffs.

Acting TSA Administrator Ha Nguyen McNeill told Congress last month that her agency saw a 25% increase in attrition during the record-setting shutdown last fall compared to the same six-week period the year before the lapse. TSA can ill-afford a similar employee drain now, she added, as the agency is preparing for increased traffic during spring break and the upcoming World Cup.

“It’s affecting recruiting as we speak,” she said of the lingering uncertainty.

Chris Sununu, a former Republican governor from New Hampshire and current president of Airlines for America, said his clients have met demand by adding capacity, but the government is failing to hold up its end of the bargain.

“Congress must get to the table and act with urgency to get a deal done that ensures frontline agencies can fully operate and employees can get the paychecks they earn for the important work they do to keep our skies secure,” Sununu said.

The groups estimated that TSA would screen an average of 2.8 million passengers per day in March and April, an all-time high. The 2025 shutdown caused 9,000 flights to be delayed or canceled, they said, which took a $6 billion toll on the travel industry.

DHS employees have told Government Executive they are still paying off loans they took out during the last shutdown and are rotating taking unpaid days off to save on commuting costs.

“For the third time in five months, TSA screeners are being asked to perform their jobs without pay because Washington can’t find a way to do its job,” said Todd Hauptli, president of the American Association of Airport Executives. “That’s wrong, and dedicated screeners shouldn’t have to pay the price for continued Washington dysfunction.”

The House on Thursday once again advanced a spending bill for DHS, though it was approved largely along party lines and did not contain the new checks on DHS law enforcement personnel that Democrats are seeking. The measure is not expected to pass the Senate in its current form. Democratic leadership and the White House have traded legislative reform proposals back and forth—and President Trump announced on Thursday he would fire DHS Secretary Kristi Noem—but the two sides have yet to reach an agreement that would reopen the department.

Senate Minority Leader Chuck Schumer, D-N.Y., made clear on Thursday that Noem's removal would not lead to a change in Democrats' strategy in holding up DHS funding.

"This is a problem of policy, not personnel," Schumer said. "The rot is deep. No one person can straighten this up until the president changes the whole agency, stops the violence and reins in [Immigration and Customs Enforcement]."

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A year after the Social Security Fairness Act, some retirees are still waiting for full benefits

Tammy Flanagan — Thu, 05 Mar 2026 15:00:00 -0500

On Jan. 5, 2025, President Biden signed the Social Security Fairness Act (SSFA) into law, repealing two onerous Social Security provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) – or the “Evil Twins,” as the late columnist Mike Causey dubbed them. The law restored full Social Security benefits to millions of retired public service workers, including federal retirees covered by the Civil Service Retirement System.

Although federal employees who paid into the Civil Service Retirement System were exempt from FICA taxes, many had worked in Social Security-covered employment before, after, or even during their federal employment, as well as serving in the military, where FICA taxes have been paid since 1957. The SSFA also restored spousal and widows’ benefits previously reduced by the GPO.

The SSFA is retroactive to Jan. 2024, meaning Dec. 2023 is the last month the WEP and GPO applied. This was welcome news for millions of public servants who had been receiving reduced retirement benefits and often were prevented from receiving spousal and widows’ benefits. However, some individuals are not entitled to retroactive payments. Those who have not applied for Social Security retirement benefits yet will not see the impact of this law until they begin receiving benefits.

Some individuals eligible for spousal and widows’ benefits before Jan. 2024 have been denied retroactive benefits because of when they previously inquired. They were told benefits would only be applied six months before the date of application. Many see this as inconsistent with the intent of the SSFA.

Survivors’ benefits

As a surviving spouse, you may be able to receive full benefits (up to 100% of the deceased spouse’s benefit amount) at your full retirement age. The full retirement age for survivors born from 1945 through 1956 is 66. It increases gradually for those born from 1957 through 1962. For anyone born in 1962 or later, full survivors’ benefits are payable at age 67. This differs from the full retirement age for retirement benefits, which is 67 for people born in 1960 or later.

A surviving spouse can get reduced benefits as early as age 60. If your surviving spouse has a disability, benefits can begin as early as age 50. For more information on survivors’ benefits, visit www.ssa.gov/survivorplan.

To qualify for Social Security widow’s benefits in addition to benefits payable at age 60, other requirements include:

Must be age 60 or older
Any age if caring for dependent children under 16 or receiving Social Security disability benefits
Former spouses who were married to the worker for at least 10 years and meet one of the above requirements

A spousal benefit payable while the worker is alive can be as much as half of the worker's primary insurance amount, depending on the worker's age at retirement. If a spouse begins receiving benefits before normal retirement age, the benefit is reduced. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.

If a spouse is eligible for a retirement benefit based on his or her own earnings and that benefit is higher than the spousal benefit, only the earned retirement benefit will be paid. A spouse can retire as early as age 62, but doing so may result in a benefit of as little as 32.5% of the worker's primary insurance amount.

Spousal benefits

Requirements to qualify for Social Security spousal benefits include:

The worker must file for retirement benefits for the spouse to be eligible for a benefit based on the worker's earnings
Spouse must be at least age 62, or any age if caring for dependent children under 16 or receiving Social Security disability benefits
Former spouses who have not remarried and were married to the worker for at least 10 years may also qualify

Spouses, surviving spouses, and former spouses are subject to an earnings limit that can reduce or terminate benefits until they reach full retirement age, when the limit no longer applies, or when earned income falls below the annual earnings limit ($24,480 in 2026).

To clarify eligibility for the repealed WEP and GPO, Social Security published FAQs at https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html, explaining how to claim spousal and widow benefits and unreduced personal benefits.

NARFE member example

Mike Teefy, president of the Vancouver chapter of the National Active and Retired Federal Employees Association (NARFE) and a retired SSA employee, shared a story from a member named Charles. It highlights perceived inequities in benefit payments after the repeal of WEP and GPO.

Charles divided impacted individuals into two groups:

Group 1: Individuals who formally applied for Social Security spousal benefits. Before the Act, some received reduced or no benefits due to WEP and GPO. SSA generally processed these cases to provide benefits back to Jan. 2024.
Group 2: Individuals who did not formally apply for benefits because they assumed their payments would be reduced to zero or insignificantly small amounts. SSA processed these cases to provide benefits six months from the application date. For example, an individual applying today would have benefits start six months before the application rather than back to Jan. 2024.

Many in Group 2 wonder why they were not entitled to benefits back to Jan. 2024, as the Act provided retroactive payments. Charles, 81, a CSRS retiree who retired in July 2011, has 34 Social Security credits and is not eligible for his own retirement benefit. He never applied for spousal benefits because the offset would have reduced them to zero.

His wife, 80, began receiving Social Security retirement payments in her mid-60s. In late January 2025, Charles contacted his local SSA office about spousal benefits under the SSFA. After a phone interview on Feb. 14, 2025, he received a deposit covering July 2024 through Jan. 2025 (six months’ retroactive benefits). He did not receive payments for Jan.–June 2024 because he was told retroactive benefits were limited to six months from his application date.

Charles and others who have not formally filed should contact SSA immediately to protect their benefits.

Retroactive benefits rules

According to the SSA handbook (https://www.ssa.gov/OP_Home/handbook/handbook.15/handbook-1513.html), full retirement age and survivor claims may be paid retroactively up to six months. Certain disability claims may be paid up to 12 months retroactively. You are entitled to benefits beginning the first month in the retroactive period that you meet all requirements, except for filing an application.

For example, if you reach full retirement age in March 2022, are fully insured, and file for benefits in March 2026, you may be entitled to retroactive benefits starting Sept. 2025 (six months before filing). Retroactive benefits for months prior to full retirement age are not payable if this permanently reduces the monthly benefit, except for surviving spouses or surviving divorced spouses under disability who are under 61 in the filing month. Surviving spouses filing after a worker's death may be entitled to benefits in the month of death if otherwise eligible.

Congressional review

Senators Susan Collins, Bill Cassidy, John Cornyn, and John Fetterman sent a letter to SSA Administrator Leland Dudek requesting a review of agency policy to grant maximum retroactive payments to protected spouses affected by the SSFA back to Jan. 2024. The SSFA, coauthored by Collins and cosponsored by Cassidy, Fetterman, and Cornyn, restores Social Security benefits for millions of public employees and their spouses by repealing WEP and GPO, including retroactive payments to Jan. 2024.

Like Charles, several constituents contacted senators’ offices regarding retroactive benefits. They were told by SSA employees years ago that spousal benefits would be reduced to $0 under the GPO, so they did not file claims. Now, these spouses are being told to file a claim but are only granted up to six months’ retroactivity from the most recent SSA contact.

Filing for reconsideration

Teefy advises members who did not receive retroactive benefits back to Jan. 2024 to file Form SSA-561, Request for Reconsideration. This action may protect rights until SSA resolves the issue or Congress or courts require SSA to conform to the legislation and Jan. 2024 effective date.

Those who have not filed for spousal benefits can use the following:

Widows and former spouses: https://www.ssa.gov/forms/ssa-10.html
Spouses and divorced spouses: https://www.ssa.gov/forms/ssa-2.html#
Marriage certification: online or Form SSA-3: https://www.ssa.gov/forms/ssa-3.pdf

Claims may require birth certificates, marriage, divorce, and death certificates depending on the type of benefits filed.

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House Dems want to know why retirees aren’t getting physical tax documents from OPM

Carten Cordell — Wed, 04 Mar 2026 07:00:00 -0500

Updated at 8:27 a.m. ET March 4

With tax season in full swing, House Democrats are pressing the Office of Personnel Management for answers about reports that federal retirees and annuitants aren’t receiving paper copies of tax documents needed to file their returns.

In the March 2 letter to OPM Director Scott Kupor, nine House members — led by Reps. James Walkinshaw, D-Va., and Frank Pallone, D-N.J. — inquired why some retirees still haven’t received physical copies of their 1099-R forms.

“Each year, OPM states that it will mail physical Form 1099-R documents to any annuitant who does not have an email address on file after January 31,” the letter said. “Despite this policy, we have heard from numerous constituents who still have not received their Form 1099-R or annuity statements, even after waiting well beyond the maximum two-week delivery window communicated by your staff.”

Form 1099-R covers annual distributions from a variety of retirement plans, including pensions, individual retirement arrangements, survivor income benefit plans, insurance contracts and others.

OPM’s Retirement Services Online portal will provide digital copies to retirees and annuitants with a Login.gov account or an email address. For those without either, the agency typically sends paper forms out by Jan. 31.

But according to some, neither has been happening this year, and when retirees or annuitants try to reach out to OPM, they can’t get an answer.

John Hatton, staff vice president for policy and programs at the National Active and Retired Federal Employees Association, told Government Executive that his organization has been "inundated" with calls from retirees who had not received a physical 1099-R form or had difficulty acquiring one online.

"We're hearing from a lot of members who don't know how to get their form, and they can't call OPM because it's almost impossible to get through on the phone," he said. "We've told people to start calling at 7:40 a.m. and keep calling for 30 minutes, and you might get through . . . And even if they did get through, [OPM] don't let you switch to mail delivery via the phone — you need to create an account just to switch it."

OPM’s inspector general recently cited customer service at its Retirement Services office as a top management challenge for fiscal 2026 due contributing factors such as a lack of resources, the loss of 100 retirement personnel from the deferred resignation program and the office’s own retirements and hiring action cancellations.

"OPM has made 1099 forms available digitally with one-click access, and users no longer need a PIN to sign in," said OPM spokesperson McLaurine Pinover in a email. "Anyone without a Retirement Services Online account was mailed a paper copy, and some deliveries may have been delayed by recent winter storms in the DC and Northeast region. We are advising recipients to allow about 10 days for mail delivery."

The nine House members requested that OPM provide statistics on the current status of 1099-Rs to be mailed, information on average call and wait times to the Office of Retirement Services’ help line, any information on customer service satisfaction data and metrics for success and how the agency plans to address the customer service issues.

Erich Wagner contributed to this report. The story was updated to include a comment from OPM.

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Most TSP funds were flat in February

Erich Wagner — Mon, 02 Mar 2026 15:40:06 -0500

Most portfolios in the federal government’s 401(k)-style retirement savings program were relatively flat last month, with just one fund exceeding 2% growth and another ending February in the red.

The Thrift Savings Plan’s international (I) was the lone bright spot, gaining 6.05% last month. So far this year, the I Fund has grown 12.34%. Meanwhile, the small-and mid-size businesses of the S Fund increased 1.08% in January, bringing its returns since January to 3.52%.

The fixed income (F) fund gained 1.63% in February; so far this year, it has increased 1.84%. And the G Fund, which is made up of government securities, grew by its statutorily mandated rate of 0.33%. So far in 2026, the G Fund has increased 0.70%.

The common stocks of the C Fund were the only TSP offerings to lose value last month, falling 0.76%. So far this year, the C Fund is up 0.68%.

Each of the TSP’s lifecycle (L) funds, which shift toward more conservative investments as participants get closer to retirement, posted modest gains in February. The L Income Fund, designed for those who have already begun making withdrawals, increased 0.82%; L 2030, 1.26%; L 2035, 1.41%; L 2040, 1.50%; L 2045, 1.58%; L 2050, 1.65%; L 2055, 1.82%; L 2060, 1.82%; L 2065, 1.82%; L 2070, 1.82%: and L 2075, 1.82%.

So far this year, the L Income Fund has grown 1.95%; L 2030, 3.23%; L 2035, 3.62%; L 2040, 3.88%; L 2045, 4.10%; L 2050, 4.31%; L 2055, 4.99%; L 2060, 4.99%; L 2065, 4.99%; L 2070, 4.99%; and L 2075, 4.99%.

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

Tammy Flanagan — Thu, 26 Feb 2026 15:00:00 -0500

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.

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Why your federal benefits may not protect your family the way you think

Neil Cain — Wed, 25 Feb 2026 07:00:00 -0500

Federal employment comes with benefits that many Americans envy, including stability, a steady paycheck, a pension, health insurance, life insurance and survivor benefits. On paper, it looks like a solid picture.

But, when Mark, a 52-year-old federal employee with more than two decades of service, passed away unexpectedly, his wife assumed the benefits they’d discussed over the years would carry her through.

What she didn’t realize, until weeks later, was how much it depended on elections made years earlier and forms that hadn’t been revisited since their children were in elementary school. Life insurance covered immediate expenses, but not long-term income. The pension survivor benefit was smaller than she expected. The TSP beneficiary form hadn’t been updated after a refinance and name change.

There wasn’t anything that was “wrong.” The plan just hadn’t kept up with life.

But here’s what many federal employees only learn after something goes wrong. Your benefits were designed to support you but not fully protect your family if something happens to you. That gap is where plans stop being theoretical and need to be fully ready to step in if life happens. Stories like Mark’s are more common than many federal employees realize, and they usually don’t involve mistakes, just assumptions.

Why “I’m covered” is usually an assumption

Most federal employees assume their benefits will “take care of things” if they die unexpectedly, become disabled or retire earlier than planned. It’s not a reckless assumption, but a reasonable one. After all, the federal government offers more benefits than most private employers. The problem is that they’re often misunderstood, incomplete or dependent on choices you may not have revisited in years.

FEGLI: Helpful, but rarely enough

Federal Employees’ Group Life Insurance is one of the most misunderstood benefits in the federal system. Though you do have life insurance, it may not be enough.

Basic FEGLI typically equals your salary rounded up to the nearest $1,000, plus $2,000. For many employees, that means $70,000–$100,000 in coverage.

For most families, that amount doesn’t replace your income for very long.

Optional FEGLI coverage can help, but premiums increase sharply with age. Many employees quietly reduce or drop coverage later in their careers because it becomes expensive and often without replacing it. It feels like coverage, but when it’s tested, there may be a gap that’s quickly uncovered.

Survivor benefits offer real protection, but often misunderstood

When a federal employee dies while still working, survivors are not left without support. In fact, federal survivor benefits can be meaningful and substantial.

For many families, benefits may include a Basic Employee Death Benefit. This is a lump sum equal to 50% of the employee’s final salary (or high-3 average) plus an additional fixed amount, along with the potential for a survivor annuity, continued health insurance coverage (Federal Employee Health Benefits) and any FEGLI life insurance in place. These benefits are administered through the Office of Personnel Management and are designed to provide immediate and ongoing financial support.

Where families are often surprised isn’t whether benefits exist. It’s how those benefits are paid, how long they last and whether they truly replace the income that was lost.

The BEDB, for example, is a one-time benefit. Survivor annuities may provide ongoing income, but typically at a reduced level compared to a full working paycheck. Importantly, unlike FEGLI, which is generally received income-tax free by beneficiaries, the survivor annuity and portions of the BEDB are taxable as ordinary income. That means the actual spendable amount can be lower than families expect once federal (and potentially state) taxes are factored in.

FEGLI may help with short-term needs, but it often isn’t designed to sustain a household for decades.

And while these benefits create a strong foundation, they don’t automatically adjust for a family’s specific financial reality — such as mortgage obligations, college funding, outstanding debt or the surviving spouse’s ability to return to work.

Without understanding how the pieces fit together, families can find themselves financially stable on paper yet still facing difficult trade-offs in real life.

Understanding inherited TSP rules — and why planning matters

Your Thrift Savings Plan is one of the most powerful wealth-building tools available to federal employees. But it is not self-executing — especially when it comes to what happens after death.

Multi-generational planning inside the TSP follows very specific rules:

Original TSP owner → First beneficiary → Second beneficiary

Each stage changes the distribution options and tax treatment — sometimes dramatically.

When the first beneficiary inherits

If the beneficiary is a spouse:
The spouse can move the TSP into a Beneficiary Participant Account within the TSP system. This preserves tax deferral and allows for continued structured withdrawals. With proper planning, this can maintain flexibility and long-term income control.

If the beneficiary is a non-spouse:
Under current post-SECURE Act rules, most non-spouse beneficiaries must follow the 10-year rule, meaning the account must be fully distributed by the end of the 10th year following death.
In limited cases (eligible designated beneficiaries or pre-SECURE inheritances), life expectancy “stretch” rules may still apply.

Already, you can see how outcomes vary depending on who inherits.

When the second beneficiary inherits

If the first beneficiary later passes and a second beneficiary inherits what is known as a non-designated beneficiary account, the rules become even more restrictive.

In most cases, the second beneficiary must fully distribute the account by Dec. 31 of the year of receipt.

There is no new 10-year clock and no life expectancy stretch available.

This often surprises families — and can trigger large, compressed taxable distributions.

Where real-world problems show up

On paper, the TSP is highly efficient. In real life, issues arise when it isn’t aligned with your actual family and financial situation.

Common gaps we see:

Beneficiary forms that haven’t been updated in decades
Asset allocations that no longer match your timeline
Assumptions that a spouse will “figure it out” later
No tax strategy for inherited withdrawals

The TSP does not automatically pass to your spouse. It only does if your beneficiary designation form says so. And even when it does pass correctly, the way distributions are structured can significantly impact:

Income taxes
Income-Related Monthly Adjustment Amount exposure
Long-term income sustainability
Multi-generational wealth transfer

A well-funded TSP without a clear plan can still create financial stress for survivors.

The goal isn’t just to accumulate a large balance.
It’s to ensure that balance transitions efficiently, tax-smart and aligned with your family’s real-world needs.

Because when it comes to inherited retirement accounts, the rules — not the balance — often determine the outcome.

Disability: The risk no one likes to talk about

Most people insure their car, their home, even their phone. But few adequately insure their ability to earn a living. You may see this referred to as your human capital. Federal disability benefits exist, but they often:

Replace only a portion of income
Take time to approve
Come with strict eligibility requirements

If an illness or injury prevents you from working for months, or even permanently, your family may face a sudden drop in income at the exact moment expenses rise.

This is one of the most financially disruptive events a family can experience, yet it’s one of the least planned for.

Health care and long-term care: The silent cost

FEHB is excellent health insurance. But it does not cover everything.

Long-term care refers to help with daily activities due to aging, illness or cognitive decline. It’s one of the largest financial risks retirees face. Medicare coverage is limited, and long-term care expenses can quietly drain savings and force difficult family decisions.

Without a plan, the burden often falls on a spouse or adult child, both from a financial and emotional perspective.

The real risk can be your assumptions

Most benefit shortfalls don’t happen because people don’t care. They happen because people assumed.

Assumed FEGLI was enough
Assumed beneficiaries were correct
Assumed retirement would “work itself out”
Assumed there would be time later

Life doesn’t always give us that time.

No better time than right now to act

You don’t need to be a financial expert to protect your family better. You just need clarity.

Start with these steps:

Review your FEGLI coverage and ask what it replaces.
Confirm all beneficiaries—TSP, FEGLI, pension, savings.
Understand your Survivor Benefit Plan election and whether it aligns with your family’s needs.
Consider income protection, not just retirement income.

Talk it through with someone who understands federal benefits and your personal situation. These benefits are a strong foundation, but it still needs walls, a roof and reinforcement. When you’ve taken the necessary steps to protect your loved ones, ensuring they’re all ready for action, with no assumptions, may be the last step to securing that confidence.

This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Neil Cain is a certified financial planner with Capital Financial Planners. To discuss your investments, including your TSP, register for a complimentary Retirement Readiness Meeting. For topics covered in even greater depth, see our YouTube Channel.

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Still digging out from the last shutdown, DHS employees brace for more delayed pay

Eric Katz — Fri, 20 Feb 2026 15:28:00 -0500

While the Homeland Security Department is shut down, the vast majority of employees—about 92%—are still reporting to work. In some cases, however, workers are finding creative solutions to get out of their regular duties and save money while their paychecks hang in the balance.

“My unit is rotating voluntary furlough days,” said one DHS staffer.

Workers in that office are taking turns to take time off work, which, during a shutdown, entails being placed in an unpaid furlough status.

“[We] conserve finances by not commuting, since we're only allowed to telework in emergency situations,” the employee said, noting some employees in the unit commute 80 miles per day and are therefore seeing significant savings on gas when they do not go to work. The employees who accept the furloughs have used the time to schedule medical appointments, handle errands or tackle home projects.

Funding for DHS lapsed Feb. 14 after congressional Democrats and the White House failed to reach an agreement on reforms to President Trump’s immigration enforcement crackdown. Most of DHS is still working because their jobs are necessary to protect life or property, but their paychecks will be delayed until Congress approves appropriations for the department. Those accepting voluntary furloughs are taking a risk, as the White House has treated back pay for furloughed workers as non-guaranteed. Congress has approved retroactive compensation in both of the two shutdowns this fiscal year, however, reaffirming a guarantee it passed into law for all future shutdowns in 2019.

The third shutdown of the year—which is impacting only DHS, as every other federal agency is funded through Septemeber—is taking its toll on the department’s employees.

“I did not dig out from the last shutdown” before this one began, said a civilian U.S. Coast Guard employee who is once again working without pay.

They received a no-interest loan from Coast Guard Mutual Assistance during last year’s 43-day funding lapse, without which “I wouldn’t have been able to make it.” The employee still has multiple payments left on the loan.

“I’m struggling,” they said. “I’m not going to paint a picture that I’m OK financially.”

Their biggest concerns, the Coast Guard worker said, was that they now know certain creditors will not be flexible, adding they will have to be vigilant with those institutions. In the previous shutdown, the before and after school care for the employee's child waived all fees. The facility does not plan to do so this time around, but is providing some flexibility on the payment schedule.

Friends and family have already reached out to offer help with groceries and other necessities. In the office, however, longstanding and pervasive issues are harder to address. The employee’s office is still doling out contract funds under the One Big Beautiful Bill Act. But the trio of shutdowns is “killing diminishing morale” and that impact is making it difficult to get work done, they said.

“We’re still working as if we’re not shut down,” the civilian worker said. “It’s very weird.”

The Trump administration has excoriated congressional Democrats for declining to approve DHS funding, suggesting it is having significant impacts on employees and agency operations alike.

“Now we have [Federal Emergency Management Agency] workers, the men and women of the United States Coast Guard, the men and women of [the Transportation Security Administration], who keep our airports moving, who will be working without paychecks for no good reason other than the Democrats wanting to pick a fight with Donald Trump, and the president thinks that is irresponsible and despicable,” said White House Press Secretary Karoline Leavitt.

FEMA is currently pursuing efforts to shed about half of its workforce.

DHS officials told lawmakers at a hearing last week that a shutdown would hurt recruiting, damage morale and stymie long-term planning and projects. The Coast Guard is curtailing training and grounding some aircraft, while TSA’s leaders warned of delays at airports. FEMA will struggle to make payments for long-term recovery efforts, while the Secret Service is pausing reforms that are currently underway. Congress returns from recess next week, but negotiators have not announced any progress in reaching a deal to fund the department.

Most DHS employees will not miss a full paycheck until the beginning of March. Craig Carter, president of the Federal Managers Association, said the impacts are already being felt across the DHS workforce.

“Federal employees at the Department of Homeland Security are once again working without pay and must endure uncertainty on their budgets for the fiscal year,” Carter said. “This is an unacceptable way to treat these dedicated feds who do so much to provide for our fellow Americans.”

Lawmakers had reached a bipartisan agreement to fund DHS before department personnel fatally shot Alex Pretti, a Veterans Affairs Department nurse protesting Immigration and Customs and Enforcement actions in Minnesota, and Democrats made new demands to change the department’s policies. To the Coast Guard civilian, that makes their current sacrifice a worthy one.

“If I have to go a month or a month and a half because more measures are put in place to ensure people aren’t murdered in the street, I’m ok with that,” they said. “What if it were my kid, or my relative, or my coworker?”

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Federal workers delay retirement as savings gaps persist

Tammy Flanagan — Thu, 19 Feb 2026 15:00:00 -0500

How many years of federal service did you have or will you have when you retire? Most of you are now retiring under the Federal Employees Retirement System, or FERS. Before we explore your FERS retirement, let’s look at some recent survey results from the 2025 Retirement Confidence Survey. The RCS is the longest-running survey of its kind, measuring worker and retiree confidence about retirement, and is conducted by the Employee Benefit Research Institute and Greenwald Research. The 2025 survey of 2,767 Americans was conducted online Jan. 2 through Feb. 3, 2025. All respondents were ages 25 or older, including 1,042 workers and 1,005 retirees.

One key finding of the survey is that workers are planning to retire later. While the median expected retirement age for workers has held steady at 65, a growing share report planning to retire at 70 or beyond. Most retirees—three in five—report retiring earlier than 65, with a median retirement age of 62. While over two in five retirees who retired early say they did so because they could afford to, nearly seven in 10 retirees indicated the reason was something out of their control.

Some troubling responses included:

Only 41% of workers have calculated how much money they would need to cover health expenses in retirement
Only 44% of workers thought about how much money they would withdraw from retirement savings and investments
Only 46% of workers planned for emergency or large expenses in retirement
Only 51% of workers reviewed their Social Security benefit at their planned retirement age
Only 52% of workers estimated the amount of income needed each month in retirement

On the other hand:

65% of workers discussed with their partner or spouse when they hoped to retire and what it would look like
58% of workers thought about the age they would claim Social Security
55% of workers thought about how they would occupy their time in retirement

Additional survey responses:

How confident are workers that they will have enough money in retirement?
- 78%: Very or somewhat confident
- 22%: Not too or not at all confident
Workers without a defined benefit or defined contribution plan:
- 33%: Very or somewhat confident
- 67%: Not too or not at all confident
Workers who feel prepared for retirement: 69% confident
Retirees who felt prepared: 75% confident
Workers with a major debt problem who are confident about financial security: 36%
Workers’ total savings and investments (excluding primary residence):
- 32%: Less than $25,000
- 7%: $25,000–$49,999
- 12%: $50,000–$99,999
- 13%: $100,000–$249,999
- 37%: $250,000 or more

How would your answers compare with the survey?

According to a Congressional Research Service report from December 2023, 98% of current civilian federal employees were enrolled in FERS, which covers employees hired since 1984. Two percent were enrolled in CSRS, which covers employees hired before 1984.

More than 2.7 million people received civil service annuity payments, including 2,226,760 employee annuitants and 475,562 survivor annuitants. Of these, 56% received annuities earned under CSRS, and 44% received annuities earned under FERS.

The average civilian federal employee who retired in FY2022 was 62.3 years old and had completed 25.1 years of federal service. Average monthly annuities: CSRS, $5,447; FERS, $2,126. FERS annuities are supplemented by Social Security benefits and the Thrift Savings Plan.

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Air traffic controller pay raise stalled by DHS shutdown

Carten Cordell — Wed, 18 Feb 2026 07:00:00 -0500

The current government shutdown of the Homeland Security Department is not only disparately impacting paychecks across the federal government’s third largest agency, it has also placed a proposed pay raise for air traffic controllers in jeopardy.

After the House passed an appropriations package to fund DHS, Senate Democrats withdrew their support for the budget plan, instead pressing for immigration enforcement reforms following multiple fatal shootings of citizens by DHS employees.

The DHS budget impasse will stretch at minimum another week while the Senate remains in recess until Feb. 23 after failing to reach a funding deal prior to the department’s appropriations running out last week. But it will also leave the fate of a proposed 3.8% pay raise for air traffic controllers an open question.

The House appropriations minibus for the Defense, Homeland Security, Labor, Health and Human Services, Education and related agencies, Transportation, Housing and Urban Development and related agencies baked in $140 million into the DHS portion of the funding package for the air traffic controller raises in fiscal 2026.

That funding would go into effect if the Federal Aviation Administrator determines “in his sole discretion, that improvements in workforce scheduling, staffing utilization, or other operational efficiencies are achieved that contribute to addressing workforce shortfalls and enhancing aviation safety.”

But despite the FAA and the Transportation Department having full-year appropriations, because the Senate carved out DHS funding, the $140 million remains on hold.

House Appropriations Committee Chairman Tom Cole, R-Okla., cited the pay raise as one of several detrimental impacts of the DHS shutdown in his opening remarks of a Feb. 11 hearing.

"I will end with this: the appropriations process shouldn’t be used as a proxy for other policy disputes. Discussions on reforms, oversight, and accountability across government can happen without leveraging other agencies as collateral," he said.

The proposed raise is targeted to help recruitment and retention efforts for air traffic controllers, which have been a focus of the agency for years but received renewed attention following a collision between an Army Black Hawk helicopter and a commercial airliner near Ronald Reagan Washington National Airport that killed all 67 people on both aircraft in January 2025.

According to the FAA’s air traffic controller workforce plan, the agency had roughly 10,730 Certified Professional Controllers in fiscal 2024 and anticipated losing an estimated 6,872 between fiscal 2025 and 2028, due to a mix of retirements, attrition, promotions and transfers and other reasons.

Meanwhile, the bulk of DHS employees will continue to report to work without pay during the shutdown, with roughly 23,000 employees placed on furlough. Immigration and Customs Enforcement and Customs and Border Protection officials are expected to utilize funding provided in the One Big Beautiful Bill Act to continue operations.

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TSP in-plan Roth conversions: Are they right for you?

Tammy Flanagan — Thu, 12 Feb 2026 15:00:00 -0500

The Thrift Savings Plan (TSP) has long served as a cornerstone of retirement savings for federal employees and members of the uniformed services. As retirement planning becomes more complex, TSP participants are increasingly interested in maximizing their accounts’ flexibility and tax advantages. One of the most significant features now available is the in-plan Roth conversion, allowing participants to convert traditional TSP balances to Roth within the plan.

Recently, TSP introduced a new calculator to help participants better understand and evaluate the impacts of such conversions. This new option presents a decision that should involve a consultation with your financial professional, who can help you evaluate how this move might benefit you in tax planning and also caution you when deciding to jump in feet first to take advantage of this new option available to TSP participants.

What do the professionals think?

One such financial advisor whom I’ve had the pleasure of getting to know is Neil Cain, a Certified Financial Planner with Capital Financial Planners. He wrote a column this week about the pros and cons to be aware of when deciding to proceed with a TSP in-plan Roth conversion. I also discussed this new option with Karen Schaeffer, a long-time colleague of mine, who is also a CFP. She has advised clients for over 40 years and has developed a diverse client base, including professional women, Foreign Service officers, foreign nationals, and federal government employees.

Both Karen and Neil have expressed holding up a big caution flag before taking advantage of this new option.

“We’re being forced to make a deal with the devil of future changes to our tax laws,” Karen said.

In other words, using a pre-tax traditional retirement savings plan allows you to save tax dollars as you are investing today and reminds us to think about tax planning and strategies we can plan for when withdrawing those taxable distributions in the future. Karen also provided the following reminders:

No one knows what the tax laws will do in four years, let alone over the next 40 years.
Those who want to do their kids a favor by leaving a tax-free account as an inheritance should consider that they can most likely save more for the future by investing pre-tax dollars, which will allow them to make their retirement more comfortable while possibly still leaving a sizeable legacy for their family. After all, she reminded us, we have already been nice to our kids; we should not sacrifice the comfort we may experience in our retirement thanks to our ability to save and invest during our working years.
Will your tax bracket really be lower when you are withdrawing these funds in retirement? Federal retirees will have a minimum of three streams of retirement income to consider: the FERS basic retirement benefit, Social Security retirement, and, once over a certain age, required minimum distributions (RMDs) from the TSP and other pre-tax retirement accounts, which can be sizeable, especially if you haven’t been taking distributions earlier in your retirement.

If it is your plan to save these funds to pass on to your favorite charity, remember that they won’t necessarily need the tax-free withdrawals, since distributions to a charity are tax-free anyway—even those that were invested on a pre-tax basis—and provide a deduction for estate tax purposes. If this is your plan, remember that TSP and IRS rules do not allow direct, tax-free charitable transfers, commonly known as QCDs (this is a discussion for another day with your financial advisor).

What is an in-plan Roth conversion?

The concept of an in-plan Roth conversion is that this process enables TSP participants to transfer all or a portion of their traditional (pre-tax) TSP account to a Roth (after-tax) account within the plan. Unlike rolling funds out to a Roth IRA, this process keeps the money within the TSP, allowing participants to continue benefiting from low-cost investment options and the familiar structure of their retirement account.

When you convert traditional TSP funds to Roth, the amount converted becomes taxable income in the year of the conversion. This means you’ll owe federal (and possibly state) income taxes on the converted amount. The taxes are not withheld from the converted investment; instead, you must plan to pay these taxes out of other funds you have available.

However, once in the Roth account, future qualified withdrawals—including earnings—are tax-free, provided certain requirements are met. This trade-off can be appealing for participants who anticipate being in a higher tax bracket in retirement or who value tax diversification.

As any financial professional will tell you, there are some advantages to having a Roth account in retirement:

Tax-free growth and withdrawals: After converting and paying taxes upfront, Roth balances grow tax-free, and qualified withdrawals in retirement are not taxed.
Tax diversification: Having both traditional and Roth balances can provide flexibility in managing taxable income in retirement.
No required minimum distributions (RMDs): While traditional TSP accounts are subject to RMDs at age 73, Roth TSP balances are not, allowing participants to keep funds invested longer.
Estate planning benefits: Roth accounts can be advantageous for heirs, who may inherit funds without immediate tax consequences.

However, the decision to convert is highly personal and depends on factors such as current and future tax rates, age, anticipated retirement income, and available funds to pay taxes on the conversion. It’s important to note that converting a large balance in a single year could push participants into a higher tax bracket, resulting in more taxes owed. Also, for those over 65, this decision can affect Medicare Part B and Part D premiums due to the income-related monthly adjustment amount, better known as IRMAA.

Using the TSP’s Roth conversion calculator

Recognizing the complexity of Roth conversions, TSP recently launched a dedicated calculator. This tool is designed to help participants visualize the financial impact of converting traditional TSP funds to Roth, estimate the tax consequences, and assess how conversions fit into their broader retirement strategy.

The calculator allows users to input their current traditional TSP balance, desired conversion amount, estimated federal and state tax rates, and anticipated future growth rates. Based on these inputs, the tool projects the immediate tax liability, the future value of the converted amount, and potential tax savings over time. It also enables comparisons between keeping funds in traditional versus Roth accounts, providing clarity on the long-term benefits and drawbacks.

The basics to use the calculator:

Access the calculator: Log in to your TSP account or visit the TSP website to find the Roth conversion calculator under the “Tools and Calculators” section.
Enter your information: Input your traditional TSP balance, the amount you wish to convert, your current federal and state tax rates, and expected annual growth rate.
Review the results: The calculator will display your estimated tax bill for the conversion, the projected value of your Roth account at retirement, and the tax-free withdrawal potential.
Compare scenarios: You can run multiple scenarios, adjusting conversion amounts and tax rates, to see how different strategies affect your retirement outcomes.
Consult a professional: While the calculator provides valuable insights, it’s wise to consult a financial advisor or tax professional before making a final decision.

Key considerations when exploring an in-plan TSP Roth conversion:

While the calculator is a powerful tool, participants should consider several factors before proceeding with a Roth conversion:

Future tax brackets are uncertain: The best you can do is run multiple scenarios to prepare for future income and tax fluctuations. Your financial planner is your best resource to forecast your future financial situation.
Future investment returns are uncertain: The best you can do is rely on historical information and remember that past results do not guarantee future returns.
Tax impact: Converting large amounts at once could increase your taxable income significantly for the year.
Ability to pay taxes: Ensure you have funds available outside TSP to pay the tax bill, as withdrawing from the TSP to pay taxes could trigger additional penalties and taxes.
Age and retirement timeline: Younger participants may benefit more from the extended tax-free growth in Roth accounts, while those nearing retirement should weigh the immediate tax costs against future benefits.
Required minimum distributions: If you are subject to RMDs, you must withdraw the RMD amount for the year before you can do a Roth in-plan conversion. The IRS doesn’t allow conversion of RMD amounts. You cannot satisfy the RMD amount by converting money from your traditional TSP balance to your Roth TSP balance.
Future tax legislation: Changes in tax laws could affect the relative benefits of traditional versus Roth accounts.

The TSP’s introduction of in-plan Roth conversions and its new calculator mark a significant step forward in empowering participants to make informed retirement planning decisions. By understanding how conversions work and utilizing the calculator to model their choices, federal employees and uniformed service members can optimize their retirement savings strategy to fit their unique circumstances.

Mark Keen, CFP®, has a webinar that explores Roth conversions, available to members of the National Active and Retired Federal Employees Association. He explains ways to discover how Roth conversions can increase after-tax wealth, lower your lifetime tax burden, and help you avoid stealth taxes. As always, careful consideration and professional guidance are recommended before making major financial moves, but the tools now available make navigating the complexities of Roth conversions easier than ever.

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Roth in-plan conversions arrive for TSP, but consider tax implications first

Neil Cain — Wed, 11 Feb 2026 07:00:00 -0500

Beginning Jan. 28, the Thrift Savings Plan now allows participants to convert traditional (pre-tax) balances into Roth (after-tax) balances inside the TSP itself. This long-awaited change gives federal employees and retirees more flexibility over how and when they pay taxes on retirement savings.

While the mechanics of the change are straightforward, the implications are not. A Roth in-plan conversion is a tax event and not just a retirement planning decision. Once it is made, it cannot be reversed. Knowing this beforehand helps you choose effective planning tools and avoid costly errors.

Why this change matters

Until now, federal employees who wanted to convert pre-tax TSP savings to Roth generally had to move money out of the TSP and into an IRA. That process introduced multiple steps, more paperwork and additional risks.

With in-plan conversions, participants can:

Convert eligible traditional TSP balances to Roth without leaving the plan
Retain access to the TSP’s low-cost structure and protections
Simplify administration by keeping retirement assets consolidated

A simple way to think about the decision

Consider a simplified scenario.

A federal employee has spent decades contributing to the traditional TSP. Most of the account has never been taxed. The new in-plan conversion feature creates a clear option: pay the tax now or pay it later.

Let's quickly review some common questions.

Question	Traditional TSP	Roth TSP (After Conversion)
When do you pay taxes?	Later, in retirement	Now, in the year you convert
Does income increase this year?	No	Yes
Are withdrawals taxed later?	Yes	No (if rules are met)
Required distributions?	Yes	No
Can you undo the decision?	N/A	No

The benefit of converting is future flexibility: tax-free qualified withdrawals and no required minimum distributions on Roth balances. The cost is immediate: higher taxable income today.

Reviewing the conversion impact

When a conversion occurs:

The converted amount is added to taxable income for that year
There is no tax withholding through the TSP
Taxes must be paid using funds outside the TSP

Depending on timing and income, a conversion can:

Push your income into a higher tax bracket
Increase Medicare premiums in future years
Change how much Social Security income is taxable
Require estimated tax payments to avoid penalties

None of these outcomes are hypothetical. They are mechanical results of how the tax code works, and bringing in a tax professional who keeps up with such policies is crucial.

Why should I care about staying inside the TSP?

The ability to convert inside the TSP is not solely a convenience feature. It preserves several advantages that can be lost when funds are moved out of the plan.

Keeping assets inside the TSP means:

Continued access to institutional-level expense ratios
Simpler account structure and oversight
Avoidance of rollover errors that can trigger unintended taxes
Fewer custodians and reporting requirements

For many federal employees, the TSP is the foundation of their retirement plan. In-plan conversions allow tax strategy adjustments without dismantling that foundation.

Why this is Not a do-it-yourself tax decision

Because Roth in-plan conversions directly affect taxable income, they cross into tax planning territory. This decision should not be made in isolation or based on general rules of thumb.

At Capital Financial Planners, Roth conversion strategies are reviewed with participation from our Certified Public Account. We’ve added this layer of oversight to help federal employees and retirees understand:

How much can be converted without crossing unintended tax thresholds
Whether the tax can be paid comfortably from non-retirement funds
How conversions interact with current income, retirement timing and future required distributions
Whether a multi-year approach is more appropriate than a single large conversion

The goal is not to pursue conversions simply because they are possible. Rather, it is to ensure that tax decisions are coordinated with long-term retirement objectives.

Greater control means greater responsibility. Avoid handling it solo.

Roth in-plan conversions give federal employees more control, but they also require more responsibility. The decision affects taxes immediately and cannot be reversed later.

Before initiating a conversion, the most important step is not choosing an amount. It is understanding the tax impact of that choice in the context of the full financial picture. With proper planning, in-plan conversions offer flexibility. But failing to consult a tax professional may lead to needless tax costs.

This material is for general information and educational purposes only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the loss of principal. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Traditional TSP account owners have considerations to make before performing a Roth conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth account and income limitations for future contributions to a Roth account. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth account.

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Dem lawmakers propose 4.1% raise for feds in 2027

Erich Wagner — Tue, 10 Feb 2026 17:27:00 -0500

Democrats in both chambers of Congress on Tuesday reintroduced legislation that would provide civilian federal employees with a 4.1% average pay increase in 2027.

The Federal Adjustment of Income Rates Act, introduced by Rep. James Walkinshaw, D-Va., and Sen. Brian Schatz, D-Hawaii, would provide federal workers with a 3.1% across-the-board increase in basic pay next year, in addition to an average 1% boost to locality pay.

Lawmakers have introduced similar legislation each year for more than a decade, albeit with slightly different raise figures, and is aimed at setting a benchmark ahead of negotiations over federal worker compensation once budget talks in the spring. Last year, the measure called for a 4.3% average increase, of which 1% would have been set aside for locality pay, in the last iteration of the bill introduced by the late Rep. Gerry Connolly, D-Va.

“Federal workers are the backbone of America, delivering the essential services and benefits that families have earned in every corner of our country,” Walkinshaw said in a statement. “They serve communities nationwide and have done so honorably even as the Trump administration has launched unprecedented attacks on the civil service. The FAIR Act delivers a much-needed 4.1% pay raise in 2027 so federal pay can keep pace with the cost of living and public service careers remain competitive.”

A 4.1% average pay raise would be a stark improvement over the 1% across-the-board pay increase most feds received last month. President Trump also authorized an additional 2.8% raise for federal law enforcement officers, in line with 2026’s 3.8% raise for military service members.

Walkinshaw and Schatz’s measure drew quick endorsements from the two largest federal employee unions.

“Federal employees have long faced a significant gap in salaries as compared to their private-sector counterparts—nearly 27% lower on average nationwide—making it hard to recruit and retain the dedicated public servants our nation deserve,” said Everett Kelley, national president of the American Federation of Government Employees. “[Fair] pay isn’t just good for federal workers—it’s also good for the quality of government services and the people we all serve.”

“Federal employees live and work in every state and congressional district across the country providing critical services for our nation and the American people,” said National Treasury Employees Union President Doreen Greenwald. “However, their pay falls far below that of individuals in comparable jobs in the private sector. NTEU applauds Sen. Schatz and Rep. Walkinshaw and the many members of Congress who cosponsored this bill for supporting federal workers receiving a fair pay increase in 2027 to ensure that employees can keep up with the costs of living and that the federal government can recruit and retain talented workers.”

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The federal leave options employees can use when annual and sick time run out

Tammy Flanagan — Thu, 05 Feb 2026 15:00:00 -0500

Between Jan. 20 and Nov. 30, 2025, personnel action records show 322,049 federal workers separated from their federal careers through resignation, retirement, expired appointments and reductions in force, based on OPM Workforce Data. The Deferred Resignation Program accounted for 154,000 of those separations, allowing employees to remain on paid administrative leave through the end of the fiscal year, or up to Dec. 31, 2025, if retirement eligible. Even with those departures, the federal government remained the nation’s largest single employer, with 2,084,618 civilian federal workers on the rolls as of Nov. 30, 2025.

The idea of paid administrative leave as an incentive for employees to resign or retire from their federal careers was a new concept in 2025. There are other types of leave available to federal workers who need time off but plan to return to their jobs. These different leave categories include annual leave and sick leave, which most employees are familiar with, but there are other types of leave available in certain circumstances. These leave categories include:

Leave without pay (LWOP)
Leave without pay is a temporary nonpay status and absence from duty that, in most cases, is granted at the employee’s request. In most instances, granting LWOP is a matter of supervisory discretion and may be limited by agency internal policy. There is entitlement to LWOP when using leave under the Family and Medical Leave Act, while performing active-duty military service, while receiving benefits through the Office of Workers’ Compensation and when a disabled veteran is in need of medical treatment.

Beware that extended periods of LWOP may affect other benefits such as insurance, leave accrual and service credit for retirement.

Family and Medical Leave Act (FMLA)
Covered federal employees are entitled to a total of 12 workweeks of unpaid FMLA leave during any 12-month period for one or more of the following purposes:

Birth of a son or daughter and care of the newborn, used no later than 12 months after the birth.
Placement of a son or daughter with the employee for adoption or foster care.
Care of an employee’s spouse, son, daughter or parent with a serious health condition.
Serious health condition of the employee that makes the employee unable to perform one or more of the essential functions of the employee’s position.
A qualifying exigency arising out of the fact that the employee’s spouse, son, daughter or parent is a covered military member on covered active duty in the armed forces.

Paid parental leave (PPL)
Paid parental leave is authorized under the Family and Medical Leave Act statute and is substituted for available unpaid FMLA leave for the birth of an employee’s son or daughter and care of the newborn following childbirth. Therefore, for an employee to use PPL, the employee must be eligible for FMLA. PPL may be used only during the 12-month period following the birth of an employee’s son or daughter and only during periods when the employee is acting in a parental role with respect to the newborn.

Military leave
The law provides 20 days per fiscal year for active duty, active-duty training, inactive duty training or other eligible training. In 2025, the law was changed, increasing the number of days of military leave accrual and the maximum carryover amount from 15 to 20. An employee can carry over a maximum of 20 days for use in the next fiscal year.

Leave for disabled veterans
Disabled veterans new to federal service can be granted up to 104 hours of paid leave in the first year of employment under the Wounded Warriors Federal Leave Act of 2015, Public Law 114-75, enacted Nov. 5, 2015.

Emergency paid leave voluntary leave transfer program
In the event of a major disaster or emergency as declared by the president that results in severe adverse effects for a substantial number of employees, the president may direct the U.S. Office of Personnel Management to establish an emergency leave transfer program.

Time off for safe leave purposes
Federal employees have access to leave to seek safety and recover from domestic violence, dating violence, sexual assault or stalking, including when such conduct is facilitated by technology. Paid and unpaid options are available for victims of domestic violence.

Blood, organ and bone marrow donation
An employee may use up to seven days of paid leave each calendar year to serve as a bone marrow donor. An employee also may use up to 30 days of paid leave each calendar year to serve as an organ donor.

Court leave
An employee is entitled to paid time off without charge to leave for service as a juror or witness.

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House panel advances bill to update federal worker buyout caps

Erich Wagner — Wed, 04 Feb 2026 17:31:00 -0500

The House Oversight and Reform Committee on Wednesday unanimously advanced legislation aimed at updating the federal government’s buyout programs to encourage employees to leave.

Voluntary Separation Incentive Payments are one of the government’s main tools for reducing agency headcounts, alongside Voluntary Early Retirement Authority and reductions in force. But VSIP offerings max out at $25,000, where the cap has sat since the 1990s.

The Federal Workforce Early Separation Incentives Act (H.R. 7256), introduced by Rep. Nick Langworthy, R-N.Y., would remove the $25,000 hard cap on VSIP payments and replace it with a maximum of six months of a federal worker’s salary, subject to agency head approval. The new model is based off how federal agencies already calculate severance pay for laid-off feds.

Langworthy said an update to the federal government’s buyout program was long-overdue, and that the changes will allow agencies to move more agilely—and humanely—in workforce planning.

“This outdated cap has limited agencies’ ability to offer competitive, voluntary offramps,” he said. “As a result, the federal government often misses opportunities to reduce payroll costs early and instead turns to more expensive and disruptive alternatives such as involuntary separations, extended administrative leave, or simply paying for positions that no longer align with few options.”

Rep. James Walkinshaw, D-Va., said he and other committee Democrats supported the measure, noting the three decades since the buyout cap was last examined. But Chairman James Comer, R-Ky., placed the bill in the context of President Trump’s seismic reorganization of government. Hundreds of thousands of federal workers left government last year, through a combination of reductions in force, purges of newly hired or promoted employees and an at-times coercive campaign to encourage voluntary exits via buyouts, early retirements and deferred resignations.

“The American people elected President Trump to take control of the federal workforce, which has become bloated at the expense of efficiency and accountability to the taxpayer,” Comer said. “But President Trump has been hamstrung by outdated federal law that provides only limited tools to downsize agency employment rolls.”

The measure advanced by a 43-0 vote. It now heads to the House floor for consideration.

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OPM expands job roles receiving 3.8% law enforcement pay raise

Carten Cordell — Wed, 04 Feb 2026 07:00:00 -0500

The Office of Personnel Management has named more job roles eligible for the 3.8% across-the-board pay raise it established for federal law enforcement in December.

In a Jan. 23 memo, OPM Director Scott Kupor designated additional positions at the Homeland Security, Treasury and Commerce departments and their component agencies, as well as officials providing personal protection services at the departments and other agencies.

“These additional positions also support ongoing agency hiring efforts for mission-critical law enforcement occupations essential to implementing the Administration’s priorities to secure the border, enforce federal laws, and protect public safety,” Kupor said in the Jan. 23 memo.

The move comes after OPM created an alternative pay plan for federal law enforcement in August 2025 and finalized the 2.8% supplemental pay raise that combined with the Trump administration’s 1% raise for most federal employees in December, adding that agencies could later name additional positions to the special pay rate “at any time”.

The new positions include:

Commerce Department: Criminal investigators/special agents, police officers within the Office of Security and certain employees under the Commerce Alternative Personnel System, such as police officers, police chief and deputy chief positions, the National Oceanic and Atmospheric Administration’s criminal investigators and enforcement officers with arrest authority.

Homeland Security Department: Criminal investigators at the U.S. Citizenship and Immigration Services and U.S. Coast Guard; criminal investigators and physical security specialists meeting the statue code definition of “law enforcement officer” at Federal Law Enforcement Training Centers; police officers, police chief and deputy chief positions at the Federal Emergency Management Agency; and investigative program specialists and protective security investigators meeting the definition of “law enforcement officer” at Customs and Border Protection.

Treasury Department: IRS special agents at all pay grades.

Under the new memo, law enforcement officers providing personal protection services at the departments of Commerce, Energy, Homeland Security, Housing and Urban Development, Transportation and Veterans Affairs, as well as the U.S Trade Representative, Environmental Protection Agency, Federal Energy Regulatory Commission and Small Business Administration are also included in the special pay rate.

The new positions’ pay rate will still be effective as of Jan. 11 and will be subject to a federal pay cap, which is currently $197,200 per year.

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Congress guarantees furloughed feds’ back pay despite continued White House maneuvering

Erich Wagner — Tue, 03 Feb 2026 17:10:00 -0500

When Congress voted Tuesday to end the four-day partial government shutdown, lawmakers included language reiterating that all federal workers furloughed or forced to work without pay during the lapse receive back pay, despite renewed wrangling by the Trump administration to the contrary.

The House voted 217-214 to pass a bill funding the departments of Defense, Labor, Health and Human Services, Education, Transportation, Housing and Urban Development, State and Treasury, as well as related independent agencies, through September. The measure, which Trump signed Tuesday afternoon, also provides two weeks of stopgap funding for the Homeland Security Department, opening the door to further Senate negotiations on Democrats’ demands to curb Trump’s crackdown on immigration and dissent in American cities.

The measure includes language reiterating that agencies “shall” use funds to pay feds as outlined in the 2019 Government Employee Fair Treatment Act, a law passed in the wake of the 2018-2019 35-day partial government shutdown guaranteeing all federal workers, excepted and furloughed alike, receive back pay automatically at the end of a lapse in appropriations.

That’s because last fall, in the midst of the record-setting 43-day full government shutdown, Office of Management and Budget Director Russell Vought began insisting that GEFTA does not, in fact, guarantee federal workers back pay automatically and that Congress still must authorize back pay payments for furloughed employees.

While OMB quietly revised its shutdown guidance document for agencies to excise references to GEFTA and automatic back pay during last October’s appropriations lapse, the Office of Personnel Management’s own document issuing guidance for shutdown furloughs and other pay and benefits issues continued to state that feds would indeed receive back pay regardless of their work status during the lapse.

“After the lapse in appropriations has ended, employees who were furloughed as a result of the lapse will receive retroactive pay for those furlough periods, (See 31 U.S.C. 1341(c)(2)),” the document stated, referring to the 2019 law. “Retroactive pay will be provided on the earliest date possible after the lapse ends, regardless of scheduled pay dates.”

But in a new update dated Jan. 30, OPM deleted that language, apparently in an effort to conform to OMB’s legal interpretation of GEFTA. Federal News Network first reported on the document’s revision.

“Congress will determine via legislation whether furloughed employees receive pay for furlough periods,” OPM wrote in the guidance’s latest version. “After any congressional action, supplemental guidance may be issued to assist agencies in determining pay and service credit for such furlough periods.”

In response, Rep. James Walkinshaw, D-Va., reintroduced the True Shutdown Fairness Act, a measure previously proposed last fall to ensure all federal workers, as well as contractors, are paid on time during any lapse in appropriations between now and Sept. 30. The measure also bars federal agencies from initiating reductions in force during shutdowns, after the administration tried unsuccessfully to do so last fall.

“Federal workers and service members should never be used as leverage in Republicans’ shutdown standoffs, and the Trump administration should never be able to use a shutdown to inflict harm on our federal workforce, as we have seen,” he said in a statement. “This bill would provide critical protections by ensuring workers get paid during any fiscal 2026 shutdown, contractors can keep paying their staff, and the Trump administration would be blocked from using a shutdown as a smokescreen to purge the federal workforce through reductions in force.”

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TSP investments begin 2026 in the black

Erich Wagner — Mon, 02 Feb 2026 16:22:00 -0500

The federal government’s 401(k)-style retirement savings program began 2026 on a positive note, with each of its investment portfolios posting gains in January.

The international stocks of the Thrift Savings Plan’s I Fund sported the best performance, growing 5.94% last month. And the small- and midsize businesses of the S Fund gained 2.41% in January.

The C Fund’s common stocks reported 1.45% in growth last month, while the fixed income (F) fund increased 0.20%.

And the G Fund, which is made up of government securities, grew at its statutorily mandate rate of 0.37%.

Likewise, each of the TSP’s lifecycle (L) funds, which shift toward more conservative investments as participants get closer to retirement, finished last month in the black. The L Income Fund, designed for participants who already have begun making withdrawals, gained 1.12%; L 2030, 1.94%; L 2035, 2.19%; L 2040, 2.34%; L 2045, 2.48%; L 2050, 2.62%; L 2055, 3.11%; L 2060, 3.11%; L 2065, 3.11%; L2070, 3.11%; and L 2075, 3.11%.

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Federal retirees face new COLAs, premiums and earnings limits in 2026

Tammy Flanagan — Thu, 29 Jan 2026 15:00:00 -0500

It’s a new year, and there are new benefit amounts that take effect at the beginning of each year as well as basic pay adjustments for federal workers under the General Schedule and cost of living adjustments for retirees. There are many federal employees who have retired since Sept. 30, who have not had their retirement claims finalized, and they have been wondering about what changes they need to be aware of in the new year. For most feds, there are changes in the premiums paid for Federal Employees Health Benefits. For retirees who are working after retirement, there are also new earnings limits applied to their FERS Special Retirement Supplement and Social Security benefits.

Here is a summary of changes that are or will be taking place this year:

Pay and Retirement Benefit Adjustments

Federal employees technically do not receive cost-of-living adjustments, but instead they receive congressionally approved and often politically motivated annual pay adjustments. According to the Office of Personnel Management, the GS base pay schedule is usually adjusted annually each January with an across-the-board pay increase based on nationwide changes in the cost of wages and salaries of private industry workers. Most GS employees are also entitled to locality pay, which is a geographic-based percentage rate that reflects pay levels for nonfederal workers in certain geographic areas as determined by surveys conducted by the U.S. Bureau of Labor Statistics.

In a memo dated Dec. 18, 2025, from Scott Kupor, OPM director, it was announced that the president has signed an executive order to implement the January 2026 pay adjustments. Pursuant to the president’s alternative plan issued under 5 U.S.C. 5303(b) and 5304a on Aug. 28, 2025, the executive order authorizes a 1.0% across-the-board increase for statutory pay systems and provides that locality percentages will remain at 2025 levels. OPM has most of the 2026 pay charts available on its website. If you were an employee on the first day of the new leave year (Jan. 11, 2026, for most federal employees), your salary rate would have reflected the increase starting on this date.

Lump Sum Annual Leave Payment

If you retired earlier than Jan. 11, 2026, you may have had some of your lump sum annual leave payment paid at the new salary rate. Generally, a lump-sum payment for annual leave will equal the pay the employee would have received had they remained employed until the expiration of the period covered by the annual leave. The additional portion reflecting the 2026 pay increase may come at a later date than your initial lump sum leave payout. A lump sum payment is paid for unused annual leave only and cannot be paid for other types of leave, such as sick leave, military leave or home leave. Read more about the lump sum payment for unused annual leave on a fact sheet available at https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/lump-sum-payments-for-annual-leave/

Here are some things OPM wants you to know about this payment:

Payment may take several months due to agency processing and leave account audits.
Employees who separate from federal service should keep a copy of their final leave and earnings statement (LES) showing their leave balances and request a copy of their SF-1150, Record of Leave Data upon Separation or Transfer, for their records.
Contact your former agency’s human resources office with any questions about your lump-sum payment.
If you return to federal service before the end of your lump-sum leave period, expect to repay part of the payment and have those hours recredited to your leave balance.

Retirement Cost-of-Living Adjustments (COLA)

On the other hand, annuitants (this includes retired federal employees and entitled surviving family members of deceased federal employees and retirees) received a cost-of-living adjustment effective on Dec. 1, 2025, which should have been reflected in their benefit payable on Jan. 2, 2026. If you retired on Dec. 31, 2025, with your first annuity payment due on Feb. 1 (for the month of January 2026), you will need to wait until next January as your first COLA will be paid on Jan. 4, 2027 (the first business day in January 2027).

Annuitants who retired earlier in 2025 will receive a prorated COLA during their first year on the annuity rolls. The proration is based on the number of months between the start date of the annuity and the effective date of the COLA. For example, if a CSRS employee had retired on Dec. 31, 2024, they would have received 11/12 of the 2.8% COLA that was effective on Dec. 1, 2025, or a 2.56% increase, on Jan. 2, 2026.

FERS cost-of-living adjustments are not provided until age 62, except for disability, survivor benefits and other “special provision” retirements (i.e., law enforcement, firefighters, etc.). FERS disability retirees get the adjustment, except when they are receiving a disability annuity based on 60% of their high-3 average salary during the first 12 months of receiving disability retirement. Also, under FERS, if retirees have a CSRS component, the component is subject to the CSRS COLA calculation. FERS survivors receive the FERS increase on their entire annuity, even where there may be a CSRS component. A FERS employee who was eligible for a COLA immediately upon retirement would also receive a prorated COLA as described in the previous paragraph.

COLA increases for FERS annuitants eligible before age 62 only apply to the retiree’s basic annuity (not the annuity supplement). For spousal survivor annuitants, the COLA applies to both the basic survivor annuity and the FERS annuity supplement (payable to survivors of retirees who are under age 60). The FERS COLA payable beginning with the December 2025 annuity payment is only 2.0% due to the FERS rules that provide a “diet” COLA. If the rate of inflation is between 2% and 3%, FERS retirement benefits only receive a 2% increase.

To get the full COLA, a retiree’s annuity or a survivor’s annuity must have begun no later than Dec. 31, 2024. If not, the increase is prorated under both CSRS and FERS retirement plans. Prorated accounts receive one-twelfth of the increase each month they receive benefits. For example, if the benefit commenced between Nov. 1 and Nov. 30, 2025, the prorated COLA would be one-twelfth of the full COLA.

Social Security COLA

The 2.8% cost-of-living adjustment (COLA) will begin with benefits payable to nearly 71 million Social Security beneficiaries in January 2026.

FERS Special Retirement Supplement (SRS) Earnings Limit

FERS retirees receiving an annuity supplement are subject to an earnings test. In the spring, around May, OPM sends an annual survey to annuitants who receive the SRS, so they can report their earnings from the previous year. The annuity supplement will be reduced effective with the July 2026 FERS annuity payment (payable on Aug. 1) if the earnings were more than the limit established for the prior year by the Social Security Administration. The reduction is $1 for every $2 earned over the minimum level.

Social Security Earnings Limit

Work earnings before the full retirement age (FRA) (67 if you were born in 1960 or later) can affect your Social Security benefit payment. If you said you’d keep working when you applied, Social Security will send you a form each year to estimate your earnings. If you’re younger than your FRA during all of 2026, Social Security must deduct $1 from your benefits for each $2 you earn above $24,480 (2026 earnings limit). If you reach full retirement age in 2026, they will deduct $1 from your benefits for every $3 you earn above $65,160 until the month you reach full retirement age. If you will have earnings over the limit, notify Social Security immediately to avoid a large overpayment of your Social Security benefits. If you receive too much in benefits, Social Security will send you information regarding the options for repaying the amount owed.

Maximum Taxable Wage for Social Security Old Age Survivors and Disability Insurance (OASDI; aka FICA)

The OASDI tax rate for wages paid in 2026 is set by statute at 6.2% for employees and employers, each. If you earn wages equal to or larger than $184,500, then you would contribute $11,439.00 to the OASDI program in 2026, and your employer would contribute the same amount. The OASDI tax rate for self-employment income in 2026 is 12.4%.

Medicare

If you plan to enroll in Medicare Part B and you missed your Initial Enrollment Period at age 65, there is a General Enrollment Period every year between Jan. 1 and March 31. Part B coverage will start the month after you sign up. You might have to pay a permanent late enrollment penalty if you don’t qualify for a Special Enrollment Period. Medicare premium for Part B is increased 10% for each full 12 months during which you could have been, but was not, enrolled.

The standard monthly premium for Medicare Part B enrollees will be $202.90 for 2026, an increase of $17.90 from 2025. You’ll pay a higher premium for Part B if your modified adjusted gross income, as reported on your IRS tax return from 2024, was more than $106,000 if you file an individual tax return or more than $212,000 if you are married and file a joint tax return. Most people pay the standard rate; however, the Income Related Monthly Adjustment Amount (IRMAA) is an extra charge added to the premium for higher earners.

Federal Employees Health Benefits

The new rates for your FEHB plan take effect on Jan. 11, 2026, for most federal employees. However, the rates for retirees and Postal employees took effect on Jan. 1 and will be adjusted in the CSRS or FERS benefit that you receive on Feb. 1 (which is your January annuity payment).

Thrift Savings Plan

Roth in-plan conversions are now available in My Account — Beginning this month, a Roth in-plan conversion option is available in My Account. Roth in-plan conversions allow you to convert money from your traditional (pre-tax) balance to a Roth (after-tax) balance within your TSP account. If you don’t already have a Roth TSP balance, your first conversion will automatically create one.

Before you decide to do a Roth in-plan conversion, it’s important to consider the current and future effects on your taxes. When you convert pre-tax money to Roth, the conversion amount becomes part of your taxable income for the year, which could increase your tax rate. You’ll need to pay taxes on the conversion amount using personal funds from another source, such as a savings account. You cannot use part of the amount you’re converting to pay taxes. It is strongly recommended that you consult a tax advisor before making a Roth in-plan conversion as this action can have a significant impact on your taxes. Once you do a conversion, you cannot reverse it or change it. A tax advisor can help you decide if a conversion makes sense for your situation.

The annual elective deferral limit (i.e., limit on employee contributions) for 2026 is $24,500, and the catch-up contribution limit for employees turning 50 in 2026 or older increased by $500 to $8,000. If you turn 60, 61, 62 or 63, in 2026, the IRS gives you an even higher catch-up limit of $11,250. In the year you turn 64, the limit returns to the regular catch-up amount. These limits apply to your contributions and do not include matching or automatic government contributions. If you’re turning 50 or older and exceed the IRS elective deferral limit, then your contributions will automatically start counting toward the IRS catch-up limit. If you earned more than the IRS income threshold ($150,000 in 2026, unchanged from 2025, adjusted annually for inflation) and your total contributions exceed the elective deferral limit, those additional contributions — catch-up contributions — must be Roth.

In mid-January, the TSP will mail IRS Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to participants who received a withdrawal between Jan. 1 and Dec. 27, 2025, and/or a taxed or foreclosed loan between Jan. 1 and Dec. 31, 202. Withdrawals processed after noon on Dec. 29 are taxable income for 2026. A copy of your 2025 Form 1099-R will also be available in your My Account secure participant mailbox by mid-February. If needed, corrected forms will be issued within three weeks of verifying the correction. It is a good idea to consult a qualified tax advisor or the IRS for questions about filing your taxes.

TSP life expectancy installments will be recalculated according to required updates to the assumptions used to determine those amounts. In early January, the TSP will send notices with more information, including recalculated amounts, to participants receiving life expectancy installments. Notices will go out based on participants’ delivery preferences on file (by mail or online through the secure participant mailbox in My Account).

In early January, the TSP will send RMD calculation notices to separated participants who will be 73 and older in 2026 and to spousal beneficiaries with RMDs due for the 2026 calendar year. Notices will go out based on participants’ delivery preferences on file (by mail or online through the secure participant mailbox in My Account). If you haven’t done so already, the TSP encourages you to add direct deposit information in My Account to receive your money quickly and easily.

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How federal employees can protect a spouse in retirement

Neil Cain — Wed, 28 Jan 2026 07:00:00 -0500

Updated at 2:59 p.m. on Jan. 29

Planning for retirement involves more than picking a last working day or exploring new goals and hobbies. It also means understanding how your retirement choices affect your spouse if unexpected events arise.

Federal retirement systems—including Social Security, Federal Employee Health Benefits, the Thrift Savings Plan and federal pensions—are complex and highly interconnected. Decisions made years before retirement can significantly affect a surviving spouse’s financial stability, access to healthcare and administrative burden.

Below are key areas federal employees should address well before retirement to protect their spouse.

Ensure both spouses understand the retirement plan
In many households, one spouse takes primary responsibility for financial decisions. While common, this approach can create risk if retirement planning depends entirely on one person’s knowledge.

Both spouses should be familiar with:

Who manages your financial life
Primary income sources in retirement
Key benefit elections
Major accounts and where they are held

For example, a federal employee who managed all accounts and benefits passed away shortly after retirement. Their spouse, who had never interacted directly with FEHB, TSP or pension systems, faced time-sensitive decisions regarding survivor benefits, tax withholding and healthcare coverage. Although assets were sufficient, the lack of shared knowledge led to delays and missed opportunities, permanently affecting income and benefits.

Shared understanding of the plan is critical for smooth transitions in the event of a spouse’s death.

Avoid the widow’s penalty with smart federal tax planning
Discussions about death are uncomfortable, but planning ahead for the financial realities a surviving spouse may face is essential—particularly for federal employees and retirees.

After a spouse passes, the survivor typically moves from married filing jointly to single filing status, which can lead to higher marginal tax rates and reduced deductions. Meanwhile, certain sources of income—such as a federal pension, TSP withdrawals or Social Security—may be reduced or eliminated.

This combination of lower income and higher taxes is known as the “widow’s penalty.”

Strategies to reduce its impact
Advance tax planning can help mitigate the widow’s penalty. Federal employees can:

Manage the timing and type of retirement income
Consider Roth conversions earlier in retirement
Coordinate Required Minimum Distributions to avoid large tax spikes

While taxes cannot be eliminated, proactive planning reduces the likelihood of a surviving spouse facing a significant, unexpected increase.

Optimize Social Security timing for survivor protection
For married federal employees, Social Security planning is about more than maximizing benefits—it’s about ensuring long-term income for a surviving spouse.

When one spouse passes, the surviving partner generally keeps the higher of the two Social Security benefits. The higher-earning spouse’s claiming decision directly affects survivor income.

For federal employees, Social Security decisions often interact with federal pensions, including Civil Service Retirement System or Federal Employee Retirement System. The Windfall Elimination Provision (WEP) no longer reduces benefits, having been repealed under the Social Security Fairness Act for payments after 2023. Some retirees may still see survivor benefits affected by the Government Pension Offset (GPO).

Delaying Social Security benefits can meaningfully increase the survivor’s lifetime income. Coordinating Social Security with pension payouts and other retirement accounts can maximize protection for a spouse.

Since claiming decisions are permanent, it’s essential to assess both spouses’ benefits, income needs and federal retirement factors carefully.

Choosing the right pension survivor option
Pension elections are permanent and highly consequential. One of the key choices is the survivor annuity, which can directly impact a spouse’s financial security and FEHB coverage after the employee’s death.

A surviving spouse often must be entitled to a survivor annuity to continue FEHB coverage. FEHB continues only if the retiree was enrolled at death and the surviving spouse is eligible for a survivor annuity. While reducing or skipping the survivor benefit increases the monthly pension, it introduces long-term risks that can jeopardize healthcare and income.

What a survivor benefit provides

Ongoing pension income: Guaranteed monthly payments after death
Continued FEHB eligibility: Maintains health coverage without disruption
Financial stability during transitions: Helps cover daily expenses, medical costs and retirement obligations

Key considerations

FEHB coordination: Survivor coverage often hinges on a pension survivor election
Spousal age and health: Younger or less healthy spouses increase the value of survivor benefits
Pension offsets and Social Security: For CSRS retirees, GPO can reduce Social Security survivor benefits; a survivor annuity can partially offset the loss
Permanent election: Survivor elections are usually permanent, though marriage, divorce or remarriage can allow changes within set OPM time limits. New spouses can be added within two years of marriage, with corresponding annuity adjustments.

Evaluate whether life insurance still makes sense
Many federal employees assume life insurance is unnecessary after retirement. In reality, the need depends on financial risk, not age.

Life insurance may still be valuable if:

Your spouse would lose significant income at your death
You elected a reduced pension survivor benefit
You want to replace lost pension or Social Security income
You need liquidity for taxes, debts or estate planning

The role of FEGLI
Federal retirees can continue Federal Employees’ Group Life Insurance coverage, which can:

Supplement a reduced pension survivor benefit or Social Security
Provide liquidity for estate taxes, debts or unexpected expenses
Fill gaps that pensions or Social Security alone may not cover

Planning tips

Evaluate before retirement: Costs and coverage options are generally better before retirement
Focus on risk, not age: Decisions should be based on exposure, such as income replacement needs
Coordinate with federal benefits: FEGLI, survivor annuities and Social Security interact—reviewing all together ensures long-term protection

Protection is a process, not a one-time decision
Protecting a spouse in retirement is not a single decision, but a coordinated approach across:

Income planning
Tax strategy
Benefit elections (FEHB, pensions, Social Security)
Insurance (FEGLI or private life insurance)
Estate planning

When one piece is overlooked, the entire system becomes more vulnerable.

Retirement planning does not need to be perfect. What matters most is building a coordinated strategy that ensures both spouses are protected and that benefits and resources can support either partner when they are needed most.

CORRECTION: An earlier version of this article incorrectly stated that the Windfall Elimination Provision (WEP) still applies; the story has been updated to reflect its repeal for benefits payable after 2023 and to clarify survivor FEHB rules.

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Could this be true?

Tammy Flanagan — Thu, 22 Jan 2026 16:32:00 -0500

I’ve been hearing from recently retired federal employees who are trying to sort out their benefits as the dust begins to settle on their new “annuitant” status. Here are some recent rumors that have been floating around the internet that suggest that there is confusion surrounding the sudden retirement that occurred for many federal workers who jumped on board the Deferred Resignation Program bandwagon. Many of these employees had little time to prepare, and most did not receive adequate retirement counseling or education. Here are some of the rumors that I’ve seen in recent weeks:

Retirement Processing

Rumor: The Office of Personnel Management has not been communicating the status of the progress of the retirement claims that have not been finalized yet.

Solution: It is true that sometimes there will be a deposit into your bank account with little, if any explanation before or on the day of the deposit. This can be the deposit of your lump sum annual leave payment (this payment is generated by your former agency’s payroll provider) or your first “interim” retirement payment from OPM. Eventually, you may receive your final leave and earnings statement or be granted access to OPM’s Services Online system that will help you understand the source and accounting of these “stealth” deposits.

In the meantime, it helps if you know what to expect. For that, OPM has published a “Quick Guide to Retirement Processing” that begins with setting your retirement all the way to your retirement being finalized with the deposit of your first regular retirement payment.

Some other things to remember including:

OPM may send you information by U.S. Mail, and you may also receive an email or even in some cases, a phone call. Respond quickly to any requests for additional information. Keep copies of anything you send to OPM and any communications you have by email or phone. Be sure to keep your address and other personal information current on OPM’s Services Online system. To learn more about OPM Services Online, visit “My Annuity and Benefits”

If you haven’t received your lump sum payment for unused annual leave or your final SF 50, Notification of Personnel Action stating the effective date of your retirement, your Civil Service Active number from OPM, or your last paycheck hasn’t been paid, then there is a good chance that OPM hasn’t received your retirement for processing yet. You may need to contact your former agency to get an update on the HR and Payroll processing status.

Communicating with OPM

Rumor: When calling OPM Retirement Services, they will not answer the phone and will disconnect the call without even allowing you to stay on hold.

Solution: OPM has the following listed for contacting Retirement Services by phone: Call us if you can't find an answer to your question on OPM.gov or if you can't sign in to OPM Retirement Services Online to manage your annuity account. You may also need to call us for special or complex cases, or because we directed you to.

Phone: 1-888-767-6738
TTY: 711

Hours: Monday thru Friday, 7:40 a.m. to 5 p.m. EST
Closed on federal holidays

Our busiest time is between 10:30 a.m. and 1:30 p.m. EST.

The OPM Office of the Inspector General has a planned audit for 2026 of OPM Retirement Services.

It is true that sometimes when the phone lines are jammed, the call will disconnect without allowing the caller to remain on hold. The suggestion is to call back in 30 minutes to see if the lines have opened and allow the caller to remain on hold. Put your speaker on and do something else while you wait; it may be a while! The best suggestion is to call as close to 7:40 am EST as possible. No guarantee, but you may be able to be on hold for less than 45 minutes, and you might not be disconnected.

Customer service at OPM has been cited for improvement by the OPM Office of the Inspector General as reported in The U.S. Office of Personnel Management’s Top Management Challenges for Fiscal Year 2026 recent report. It was reported that while Retirement Services works to decrease the processing time of retirement applications and enhance the customer service experience for annuitants, the OIG is concerned that a reduced workforce—more than 100 Retirement Services staff lost due to the deferred resignation program, regular retirements and hiring action cancellations—could affect Retirement Services’ progress and its ability to continue to respond to the roughly 6,000 calls received daily. Specifically, the report stated:

Customer service remains an issue for OPM’s retirement operations. Reporting in the Washington Post anecdotally described customer service issues similar to those the OIG has identified as a top challenge for OPM in previous reports. In previous top management challenge reports, we identified lack of resources as a contributing factor to this issue. Annuitants, and especially survivor annuitants, often call the OIG Hotline when they are frustrated with their inability to obtain help with their retirement issues due to long hold times in Retirement Services.

Since January 2025, the OIG has received more than 250 customer service-related hotline complaints that we referred to Retirement Services. About 20 percent of the hotline complaints that the OIG receives regarding retirement customer service are for a lack of response from the OPM program office. As of August 26, 2025, we have approximately 30 complaints that have, to our knowledge, not received an OPM response more than 100 days after we provided the information to the Retirement Services program office.

With the surge of retirees from the Deferred Resignation Program, as well as the increased use of Voluntary Separation Incentive Payments and the Voluntary Early Retirement Authority contributing to the overall shrinking of the federal workforce by approximately 300,000 employees (or 12.5 percent), OPM must anticipate and prepare for increases in customer service contacts as it seeks to continue to serve annuitants.

FEHB Coverage Requirements

Rumor: OPM did not process Open Season changes for recent retirees who retired during or right before the 2025 Open Season.

Solution: Hopefully, this problem has been solved by now. If not, immediately contact OPM to let them know the change that you were trying to make during the Open Season to be sure your agency notified OPM properly. There was a delay in processing some Health Benefit changes for annuitants. According to the National Active and Retired Federal Employees Association (www.narfe.org), OPM shared that Open Season changes would be processed by Jan. 16 with coverage backdated to Jan. 1. If someone needs to use their health benefits and has not received their card yet, they can pay out of pocket and submit a reimbursement to their new insurance carrier once they get their card information. The annuity adjustment statements will be like the 1099Rs… they will email those out to all annuitants for whom OPM has an email address. They will send via mail to those for whom OPM does not have an email. Their adjusted statement is also available in their Retirement Services Online account at www.opm.gov/rso.

OPM canceled health insurance coverage for many employees

Rumor: OPM canceled health insurance for some recent retirees. One employee who retired on Sept. 30 under the Deferred Resignation Program received notice that her health insurance was canceled by OPM because she only had FEHB coverage for four years and 10 months. Before retirement, she was assured that her coverage would continue. Is she going to be covered?

Solution: At retirement, your employing office will tentatively determine if you are eligible to continue enrollment. OPM will review the retirement and health benefits documents and make a final determination of eligibility to continue the FEHB enrollment into retirement. If you feel that you don’t have FEHB and you have retired recently, immediately contact your former agency's HR office first and submit a Request for Reconsideration with OPM if you have been told that you are no longer covered under FEHB https://www.opm.gov/retirement-center/publications-forms/pamphlets/ri38-47.pdf. According to the Office of Personnel Management’s Guide to Voluntary Early Retirement Regulations :

An agency offering VERA or VSIP may be covered by a waiver of the usual participation requirement to continue health benefits into retirement.

To continue federal health insurance into retirement, employees must generally meet a requirement of being enrolled in the Federal Employees Health Benefits Program for at least 5 years prior to retirement, or since their first opportunity to enroll. Otherwise, the employee must request that OPM waive the 5-year participation requirement.

The agency's benefits officer can assist employees in requesting a waiver from OPM. The benefits officer can also determine if an employee who is retiring from an agency with current VERA or VSIP authority is eligible for a blanket waiver of the 5-year participation requirement under Benefits Administration Letter (BAL) 04-208, dated Sept. 8, 2004, titled “Federal Employees Health Benefits Program: Participation Requirements for Employees Retiring During a Period of Voluntary Separation Incentive Payments or Voluntary Early Retirement Authority.”

According to BAL 04-208: OPM will grant pre-approved waivers to employees who have been:

Covered under the FEHB Program continuously since the beginning date of the agency’s latest statutory VSIP authority, or OPM-approved VSIP or VERA authority; and

Retire during the statutory VSIP or OPM-approved VSIP/VERA period; and

Receive a VSIP; or

Take early optional retirement; or

Take discontinued service retirement based on an involuntary separation due to RIF, directed reassignment, reclassification to a lower grade or abolishment of position.

Her agency should have provided a memo to OPM that accompanied her retirement application stating that the employee meets the requirements for a pre-approved waiver by OPM as set forth inOPM’s specific instructions to the agency.

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Defense Department set to issue new civilian employee awards by end of the month

Carten Cordell — Wed, 21 Jan 2026 07:00:00 -0500

By the end of the month, the Defense Department’s top civilian employees will likely get a sizable one-time bump in their paychecks.

In an effort to recognize and retain its top civilian employees, Defense Secretary Pete Hegseth directed the DOD’s component agency heads and principal staff assistants to designate monetary awards for the top 15 percent of performers in each of their agencies.

The awards, outlined in a Dec. 15 memo and expected to be issued by Jan. 30, would be 15% to 25% of an employee’s basic pay, up to $25,000. The awards’ funding would come from each component agency’s budget under their respective awards authorities for their employee pay systems, such as the Senior Executive Service, Senior Professional, General Schedule, Federal Wage System and alternative personnel systems.

Hegseth said in the memo that the awards are meant to both recognize the DOD civilian workforce’s resilience during the new administration’s transition and the “severe strain” it had been put under during last year’s 43-day government shutdown.

“I am enormously grateful for the incredible contributions of our entire civilian workforce, and I am proud to work with everyone in the Department, military and civilian, in defending our Nation,” he said in the memo.

Who gets the awards and how much will be allotted will be determined by each component agency’s leader, in coordination with their financial management and comptroller groups for budget planning.

Hegseth also said that if components want issue awards beyond the 15% threshold, they can reallocate internal budget resources to do so.

The memo follows other recent high-performer retention incentives outlined by the DOD last year, coupled with a 5% to 8% reduction of its civilian workforce, or roughly 61,000 employees as part of a broader reorganization of the department.

Because the awards are considered personnel actions, recipients likely won’t be made public.

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Lawmakers propose 35% pay raise for federal prison workers

Erich Wagner — Fri, 16 Jan 2026 17:16:14 -0500

Lawmakers from both parties and chambers of Congress this week introduced legislation that would institute a 35% pay raise for employees at the U.S. Bureau of Prisons, in a bid to counter longstanding staffing shortages at federal correctional institutions.

For years, federal prisons have suffered chronic understaffing due to low pay and their location in often remote areas, leading to overuse of mandatory overtime and temporarily detailing support staff to correctional duties, a phenomenon known as “augmentation.” Though many prisons had employed retention incentives to boost workers’ pay by 10% to 25%, around 23,000 employees lost those payments when the bureau cancelled them last year, citing budget constraints.

Workers at the bureau were among the federal employees to receive a 3.8% pay raise this month, as part of a 2.8% supplemental pay raise for federal law enforcement.

The Federal Correctional Officer Paycheck Protection Act (S. 3626 and H.R. 7033), introduced by Sens. Jeanne Shaheen, D-N.H., and David McCormick, R-Pa., in the Senate and Reps. Dan Goldman, D-N.Y., Rob Bresnahan, R-Pa., and Maggie Goodlander, D-N.H., would set a 35% special salary rate increase for all Bureau of Prisons correctional staff, whether they are employed under the General Schedule, the GS Law Enforcement Officer or the Federal Wage System pay scales.

The bipartisan bill would remain in effect until the Justice Department inspector general can affirm that the agency has demonstrated “measurable progress” in reducing its reliance on augmentation and mandatory overtime.

“[Federal Correctional Institution] Berlin [in New Hampshire] has dealt with workforce challenges that have forced a thinly stretched staff to work unreasonable hours just to help maintain daily operations and make ends meet,” Shaheen said. “It’s untenable—and there’s more we can do to support the Granite Staters working to keep our communities safe and provide for their families. Persistent and often dangerous staffing shortages at federal prisons nationwide cause safety concerns for BOP personnel and incarcerated individuals alike.”

“Our correctional officers . . . have been asked to do more with less for far too long, and it’s not sustainable,” Bresnahan said. “This legislation provides a long-term fix that will help bring in new officers, keep experienced staff on the job, and cut the reliance on mandatory overtime, making our prisons safer for everyone.”

Brandy Moore White, national president of the American Federation of Government Employees’ Council of Prison Locals, urged lawmakers to prioritize the bill’s advancement.

“This reform is critical,” she said. “It will align BOP compensation with federal law enforcement standards, stem the loss of experienced officers, and attract qualified applicants in an increasingly competitive hiring market. Most importantly, it will help restore safe staffing levels across federal institutions, reduce violence, protect staff and ensure mission readiness.”

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How federal retirement benefits are calculated and where estimates go wrong

Tammy Flanagan — Thu, 15 Jan 2026 15:00:00 -0500

In 2017, I wrote a column about factors that contribute to an accurate retirement estimate that I think is worth repeating this week. I have been learning about employees who have had to retire with very short notice who have not had time to do careful retirement preparations and are worried that they are not receiving the correct amount of their retirement benefit. If you have not taken the DRP and are planning to stay in federal service longer, it is time to begin planning and preparing now. Sometimes opportunities arise that do not allow time to do the preparations that provide you with the peace of mind of knowing how much your retirement will be worth.

The two main factors that affect the value of your federal retirement benefit are your high-three average salary and your length of creditable service. The first is straightforward, but the second can get confusing.

If all federal employees ended their careers exactly 30 or 40 years after they started, figuring length of service would be easy. But, of course, that is often not the case. Here are some complicating factors in calculating length of service:

• Documentation of your beginning and ending dates of federal service may be missing from your electronic Official Personnel Folder (eOPF). Solution: Review your eOPF to locate documents such as an SF 50, Notification of Personnel Action form, that indicates your date of entry in federal service and any changes to your employment such as a change in work schedule, a break in service, or a change in your retirement coverage. If you are unable to find documentation that clearly shows these important pieces of information, schedule an appointment to discuss your concerns with a retirement specialist in your human resources office.

• If you have completed active-duty military service, ensure that these periods are accurately documented and recognized for purposes of retirement eligibility and calculation. Remember that military service credit deposits must be completed before you separate from your federal career.

• You may owe money to the retirement fund if you have had a break in service and withdrew your retirement contributions from CSRS or FERS, or if you had a period of federal employment when you were not covered under CSRS or FERS. “Non-deduction” service may be credited if you pay a deposit payment. However, non-deduction service performed after 1988 is not creditable under FERS, and there is no option to pay a deposit to make this time count toward eligibility or computation of the FERS basic retirement benefit.

• Change in retirement coverage from CSRS to FERS or FICA to FERS or CSRS to CSRS Offset — or worse yet, an undiscovered error in your retirement coverage determination.

• If you had a change in your work schedule, such as from full time to part time. An intermittent (or “when actually employed”) work schedule or periods of leave without pay lasting longer than six months can change your length of service calculation.

For more information on creditable service, see Chapter 20 of the CSRS and FERS Handbook for Personnel and Payroll Offices and Chapter 21 for creditable military service. But due to the potential to misinterpret this guidance, decisions regarding creditable service and computation of unpaid deposits are best left to human resources professionals who can assist you in determining what counts and what does not.

Agencies should, and often do, address deposits and redeposits when employees are first hired. It is important for new hires to know how their past federal civilian and military service can be used in their future retirement benefit.

If you have a complicated service history, you should be proactive and contact a retirement specialist in your human resources office. They can help you find out how much you owe for a service credit deposit and learn about the impact to your future retirement if you leave the deposit unpaid. If there are missing service records from past appointments, it is important to address these issues early, if possible, to avoid unnecessary delays when you are ready to retire.

As important as it is to have your retirement accurately calculated, it is also critical to address the reductions and withholdings that will take your gross retirement benefit to a net amount that can be substantially less than you might have expected. Consider the following potential reductions:

• Age reduction: Reduction for age when retiring under early deferred retirement or MRA plus 10 provisions.

• Survivor reduction: Reduction to provide a survivor annuity to a spouse and or former spouse(s), and or reduction to provide a survivor annuity to a person with an insurable interest.

• Alternative annuity reduction: Reduction because of an alternative annuity election. See Chapter 53 of the CSRS and FERS Handbook for information about election of an alternative annuity.

Also, consider the following potential withholdings from your monthly retirement benefit:

• Federal income tax
• State income tax

Insurance:
• Federal Employees Health Benefits (FEHB) or Postal Service Health Benefits (PSHB)
• Federal Employees Group Life Insurance (FEGLI)
• Federal Employees Supplemental Dental and Vision Insurance Program (FEDVIP)
• Federal Long-Term Care Insurance Program (FLTCIP)

If you are nearing retirement, it is a good idea to explore any service credit issues with a retirement specialist to be sure there will not be any snags in the processing of your future retirement benefit. It is a lot better to correct a problem while you are receiving a paycheck every two weeks rather than when you are waiting for your retirement claim to be finalized.

In this time of massive agency downsizing and reorganization, it can be difficult to find someone knowledgeable and available to assist in your retirement preparations. Here is where you can find some resources that may help, including videos, pamphlets and publications.

Visit OPM for the agency benefits officers database, which may be helpful in locating your retirement specialist. If you need additional assistance, you may contact one of our experienced retirement and insurance professionals at www.retirefederal.com.

If you are looking for financial guidance to determine if you can afford to retire or whether this is a good time to consider TSP distributions or filing for Social Security benefits, you may also require assistance from a financial or tax adviser. You can learn more about working with these professionals at the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

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