Government Executive - Authors - Tammy Flanagan

Federal retirees face more than a COLA change in 2027

Tammy Flanagan — Thu, 15 Oct 2026 15:00:00 -0400

If you’re retired from federal service, a bigger benefit check in 2027 is welcome news. But how much more you’ll get depends on your retirement system, and there are other changes on the horizon that could affect your bottom line.

The cost-of-living adjustment announced this week is 3.6% for CSRS annuities, Social Security benefits, military retirement benefits and VA disability benefits. Eligible FERS annuities will get a smaller 2.6% increase. Here’s what that means for your retirement check.

CSRS retirement and survivor benefits

If you receive a CSRS annuity, your monthly payment will increase by 3.6%. A $4,000 monthly annuity, for example, would go up by about $144, bringing it to approximately $4,144 before deductions. Survivor annuities get the same adjustment, though your first COLA may be prorated based on how many months you’ve been on the annuity roll.

FERS Retirement and Survivor Benefits

Because the COLA is more than 3%, eligible FERS annuitants receive the COLA rate minus one percentage point. The 2027 FERS COLA is therefore 2.6%, not 3.6%. For example, a $3,000 monthly FERS annuity would increase by about $78, to approximately $3,078 before deductions. The FERS spousal Basic Employee Death Benefit is adjusted by the full 3.6% CSRS COLA to approximately $45,377.34 up from $43,800.53 in 2026. The official announcement will be reported by OPM later. This is in addition to one-half of the final annual pay (or average pay, if higher).

COLA increases for FERS annuitants only apply to the retiree’s basic annuity (not the annuity supplement). For survivor annuitants, COLA applies to both the basic survivor annuity and supplement (if payable) annuity. The COLA increase is prorated according to the annuity commencing date during an annuitant’s first year on the annuity roll. This provision applies to FERS annuitants who are eligible for an “immediate” COLA at retirement. Not all FERS annuitants will receive an immediate FERS COLA. FERS COLAs generally do not apply to annuitants who are under age 62 as of Dec. 1, 2025, except for:

Spouse, former spouse, or insurable interest survivor annuitants;
Certain disability annuitants;
Those who retired under the special provisions for law enforcement officers, firefighters, and Capitol Police;
Those who retired under the special provisions for air traffic controllers; and
Those who retired under the special provision for military reserve technicians (age 50, 25 years of service) because they ceased to quality for military membership on account of disability;

FERS disability annuitants receiving the 60% rate during their first year on the disability roll will not receive a COLA increase.

FERS retirees may want to pay attention to proposed legislation, H.R. 491 /S.624: Equal COLA Act that would provide full cost-of-living adjustments, based on the relevant change in consumer prices, to Federal Employees Retirement System annuities. Don’t get too excited about this proposal, however, according to GovTrack.us, this bill is in the first stage of the legislative process. It was introduced by Congress on Jan. 16, 2025, and has only a nine percent chance of passing at this time.

FERS Annuity Supplement Earning Limit

FERS annuitants receiving an annuity supplement are subject to an earnings test. The annuity supplement is reduced if the annuitant earns more than the exempt amount of earnings set forth each year by the Social Security Administration. The Social Security earnings limitation for 2027 is $25,560.00. If a FERS annuitant earns more than this amount, annuity supplement will be reduced by $1.00 for every $2.00 earned over the minimum level unless the annuitant retired under the minimum retirement age and retired under one of the special provisions related to these specific employee populations: law enforcement officers, firefighters, air traffic controllers, military reserve technicians separated for loss of military membership. The 2026 earnings survey will be sent to current retirees in the spring of 2027. The earnings limit for 2026 is $24,480.

Interest Rate for Service Credit Deposits

The official 2027 variable interest rate for FERS and CSRS service credit deposits has not yet been released by the Treasury Department or the Office of Personnel Management (OPM). Treasury typically calculates and announces this specific retirement-related interest rate in late November or December for the upcoming calendar year. The 2026 variable interest rate is 4.25%.

Social Security

Social Security retirement, survivor, and disability benefits will increase by 3.6% beginning with benefits payable in January 2027. The Social Security Administration estimates that the average retired-worker benefit will rise from $2,095 to $2,170 per month—an increase of about $75. The exact change for an individual may differ slightly because Social Security applies the annual COLA to the Primary Insurance Amount determined at the Normal Retirement Age (67 if born in 1960 or later). If you choose to retire earlier, your benefit will be lower than your PIA. On the other hand, if you choose to retire after you reach your normal retirement age, your benefit will be higher than your PIA.

Other 2027 Amounts That Change

Social Security taxable maximum wage for the 6.2% FICA tax increases from $184,500 to $192,300.

One credit of coverage is earned if Social Security covered wages $1,970 in 2027, up from $1,890 in 2026 (four credits earned if wages are $7,880 or more in 2027).

Retirement earnings test: the annual limit for beneficiaries under normal retirement age increases to $25,560; the limit for the year a beneficiary reaches full retirement age increases to $67,920 for earnings before the month in the year when the normal retirement age is reached.

Medicare Costs, Part B Premiums, and IRMAA

The 2027 standard Medicare Part B premium, annual deductible, and income-related monthly adjustment amounts have not yet been officially announced. CMS generally releases the following year’s figures in late October or November; for example, the 2026 amounts were released on November 14, 2025. After the 2027 figures are issued, Social Security will generally send beneficiaries a notice in November or early December showing the new benefit amount, Medicare deductions, and net payment beginning in January.

How the Standard Part B Premium Is Calculated

The Part B premium is calculated separately from the Social Security COLA. The Centers for Medicare and Medicaid Services (CMS) actuaries estimate the coming year’s costs for physician and outpatient services, durable medical equipment, certain home health services and physician-administered drugs, expected use of services, medical-price changes, administrative expenses, and a contingency margin. The standard beneficiary premium is generally intended to finance about 25% of projected Part B costs, with federal general revenues financing approximately 75%. Because it is based on Medicare’s projected costs rather than COLA, the premium can rise by more or less than 3.6%. According to the 2026 Medicare Trustees Report, the estimated standard monthly premium for Part B in 2027 will be $209.50.

How IRMAA Is Determined

Income Related Monthly Adjustment Amount (IRMAA) is an additional charge for higher-income beneficiaries enrolled in Part B or Part D. Social Security generally uses modified adjusted gross income reported by the IRS for the tax year two years before the premium year. Therefore, 2027 IRMAA will ordinarily be based on the beneficiary’s 2025 federal tax return. For this purpose, modified adjusted gross income is adjusted gross income plus tax-exempt interest.

Social Security compares that income with statutory brackets for the beneficiary’s tax-filing status. Part B IRMAA tiers increase the beneficiary’s share of program costs above the standard level—generally to approximately 35%, 50%, 65%, 80%, or 85%. Part D uses separate monthly adjustment amounts for the same income tiers, added to the premium charged by the beneficiary’s drug plan. The exact 2027 income thresholds and adjustment amounts will be known only when the official tables are released.

General Pay Adjustment for Active Federal Employees

Active federal employees may also hear the term annual pay adjustment, but that adjustment is separate from the COLA for CSRS and FERS annuitants. Retiree COLAs are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, while General Schedule pay adjustments follow a different process intended to reflect changes in private-sector wages and geographic pay differences. 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 non-Federal workers in certain geographic areas as determined by surveys conducted by the U.S. Bureau of Labor Statistics.

Under the statutory process, January General Schedule pay has two potential components. The first is an across-the-board adjustment to the GS base-pay schedule, normally derived from the Employment Cost Index for private-industry wages and salaries, measured from the third quarter of one year to the third quarter of the next, minus 0.5 percentage point. The second is locality pay, based on Bureau of Labor Statistics comparisons of federal and nonfederal salaries for comparable levels of work in each locality pay area. The Federal Salary Council reviews the data and makes recommendations to the President’s Pay Agent, which consists of the Secretary of Labor and the directors of OMB and OPM.

The statutory formulas do not necessarily become the actual pay increase. Congress may establish a different amount through legislation, and the President may issue an alternative pay plan when economic conditions or a national emergency make the statutory adjustments inappropriate. The final rates are generally implemented by a presidential executive order near the end of the calendar year, after which OPM publishes the official pay tables.

For January 2027, the president announced an alternative pay plan freezing General Schedule base and locality rates at their 2026 levels. Accordingly, most covered federal employees are scheduled to receive no general across-the-board or locality-pay increase for 2027 unless subsequent legislation changes that result. This pay freeze does not prevent an employee from receiving a within-grade increase, promotion, or other individually applicable pay action.

A separate exception is planned for designated federal law enforcement personnel. OPM has been directed to use special salary-rate authority to provide a 3.8% increase for covered positions, with final occupational and agency coverage to be announced in the special-rate tables. Special salary rates are used to address significant recruitment or retention problems and are generally treated as basic pay for purposes such as retirement deductions, overtime and certain percentage-based incentives.

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Don’t let 5% become your TSP retirement strategy

Tammy Flanagan — Thu, 08 Oct 2026 15:00:00 -0400

Should you lower your TSP contributions before retirement? A 5% contribution can secure the full FERS agency contribution, but that does not necessarily make it the best choice for employees nearing retirement. Here’s what to weigh before changing your contribution rate, from taxes and cash flow to long-term savings.

TSP considerations when you are near retirement

Today’s column was inspired by a recent email from an employee who is nearing retirement and wants to know some of the pros and cons of reducing her TSP contributions to 5%, which is the amount that is subject to agency matching.

For federal employees covered by the Federal Employees Retirement System (FERS), contributing 5% of basic pay to the Thrift Savings Plan (TSP) generally captures the full agency contribution. The first 3% is matched dollar-for-dollar, and the next 2% is matched at 50 cents on the dollar.

Combined with the Agency Automatic 1% Contribution, an employee who contributes 5% receives agency contributions equal to 5% of basic pay. That makes 5% an important floor, but not necessarily the ideal ceiling.

For an employee who is retiring in late 2026 or spring 2027, the decision to contribute more turns on the balance between current cash needs, taxes and the long-term value of additional retirement savings.

That decision begins with the annual contribution limits. For 2026, the employee elective-deferral limit is $24,500, shared by traditional and Roth employee contributions. Participants who are at least 50 may also make catch-up contributions: up to $8,000 for most eligible participants or $11,250 for those who turn 60, 61, 62 or 63 during 2026. Agency automatic and matching contributions do not count against the $24,500 employee limit.

Because these limits can change from year to year, employees who are not retiring in 2026 should watch for the annual update. The IRS reviews the limits using cost-of-living adjustments tied to the Consumer Price Index (CPI), as required by federal law.

When inflation warrants an increase, the contribution caps rise in statutory increments, such as the $1,000 increase in the elective-deferral limit from 2025 to 2026. The IRS typically announces the following year’s retirement plan adjustments in late October or November. For example, the TSP published its 2026 contribution-limit announcement in mid-November 2025.

The annual limit is only part of the calculation; timing matters as well. To receive a maximum of 5% in agency automatic and matching contributions, you must contribute at least 5% of basic pay each pay period.

If you reach the annual elective-deferral limit early and payroll contributions stop, matching contributions also stop for the remaining pay periods. Employees who want the full-year match should therefore spread their contributions across all pay periods in the year or, if retiring, over all the pay periods leading to their retirement date.

Recent TSP statistics show that nearly nine in 10 contributing FERS participants save at least 5% of basic pay, but the published monthly data do not distinguish between employees contributing exactly 5% and those contributing more.

Learn more about elective deferral limits by reading the TSP fact sheet, “Annual Limit on Elective Deferrals.”

Separate plan-wide data, not limited to FERS employees, show a strong relationship between the length of time participants contribute and the balances they accumulate. As of March 2025, the following balance groups had these average contribution histories:

Limiting contributions to 5% may offer several advantages, especially for employees approaching retirement:

More money in each paycheck. Reducing your contribution rate can free up cash for an emergency fund, debt repayment, relocation, health expenses or the transition from your final paycheck to your first retirement benefit payment. This flexibility may be especially valuable because retirement claims can take time to finalize.
Full agency contributions can continue. Contributing 5% in every pay period generally allows you to receive the full FERS agency contribution while reducing the risk of reaching the annual employee limit before year-end.
Limited short-term effect near retirement. If you plan to retire within a few months, the difference between contributing 5% and a higher rate applies to only a limited number of pay periods. When your retirement savings are already sufficient, using some of that cash for a specific transition expense may be reasonable.

Those benefits, however, must be weighed against the potential costs of limiting contributions to 5% of basic pay:

Use-it-or-lose-it contribution opportunity. Once the calendar year ends, you generally cannot make up unused TSP contribution room for that year. Contributing less now could mean missing the chance to invest thousands of additional dollars in the TSP.
Less time for your savings to grow. Although you may not consider contributions above 5% when you are near retirement very important, remember that contributions made shortly before retirement can remain invested for many years. Contributing less now reduces the amount available for future compounded growth.
A potentially higher tax bill this year. You may not be increasing your take-home pay as much as you think. Traditional TSP contributions reduce your current taxable income. Lowering them may increase your federal and possibly state income tax, particularly during a final high-earning year.
Less tax flexibility in retirement. Roth TSP contributions are made after tax, but qualified withdrawals are tax-free. Reducing Roth contributions may leave you with fewer options for managing taxable income later, especially because Roth TSP balances are not subject to required minimum distributions during your lifetime.
A greater risk of spending instead of saving. Extra take-home pay improves your retirement readiness only if you use it for a specific financial purpose. If you simply spend the difference, you will enter retirement with fewer assets and no offsetting benefit.

How SECURE Act 2.0 changes the calculation

The choice is further impacted by changes enacted under SECURE Act 2.0. For employees making a near-term contribution decision, the most significant change is the mandatory Roth treatment of certain catch-up contributions beginning in 2026.

The rule applies to an employee who is eligible to make catch-up contributions, generally because the employee will be 50 or older in 2026, and who has 2025 FICA wages from the TSP-covered federal employer that exceeded $150,000.

In other words, 2025 wages of $150,000.01 or more trigger the Roth requirement, while wages of exactly $150,000 or less do not. The test uses prior-year wages from the employer sponsoring the plan, not the employee’s 2026 salary, adjusted gross income or total household income.

Only 2026 contributions above the $24,500 regular elective-deferral limit must be Roth; the rule does not require the employee’s first $24,500 of TSP contributions to be Roth. Employees at or below the threshold may generally choose traditional or Roth treatment for catch-up savings. Because the wage threshold is indexed for inflation, it may change in later years.

The law also raised the required minimum distribution (RMD) starting age from 72 to 73 beginning in 2023 and will raise it to 75 in 2033. It also eliminated lifetime RMDs from a participant’s Roth TSP balance beginning in 2024, reduced the excise tax for missed RMDs and created a larger catch-up limit for participants ages 60 through 63 beginning in 2025.

Taken together, these considerations make 5% a useful benchmark rather than a universal recommendation. It is usually the minimum sensible contribution rate for a FERS employee who wants the full match, but it is not automatically the best rate near retirement.

Before reducing contributions, project them by pay date so the 5% election continues through the final pay period, estimate the tax effect of losing traditional deductions and identify a specific purpose for the additional take-home pay.

Employees affected by the Roth catch-up rule should also compare their expected tax rate in 2026 with their likely tax rate in retirement. Because retirement dates, payroll calendars, FICA wages and tax circumstances differ, employees should confirm their election with their payroll office and consult a qualified tax or financial professional before acting.

Checklist for retirement readiness

Use this checklist to test whether your expected retirement income can support your desired lifestyle, withstand unexpected costs and remain sustainable over a long retirement.

First things first, confirm your retirement eligibility:

Confirm that you meet the age and service requirements for an immediate FERS retirement.
Verify your service computation date and resolve any missing or incorrect service records.
Determine whether you have any outstanding military or temporary civilian service deposits and compare your retirement estimate with and without making these payments.
Compare estimates for two different retirement dates to determine the impact on your monthly income from the FERS basic retirement benefit, Social Security or the FERS Supplement and potential income from your TSP investment.
If retiring under the MRA + 10 provisions, consider the benefit of working longer to avoid the age reduction vs. postponing your retirement application.
If retiring under age 62, compare the benefit of the enhanced annuity calculation factor of 1.1% instead of 1.0% if you will have 20 or more years of service by age 62.

Compute your “net” retirement income:

Obtain an official or agency-prepared estimate of your gross FERS annuity, including the FERS retirement supplement, if eligible.
Be sure to estimate reductions to your FERS retirement benefit that may include:
- Survivor benefit elections for a current spouse
- Court-ordered survivor benefit requirements for a former spouse
- Part-time work schedule proration
- Alternative annuity actuarial reduction
- Offset for Social Security (CSRS Offset coverage only)
- Unpaid deposits or redeposits (CSRS only)
Service not covered by retirement deductions is not creditable under FERS; compute retirement estimates without service where retirement deductions were not withheld or deposited. Noncovered civilian service performed after 1988 is not creditable and not eligible for a service credit deposit.
Estimate withholdings from your monthly benefit that may include:
- Federal income tax
- State income tax
- Insurance premiums (FEHB, FEGLI, FEDVIP, FLTCIP)
- Court-ordered apportionment payable to a former spouse
Review your Social Security estimate at several claiming ages, including at age 62, your full retirement age (67 if born in 1960 or later) and age 70.
If retiring at 65 or later, consider the cost of Medicare Part B premiums.
Estimate income from your TSP, IRAs, spouse benefits, pensions, part-time work and other sources.
Calculate expected after-tax monthly income rather than relying on gross amounts.
Identify which income sources are guaranteed and which depend on investment performance.
Identify which income sources will receive cost-of-living adjustments and when they are applicable to help maintain buying power in the future.

Cash reserves and retirement spending plan

Build a retirement budget that separates essential expenses from discretionary spending.
Compare the estimated net income you will have in retirement to your current net income while employed.
Account for irregular expenses and inflation rather than using current monthly bills alone.
Compare projected income with projected spending and calculate the annual amount your savings must provide.
Maintain an accessible emergency reserve so you are not forced to sell investments during a market decline.
Try living on your projected retirement income for several months before retiring if you expect to have less net income in retirement.

TSP and investment strategy

Confirm that your contribution rate captures the full agency match through your final eligible pay period.
Estimate your TSP balance at retirement under conservative, expected and unfavorable market scenarios.
Decide how much you expect to withdraw in the first year and whether that amount is sustainable.
Review your traditional and Roth balances and the tax treatment of future withdrawals.
Check whether your investment allocation matches your time horizon, income needs and tolerance for market declines.
Understand the differences among installments, partial withdrawals, rollovers and a TSP annuity before choosing a distribution method.
Include outstanding TSP loans in your retirement plan and understand the consequences of separation from service.

Consider your health, insurance needs and long-term risks to your financial security:

Verify eligibility to continue Federal Employees Health Benefits coverage into retirement.
Consider coordination of FEHB coverage with Medicare Parts A and B when you become eligible.
Review Federal Employees’ Group Life Insurance choices and the cost of coverage as you age.
Consider how you would pay for long-term care, extended home assistance or assisted living.
Test whether your plan can withstand higher medical costs, a long life and several years of elevated inflation.

Taxes, debt and survivor planning

Estimate federal and state taxes on your annuity, Social Security, traditional TSP withdrawals and other income.
Evaluate whether Roth withdrawals or conversions could improve future tax flexibility.
Decide how mortgages, consumer debt and other obligations will be handled before and after retirement.
Compare FERS survivor annuity options and their effect on your monthly benefit and a spouse’s future financial security and continued FEHB eligibility.
Review beneficiary designations for the TSP, Federal Employees’ Group Life Insurance, unpaid compensation and retirement (FERS or CSRS).
Update your will, powers of attorney, health care directives and instructions for locating important records.

Test your retirement readiness

Your projected after-tax income covers essential and discretionary spending with a reasonable margin.
Your plan remains workable if markets decline early in retirement, inflation is higher than expected or you live longer than expected.
You have enough accessible cash for emergencies and the possible delay between your final paycheck and finalized annuity payments.
You and your spouse or partner understand income, insurance, survivor and withdrawal decisions.
You have reviewed the plan with your agency’s retirement specialist and, when appropriate, a qualified tax or financial professional.

Readiness benchmark: A specific TSP balance alone does not establish readiness. A stronger test is whether dependable and investment income can cover expected after-tax expenses, preserve an emergency reserve and remain sustainable under less favorable assumptions.

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Retiring in 2027? Picking the right date could pay off

Tammy Flanagan — Thu, 01 Oct 2026 15:00:00 -0400

Download the 2027 Best Dates to Retire Calendar

If you’re thinking about retiring from federal service in 2027, you’ve probably spent plenty of time figuring out when you’ll be eligible and whether you’ll have enough money to make the jump. But there’s one more decision worth giving some thought to: exactly when to walk out the door.

Picking a retirement date isn’t just about choosing a Friday that feels right. The date you choose can affect when your retirement annuity begins, how much you receive in your lump-sum payment for unused annual leave and how much of that leave you’re able to cash out at your current salary rate.

There are some dates that are especially attractive for federal employees, depending on whether you’re covered by FERS, CSRS or CSRS Offset. The timing of the end of a pay period, the end of the month and the end of the leave year can all come into play. And because those calendars don’t always line up neatly, choosing a retirement date can be a little more complicated than it might seem.

For example, a FERS employee generally wants to retire at the end of a month if they want their annuity to begin as soon as possible. But the rules governing the payment of unused annual leave can make the end of the leave year especially important, too. For CSRS employees, some of the timing rules are different.

That means there isn’t necessarily one magic retirement date that works for everyone. The best date depends on your retirement system, your leave balance and what you’re trying to maximize.

As we do every year, we’ve gone through the 2027 calendar to identify the dates that can give retiring federal employees the best financial advantages. Here's our annual "Best Dates to Retire" calendar to help you plan for retirement in 2027.

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Your federal benefits changed this year. Here’s what to know

Tammy Flanagan — Thu, 24 Sep 2026 15:00:00 -0400

What changed in your federal benefits in 2026 — and what could change next? Agencies updated federal retirement, insurance, Social Security and Thrift Savings Plan programs, while Congress considered proposals affecting future pay and benefits. This article summarizes the changes that took place in 2026 along with the links to official sources.

Review the 2026 changes now and watch for 2027 updates this fall. During Federal Benefits Open Season, OPM will soon begin to publish 2027 plans, premiums and coverage information. The September CPI release on Oct. 14, 2026, will provide the final CPI-W data used to determine 2027 Social Security and federal retirement COLAs.

Legislative watch: enacted changes and congressional proposals

Status as of Sept. 24, 2026: A proposal changes benefits only after both chambers pass identical text and the president signs it. The section below separates current-law changes from selected 119th Congress proposals.

How likely is enactment? Remember that most proposals do not become law. By September 2026, 112 of the 18,956 measures in the 119th Congress had become stand-alone laws; 431, or only about 2%, had been enacted alone or through another measure. Bills often stall in committee, lose floor time, face policy or budget objections, fail to clear Senate procedures or expire before both chambers agree.

H.R. 8364 has advanced the furthest among the proposals below because it passed the House. These are not bill-specific forecasts.

Track a bill: Search its number on Congress.gov, then review “Latest Action,” committees, text and related bills. Cosponsors show support; committee action or chamber passage shows more meaningful progress.

Other resources: Membership associations, unions and nonpartisan public-interest organizations may provide education and legislative updates. Compare their information with official OPM, SSA, TSP and Congress.gov sources. Examples: NARFE serves active and retired federal employees; AFGE and NTEU serve represented employees; FMA serves eligible managers, supervisors, executives and retirees; and NAPS serves eligible Postal Service supervisors, managers and postmasters. Eligibility, dues, services and viewpoints vary.

Federal employee pay for 2027

Administration plan: The Aug. 26 alternative pay plan would keep most 2027 General Schedule base and locality rates at 2026 levels. OPM is developing a 3.8% special-rate increase for covered law-enforcement personnel, tentatively effective Jan. 10, 2027; final coverage is still pending. OPM pay information.
FAIR Act (H.R. 7480/S. 3823): Would raise statutory basic and prevailing-rate pay 3.1% and locality pay 1% for 2027 — an average 4.1%, according to sponsors. Both bills remain in committee. House bill; Senate bill.

Federal retirement benefits

No broad 2026 FERS reduction: House-passed 2025 proposals, including elimination of the FERS annuity supplement for many future retirees, were not included in the enacted law. C
Equal COLA Act (H.R. 491/S. 624): Would give eligible FERS annuitants the full CSRS/Social Security COLA formula. Both bills remain in committee and neither has passed a chamber.
Federal Retirement Fairness Act (H.R. 1522): Would allow certain post-1988 temporary service to count under FERS after a deposit. Introduced Feb. 24, 2025, it remains in House committee.
Targeted proposals: H.R. 8364, allowing a Capitol Police retirement age of 57-65, passed the House April 27, 2026, and awaits Senate action. H.R. 10283, limiting retirement credit for certain Members, remains in House committees. Neither affects the general workforce.

Federal insurance benefits

No broad 2026 FEHB, PSHB, FEGLI or FEDVIP benefit law identified: The 2026 premium and plan-option changes described below are annual program changes, not newly enacted benefit statutes.
FEHB Protection Act (H.R. 2193): Would require OPM to verify qualifying life events and family-member eligibility when dependents are added to FEHB or PSHB coverage and to include ineligible enrollment in fraud-risk reviews. The House committee ordered the bill reported, but it has not become law.

Social Security retirement and survivor benefits

Current-law changes affecting 2026 payments: The 2.8% COLA, higher taxable maximum and revised earnings-test thresholds took effect automatically under existing law; they were not created by a new 2026 act of Congress. The most recent major statutory benefit change remains the Social Security Fairness Act, enacted Jan. 5, 2025, which repealed the Windfall Elimination Provision and Government Pension Offset for benefits payable after December 2023.
Social Security 2100 Act (H.R. 9519/S. 5042): Would temporarily raise benefits, revise COLAs and minimum and survivor benefits, add caregiver credits and increase revenue. Both 2026 bills remain in committee. House bill; Senate bill.
Senior Citizens’ Freedom to Work Act (H.R. 8344): Would repeal the Social Security retirement earnings test, which currently withholds some benefits when a beneficiary below full retirement age has earnings above the annual limit. Read the bill.
Other proposals: H.R. 1700 and S. 3462 would raise benefits, change the COLA measure and tax higher earnings. Both remain in committee, and neither has passed a chamber.

Medicare

Current-law changes effective in 2026: Under the Inflation Reduction Act, negotiated prices took effect for the first 10 selected high-spending Medicare drugs, and the Part D annual out-of-pocket threshold rose to $2,100 after inflation adjustment.
Medicare Advantage Improvement Act of 2026 (S. 4384): Would shorten certain prior-authorization decision timeframes and make other Medicare Advantage reforms. Introduced April 27, 2026, it remains referred to the Senate Finance Committee.
Commission on Sustaining Medicare and Social Security Act (H.R. 9089): Would establish a commission to recommend options on solvency, premiums, fraud and program integrity. Introduced June 2, 2026, it remains in House committees.

Thrift Savings Plan

SECURE 2.0 rules effective in 2026: Under legislation enacted in 2022, catch-up contributions must be Roth for participants whose prior-year wages from the plan sponsor exceeded $150,000, and participants ages 60 through 63 retain the higher $11,250 catch-up limit. The regular 2026 TSP deferral limit is $24,500 and the general age-50 catch-up limit is $8,000.
TSP Modernization Act (H.R. 9214): Would require permitted transfers from TSP accounts to qualified retirement plans at brokerage firms to be available electronically. The bill was introduced June 9, 2026, and remains referred to the House Committee on Oversight and Government Reform; it has not become law.
TSP Fiduciary Security Act (H.R. 7357): Would add a national-security consideration to TSP fiduciary duties and require a compliance review.
Emergency withdrawals: S. 2966/H.R. 5674 would waive the 10% additional tax on up to $30,000 during a shutdown; H.R. 6929 would allow certain separated employees up to $100,000 in penalty-free distributions. All remain in committee.
FORWARD Act (H.R. 4996): Would allow certain retired or totally disabled former uniformed-service members with an existing TSP account to continue contributing from retired pay or disability compensation, without agency matching.

The proposals above may shape future policy, but the sections below focus on changes already affecting employees, annuitants, survivors and TSP participants in 2026. Each section links directly to the agency responsible for administering the program.

Recent OPM updates

2026 retiree COLAs: Eligible Civil Service Retirement System annuitants receive a 2.8% increase, while eligible Federal Employees Retirement System annuitants receive 2.0%. The adjustment took effect Dec. 1, 2025, and was reflected in January 2026 payments. A first COLA may be prorated. FERS COLAs generally do not apply before age 62, subject to statutory exceptions, and do not increase the FERS annuity supplement.
Federal Workforce Data site: In January 2026, OPM launched the redesigned Federal Workforce Data site to replace FedScope. The separate data site offers interactive visuals, downloadable datasets, monthly updates and expanded workforce information; it was not a redesign of the entire OPM.gov website.
CHCO Council memoranda: On Aug. 28, 2025, OPM moved Chief Human Capital Officers Council memoranda directly onto OPM.gov. The change organizes agency guidance alongside other OPM resources, making policy updates easier to find and access.
Online retirement processing: OPM’s digital Online Retirement Application provides pre-filled information, annuity estimates, document uploads, completeness checks and status tracking. Contact your agency HR office to begin; OPM assists after receiving the case and assigning a CSA claim number.
August 2026 processing: OPM received 7,618 claims, processed 15,281 and ended with 15,427 pending. Average processing time was 70 days for digital claims, 150 for paper and 79 overall.
Reemployed annuitants: OPM issued new decision tables on March 24, 2026, to help agencies determine CSRS/FERS retirement coverage and the treatment of FEHB and FEGLI benefits when an annuitant is reemployed, separates or dies during reemployment.
2026 coverage: OPM offered 132 FEHB, 75 PSHB, 21 FEDVIP dental and 10 vision options. Average enrollee premiums rose 12.3% for FEHB, 11.3% for PSHB, 3.35% for dental and 0.47% for vision.

Recent Social Security updates

2026 benefit increase: Social Security retirement and survivor benefits increased 2.8% for 2026. SSA estimates the average retired-worker benefit at $2,071 per month and the average benefit for an aged widow or widower living alone at $1,919 per month after the increase.
Working while receiving benefits: The 2026 earnings limit is $24,480 before full retirement age, with $1 withheld for every $2 above it. In the year full retirement age is reached, the pre-birthday-month limit is $65,160, with $1 withheld for every $3 above it. No limit applies afterward.
Survivor eligibility: A surviving spouse may qualify at 60, at 50 if disabled or at any age while caring for the deceased worker’s child under 16 or with a disability. Eligible divorced spouses may also qualify. Benefits generally range from 71.5% to 100% based on claiming age.
Applying: Survivor benefits cannot currently be requested online; call 1-800-772-1213. If both retirement and survivor benefits apply, SSA generally pays the higher amount rather than adding them together.

Recent Medicare updates

2026 Parts A and B costs: The standard Part B premium is $202.90 per month. The Part A inpatient deductible is $1,736 per benefit period; most beneficiaries continue to receive premium-free Part A.
Part D prescription costs: The annual out-of-pocket threshold is $2,100 in 2026. Negotiated prices for the first 10 selected drugs also took effect Jan. 1, 2026, alongside updated Part D plan, manufacturer and Medicare payment responsibilities.

Recent Thrift Savings Plan updates

Refreshed TSP website: It is now easier to find what you need on tsp.gov. The redesigned site helps you quickly check contribution and withdrawal information, compare funds, find guidance for major life events, use forms and calculators and get help with My Account.
Death reporting: Anyone may report a participant’s death, although an agency reports an active employee’s death. The secure Life Events Hub accepts documents and provides updates. Gather identifying, marital and employment information plus a legible certified death certificate; foreign certificates may require English translation. Reports may also be made through the ThriftLine at 1-877-968-3778, by mail or by fax.
My Account has a new address: TSP says the new sign-in address is tsp.gov/login and advises participants to update saved bookmarks. Sign in at the new My Account address.
2026 limits: The elective-deferral limit is $24,500. Catch-up limits are $8,000 for ages 50-59 and 64+, and $11,250 for ages 60-63.
Roth catch-up rule clarification: Beginning in 2026, catch-up contributions must be Roth for participants whose prior-year FICA wages from their TSP-contributing employer exceeded $150,000. TSP updated its agency guidance in June 2026 to specify that, beginning in 2027, payroll offices should use Box 3 of Form W-2 to determine prior-year FICA wages for this rule.
Roth conversions: Eligible participants and spousal beneficiaries may convert traditional TSP money to Roth in My Account. The minimum is $500, with up to 26 conversions per account annually; conversions are irrevocable and generally taxable that year

Summary

In 2026, key developments included retirement and Social Security COLAs, digital retirement processing, insurance changes, updated TSP limits and Roth rules and new online tools. Pending bills could affect future pay and benefits, but current benefits change only when a proposal becomes law.

To prepare for retirement, review benefit statements, beneficiaries, insurance, Social Security estimates and TSP elections regularly. Watch Open Season, COLA, pay and legislative announcements, and confirm decisions with the administering agency. Acting early can make the transition smoother and protect future income, coverage and survivors.

Beginning next month and through the end of this year, get ready for the announcements of the 2027 updates for Social Security, Medicare, health insurance, TSP and your retirement.

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Navigating the Pay.gov maze for federal retirement deposits

Tammy Flanagan — Thu, 17 Sep 2026 15:00:00 -0400

Creditable Federal civilian and military service affects both retirement eligibility and the CSRS or FERS monthly annuity, which generally uses the employee’s high-3 average salary, the applicable formula and creditable service. Unpaid deposits and redeposits are treated differently by system, service type and date: some service is excluded, while some remains creditable with an annuity reduction. Employees should review their records early and ask their agency benefits office whether payment is required. The following examples show the difference a deposit can make when the service is not creditable without the payment.

Assumptions and limitations: These examples use an $80,000 high-3, whole years and regular FERS rules. The 1.1% factor applies only at age 62 or older with at least 20 years. Amounts are gross estimates, rounded monthly and exclude special-category rules, partial months, survivor elections, taxes, insurance, court orders and other adjustments. Agency estimates are planning tools; OPM determines the final benefit.

Comparable CSRS example: For a regular CSRS employee with the same $80,000 high-3, the general formula is 1.5% for the first 5 years, 1.75% for the next 5 and 2% thereafter. At 28 years, the estimated annuity is $42,800 annually, or about $3,567 monthly. At 30 years, it is $46,000 annually, or about $3,833 monthly, about $267 more. The estimate excludes special-category rules, deductions, partial months and the CSRS maximum-annuity rule.

What you can pay through Pay.gov

Federal employees and retirees may owe OPM for service credit, insurance premiums or other benefit debts. Pay.gov, the Treasury Department’s secure payment service, eliminates mailing time, guides users through required information and provides an electronic submission record. OPM processing and account-posting times still apply.

A deposit pays for eligible service during which retirement deductions were not withheld; a redeposit repays retirement deductions that were previously withheld and later refunded. Employees should work through their agency benefits office and wait for OPM’s billing information. The active-employee Pay.gov form requires the seven-digit CSD number shown on the statement received from OPM (form RI 36-23).

Important FERS limitation: Civilian service that was not covered by FERS deductions performed on or after Jan. 1, 1989, is not creditable, and an employee cannot make a deposit to obtain credit for that service. Employees should ask their agency benefits office to determine service subject to a service credit deposit to be creditable for retirement eligibility and/or computation.

Annuitants use a separate service-credit form requiring a CSA or CSF claim number. Pay.gov also serves OPM retirees whose annuity cannot cover FEGLI premiums and provides forms for voluntary contributions and certain debts or underpaid benefits. Select the form that exactly matches the obligation.

If your CSRS or FERS annuity is too small to pay your health or life insurance premiums, you can pay your premiums directly to OPM. You shouldn't send any payment until OPM contacts you with instructions on how to pay your premiums to OPM.

Voluntary contributions for CSRS and CSRS Offset employees

Only employees currently covered by CSRS (including CSRS Offset) or separated employees whose application for retirement under CSRS is currently being processed by OPM are eligible to apply or make Voluntary Contributions. Applicants must first pay any required CSRS civilian-service deposit or redeposit, submit SF 2804 through their agency or directly to OPM with their retirement application, and wait for OPM to approve the application and establish the account. “After-tax” contributions are made in $25 multiples and cannot exceed 10 percent of aggregate basic pay for creditable civilian service.

After OPM approves the application and supplies a valid voluntary-contribution account number, employees may use the designated Pay.gov form. A retiring CSRS or CSRS Offset employee may continue making contributions while OPM finalizes the retirement claim, provided OPM continues to accept the payments; contributions must stop when the claim is finalized. Retain each submission confirmation and verify that OPM credited the payment. The account earns interest at rates prescribed by law. At retirement, the balance may purchase an additional CSRS annuity, including an optional survivor feature, or be refunded under applicable rules. The additional annuity does not receive cost-of-living adjustments; compare it with refund and permitted rollover options.

Military service deposits: Who can use Pay.gov

A military service deposit may provide retirement credit for eligible post-1956 active-duty service that ended under honorable conditions. CSRS, CSRS Offset and FERS employees should provide service and estimated-earnings records to their agency and servicing payroll provider. The deposit must be paid to the employing agency before separation, and interest can increase the cost after the initial two-year interest-free grace period for new hires.

Pay.gov is available only when the servicing payroll provider offers a military-deposit form and issues the required billing information. DFAS- and Interior Business Center-serviced employees may use their provider’s form when instructed. Do not choose a form simply because it appears in a search; it must match the payroll provider and notice.

Most employees pay military deposits through their payroll deduction, permitted installments or personal check. Use only provider instructions, monitor the balance and retain records until receiving paid-in-full confirmation.

Peace Corps service credit deposits

Former Peace Corps volunteers and volunteer leaders may receive retirement credit for satisfactory full-time service; pre-enrollment training is excluded. Under FERS, the service is creditable only if the required deposit is paid. Under CSRS and the CSRS component of a FERS transfer annuity, the effect of nonpayment depends on the applicable service dates and deposit rules, so employees should request an individual determination from their agency benefits office — with all rules taken into consideration.

The deposit is based on the qualifying readjustment allowance or stipend, plus interest—not later Federal salary. Obtain Peace Corps certification and submit SF 2803 for CSRS or CSRS Offset, or SF 3108 for FERS, through the agency benefits office. Do not estimate or pay until the agency and OPM determine creditability and issue the amount due.

After OPM establishes the account, a current employee may use the active-employee Pay.gov form with the seven-digit CSD number on RI 36-23; annuitants use the separate form with a CSA or CSF claim number. Retain confirmation, verify posting, and obtain paid-in-full documentation.

Before you begin

Begin at OPM’s How to Make a Payment page and select the exact obligation. Have the OPM notice, account or claim number, amount, identifying information and payment details ready. Accepted bank or card options vary by form.

Why the online process is more efficient

Pay.gov eliminates postage and delivery uncertainty, prompts for required information, allows review before submission, and creates immediate confirmation. It does not eliminate OPM processing time, so users must verify that the payment posts to the correct account.

Protect your information and follow up

Use a trusted device and private network, confirm the .gov address, and never email bank or claim data. Avoid duplicate payments while posting is pending. If rejected or returned, verify the information and contact the office named on the OPM notice before retrying.

Pay.gov makes retirement and insurance payments easier to submit and document. Start with OPM’s official payment page, choose the exact form, use the identifiers on OPM correspondence, review the entry, save confirmation and verify posting.

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What 9/11 can teach federal families about benefits

Tammy Flanagan — Thu, 10 Sep 2026 15:00:00 -0400

Every year, the anniversary of Sept. 11, 2001, brings back the same difficult truth: federal service is not always performed behind a desk, and risk does not always announce itself in advance. Sixty-nine federal employees were among those who died that day — including 62 at the Pentagon, three at the World Trade Center, three aboard Flight 93, one aboard Flight 77 at the Pentagon and one aboard Flight 175 at the World Trade Center. Many more reported for duty afterward to secure facilities, investigate the attacks, transport people, provide emergency assistance and help the country recover.

For their families, the lesson is not only one of remembrance. It is also a benefits lesson. If a civilian federal employee is injured, develops an occupational illness or dies because of federal employment, the Federal Employees’ Compensation Act may provide important protection.

FECA is the federal government’s workers’ compensation program for civilian employees, administered by the Labor Department’s Office of Workers’ Compensation Programs. It can pay for medical treatment, replace part of lost wages, provide compensation for permanent impairment and, in fatal cases, provide benefits to eligible survivors.

This is where many employees and families get into trouble: They know there are “benefits,” but they do not know which benefit applies, who administers it or what evidence is needed. A traumatic injury is generally tied to a specific incident during one workday or shift and is reported on Form CA-1. An occupational disease or illness develops over more than one workday or shift and is reported on Form CA-2. Wage-loss compensation is generally claimed separately, often with Form CA-7.

These distinctions are more than paperwork. They affect deadlines, agency responsibilities, medical documentation and how the claim is developed.

For survivors, FECA death benefits can be a critical source of financial protection. If the employee’s death was caused by a work-related injury or occupational illness, eligible dependents may receive recurring compensation based on the employee’s pay, subject to limits under the law. A surviving spouse may qualify. Eligible children may be included. In some situations, other dependent relatives may have rights as well.

FECA may also help with funeral and burial expenses and transportation of remains when applicable. But these benefits are not automatic just because the person worked for the federal government. The claim must show that the death was causally related to federal employment.

That means survivors need records. A surviving spouse or eligible children generally use Form CA-5 to claim compensation. Other dependent relatives may use Form CA-5b.

The file may need a death certificate, medical reports explaining the cause of death, proof of marriage or dependency, birth or adoption records, incident reports, position descriptions, exposure records and any prior FECA claim information. When the death follows an accepted work injury, the earlier claim file may be especially important. When the illness appears years later, the quality of the medical explanation and the factual history can make all the difference.

Sept. 11 also reminds us that not every compensable condition is visible on the day of the event. Some injuries are immediate, but others involve exposure, cumulative stress or occupational disease that may not be diagnosed until later.

Employees should not wait to document what happened. Write down where you were assigned, what you were exposed to, who was with you, what symptoms developed and what medical care you received. Survivors should ask whether an incident report was filed, whether there was a prior FECA claim and whether agency or medical records connect the condition to federal duty.

FECA is also only one part of the survivor-benefits picture. A family may also need to deal with the employing agency, the Office of Personnel Management, Federal Employees’ Group Life Insurance, the Thrift Savings Plan, Social Security and, in certain 9/11-related circumstances, other specialized programs.

These programs do not all use the same forms, deadlines or rules. Filing a FECA claim does not automatically file a retirement survivor annuity claim, a life insurance claim, a TSP beneficiary claim or a Social Security survivor claim.

Here is the practical advice I would give any federal employee: Do not leave your family to search for help as if they were on a scavenger hunt. Keep beneficiary designations current. Tell your spouse, adult child or trusted person where to find your personnel records, FECA correspondence, insurance information, TSP account information, medical records and emergency contacts.

If your work involves unusual hazards, deployments, emergency response, law enforcement, security operations, transportation, public health or disaster recovery, keep records that explain what you did and where you served.

A practical family checklist: Know the employing agency contact; know whether a FECA claim was ever filed; keep copies of medical, exposure and incident records; preserve marriage, birth, adoption and dependency documents; confirm beneficiary designations for life insurance and TSP; keep the death certificate and final medical records; ask promptly about FECA death benefits; and remember that a delayed illness, retirement or separation from service does not necessarily end the question of whether a condition was work-related.

Forms and resources to know: The Labor Department’s FECA program website and OWCP forms page are the official places to find current instructions, forms and claim resources.

CA-1 for a traumatic injury that occurs during one workday or shift;
CA-2 for an occupational disease or illness that develops over more than one workday or shift;
CA-7 to claim wage-loss compensation;
CA-5 when a surviving spouse or eligible child claims death compensation;
CA-5b when another dependent relative files a survivor claim.

Employees and survivors can learn more about filing a claim and how to use the Labor Department’s ECOMP system to start claims, upload supporting documents and follow claim activity.

The anniversary of 9/11 is a time to remember the lives lost and the service given. It is also a reminder to prepare. FECA cannot remove grief, but it can provide medical support, income protection and survivor benefits when the requirements are met.

Families are in the best position when they know the benefit exists, understand that documentation matters and have the records needed to act quickly. In federal benefits, as in retirement planning, the best time to get organized is before there is an emergency.

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Reliable rules for your retirement recordkeeping

Tammy Flanagan — Thu, 03 Sep 2026 15:00:00 -0400

This is an update to an article I wrote last year (and the year before) that provides tips and resources to transition from employee to annuitant and to catch up on some of the retirement planning that should have, but maybe didn’t, begin when you started your career.

Here are some crucial tips for every stage of your federal career:

Understand the parts of the Federal Employees Retirement System (FERS)

FERS An Overview of Your Benefits

FERS Information

Learn about your Minimum Retirement Age (MRA)

Service Credit

You know how long you’ve been a federal employee, but is there sufficient evidence of your career so that service may be credited towards your retirement eligibility and calculation? Be sure that there is documentation of your prior federal civilian and military service in your electronic Official Personnel Folder (eOPF) or paper OPF. If documentation is missing, let your retirement specialist know so that it can be retrieved and included in your service history for leave accrual and future retirement eligibility and computation.

In today’s climate where every federal employee is on alert for early retirement offers and, in some cases, the “pink slip” of an involuntary separation, it is important to take responsibility for gathering copies of the records that prove your beginning and ending dates of federal and military service, your retirement coverage, and work schedule.

If your agency isn’t as responsive as you would like, try to learn more about service credit by reading and attending available training. Here are some places to begin:

Office of Personnel Management YouTube: Retirement Counseling Tips

Office of Personnel Management YouTube: Quick Guide to Retirement Processing

Office of Personnel Management YouTube: Navigating Federal Retirement: How to Register for a Login.gov Account through Services Online

Consider paying a deposit into FERS for military service, non-covered civilian federal employment performed before 1989 (civilian service not covered by FERS deductions after 1988 is not currently creditable), and any refunded FERS contributions that you may have if there was a break in your federal career allowing you a return of your retirement contributions.

Understand the value of your sick leave and annual leave

Sick leave is your “short-term disability” protection. Treat it like “gold!” You earn four hours per pay period which translates to six months of paid time off after 10 years and a full year of paid time off after 20 years of federal employment.

Unfortunately, sick leave does not add much value to your retirement benefit – only 1/12 of 1% (or 1.1%) of your high-three average salary per year. For example, if you have a high-three of $100,000, 1 month of sick leave would add 1/12 of $100,000 x 1% or $83/year or about $7/month… where using that 1 month of accrued leave would be worth around $48 x 22 workdays x 8 hour/day = $8,448. Plus you would earn a little more annual and sick leave at the same time! If you need to use your sick leave and you have retirement coming up in your near future, then it is OK to use it if you have a valid reason to use it. Otherwise, be thankful you were healthy! It hasn’t been that long that FERS retirement received any credit for unused sicvk leave towards retirement calculation credit… so there’s that! It has only been for about the last 13 years: 50% Credit was applied to retirements with an annuity starting date from Oct. 28, 2009, through Dec. 31, 2013 and 100% Credit was implemented for all retirements starting on or after Jan. 1, 2014.

Know the rules for using your leave:

Fact Sheet: Annual Leave (General Information): An employee may use annual leave to establish initial eligibility for retirement in reduction-in-force (RIF) and other restructuring situations. An employee who has received a specific notice of termination in a RIF situation may use annual leave past the date the employee would otherwise have been separated to establish initial eligibility for immediate retirement, including discontinued service or voluntary early retirement.

Fact Sheet: Sick Leave (General Information): Unused sick leave will be used in the calculation of an employee's or survivor's CSRS or FERS annuity based on retirement with an immediate annuity or on a death in service.

Update your designation of beneficiary

Unpaid Compensation SF 1152: (Last paycheck, allowances and reimbursement for things such as unused annual leave, and anything else that is owed to an employee from the agency upon the death of a federal employee)

Federal Employees Group Life Insurance SF 2823

Reporting a death/FEGLI Death Claims

Federal Employees Retirement System or Civil Service Retirement System SF 3102 This does not determine any recurring benefits such as a survivor annuity for a spouse or a child. This benefit consists of the deceased's retirement contributions, plus any applicable interest, in the Civil Service Retirement and Disability Fund.

Chapter 75, CSRS and FERS Handbook, Lump Sum Benefits

Office of Personnel Management Survivor Benefits

Thrift Savings Plan: To designate a beneficiary or beneficiaries, log in to My Account on tsp.gov or use one of the Thrift Line Service Center options listed in the Death Benefits booklet. Remember that once you select a beneficiary(ies), you cannot cancel and return to the order of precedence. You will only be able to designate a new beneficiary. If your spouse inherits your TSP account, they will have a TSP Beneficiary Account set up for their inherited funds.

Understand how the TSP works

Online Learning Opportunities: The TSP offers free recorded webinars, live webinars, and other scheduled training which cover many topics for TSP participants and their beneficiaries. These learning opportunities are hosted by the Federal Retirement Thrift Investment Board (FRTIB).

How Does Compound Interest Work? By Mark Catanzaro, St. Louis Federal Reserve Bank: Learn about the Rule of 72 and learn about how inflation affects purchasing power of money. This should always be considered when reviewing long-term projections. For instance, the purchasing power of $787,180 today would be approximately $434,580 in 30 years, assuming a 2% average inflation rate.

Core Funds vs. L Funds vs. Mutual Fund Window

Set up your “My Social Security” account with LOGIN.GOV: This account will let you access your earnings record, age-appropriate information about Social Security benefits and estimates of the benefits you are earning.

Leaving federal service early:

Leaving early might mean giving up lifetime FEHB coverage, life insurance, and credit for unused sick leave toward your retirement computation.

A deferred retirement is paid later when a federal employee is not entitled to an immediate retirement benefit, however, you must have a minimum of five years of creditable civilian federal service to qualify for any retirement benefit. A deferred annuitant is not entitled to the FERS Special Retirement Supplement to hold you over until you qualify for Social Security at age 62. When contemplating a move to the private sector, consider and compare workplace flexibility; leave policies and accrual; retirement benefits, insurance options; and of course, salary.

If you make the decision to leave:

Consider keeping your FERS retirement contributions on deposit to allow a deferred retirement benefit that is payable later if you have at least five years of creditable civilian federal employment.

Consider keeping your retirement savings in your TSP account if you leave federal service when you are at least 55 in the year of your separation from federal employment to avoid early withdrawal penalties that may apply from an IRA when you make withdrawals before age 59 ½. If you separate before the year that you reach age 55, be aware of the potential tax penalties for early withdrawal unless you meet one of the other exceptions as described in the TSP Tax Rules About TSP Payments publication.

You may continue your FEHB coverage for up to 18 months following your separation (this is called Temporary Continuation of Coverage comparable to COBRA in the private sector). Under TCC, you will pay the employer and the employee share of the premium.

Be sure to use up your flexible spending account dollars before you leave. The balances in your Health Care FSA (HCFSA), Limited Expense Health Care FSA (LEX HCFSA) and Dependent Care FSA (DCFSA) are treated differently if you separate before the end of the calendar year.
- Your HCFSA or LEX HCFSA will terminate as of the date of your separation or retirement. There are no extensions. Any eligible health care expenses incurred prior to the date of separation will still be reimbursed but those incurred after the separation date are not reimbursable, even if you accelerated your allotments. If you used your entire elected amount before FSAFEDS has deducted it from your pay, you will not be responsible for the remaining allotments.
- Your DCFSA remaining balance can continue to be used to pay for eligible dependent care expenses until your account balance is depleted or the end of the calendar year, whichever comes first.

Retirement Sooner than Later:

Make sure you are on track with your savings (review the TSP tips for new hires)

Learn the pros and cons of a TSP Loan before you apply for one.

Try saving for big items such as a car, vacations, and other major outlays rather than using credit or loans.

Update your designation of beneficiary forms

The TSP allocation you have could be too conservative

The TSP allocation you have could be too aggressive (or not aggressive enough)

Begin to project your retirement benefits payable at your MRA, age 60, and at age 62.

At your MRA, you may find that you are eligible for either a reduced MRA + 10 benefit or an unreduced immediate retirement benefit with a supplemental payment to help you retire earlier than age 62. Although you may be eligible to retire, can you afford to retire?

At age 60, you will only need 20 years of creditable service to retire with an unreduced, immediate retirement benefit, and be entitled to a FERS Special Retirement Supplement to age 62.

Age 62 is worth considering for a variety of reasons:

To be eligible for an immediate retirement at age 62, you only need five years of creditable civilian service covered by FERS.
If you have 20 years of creditable service (including credit for unused sick leave), you will qualify for a higher computation factor for your benefit resulting in a ten percent increase just for have 20 or more years of service (and being 62 or older),
Cost of living adjustments for most FERS retirees begin at age 62. Remember that if you retire before 62, your retirement under FERS (and the FERS Supplement) will not increase until you turn 62 years old. Exceptions for special groups such as law enforcement officers and firefighters retiring under FERS along with disability annuitants and survivor annuitants.
At age 62, you are now eligible for Social Security retirement benefits which will be more than the FERS Supplement because they will be based on your lifetime of Social Security covered employment rather than only your civilian service covered by FERS. Social Security benefits are adjusted annually for inflation.

To Do List:

Run the numbers
- Compute your FERS Basic Retirement Benefit (or have your HR office do it for you). Consider reductions for survivor elections, former spouse apportionments and survivor benefits, age reduction for MRA + 10 option, and proration of the benefit if you ever worked part-time. Be sure to review your service history and be sure that all the time is creditable for the calculation of your retirement.
- Your retirement benefit will also be subject to monthly withholdings for federal and state income tax (not all states tax federal retirement benefits, however), and insurance (FEHB, FEGLI, FLTCIP, and FEDVIP).
- If you are going to file for Social Security retirement, get an updated estimate at www.ssa.gov. Your benefit will be partially taxable on the federal level and there are about six states that also tax SSA benefits.
You can prepare the Application for Immediate Retirement, SF 3107, https://www.opm.gov/forms/pdf_fill/sf3107.pdf before you begin the Online Retirement Application. This will help you understand the decisions you will need to make and the documents you may need to upload into the ORA System. If available, set up pre-retirement counseling to ask questions, review your estimated benefits, and learn how your agency processes your retirement.
- Become familiar with the new Online Retirement Application: https://retire.opm.gov/portal
- SF 2818 Continuation of Life Insurance (FEGLI)
- Fact Sheet: Lump Sum Payment for Annual Leave
- Retirement Facts 8: Credit for Unused Sick Leave Under the Civil Service Retirement System (also applies to FERS)
The health plan you are in may not be the best health plan for retirement. This is especially true if you enroll in Medicare Part B once you have retired. FEHB plans wrap around Medicare nicely so you can avoid most out-of-pocket expenses (deductible, copays, and coinsurance). It pays to compare your current coverage with plans that offer incentives to enroll in Medicare. Members of the National Active and Retired Federal Employees Association have access to a series of webinars that can help you understand and choose the best plan for you. In addition, the Checkbook Guide to Federal Health Plans can provide comprehensive information for employees and retirees during open season.
- Retirement is not a Qualifying Life Event, however if you move outside of your FEHB plan’s service area or if you are 65 or older, you can use a QLE to change plans outside of open season. See a list of all QLEs on form SF 2809 or OPM Form 2809.
Make copies of everything that you fill out before you turn in your applications.
Brush up on tax information
- W-4P Withholding Certificate for Periodic Pension or Annuity Payments
- IRS Publication 721 Tax Guide to U.S. Civil Service Retirement Benefits
- Tax Rules About TSP Payments, TSP Publication 26
- Request to withhold taxes from your Social Security benefit

Be sure to have six months of living expenses in the bank before you retire to allow for delays in processing your benefits.
Update your designation of beneficiary forms (see above) Information for FERS Annuitants
When you receive your CSA (Civil Service Active) number from the Office of Personnel Management, it is time to set up your Services Online account. This will allow you to make changes such as updating your address, electing federal and state tax withholding, view your annuity statement and more.
Learn how to manage your TSP account in retirement
The TSP allocation you have could be too conservative
The TSP allocation you have could be too aggressive
Consider the options for distribution of your TSP account
TSP Distribution Booklet
Withdrawing Your TSP Account after Retirement
- One option for a TSP distribution is to purchase a TSP life annuity through the TSP vendor. To compute an estimate of this, use the TSP annuity calculator. The current TSP Annuity interest rate index factor is 5.075% up from 4.95% in August. The historical rates can be found here: https://www.tsp.gov/withdrawals-in-retirement/historical-annuity-rates/ Learn about this option in the TSP Annuity Fact Sheet.
- Other, more flexible options include requesting monthly, quarterly, or annual installment payments directly from your account; partial payments, as needed; and you may also transfer some or all your TSP to an IRA.
- Make sure that your address is current with the TSP and be sure to enter your bank information by accessing your account at www.tsp.gov. This will make your withdrawals go smoother and take less time to process.
- For your protection, the destination you wish to send your TSP payment to must be on file for at least seven days before it can receive funds. This includes any postal address or any direct deposit information you’ve entered. Make sure this information is on file for at least seven days before you start your request. Lost, stolen, damaged, or misdirected checks can take six weeks or longer to replace.

All the best to those of you who are getting ready to complete your career of dedicated federal service and move into the next chapter of your career or your retirement life!

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Want to retire at the end of 2026? Start planning now

Tammy Flanagan — Thu, 27 Aug 2026 15:00:00 -0400

If you're planning to retire at the end of 2026, it's time to get busy preparing. End-of-year retirements are popular, especially for federal employees who are saving annual leave for a large lump-sum payout in 2027.

The Office of Personnel Management continues to process a historically high volume of retirement claims, and while digital submissions are improving processing efficiency, overall claim inventories are still above target levels. This is why early preparation helps during the transition from employee to annuitant.

Employees can reduce potential delays by confirming service records, reviewing benefit elections, preparing financially for the transition period and submitting retirement paperwork early through their agency's recommended process.

Some recent retirement processing numbers:

In July 2026, OPM processed 14,370 digital claims and 3,471 paper application packages. By comparison, in January 2026, OPM processed 6,465 digital applications and 9,106 paper applications.

The 2025 Deferred Resignation Program contributed to the 2026 surge. Large numbers of employees left federal service under the DRP, creating delays for payroll providers and human resources offices responsible for initial retirement processing.

As of the end of July 2026, OPM still had 24,784 claims awaiting adjudication, above its goal of 13,000 or fewer pending claims. Although the inventory has improved from a high of 65,237 claims in February 2026, processing times remain a key consideration for employees planning a year-end retirement.

Checklist to get ready

1. Build a cash reserve for the transition.

Your final paycheck should arrive within a few weeks of retirement, and your lump-sum annual leave payment usually follows soon after. However, timing can vary.

Interim retirement payments may begin within 6 to 8 weeks, while final adjudication may take several months. In July 2026, digital claims averaged about 98 days from receipt at OPM, while paper claims averaged 156 days.

It is not clear whether those are 22-day work months or 30-day calendar months, but either way, these are only "averages."

2. Confirm that your records and paperwork are complete.

Verify that your federal service is fully documented in your eOPF, including appointment dates, work schedule changes and retirement coverage changes.

Keep copies of key records in your personal personnel file.

Confirm whether any military service credit deposits are complete.

Verify that all service is creditable for retirement eligibility and computation before setting your retirement date.

3. Update beneficiary designations for CSRS or FERS, TSP and FEGLI.

4. Review survivor benefit elections.

If applicable, consider spousal survivor benefit options before submitting your retirement application.

5. Confirm FEHB eligibility.

Remember, you must be "covered" by FEHB (or PSHB) for the five years immediately preceding your retirement date. You also must be retiring with immediate retirement eligibility.

6. Determine whether a former spouse is entitled to benefits.

If applicable, review your divorce decree or court order. Include a copy with your retirement application if benefits are payable to a former spouse.

7. Review life insurance needs.

Consider your FEGLI coverage and review the Continuation of Life Insurance form, SF 2818

Additional information is available from OPM's life insurance resources

8. Give sufficient notice and begin the application early.

OPM advises employees to contact their employing agency about recommended submission timeframes. Agencies generally need at least 60 days to process a retirement application before sending it to OPM, but some agencies may require more time.

9. Final retirement estimate

Do you understand the numbers on this estimate? If not, ask questions to be sure.

This is an "estimate." OPM is responsible for the final numbers. Be sure to receive a final retirement estimate and be sure that you understand and agree with the dates and numbers.

10. Understand the difference between paper and digital applications.

Paper applications: Employees complete the Application for Immediate Retirement, SF 3107 for FERS or SF 2801 for CSRS. HR reviews the application, completes the Certified Summary of Federal Service, which you will need to sign and return, and submits the package through payroll to OPM.

Digital applications: When an employee notifies HR of a retirement date, HR sends an invitation to access the Online Retirement Application system. HR and payroll review and complete their portions before electronically releasing the application to OPM.

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Life happened. Now what about your retirement benefits?

Tammy Flanagan — Thu, 20 Aug 2026 15:00:30 -0400

Retiring from federal service is a major milestone, of course, but it does not end the need to understand how federal benefits work. In the years after retirement, life events and new opportunities can raise important questions about insurance, survivor benefits, beneficiary designations and the effect of returning to government employment.

Today I will highlight several post-retirement issues that federal employees may want to plan for in advance. This is not an all-inclusive list, but it’s a list that will hopefully remind you that it is important to review your benefits and be sure to understand how they can change as life goes on.

The topics included today are the FEGLI Living Benefit, reemployment in federal service after retirement, changing beneficiary designations, marrying after retirement and providing benefits to a new spouse, and understanding how CSRS or FERS retirement benefits may change over time.

The FEGLI Living Benefit

The FEGLI Living Benefit is one that we hope that we will never need, but it can be very important to the person who is entitled to it.

This benefit allows an eligible employee, annuitant, or compensationer (a person receiving benefits from the Office of Workers’ Compensation Programs as a result of a work-related injury) enrolled in FEGLI Basic life insurance to receive a lump-sum payment while still living if the person is terminally ill and has a documented medical prognosis showing a life expectancy of no more than nine months. This payment can provide important financial flexibility at a difficult time.

It may help pay for medical costs, in-home care, family travel, household expenses, debt, or other needs that arise when an employee or retiree is facing a serious illness and may no longer be able to work or manage expenses in the usual way.

Using the Living Benefit also affects the people who would otherwise receive the FEGLI Basic insurance after the insured person’s death. The Living Benefit is an advance payment of Basic insurance, so any amount paid while the insured person is living reduces, or may eliminate, the Basic insurance payable to beneficiaries later.

Employees may be able to elect a full or partial Living Benefit, while annuitants and compensationers may elect only a full Living Benefit. A full election generally means there will be no remaining Basic insurance payable to beneficiaries after death, although any FEGLI Optional insurance remains separate and is not reduced by the Living Benefit election.

Although premiums may end for the amount covered by the Living Benefit, the individual must continue to pay premiums for any option coverage remaining.

The Living Benefit is not subject to federal income tax. According to the U.S. Office of Personnel Management, these payments are tax-free at the federal level, though you should still check your specific state laws since a few states treat them differently.

Because the decision is irrevocable and directly affects both current cash flow and survivor protection, it should be considered carefully with family members, beneficiaries, and financial or tax advisers.

For example, suppose a federal retiree with FEGLI Basic coverage is diagnosed with a terminal illness and elects to receive the full Living Benefit. The lump-sum payment could help the retiree pay for uncovered medical expenses, arrange additional care at home, or reduce financial pressure on family members.

However, because the Basic insurance has been paid in advance, the retiree’s beneficiaries should understand that little or no Basic insurance may remain payable after death, depending on the election made.

Reemployment in federal service after retirement

Some retirees later return to federal employment as reemployed annuitants. In many cases, the retiree’s existing CSRS or FERS annuity continues during the period of reemployment, but the new federal salary is reduced, or offset, by the amount of annuity that applies to the time worked.

This means the retiree usually does not receive both a full annuity and a full salary at the same time unless a specific exception or dual compensation waiver applies. The employing agency pays the reduced salary and sends the offset amount to the retirement fund, while OPM generally continues paying the annuity separately.

FERS retirees who are receiving the FERS annuity supplement should also understand that returning to work can affect that payment. The supplement is separate from the regular FERS basic annuity and is intended to approximate the Social Security benefit earned through FERS service until age 62.

After a retiree reaches the minimum retirement age, the supplement is subject to an earnings test. Wages or net self-employment income above the annual exempt amount ($24,480 in 2026) can reduce the supplement by $1 for every $2 earned over the limit, and high enough earnings can reduce the supplement to zero.

This rule applies even when the retiree returns to federal service as a reemployed annuitant, including situations involving a dual compensation waiver; the waiver may affect salary offset rules, but it does not by itself exempt the FERS supplement from the earnings test.

Reemployment can also allow an increase to future retirement benefits if the period of service is long enough and retirement deductions are properly withheld or deposited. A supplemental annuity may be available after the annuitant completes at least one year of actual, continuous, full-time reemployment service, or the equivalent amount of part-time service.

If an annuitant is reemployed in a part-time position at a tour of duty less than 40 hours per week, for example, 20 hours per week, and if the annuitant works a total of 1,040 hours in a year (52 weeks x 20 hours), then the employee must work for two continuous years to be eligible for a supplemental annuity.

When the reemployment ends, the supplemental annuity is added to the retiree’s existing annuity rather than replacing it, giving the retiree an additional monthly amount based on the new period of federal service.

A redetermined annuity may be available after a longer period of reemployment, generally at least five years of actual, continuous, full-time service, or the part-time equivalent. Instead of simply adding a supplemental amount to the old annuity, a redetermined annuity is a new computation that considers all creditable service and the law in effect when the employee separates from reemployment.

The retiree must elect the redetermined annuity in place of the prior annuity and any supplemental annuity that otherwise would be payable. Because the rules can vary based on the type of retirement, appointment, retirement system, salary offset status, and whether a waiver applies, retirees should review the details with the employing agency and OPM before accepting reemployment and again before separating from the new position.

OPM has a new Benefits Administration Letter 26-104, titled Reemployed Annuitant Decision Tables, designed to detail the agency actions required for retirement coverage and benefits, health insurance, and life insurance for an annuitant upon appointment, separation, and death (if an annuitant dies during reemployment).

Changing beneficiary designations after retirement

Beneficiary designations determine who receives certain benefits, such as life insurance proceeds or retirement contributions or the final retirement payment, after a retiree’s death. Because family circumstances can change after retirement, retirees should periodically review and update their designations to make sure benefits are paid according to their current wishes.

Outdated forms can lead to unintended results, especially after marriage, divorce, the death of a beneficiary, or changes in family relationships. An easy way to do this is to file new designation of beneficiary elections which will supersede any that have been previously filed.

Different federal benefits have different designation of beneficiary forms, so retirees should be careful not to assume that one designation controls every benefit. For FEGLI life insurance, the beneficiary form is SF 2823, Designation of Beneficiary, Federal Employees’ Group Life Insurance Program. SF 3102 is the Designation of Beneficiary form for federal employees and retirees under both the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS).

You can download these forms directly from www.opm.gov/forms. These forms are separate from any survivor annuity election, which is governed by different rules.

Annuitants should send the completed SF 3102 and SF 2823 to the U.S. Office of Personnel Management Retirement Operations Center at P.O. Box 45, Boyers, PA 16017-0045. The forms must reach OPM before your death to be legally valid.

TSP beneficiary designations are handled separately through the Thrift Savings Plan. Retirees can add or update TSP beneficiaries by logging in to My Account at TSP.gov; TSP also explains that the designation must be on file with TSP at the time of death and that a will or other document will not control the TSP account.

Because beneficiary designations can override expectations after events such as divorce, remarriage, or the death of a beneficiary, retirees should review FEGLI, CSRS or FERS, and TSP designations whenever their family or estate-planning situation changes.

Marriage after retirement and benefits for a new spouse

Marriage after retirement can create new questions about survivor benefits and continued access to federal benefit programs for a new spouse. If a retiree marries after leaving federal service, the retiree may elect a reduced annuity to provide a survivor annuity for the new spouse, but the election generally must be made in writing to OPM within two years of the date of marriage.

This election is separate from changing beneficiary designations and is important because, without a survivor annuity election, a new spouse generally will not receive a continuing monthly CSRS or FERS survivor benefit after the retiree’s death.

OPM will provide the retiree with form RI 20-63, Survivor Annuity Election for a Spouse, which will include the option of choosing the maximum amount available or an amount that will provide a survivor annuity of a specific dollar amount (no more than the maximum survivor annuity benefit).

OPM will also include a letter outlining the cost associated with this election and directions on how to respond within the two-year deadline for this election. It is important to contact OPM after you remarry and well before the expiration of the two-year deadline so that you have time to consider your options.

In addition to the regular survivor annuity reduction, a post-retirement election for a new spouse generally requires a permanent actuarial reduction. OPM describes this reduction as the difference between the annuity already received without the survivor election and the amount that would have been paid if the survivor election had been in effect since retirement, plus 6% interest.

This actuarial reduction is spread over the retiree’s lifetime and continues even if the marriage later ends, so retirees should ask OPM for a cost statement and carefully review the effect on their monthly income before confirming the election.

A new spouse may also be added to FEHB coverage because marriage is a qualifying life event. A retiree who is enrolled in FEHB may generally change to a family enrollment or self plus one enrollment during the permitted qualifying life event window, beginning 31 days before marriage and ending 60 days after marriage or doing a future open season.

Retirees should include this request when contacting OPM regarding the remarriage. Providing a survivor annuity is also an important election to allow FEHB coverage for your new spouse to continue if you predecease them.

Cost-of-living adjustments to maintain your buying power

The purpose of cost-of-living adjustments (COLAs) for federal retirees is to protect the fixed retirement income CSRS or FERS retirement benefit from the impact of inflation that can erode the buying power as the costs of goods, services, and medical care rise over time.

The retirement benefit COLA automatically adjusts annuity payouts using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) measured during the third quarter of the year.

The CSRS receives the full calculated COLA matching the measured rate of inflation, while the FERS benefit often receives a modified or capped COLA (e.g., if inflation exceeds 3%, the FERS increase is typically 1% less than the CPI increase) and generally does not kick in for regular retirees until the Minimum Retirement Age (MRA), which is 57 for retirees born in 1970 and later and between 55 and 57 for retirees born earlier.

The “offset” for CSRS Offset retirees and survivor annuitants

CSRS Offset retirees and survivor annuitants should also understand that their civil service annuity may be reduced when Social Security entitlement begins or would begin upon proper application. For retirees, OPM generally determines the offset around age 62, or at retirement if the retiree is already over age 62, and reduces the CSRS annuity by the portion of Social Security attributable to CSRS Offset service.

A CSRS Offset survivor annuity is computed like a regular CSRS survivor annuity, but it may be reduced if the survivor is eligible for Social Security benefits based on the retiree’s federal service.

In cases where the survivor annuity is reduced because of the survivor annuitant’s own “earned” Social Security retirement benefit, the offset may be reduced or eliminated. It is important for survivor annuitants to understand this since OPM may not always be aware of the survivor annuitant’s earned Social Security benefit amount.

See previous Government Executive articles, A Rude Annuity Shock and Sometimes, Your Benefit Really Is Too Small, to learn more about this situation.

Health benefits and life events

Health benefits can also change after retirement, not only the premiums and the benefits, but your needs may change over time. Outside of open season, FEHB changes generally must be tied to a Qualifying Life Event (QLE), such as marriage, divorce, death of a family member, or a move out of a plan’s service area, and many changes must be requested within 60 days of the event.

Annuitants should confirm the effective date with OPM because the timing can depend on the type of change. For example, some enrollment decreases may be made at any time and are commonly effective at the beginning of the month after OPM receives the election, while other changes follow the qualifying life event rules.

There is a little-known option to change insurance just because you have reached age 65, it is QLE 2L. This is your “ace in the hole” that you can only use once in your lifetime to change plans outside of open season.

This is generally used to change plans when enrolling in Medicare after retirement, but if not used at age 65, it can be used later – but only once!

Restoration of a reduced CSRS or FERS annuity

If a spouse or former spouse dies and the retiree’s CSRS or FERS annuity is being reduced to provide a survivor annuity for that person, the retiree should notify OPM and provide the required proof, such as a death certificate or marriage certificate in the case of a former spouse who remarries before age 55.

OPM may then increase the retiree’s annuity by removing the survivor reduction, restoring the annuity to the unreduced amount prospectively.

Retirees who divorce should also notify OPM promptly. If the marriage ends by divorce, the survivor reduction may be removed. However, as is often the case, a court order may require the retiree to continue providing a former spouse survivor benefit.

In a divorce, not only are survivor annuity benefits sometimes continued for the former spouse, but divorce can also create continuing rights for a former spouse to a portion of your retirement, often referred to as the “marital share.”

Court orders may also require assignment of FEGLI to the former spouse and require continuation of health benefits for the children of the marriage. There are also Temporary Continuation of Coverage (TCC) and Spouse Equity benefits available for a former spouse to continue health benefits coverage.

Because OPM must follow clear and specific court orders and will not rewrite unclear terms, retirees should make sure any divorce order addresses federal retirement, survivor, health benefits, and life insurance issues with precision. Be sure that your attorney uses the language outlined in the Attorney Handbook.

Key takeaways for federal retirees

Review benefits after every major life event. Marriage, divorce, the death of a spouse or beneficiary, reemployment, or a serious illness can all change how federal benefits work.

Keep beneficiary designations current. FEGLI, CSRS, FERS, and TSP benefits are controlled by their own forms or account records, and a will may not override an outdated designation.

Do not assume a new spouse is automatically protected. A survivor annuity election, FEHB enrollment change, or other action may be required within a specific deadline.

Understand how income can change after retirement. COLAs, CSRS Offset reductions, survivor benefit reductions, reemployment salary offsets, supplemental annuities, redetermined annuities, and court orders can all affect monthly income.

Act promptly after divorce or the death of a spouse or former spouse. OPM may need documentation to adjust an annuity, restore an unreduced benefit, or apply a court order.

Check before relying on assumptions. Federal retirement, insurance, health benefits, and TSP rules can interact in ways that are easy to overlook, so retirees should contact OPM, TSP, or a knowledgeable benefits specialist before making decisions that affect current income or survivor protection.

Understanding federal benefits does not end on the day an employee retires. Retirement can bring new decisions about life insurance, beneficiary designations, reemployment, survivor protection, health benefits, and changes to CSRS or FERS annuity payments.

By reviewing these rules before a major life event occurs – and knowing when to contact OPM, TSP, or a former employing agency, retirees can make more informed decisions, avoid unintended consequences, and better protect themselves and their families throughout retirement.

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Before you take money out of your TSP, weigh these trade-offs

Tammy Flanagan — Thu, 13 Aug 2026 15:00:00 -0400

The Thrift Savings Plan can be one of the most valuable retirement assets for federal employees (as well as members of the uniformed services), but once you leave federal service, the distribution decision is not just a matter of deciding how much cash you need. There are other important considerations to understand before you can select the dollar amount you will need to make your retirement financially secure. Remember that once a TSP withdrawal is processed, it generally cannot be reversed, so these are all important considerations to understand before deciding on your distribution plan.

If you have a minimum balance of $200, you may keep your money in the TSP. TSP elections for withdrawal include taking a partial distribution (minimum amount is $1,000), electing a total distribution, purchasing a life annuity (must have at least $3,500 to elect this option), setting up installment payments or combining methods.

Keeping money in the TSP may be appropriate if you do not need immediate income, because the plan offers simple investment choices and historically low expenses. Installment payments can create predictable cash flow while leaving the remaining balance invested. A life annuity can provide income for life, but it is typically irreversible and may reduce flexibility for heirs or future emergencies. A lump sum may be useful for a specific need, but it can create a large taxable event and remove assets from a disciplined retirement structure.

Taxes

Traditional TSP withdrawals are generally taxed as ordinary income in the year received. That means the timing and size of distributions can affect your marginal tax bracket, taxation of Social Security benefits, net investment income planning, state income taxes and estimated-tax requirements. Adding additional taxable income may even have an impact on the premiums you will pay for Medicare Parts B and D.

The TSP reports distributions to the IRS and may be required to withhold federal income tax from taxable payments, but remember that this withholding is not the same as the final tax that may be due. In addition to the IRS and federal income taxes, remember that many states will also consider these distributions taxable on the state level.

States that generally do not tax TSP or similar retirement-account distributions include the following states that don’t have an income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — as well as states that generally exempt most retirement distributions, such as Illinois, Iowa, Mississippi and Pennsylvania.

State rules can change and may depend on residency, age, income level and the type of retirement income, so retirees should verify their state’s current rules before making large withdrawals or relocating to a state because of favorable income tax rules. Don’t forget about property tax, sales tax and other taxes that states need to collect to make the state an attractive place to retire.

Retirees should coordinate withdrawals with other taxable income, deductions, charitable giving and any planned Roth conversions.

Required minimum distributions (RMDs) also matter. If you are subject to RMDs, waiting until the first-year deadline may cause two taxable distributions in one calendar year: the delayed first RMD and the current-year RMD. That income bunching can increase taxes and may ripple into other areas, including Medicare premiums.

Roth TSP balances are treated differently from traditional balances under recent rules, but taxpayers should confirm current requirements before making elections. If you were born before 1960 and have left federal service, your RMD is at age 73 and the first distribution is due by April 1 of the year after you turn 73. If you were born in 1960 or later, your RMD age is 75 and your first distribution is due by April 1 of the year after you turn 75 or older and have left federal service.

If you are retiring early, be sure to understand the 10% early withdrawal penalty tax if you plan to take distributions or elect a withdrawal option before you reach age 59½. There is good news for some, since the additional 10% tax generally does not apply to payments made from your TSP account if you separate from federal service during or after the year you reach age 55.

Additionally, if you are a public safety employee as defined in section 72(t)(10)(B)(ii) of the Internal Revenue Code, payments made after you separate from service during or after the year you reach age 50 or have 25 years of service under the TSP are also exempt.

If you elect a life annuity, these payments will not be subject to the 10% penalty. If you elect a distribution of substantially equal payments over your life expectancy, these payments will not be penalized, but you must maintain this election until you reach age 59½.

The penalty can be applied retroactively if you stop your life expectancy installments or take additional money from your account within five years of beginning your installments or before you turn 59½ years old, whichever is later. See the TSP booklet 26, Tax Rules About TSP Payments, for more tax information and additional exceptions. Also, refer to IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits.

Living longer

One reason TSP distribution planning is so important is that older adults are one of the fastest-growing segments of the U.S. population, and more retirees may need their savings to last 25, 30 or even more years in retirement. Many retirees underestimate how long retirement can last.

Taking too much too soon can leave the later years exposed to inflation, medical costs, long-term care expenses or the loss of a spouse’s income. On the other hand, withdrawing too little may lead to unnecessarily large RMDs later or leaving out some of the enjoyment this additional income can add to your early retirement years.

A sustainable withdrawal strategy should consider expected longevity, survivor needs, inflation, investment risk, guaranteed income sources (i.e., Social Security benefits, CSRS, FERS retirement benefits, etc.) and whether it is important to preserve assets for your beneficiaries.

The following examples show why the distribution rate matters as much as the investment return. These are simplified illustrations using a $500,000 TSP balance, annual withdrawals taken at year-end, no additional contributions, no taxes, no inflation adjustment and steady annual returns of either 6% or 10%.

Actual results will vary because market returns are not level from year to year, taxes reduce spendable income and increasing withdrawals for inflation will shorten the timeline.

If you withdraw…

$25,000/year or 5% of your $500,000 balance, your payments can last indefinitely if a rate of return of at least 6% is earned consistently before costs and taxes are deducted.

However, if you increase your withdrawal amount each year by an estimated 3% inflation rate to maintain your purchasing power, your investment will last for only 29 years.

If you withdraw 7% of your balance or $35,000/year, you will run out of money in about 33 years if you earn a consistent 6% rate of return.

Your money may last indefinitely if 10% is earned consistently before costs and taxes.

However, if you add a rate of 3% or 4% inflation, your spending will quickly overtake the growth, and you may run out of money in as little as 26 years.

Unfortunately, if you start taking out lump-sum distributions in addition to the stream of payments, you may deplete your balance much more quickly.

A 10% average return can still produce poor outcomes if losses occur early in retirement, because withdrawals during down markets permanently reduce the number of shares left to recover. This is known as sequence-of-returns risk.

For that reason, retirees should test their TSP election against conservative return assumptions, inflation-adjusted withdrawals, income taxes, Medicare premium thresholds and the possibility of a very long retirement.

These examples do not guarantee these projections or recommendations! Try this calculator from USAA to help gauge how long your savings may last using estimated rates of inflation, your tax bracket and estimated rate of return.

Too much risk? Consider the life annuity

A TSP life annuity converts part or all of your account balance into guaranteed monthly payments for life through the TSP annuity provider. The primary advantage is longevity protection: Payments continue even if you live far longer than expected.

It can also reduce the pressure of managing investments in retirement and may be useful for someone who wants more guaranteed income in addition to a FERS or CSRS pension and Social Security.

There is a big trade-off to these advantages. Once TSP money is used to purchase a life annuity, you give up control. The payment amount depends on the purchase amount, age, interest-rate environment and selected features.

A single-life annuity may pay more each month than a joint-life annuity, but payments can stop at your death unless a qualifying feature is elected. A joint-life annuity can protect a spouse or other eligible joint annuitant, but the monthly payment is usually lower because the insurer may have to pay for two lifetimes.

Inflation is another key issue. Level payments start higher but remain the same, so purchasing power can decline over time. Increasing payments start lower but rise by a stated percentage each year, which may help offset inflation, although the increase may not fully match actual living-cost increases.

Retirees should also understand beneficiary features, such as cash-refund or certain-period options, because adding protection for heirs can reduce the monthly income. Here are some of the options with the key pros and cons:

Single life annuity with level payments provides the highest starting monthly income and the payments will last as long as you do, but there will be no continuing payment to your survivors unless you add additional features, and your purchasing power will be eroded over time since the payments will not increase.

Single life annuity with increasing payments provides a lower starting payment but will increase over time by a 2% annual adjustment that will help reduce some of the risk of inflation. However, these increases may not keep pace with actual inflation.

Joint life annuity with spouse and increasing payments will provide lifetime income for two lives with payments that rise over time. Typically, the lowest starting income of these examples is because it combines survivor protection with increasing payments.

Remember that electing a 50% survivor option will pay 50% of the payment to the survivor (not “your” survivor). Full payment is only paid while you are both living. To keep the payment level over both lifetimes, a 100% survivor election is available with or without the increasing payment option added.

The following illustration assumes $250,000 is used to purchase a single-life, level-payment TSP annuity. There is no payment to your beneficiary regardless of how long you survive after the annuity begins unless you add the “10-year certain” feature or “cash refund” feature, which would reduce these estimates.

This example uses the current August 2026 TSP annuity interest-rate index of 4.95% as the basis for the comparison, but the figures should still be treated as estimates rather than exact quotes. Actual TSP annuity payments depend on the participant’s exact age at purchase, the annuity provider’s factors, the option selected, whether increasing payments or refund features are added and the rate in effect when the annuity is purchased.

If a single life annuity is purchased at age 50, the monthly payment would be $720 and over 30 years, you would receive approximately $259,200. Over 10 years, the annuity would pay only $86,400.

If purchased at age 60, the monthly payment would be $1,095 and over 30 years, you would receive approximately $394,200. Over 10 years, the annuity would pay only $131,400.

This comparison highlights the longevity trade-off. A younger retiree generally receives a smaller monthly payment because the insurer expects to pay for more years. If that retiree lives long enough, the cumulative payments can eventually exceed the original $250,000 purchase amount.

However, if death occurs early and no refund or survivor feature was elected, the retiree may receive far less than the amount used to buy the annuity. Adding refund protection, survivor protection or increasing payments can change the result and usually reduces the initial monthly income.

You can use the TSP Annuity Calculator to try this for yourself.

TSP distributions can also affect Medicare Part B and Part D premiums through the income-related monthly adjustment amount, commonly called IRMAA. Medicare uses modified adjusted gross income from a prior tax year to determine whether higher-income beneficiaries owe surcharges.

A large TSP withdrawal, Roth conversion or RMD year can therefore increase Medicare costs two years later. This does not mean distributions should always be minimized, but it does mean retirees should model the after-tax and after-premium result before taking a large payment.

If your modified adjusted gross income as reported on your IRS tax return from 2024 is above $109,000 if you file an individual tax return or above $218,000 for those filing a joint return, you’ll pay the standard Part B premium of $202.90 (2026) and an income-related monthly adjustment amount.

Estate planning issues after retirement

Estate planning should also be part of the TSP distribution decision. Beneficiary designations generally control who receives the account at death, so retirees should review them regularly and coordinate them with a will, trust, life insurance, pension survivor election and family circumstances.

This review is especially important after marriage, divorce, the death of a spouse, the birth of grandchildren or a blended-family change.

Retirees should also consider whether a surviving spouse or other beneficiary will need continued income. A withdrawal strategy that works during a couple’s joint lifetime may not be sufficient if one spouse dies and household income changes.

Traditional TSP balances are generally taxable when distributed to beneficiaries, so leaving a large account to adult children can create income-tax consequences for heirs, particularly if they are already in high-earning years. A spouse may have more flexibility than a non-spouse beneficiary, and an IRA rollover may offer additional beneficiary-planning tools in some cases.

The TSP annuity election also has estate-planning consequences. Money used to purchase a single-life annuity may no longer be available to heirs unless a refund, survivor or certain-period feature is elected.

Those protections can help address survivor or legacy goals, but they usually reduce the starting monthly income. Retirees should balance guaranteed lifetime income against the need for liquidity, long-term care expenses and the desire to leave assets to family or charity.

Trust planning may be appropriate when beneficiaries are minors, have disabilities, struggle with financial management or are part of a blended-family plan, but retirement accounts and trusts require careful tax drafting.

Charitable planning should also be coordinated, because taxable retirement assets may be better suited for charitable gifts than after-tax assets. In short, the TSP should not be treated only as an income source. It is also an estate-planning asset that should fit with the retiree’s broader tax, legal and family goals.

Should I stay or should I go?

The IRA-versus-TSP decision is rarely all-or-nothing. Leaving money in the TSP may preserve low-cost investment access, the G Fund, creditor protections, simplicity and certain penalty exceptions.

Rolling money to an IRA may provide broader investment choices, more flexible beneficiary planning, qualified charitable distribution options, professional account management or coordinated Roth conversion strategies. However, IRAs can also carry higher costs, sales incentives, more complicated investment choices and different protection rules.

A direct rollover can avoid current taxation when moving traditional TSP money to a traditional IRA, but an indirect rollover, missed deadline or Roth conversion can create taxable income.

A qualified financial professional can help compare TSP distribution choices, but the selection should be made carefully. The right advisor should understand federal benefits, TSP withdrawal rules, the FERS or CSRS pension, Social Security claiming, Medicare premium thresholds, beneficiary planning and the tax impact of traditional and Roth withdrawals.

This is especially important because TSP elections often interact with several other retirement decisions at the same time. Ask whether the professional you are considering acts as a fiduciary, how they are paid, what credentials they hold and whether they have specific experience working with federal employees.

Fee-only, fee-based, commission-based and insurance-licensed professionals may all provide different services, but their compensation structures and potential conflicts should be clear. It is also wise to ask whether the advisor will coordinate with a tax professional or estate planning attorney when the TSP decision involves Roth conversions, RMDs, trusts, charitable planning or large rollovers.

Before hiring someone, consider asking practical questions:

Have you worked with federal retirees before?

Can you compare leaving money in the TSP with rolling assets to an IRA?

Will you provide a written analysis of taxes, Medicare effects, survivor needs and investment risks?

Do you recommend specific products, and if so, how are you compensated? Will I retain access to low-cost TSP options if I move money?

A good professional should be willing to explain both the benefits and drawbacks of each option, not simply recommend a rollover or annuity without showing how it fits the retiree’s broader plan.

Before making an election, here are five questions to consider:

How much income do I need now?

What tax bracket will this distribution create?

Could the distribution increase Medicare premiums?

Will I need penalty-free access before age 59½?

Am I giving up TSP features that are hard to replace?

The best TSP distribution strategy is the one that balances current income needs with tax efficiency, Medicare planning, longevity protection and flexibility. Because the consequences can last for decades, a careful review with a qualified tax or financial professional is often worth the effort before the election is submitted.

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Former feds have a new way to find their personnel files

Tammy Flanagan — Thu, 06 Aug 2026 15:00:00 -0400

One of my colleagues, retirement benefits expert Michele Bollier, who answers emails from members of the National Active and Retired Federal Employees Association, was helping a retiree and discovered more good news coming from the Office of Personnel Management.

The agency has taken an important step toward modernizing access to federal personnel records with a new resource called the eOPF Resource Center and the recent launch of the eOPF Documents Request Service.

The electronic Official Personnel Folder, or eOPF, began 20 years ago when the National Finance Center payroll provider started sending SF-50s, Personnel Action Statements, and transactions to the eOPF system for processing. Scanned documents from paper Official Personnel Folders began being added to eOPF in 2007. Two decades have passed since the Commerce Department implemented an e-government initiative that provided easier and faster access for current employees to their personnel files.

Now, if you are a former federal employee or retiree looking for personnel records from your eOPF, there is a new and faster way to request them.

For current and former federal employees, the “electronic Official Personnel Folder,” or eOPF, is more than an administrative archive. It is the official record of federal employment, containing documents such as SF-50s, appointment and separation actions, position changes, benefits-related forms and other records that may be needed years after someone leaves government service.

For many former employees, getting these records has historically been frustrating. Once an employee separated, online access to the agency eOPF system generally ended, leaving the former employee to contact a previous agency human resources office or submit a written request to the National Personnel Records Center.

OPM’s new resources are designed to make that process clearer and, for many people, faster.

The most significant new resource is the Documents Request Service, a secure, public-facing portal. The service allows eligible separated federal employees to request and receive a copy of their eOPF employment folder electronically.

OPM describes the tool as a self-service option that eliminates the need for former employees to rely on government networks, agency-issued credentials or manual paper-based fulfillment methods when their records are already maintained in eOPF.

Being a former federal employee, I decided to try out this new service. I had my doubts since I left federal service in 1988 and doubted that anyone had scanned my old personnel records into the eOPF system. I was right: There were no records.

However, I was reminded that to sign into the Login.gov system, you will need to scan your driver’s license or passport into the system and then provide your Social Security number as further identification that it is you who is trying to log in.

If you are informed that the system could not find your records, you should check the information you entered and try again. Common mistakes are an incorrect Social Security number or ZIP code. You can try it four more times. Then you must wait six hours before trying again.

The service is intended primarily for separated federal employees whose records are in eOPF. It may also be used by current federal employees who do not have government-furnished equipment, a PIV card, a government email address or secure access to their agency’s eOPF system.

It is not intended for current employees who already have normal access through their agency, third-party requesters, the public or individuals whose records were never maintained in the eOPF system.

Former employees who want to use the Documents Request Service should generally wait at least 30 days after their separation date before submitting a request. OPM advises this waiting period because final separation documents, including the SF-50 documenting separation, may not be profiled into the eOPF immediately. Requesting too early could result in an incomplete folder.

OPM’s user guidance says the file should be downloaded and saved promptly because the link expires after 24 hours. The password format described in OPM’s guide uses the employee’s date of birth and the last four digits of the Social Security number.

Because the file contains sensitive personnel information, former employees should save it in a secure location and avoid forwarding it through unsecured email.

In case your records can’t be retrieved through this new system, OPM points users to more traditional options: Contact the former employing agency or request records from the National Personnel Records Center. NPRC maintains official personnel folders for many former federal civilian employees whose service ended after 1951. These records remain subject to the Privacy Act, so access is restricted.

The person of record may request copies of most civilian personnel records, including SF-50s, by submitting a written, signed and dated request. The request should include identifying information such as full name, date of birth, Social Security number, last employing agency, duty station, approximate dates of employment and a clear description of the records needed.

Timing is important here as well. NPRC guidance notes that OPFs are generally retired to the center after separation. If not enough time has passed, the former employee may need to contact the last employing agency instead.

OPM’s post-separation FAQ also explains that eOPF records are often transferred from the former agency to NPRC within 30 to 60 days after the separation action is processed, though an agency may retain the eOPF longer. If the agency still has the folder, it may be required to provide physical copies upon request.

For older personnel records, former employees should understand the difference between non-archival and archival OPFs.

NPRC’s Federal Records Center Program maintains OPFs for former federal civilian employees whose employment ended after 1951. These files generally remain in OPM’s legal custody and are protected by the Privacy Act, which means the person of record, or an authorized third party with signed consent, is usually the proper requester.

Civilian employment records are normally transferred to NPRC within 120 days after separation. If fewer than 120 days have passed, the employee should write to the last employing agency instead.

A written NPRC request should be signed and dated and should clearly identify the records needed, such as the most recent SF-50 or the complete official personnel folder. To help NPRC locate the file, the request should include the full name used during federal employment, date of birth, Social Security number if applicable, employing agency name and location, duty station and approximate beginning and ending dates of service.

Records for federal civilian employees whose service ended before 1952 follow a different archival access process through the National Archives. Those older OPFs may be handled as archival holdings rather than current federal records, so requesters should use National Archives guidance for archival civilian personnel folders.

In practical terms, a former employee seeking older records should first determine the approximate separation date: After 1951 generally points to NPRC’s non-archival OPF process, while before 1952 points to the archival OPF process.

Access to personnel records is not just a matter of convenience. Former employees may need their SF-50s and related documents to verify prior federal service, apply for another federal position, resolve pay or leave questions, support a retirement or benefits claim, confirm military service credit or assist with a security clearance review.

Having an easier electronic path to these documents can reduce delays at moments when former employees may be facing deadlines or life transitions.

The new eOPF resources also reinforce a best practice: Employees should review and download important records before leaving federal service whenever possible. It is much easier to identify missing or incorrect documents while still employed and while agency HR staff can correct problems directly.

Before separation, employees should check key documents such as SF-50s, service computation dates, beneficiary forms, military deposit records, retirement coverage and benefits elections. Any discrepancies should be raised with HR before access ends.

OPM’s updated eOPF Resource Center and Documents Request Service give former federal employees a clearer roadmap for obtaining personnel records after leaving government. The best approach is to start with the new portal if eligible, wait long enough for final separation documents to be added, download the completed folder promptly and keep the records secure. If the portal cannot locate the folder, the next step is to contact the former agency or submit a written request to NPRC. Together, these resources should make it easier for former employees to prove their service, protect their benefits and manage federal employment records long after their last day on the job.

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Why time, not timing, is the biggest retirement advantage for federal employees

Tammy Flanagan — Thu, 30 Jul 2026 15:00:00 -0400

As most federal employees covered by the Federal Employees Retirement System (FERS) know, a comfortable retirement cannot rely on the FERS basic retirement benefit alone. FERS is built on three parts working together to produce a financially comfortable retirement: the basic retirement benefit, Social Security and the Thrift Savings Plan (TSP). Of those three, the TSP is the part employees can most directly influence through payroll contributions, investment choices and time in the market. That is why understanding compounding is not just a financial concept. It is a practical career-long strategy.

It is amazing to learn that the largest TSP account balance was $10,820,000 as of the end of June. However, at the Federal Retirement Thrift Investment Board's July board meeting, the reported average TSP account balance for June was $157,412, with the average participant contributing for nearly 11 years. Yet most accounts — 4,095,134 of them — were still under $50,000, with an average contribution history of a little more than six years.

The contrast is important: Balances tend to grow most visibly after years of steady saving, reinvested earnings and market participation.

For accounts between $500,000 and $749,000, the average number of years contributed was 21.96 years.
For accounts between $750,000 and $999,000, the average number of years contributed was 23.85 years.
For accounts of $1,000,000 or more, the average number of years contributed was 27.25 years.

Note: Values include FERS, CSRS and uniformed services accounts.

These numbers are a practical reminder that retirement wealth is built through repeated contributions, agency matching dollars, long-term investment discipline and the compounding of earnings over many years. Compounding is the process of earning money not only on contributions but also on prior earnings. In a retirement account, that means the earliest dollars have the longest runway. A contribution made in the first decade of a federal career can potentially benefit from decades of market returns, reinvested growth and additional agency contributions.

For eligible FERS employees, the agency contribution makes early and consistent saving even more powerful. FERS employees receive an automatic 1% agency contribution to the TSP, along with dollar-for-dollar matching contributions on the first 3% of basic pay they contribute and an additional 50 cents on the dollar on the fourth and fifth percent of employee contributions. Setting your savings at 5% or higher is the key to receiving the full available agency match. Missing that match means giving up retirement money today and the future growth that money could have produced.

As of May 31, the C Fund held more than $500 billion of the TSP's total assets, representing a 43.9% share of all TSP fund assets.

As of June 30, 2026, the top companies in the S&P 500 Index, which the TSP's C Fund is designed to track, were dominated by technology and communication services companies, including Nvidia, Apple, Microsoft, Amazon, Alphabet, Broadcom, Micron, Meta and Tesla.

Sector weightings showed information technology at 38.0%, followed by financials at 11.8%, communication services at 9.7%, consumer discretionary at 9.3%, industrials and health care at 8.9% each and smaller allocations across consumer staples, energy, utilities, materials and real estate.

The lesson is to participate consistently through a diversified strategy that can benefit as market leaders shift over time. According to S&P Global, the S&P 500 currently represents approximately 83% of total U.S. market capitalization. This broad coverage enables it to closely track the performance of the overall U.S. equity market. The largest companies in the index account for a substantial share of its total market capitalization, giving them the greatest influence on the index's performance.

Consider the performance of the following investments over time:

A $1,000 investment in the S&P 500 made 20 years ago would be worth more than $8,500 today. In 2006, the maximum elective deferral limit was $15,000. Investing $15,000 in the C Fund 20 years ago would be worth around $127,500 today.
A $1,000 investment in Nvidia 20 years ago would be worth more than $560,000 today. Interestingly, Nvidia officially joined the S&P 500 on Nov. 29, 2001, replacing Enron.
A $1,000 investment in Apple 20 years ago would be worth about $130,000 today.
A $1,000 investment in Microsoft at its 1986 initial public offering would be worth roughly $6.46 million today. A $1,000 investment made 20 years ago would be worth approximately $20,088.
A $1,000 investment in Amazon 20 years ago would be worth roughly $90,000 to $135,000 today.
A $1,000 investment in Broadcom 20 years ago would be worth approximately $254,613 today.

These examples are not recommendations for buying individual stocks, as past performance cannot predict future results. Buying individual stocks for retirement is risky because it lacks diversification, demands intensive research and introduces high emotional volatility. In the TSP, most federal employees pursue this kind of long-term growth through diversified funds, such as the C, S, I, F and G Funds, or through Lifecycle Funds that adjust allocations across all five core funds over time.

Looking back to 1980 — a year that was personal for me because I got married, moved to Washington, D.C., and was just beginning my career at age 22 — the leading companies looked very different:

IBM, then the index heavyweight in information technology. If you put $1,000 into IBM stock 20 years ago, it would be worth about $5,700 today.
AT&T, the pre-divestiture telecommunications monopoly.
Exxon, now part of ExxonMobil.
Standard Oil of Indiana, later Amoco and eventually part of BP.
Schlumberger, an energy and oil field services company.
Shell Oil, part of the energy sector.
Mobil, later merged with Exxon.
Standard Oil of California, later Chevron.
Atlantic Richfield, known as ARCO, was later acquired by BP.
General Electric, an industrial leader.

The point is not that one sector is always best. In 1980, energy and oil service companies dominated the top 10. Today, technology and communication services carry much more weight. Federal employees who save steadily in diversified TSP funds do not have to know in advance which companies will lead the next generation. They simply need a contribution plan, an allocation appropriate for their age and risk tolerance and the patience to let compounding work.

Here are some things you can do to prepare for your future retirement:

Contribute at least 5% if you are eligible for the full FERS match. The match is part of your compensation and can compound along with your own contributions. The May TSP Activity Report indicated that 86.6% of FERS employees contributed at least 5% of their basic pay to receive the full match.
Increase contributions when pay increases. Even small increases can become meaningful over a full federal career.
Know the annual limits. For 2026, the TSP elective deferral limit is $24,500. FERS employees age 50 and older may make up to $8,000 in additional catch-up contributions, with a higher catch-up opportunity of $11,250 for those ages 60 through 63.

The following two things can be done automatically by investing in the TSP Lifecycle Fund that matches your time horizon (an investment time horizon is the period during which an investment is expected to be held to achieve financial goals):

Stay diversified. Market leadership changes. Diversification helps reduce the risk of relying too heavily on one company or sector.
Review your allocation periodically. Your investment mix should reflect your time horizon, risk tolerance and retirement income needs.

Do not wait for the perfect time. The most valuable ingredient in compounding is time, and time cannot be replaced later.

Federal service comes with a valuable retirement framework, but the strength of that framework depends in part on the actions you take throughout your career. The FERS annuity and Social Security provide important foundations. The TSP gives employees the opportunity to build personal retirement wealth through disciplined saving, agency contributions, diversified investing and compounding.

A trip down memory lane shows that markets evolve, leaders change and time rewards consistency. For federal employees, the most important step may be the simplest: Start saving, keep saving and give compounding enough years to do the heavy lifting.

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Why your retirement experience may depend more on the agency than the benefit

Tammy Flanagan — Thu, 23 Jul 2026 15:00:00 -0400

As federal employees transition into retirement, they also transition from familiar routines. After many years, if not many decades, of knowing where to go when it is time to access or change their federal benefits, retirement creates a need to learn new methods of communicating with new organizations. For health benefits, life insurance and, most importantly, retirement, the Office of Personnel Management becomes the new "personnel" shop for recent retirees. To turn on Social Security retirement benefits, learning to navigate the Social Security Administration's website and phone system becomes very important.

Instead of watching their lifetime retirement savings continue to grow, it is now time to figure out how to turn those investments into a stream of income that must last for many years and often several decades to come. These organizations provide customer service to help answer questions and guide new annuitants as they learn the ropes of life after retirement. Customer service is the help and support these individuals will rely on before, during and after their service to the federal government comes to an end. In anticipation of a smooth and enjoyable experience, there is an element of not knowing what to expect and the fear that something might go wrong.

For federal employees and retirees, customer service is not an abstract measure of government performance. It determines how quickly a new retiree receives their full annuity, whether a participant can resolve a Thrift Savings Plan account problem and how long a Social Security beneficiary must wait for help with a benefit issue. Recent statistics suggest three very different customer service stories. OPM's Retirement Services operation is still judged largely by claims-processing time and backlog. The Thrift Savings Plan, administered by the Federal Retirement Thrift Investment Board, reports comparatively strong participant satisfaction and short telephone wait times. The Social Security Administration serves a much broader public and has recently shown measurable improvement in telephone service, though its reported averages can mask long waits for some callers.

OPM Retirement Services has one of the most consequential service roles in the federal benefits ecosystem: converting a retiring employee's application into interim and then final annuity payments. The most recent OPM retirement processing data show the scale of the challenge. OPM reported that it experienced a historic surge in retirements in 2025 and responded by expanding the team. However, overall, Retirement Services shrunk 16% from fiscal 2024 to fiscal 2026.

That higher volume matters because retirement processing is document-heavy, depends on agency and payroll office submissions and can be delayed by missing or inconsistent records.

OPM's June 2026 retirement processing report illustrates both improvement and strain. In June, the agency received 8,663 new retirement claims, of which 6,852 were digital and 1,811 were paper. It processed 12,751 total claims that month, but the total inventory still stood at 33,851 pending cases.

The average processing time for all cases was 108 days in June, while digital cases were processed in 96 days and paper claims in 120 days. For the fiscal year to date, the average processing time was 77 days, and the fiscal-year-to-date digital processing time was 52 days. These numbers show why digital retirement processing is central to OPM's service strategy: Digital cases are faster, but the transition is incomplete, and paper cases continue to slow the system.

Compared with the other two agencies, OPM's service problem is the most specialized and the most procedural. The customer may contact OPM for status updates, but the real service outcome is whether the retirement claim is adjudicated accurately and quickly. A retiree waiting months for a finalized annuity may see the process as poor customer service even if phone representatives are courteous. OPM's published data also make clear that modernization is producing benefits, but not yet enough to eliminate large inventories or long waits during claim surges.

The TSP presents a different customer service profile. The TSP is massive. Recent reports show more than 7.3 million accounts and assets surpassing $1 trillion, yet its service statistics are notably favorable. In recent years, the TSP said it issued more than 1 million Forms 1099-R and notified more than 300,000 participants about required minimum distributions.

The March 2026 board materials showed that in February, the ThriftLine received approximately 200,000 calls, with an average waiting time to reach an agent of 11 seconds and 95% of callers waiting 20 seconds or less. Overall participant satisfaction with the ThriftLine exceeded 93% for the 12th consecutive month.

In the May report, it was noted that participants logged in about 4 million times to My Account through the Thrift Savings Plan mobile app during April, accounting for 42% of all TSP logins, up from 32% one year earlier. In April, TSP participants completed nearly 7,000 Roth in-plan conversions totaling approximately $135 million.

These statistics suggest that, among the three organizations, TSP currently offers the strongest measurable front-end customer experience. Its service channels are designed around account access, transactions, withdrawals, loans, beneficiary issues and investment elections. While individual participants may still encounter complex cases, especially around post-separation withdrawals or legal processing, the published service metrics point to a system that is answering calls quickly and satisfying most users who interact with it. The TSP also benefits from a narrower mission than SSA and a more account-based operating model than OPM Retirement Services.

The Social Security Administration is not directly comparable in scale. It serves more than 300 million people with active Social Security numbers and more than 71 million beneficiaries. Its customer service challenge spans retirement, disability, survivors, Medicare-related services, Social Security numbers, overpayments, appeals and in-person field office needs. SSA reports that online and telephone channels now account for most customer contacts, with online services increasingly emphasized through my Social Security accounts and digital transactions.

Recent SSA data show meaningful improvement, especially on the National 800 Number. The agency reported that, compared with service levels in May 2025, reductions in wait times through May 2026 saved the public an estimated 14.2 million hours: 7.6 million through online services, 4.9 million through the National 800 Number and 1.7 million through field office calls and visits. SSA also said it had served 5.9 million more callers in the fiscal year to date, an increase of more than 29% compared with prior years.

An inspector general audit released in December 2025 found that SSA's publicly reported National 800 Number metrics were accurate and that overall telephone service improved in fiscal 2025. The report said SSA served 68 million callers through employees or automation, a 65% increase from fiscal 2024. The average speed of answer was 13 minutes in October 2024, peaked at 30 minutes in January 2025 and fell to 7 minutes by September 2025. That was an improvement over fiscal 2024, when the peak was about 42 minutes and the low was 12 minutes.

Still, SSA's statistics require careful interpretation. The inspector general noted that the average speed of answer does not capture the full wait experienced by every caller. If a caller accepted a callback, SSA counted the call as having zero wait time for that metric, while the later callback delay was tracked separately.

For callers who stayed on hold in fiscal 2025, average queue wait time was about 51 minutes in October 2024, peaked at 1 hour and 40 minutes in January 2025 and fell to 19 minutes in September 2025. Average callback time was about 1 hour and 49 minutes in October 2024, peaked at 2 hours and 32 minutes in January 2025 and declined to about 1 hour and 2 minutes in September 2025. In other words, SSA improved significantly, but some customers still experienced long waits.

Measured by speed and satisfaction, the TSP appears to be performing best. Its recent reported wait times are measured in seconds, and satisfaction has remained above 93% for at least a year. Measured by breadth of service and volume handled, SSA faces the hardest public-facing challenge and has shown the largest recent improvement. Its phone metrics improved substantially in fiscal 2025 and continued to show gains into 2026, but its callback and queue-wait details reveal that averages can understate the experience of customers with complicated needs.

Measured by the consequences of delay, OPM Retirement Services may present the highest anxiety for its customers. A delayed TSP transaction or SSA phone call is frustrating, but a delayed federal annuity calculation can affect a retiree's monthly income for months.

The fairest conclusion is that each organization's customer service record reflects its mission and operating model. TSP service is the most consistently positive in the available statistics, aided by a transactional account structure and strong call center performance. SSA is the most improved, but because it serves nearly the entire public and handles highly varied benefit issues, it remains vulnerable to congestion and uneven experiences. OPM Retirement Services is making progress through digital retirement processing, but its backlog and processing times remain the most visible pain point for federal retirees.

For employees approaching retirement, the practical lesson is clear: Prepare paperwork early, use digital tools where available, monitor account access before separation and keep expectations realistic. The best customer service among the three is currently at the TSP, the most improved is SSA and the most urgent modernization challenge remains OPM retirement processing.

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Why Social Security's uncertainty is becoming a federal workforce issue

Tammy Flanagan — Thu, 16 Jul 2026 15:00:00 -0400

This week, Sens. Tim Kaine, D-Va., Dick Durbin, D-Ill., Bill Cassidy, R-La., Thom Tillis, R-N.C., and Angus King, I-Maine, introduced a bipartisan proposal to encourage congressional action on Social Security: the Protecting Retirement Opportunities and Maintaining Income Security for Everyone, or PROMISE, Act.

The PROMISE Act tackles the long-term finances of Social Security's retirement program by moving reform out of endless discussion and into an actual legislative process. The bill itself does not raise payroll taxes, reduce benefits, change the retirement age or alter eligibility rules. Instead, it creates a framework in which those options, or some combination of them, could be evaluated, amended and put to a vote.

The Social Security 2026 Trustees Report was released earlier this year and showed that within six years, if Congress does nothing, Social Security income will cover only about 78% of scheduled retirement benefits. That warning is especially consequential for federal employees covered under the Federal Employees Retirement System because FERS was built on three coordinated sources of retirement income: the FERS basic benefit, Social Security and the Thrift Savings Plan. For federal workers, Social Security reform is not an abstract national budget debate. It directly affects retirement timing, income planning, TSP savings decisions and confidence in the federal retirement promise.

Because FERS employees pay Social Security taxes and rely on Social Security for a meaningful share of retirement income, changes to the program's solvency, claiming rules, disability protections or benefit formulas can directly affect their retirement planning. Understanding the role Social Security plays in that plan is essential. It helps employees estimate lifetime income, decide when to claim benefits, determine how much to save in the TSP, evaluate survivor and disability protections and judge whether they can afford to retire at a particular age.

Social Security's YouTube channel has a variety of recorded training videos that explain what to know before signing up, earnings limits, how survivor benefits work, how to change your address and even the history of Social Security.

Social Security planning is especially important for retirees who receive the FERS retirement annuity supplement, which is designed to bridge the gap between federal retirement and first eligibility for Social Security. According to OPM, the supplement stops at the end of the month before a retiree turns 62, even if the retiree chooses not to apply for Social Security at that time. As a result, some federal retirees may feel financial pressure to claim Social Security as soon as they become eligible at age 62 to replace the income lost when the supplement ends. Others may choose to delay claiming to achieve a higher monthly benefit, but only if their TSP savings, FERS annuity, spouse's income or other resources can cover the gap.

A 2025 poll released by the Bipartisan Policy Center on Social Security's 90th anniversary underscores why reform has broad public urgency. The survey, commissioned by BPC's American Savings Education Council and conducted by Public First, found that 93% of Americans consider Social Security a valuable federal program and 83% believe addressing its challenges should be a top priority for Congress.

The same poll found deep anxiety about the program's future: 74% of respondents were concerned Social Security could run out before they retire, 80% worried Congress would cut benefits and 41% expected Social Security to be their primary source of retirement income. For federal employees covered under FERS, Social Security is not a supplemental benefit. It is one of the system's three core retirement pillars. If workers broadly fear benefit reductions or insolvency, FERS employees have reason to reassess retirement dates, TSP contribution levels, survivor planning and assumptions about post-retirement income.

The poll therefore reinforces that Social Security reform is not only a national retirement issue but also a direct workforce and financial security issue for current and future federal retirees. The findings also showed bipartisan appetite for action, with majorities of Democrats and Republicans agreeing that lawmakers should work across party lines to strengthen the program.

The current funding debate also echoes the Social Security crisis of 1982, but with an important difference in timing and scale. In the early 1980s, the Old-Age and Survivors Insurance trust fund was projected to run out of money as early as August 1983, leaving the program only months away from being unable to pay full benefits on time. That emergency led to the Greenspan Commission and the 1983 Social Security Amendments, a bipartisan package that accelerated payroll tax increases, delayed cost-of-living adjustments, taxed some benefits, gradually raised the full retirement age and brought newly hired federal employees into Social Security.

Today's crisis is less immediate but potentially harder to solve. Trust fund depletion is still several years away, yet the long-term gap between scheduled benefits and dedicated payroll tax revenue is larger and driven by demographic pressures that have been building for decades. The lesson for today is that waiting until the last minute may preserve political convenience, but it narrows the choices available to workers, retirees and federal employees who need time to adjust their retirement plans.

The PROMISE Act would not guarantee a particular outcome, but it could make it harder for lawmakers to postpone decisions indefinitely. The bill would create a structured congressional process for developing and voting on a long-term Social Security solvency plan.

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No more paper: Navigating OPM’s new digital retirement process

Tammy Flanagan — Thu, 09 Jul 2026 15:00:00 -0400

OPM recently announced that over 95% of retirement applications are now submitted electronically, signaling an end to an agency long defined by physical files, snail mail and manual data entry. With the full launch of the Online Retirement Application (ORA), OPM has officially reached its "Last Day of Paper." While June figures are still pending, May data showed that digital submissions already accounted for 70% to 75% of all applications.

The mission behind ORA is simple: make retirement seamless. By eliminating the physical transport of documents between agencies and payroll offices, the digital system provides better tracking and slashes the risk of human error — the kind that often crops up during manual processing.

The scale of this shift is massive. OPM reports that ORA managed more than 155,000 applications last year. To put that in perspective, processing over 100,000 new retirees in a single year is a rare feat — it has only happened nine times since 2000 — including high-volume years like 2013 and 2025.

While the 2025 data is currently missing totals from November and December, early indicators for 2026 suggest the momentum is holding steady, with nearly 100,000 claims processed through May.

It is possible that OPM's numbers include claims still being worked on. Early data for 2026 suggests another busy year — with nearly 100,000 claims processed through May.

Efficiency is also on the rise. Between January and May, digital claims were finalized in 34 to 66 days on average — a significant improvement over traditional paper-based methods.

October:

Digital claims processed: 1,686 in an average of 45 days

Total claims processed: 8,751 in an average of 79 days

November:

Digital claims processed: 4,363 in an average of 38 days

Total claims processed: 8,707 in an average of 66 days

December:

Digital claims processed: 3,506 in an average of 40 days

Total claims processed: 9,428 in an average of 67 days

January:

Digital claims processed: 6,465 in an average of 48 days

Total claims processed: 15,571 in an average of 77 days

February:

Digital claims processed: 7,054 in an average of 34 days

Total claims processed: 18,149 in an average of 71 days

March:

Digital claims processed: 10,817 in an average of 39 days

Total claims processed: 22,237 in an average of 60 days

April:

Digital claims processed: 7,394 in an average of 50 days

Total claims processed: 17,175 in an average of 78 days

May:

Digital claims processed: 8,761 in an average of 66 days

Total claims processed: 19,433 in an average of 87 days

Modernization isn't just about filing; it's about getting paid faster. OPM is now beginning the approval process while final payroll details are being wrapped up. The new target? Delivering the first pension payment within seven days of retirement for complete applications submitted by a worker's final day on the job.

The digital transition also applies to former employees eligible for deferred or postponed retirement. Although the RI 79-9 paper form may still appear online, ORA is now the mandatory portal for these applications. If you have already submitted a paper file, OPM recommends checking in to see if you can resubmit digitally. Agencies are no longer the gatekeepers for these claims; their role is now to help you navigate ORA so you can take control of the process yourself.

To support this shift, OPM has revamped its online resources for planning and applying: https://www.opm.gov/retirement-center/csrs-information/planning-and-applying/. Here is the essential guidance for your application (pay close attention to the Application tips to avoid common delays):

Applying for retirement

To get payments from CSRS or FERS, you must apply using the Online Retirement Application (ORA) platform.

How to submit your retirement application

If you have been out of federal service for more than 30 days, you must send your application directly to OPM through the ORA portal. If you are still working, talk to your human resources office to start the process.

If you are still working, contact your human resources office to start your application through ORA.

Application processing

Processing your retirement involves your former agency, the payroll office, and finally OPM, which approves your payments.

Reducing delays in processing

You can help avoid delays by applying early and making sure your Official Personnel Folder (OPF) is complete. Also, review our Application Tips to see if you need to include any extra documents.

If you apply early, your human resources office can finish their part before you retire.

How your application is processed

Your human resources office

Your HR office does the following to process your application:

Verify any service not fully documented in your OPF. If documentation is missing, verification may be obtained by contacting federal record centers. If the human resources office is unable to obtain verification, OPM will complete verification upon receipt of your retirement application and records.  However, this process will cause a delay in processing.

Transfer your enrollment under the Federal Employees Health Benefits (FEHB) program to OPM.

Transfer your coverage under the Federal Employees' Group Life Insurance (FEGLI) program to OPM.

Prepare your separation Notification of Personnel Action (SF 50)

Complete the human resources checklist and send your retirement application package to the payroll office.

Your payroll office

Once HR finishes, your payroll office will:

Authorize your final paycheck and lump sum payment for unused annual leave.

Prepare your Individual Retirement Record (IRR), SF 2806 (CSRS) or SF 3100 (FERS), which reflects service, salary history, and annual retirement deductions.

Complete the payroll checklist and submit the final retirement application package to OPM.

Opm claim processing

Once OPM receives your application, they will:

Send you a welcome notice with your Civil Service Annuitant (CSA) claim number.

Obtain any missing information or documents from your retirement application package.

Determine your eligibility for an annuity and to continue health and life insurance benefits.

Calculate your annuity amount.

Send you information about your ability to pay an unpaid deposit or redeposit.

Authorize your annuity payments which are paid by the Department of the Treasury.

Provide you with your retirement benefits booklet which is available through Retirement Services Online.

Your csa claim number

When OPM gets your application, they will send you a welcome notice with your Civil Service Annuitant (CSA) claim number. This number looks like A8DXXXXX0. You must use this number whenever you contact OPM.

With your CSA number, you can log in to Retirement Services Online (RSO). There, you can track your application and update your tax withholding, address, and direct deposit. RSO will be your main portal for managing benefits.

If you have questions before you receive your claim number

If you need to contact OPM early, check your status on the ORA platform first. If it hasn't been sent to OPM yet, then contact your former HR office.

If you didn't use ORA, contact your former HR office to see when they sent your package to OPM. Former employees can contact OPM directly by phone, mail, or help request.

Annuity payment schedule

Monthly payments are sent on the first business day of the month for the month before. For example, your June 1 payment is for May.

Time frame for processing application

For current times, visit our Retirement Processing Times page.

If your records are complete, your application may be processed faster than average. However, it can take longer if we have to contact you or your agency for more info.

Deferred retirement

Deferred retirement is for former employees who left before they were eligible for an immediate annuity. Your annuity starts once you reach the required age and service years (like age 62 with 5 years). Apply through ORA at least 60 days before you want your payments to start.

Note that health and life insurance cannot be restarted with a deferred retirement. To apply, create an ORA account, verify your ID with Login.gov, and submit your application. Be ready with your service dates, military info, and any previous refund or workers' comp data.

Postponed retirement

Postponed retirement is different. It is for those who left at or after minimum retirement age with 10+ years of service but waited to start payments. Unlike deferred retirement, this may let you restart health and life insurance if you had them for the five years before you left.

You must also use ORA and apply at least 60 days before your start date. This date must be the first of a month and before your 62nd birthday. This is critical " — " if you wait until age 62, it becomes a deferred retirement, and you lose your insurance benefits forever.

To apply, create an ORA account and verify your ID. Provide the same info as deferred retirement, plus your start date and insurance info.

This is a bold step forward, but it isn't a magic fix. While ORA breaks the slow paper chains of the past, accuracy remains paramount.

Delays can still happen if you have missing service info, court orders or need Social Security info.

Financial experts still advise keeping a six-month cash reserve while your retirement is finalized. Many employees strategically save annual leave for a lump-sum payout, which is why retirement spikes are common at the end of the leave year.

The "Last Day of Paper" marks a new era for the federal workforce, offering a transparent and efficient route to retirement. For OPM, it's a tool to manage growing retiree numbers with precision. Ultimately, the success of this digital age will depend on clear communication and the workforce's ability to adapt to these new rules.

Here is where employees as well as former employees who are applying for a deferred or a postponed retirement can begin the process: https://retire.opm.gov/portal

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The Medicare question federal retirees can’t ignore anymore

Tammy Flanagan — Thu, 25 Jun 2026 15:00:00 -0400

Just as Social Security is central to the Federal Employees Retirement System (FERS), Medicare may play an important role in meeting your health insurance needs in retirement. The 2026 Medicare Trustees Report, released on June 9, offers useful insight into future Medicare costs and why federal retirees should think carefully about whether adding Medicare to the Federal Employees Health Benefits Program (FEHB) makes sense.

For federal civilian retirees covered by FEHB, the Medicare decision is often confusing for a few basic reasons:

You are not required to enroll in Medicare to keep FEHB coverage after age 65.
The Medicare Part B premium is substantial and, for some people, may equal or exceed the premium for their FEHB plan.
The choice is rarely as simple as dropping FEHB or skipping Medicare. More often, it comes down to whether adding Medicare to an FEHB plan that “wraps around” Medicare actually improves coverage enough to justify the added cost.
It is almost never advisable to drop FEHB coverage in retirement. Once you leave it, you generally cannot get it back.
The decision gets more complicated when one spouse or family member turns 65 while others remain ineligible for Medicare.
Medicare Part A (inpatient hospital care) and Part B (outpatient care, including doctor visits, lab work and testing) overlap significantly with services already covered under FEHB.

Note: To continue coverage under the Postal Service Health Benefits (PSHB) Program in retirement, you must enroll in Medicare Part B unless you qualify for an exception. For complete PSHB eligibility rules and exceptions, see guidance from the Office of Personnel Management (OPM).

Part B premiums

According to the latest report, Medicare Part B premiums are expected to keep rising.

Most enrollees pay the standard premium — $202.90 per month in 2026 — which covers about 25% of the average program cost for an older beneficiary. Higher-income retirees also pay an Income-Related Monthly Adjustment Amount (IRMAA). For 2026, IRMAA applies when 2024 modified adjusted gross income exceeds $109,000 for single filers or $218,000 for joint filers. Higher-income retirees may also owe IRMAA surcharges for Part D coverage, even when their FEHB plan includes prescription drug coverage through the Medicare Prescription Drug Program at no additional premium.

Late enrollment can also add a permanent penalty. In most cases, the penalty equals 10% of the standard Part B premium for each full 12-month period enrollment is delayed after the initial enrollment period ends. People age 65 or older who are covered by health insurance from current employment may qualify for a special enrollment period and avoid the penalty if they enroll within eight months after that coverage ends.

Some beneficiaries pay less than the standard premium because of the hold harmless provision, which limits premium increases for individuals whose Social Security cost-of-living adjustment is smaller than the Medicare premium increase.

FEHB and Medicare

When deciding whether to enroll in Medicare while keeping FEHB, premiums are only part of the equation. Medicare may reduce out-of-pocket costs, expand provider options and make it worthwhile to choose an FEHB plan that coordinates more effectively with Medicare. That becomes especially relevant in years involving serious illness, injury or ongoing treatment.

The Trustees Report projects the following Part B premiums:

Year	Estimated monthly premium	Annual amount (per person)
2027	$209.50	$2,514.00
2028	$224.50	$2,694.00
2029	$238.50	$2,862.00
2030	$255.50	$3,066.00
2031	$272.10	$3,265.20
2032	$290.20	$3,482.40
2033	$313.60	$3,763.20
2034	$338.50	$4,062.00
2035	$360.60	$4,327.20

The value of combining FEHB with premium-free Part A and Part B depends heavily on how a specific FEHB plan coordinates with Medicare.

Some FEHB plans waive deductibles, copays and coinsurance when Medicare is the primary payer. In practice, that can significantly reduce out-of-pocket costs and, in some cases, offset much of the Part B premium for retirees with higher health care usage.

Examples include Blue Cross Blue Shield Basic Option and Standard Option, MHBP Consumer Plan and Standard, G.E.H.A. High Option and Standard, and Aetna Direct. These plans vary in premiums, provider networks, out-of-pocket maximums and Medicare coordination rules, so retirees need to compare full plan brochures rather than relying on summaries.

To evaluate options, retirees should review Section 4 for catastrophic protection and out-of-pocket maximums, the back cover for premiums and Section 9 for Medicare coordination details. Not all FEHB plans waive cost-sharing when Medicare is primary. The Office of Personnel Management provides a plan comparison tool, and the Checkbook Guide to Federal Health Plans is also widely used.

Some FEHB plans also provide Medicare Part B premium rebates. Examples include Blue Cross Blue Shield Basic Option ($800 annually per person), G.E.H.A. High Option ($1,000) and Aetna Direct ($900). These offsets can materially change the effective cost comparison between plans.

Plans that coordinate well with Medicare tend to fall into two broad patterns: lower-premium designs with stronger Medicare integration or higher-premium plans that trade cost for broader networks and simpler access. HMOs may appeal to retirees who want coordinated care and fewer administrative decisions, while fee-for-service plans may better suit those prioritizing provider flexibility.

FEHB and Medicare Part C, also known as Medicare Advantage

Retirees enrolled in Medicare Parts A and B may also have access to Medicare Advantage options through FEHB carriers. These employer group plans typically bundle medical, hospital and prescription drug coverage, though benefits vary by carrier and geography.

Common features include:

Lower premiums or reductions in Part B costs
Reduced or waived deductibles, coinsurance and copays
Fitness, wellness, home health or over-the-counter benefits
Prescription savings and, in some cases, broader networks or fewer referral requirements

Even as Medicare and FEHB premiums continue to rise, many retirees still find the combination worthwhile when plans include cost-sharing waivers, rebates or Medicare Advantage structures that shift more costs away from point-of-care spending. Higher-income retirees subject to IRMAA face a sharper calculation: higher fixed premiums today versus potential exposure to higher out-of-pocket costs later. For many, the decision is less about optimization than risk tolerance over time.

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Why Social Security’s funding gap matters to federal retirement

Tammy Flanagan — Thu, 11 Jun 2026 15:00:00 -0400

The 2026 Social Security Trustees Report released this week has a familiar warning and a shorter clock.

Social Security is not going anywhere, but the program is moving closer to the point where it will no longer be able to pay full scheduled benefits from its current revenue. The report says the Old-Age and Survivors Insurance trust fund can pay full benefits only until the fourth quarter of 2032. After that, incoming revenue would cover about 78% of scheduled benefits unless Congress acts. If combined with the disability trust fund, the system could pay full benefits until 2034, then benefits will be reduced to about 83% of the promised amount.

To be sure, there is nothing indicating that benefits will stop. Payroll taxes will keep coming in, and Social Security will still pay most of what it owes. But it will mean an automatic cut if lawmakers do nothing.

That is why the comparison to 1983 matters. Congress faced a Social Security emergency then, too, and acted before full checks were interrupted. The difference is that today’s problem is less a sudden cash crisis than a slower, deeper mismatch between promised benefits and projected revenue.

For many Americans, these reductions would cause or worsen impoverishment and create financial hardship for most retirees.

Got a question for federal retirement expert Tammy Flanagan? Send to us at newstips@govexec.com and she might answer it during our live webinar at 2 p.m. on Thurs., June 18.

What the report really says

The trustees track two funds: one for retirement and survivors benefits, and one for disability benefits.

The headline number in 2026 is the retirement fund’s projected depletion in late 2032. The combined projection stretches to 2034, and the disability fund remains in much stronger shape on its own.

The bigger point is that the gap is no longer abstract. It is close enough that every year of delay makes the eventual fix harder. Analysts estimate a 75-year actuarial deficit of 4.42% of taxable payroll, with a present-value shortfall of roughly $31 trillion. In plain English, there is no tiny fix left. Congress can still solve the problem gradually, but not painlessly.

Why the gap keeps growing

Social Security runs mainly on payroll taxes, so the math works best when there are many workers relative to retirees.

Over time, that balance has changed. Birth rates are lower, people live longer and the baby boom generation is already retiring. The result is a smaller worker-to-beneficiary ratio and a larger bill for benefits.

That is the key contrast with 1983: Then, lawmakers were trying to stop an immediate payment crisis. Now, they are confronting a bigger structural problem that has been building for years.

The 2026 report also reflects lower projected fertility, lower assumed immigration and policy changes that reduce tax revenue from the taxation of benefits.

In other words, Social Security is being squeezed by demographics, economics and policy at the same time.

What can Congress actually do?

The menu is not endless.

Congress can raise more revenue, slow the growth of future benefits, change eligibility rules or mix those steps to avoid relying on one substantial solution.

That was the logic in 1983, too.

The difference is scale: Today’s shortfall is larger, and the politics may be tougher.

For most current civilian employees, the Federal Employees Retirement System is built on three parts: the FERS Basic Retirement benefit, also known as a pension, the Thrift Savings Plan and Social Security. In other words, Social Security is not a side benefit for most federal workers and retirees today. It is an important leg of retirement income and a source of disability and survivor protection for families.

For many federal employees, especially those under FERS, the program is an integral part of retirement security rather than an add-on.

Raise more revenue

The most straightforward option is to bring in more money. Congress could raise the payroll tax rate or lift the taxable wage cap so high earners pay more of their income into the system. Supporters say that is the cleanest way to close the gap. Critics say it would reduce take-home pay or increase labor costs.

In 1983, lawmakers accelerated already scheduled payroll tax increases. This time, the debate is more likely to center on the wage cap and broader revenue measures.

Slow future benefits

Another approach is to slow the growth of future benefits, especially for higher earners. That can mean changing the initial benefit formula, trimming annual cost-of-living increases or expanding some form of means testing.

Supporters argue that promised benefits have outgrown dedicated funding.

Opponents warn that even gradual cuts would hit workers who rely heavily on Social Security and have little savings to fall back on.

Raise the retirement age

Raising the full retirement age beyond 67 is another familiar proposal.

Supporters say longer life expectancy makes it reasonable to wait longer for full benefits.

Critics counter that this is a benefit cut by another name, especially for workers in physically demanding jobs or with shorter life expectancies.

Because the 1983 amendments already raised the full retirement age from 65 to 67, any new increase would feel less like a tweak and more like a second major rewrite of Social Security’s retirement promise.

How about a compromise?

Many policy specialists think the only realistic answer is a blended package: some new revenue, some slower growth in benefits and stronger protection for people who depend most on the program.

That was also the basic logic in 1983.

The challenge now is that compromise is harder in a more polarized Congress, and every serious fix creates obvious political losers.

The June 10 House Ways and Means Committee hearing on Social Security

Commissioner Frank J. Bisignano’s June 10 testimony before the House Ways and Means Committee added another wrinkle: Social Security’s finances are now being debated alongside the agency’s day-to-day performance.

In this hearing, the focus was on customer service and modernization. Lawmakers pushed back on whether seniors, people with disabilities and other beneficiaries are experiencing better access. That matters because even a strong solvency plan will be harder to sell if the public does not trust the agency running the program.

Does 1983 still matter?

The Social Security Amendments of 1983 remain the clearest benchmark for what a rescue looks like.

That bipartisan deal, signed into law on April 20, 43 years ago, provided a combination of faster payroll tax increases, taxation of some benefits, a phased increase in the full retirement age and broader coverage for more workers, including all federal employees first hired after 1983, who were then required to pay FICA taxes.

Lawmakers acted before the crisis became unmanageable and spread the pain across multiple groups.

Today’s problem is harder in one important way: It is not just a short-term liquidity scare. It is a long-term structural mismatch between benefits and revenue after decades of delay.

That means Congress needs a broader, more long-lasting package than it adopted in 1983, with more emphasis on revenue and clearer protections for lower-income retirees.

What is Congress waiting for?

Social Security reform is hard for an obvious reason: Every real solution will make some groups unhappy.

Higher taxes anger workers and employers.

Slower benefit growth alarms retirees and near-retirees.

A higher retirement age sparks backlash from labor groups and people in physically demanding jobs.

Lawmakers often promise protection and attack the other side’s ideas rather than vote for a package of trade-offs.

The trouble is that waiting only makes the final fix larger and harsher.

The bottom line

The lesson of the 2026 trustees report is simple: Social Security still has time, but not much easy time left.

The retirement trust fund is projected to run short in 2032, and the combined system will face automatic benefit reductions in 2034 if Congress does nothing. The 1983 comparison shows that bipartisan reform is possible. It also shows why delays are dangerous.

Then, lawmakers acted before the crisis became unmanageable. Now, they face a larger structural shortfall after years of drift.

The most plausible solution is not a miracle fix, but a politically painful compromise that mixes new revenue, slower benefit growth and protections for the people most dependent on the program.

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A record number of feds are retiring. Will that slow your claim?

Tammy Flanagan — Thu, 04 Jun 2026 16:04:20 -0400

Retirement statistics are more than monthly government reports, they offer a practical window into how long claims are taking, where delays may occur and what future retirees should expect. For federal employees planning to leave service, these numbers can help set realistic expectations, guide financial preparation and highlight why understanding the retirement process matters before you submit your application.

New claims processing - This report provides historical data detailing key performance variables, with average processing time presented in days.
Agency retirement case accuracy report - This report reflects the number of non-disability retirement application packages audited and the associated error rate for an agency that had at least 15 cases reviewed in a specified month in the current fiscal year.

Note: The Agency Retirement Case Accuracy Reports do not appear to be current. It is unclear whether the December-July period shown is from 2024-2025 or an earlier year.

How these statistics can help you prepare

Prepare for a period when you may need to rely on personal savings while your CSRS or FERS retirement is being processed.

Within about 2-4 weeks after OPM receives your application, you are usually placed in interim pay status. These temporary monthly payments are estimated and are often much lower than your final benefit.

Set aside about six months of living expenses in case your full benefit is delayed.

If possible, save annual leave and retire near the end of the year so you receive a larger lump-sum leave payout.

A TSP loan may help increase short-term cash reserves, since loans can now be repaid after separation. However, loans are only available while you are employed. They have fees, reduce potential investment growth and may create taxable income if not repaid on time.

Understand how your benefit is calculated, especially when large numbers of retirements are being processed and cases may move at different speeds.

If your case is complex, it may take longer than the average processing time.

High volume can also increase the risk of errors if cases are rushed.

If your agency uses the Online Retirement Application (ORA), your claim may move faster than a paper application.

Public data does not show how long it takes for your application to move from your agency to the payroll provider and then to OPM. Although this should take about four to six weeks after separation, in recent months it has been rumored that it is taking sometimes much longer.

If you have not received your annual leave payout or your Civil Service Active (CSA) number, your claim may not have reached OPM yet.

Key monthly retirement claim trends

Digital (Online Retirement Application) claims received each month:

October 2025 — 6,176 (30% of total claims)
November 2025 — 7,833 (33% of total claims)
December 2025 — 6,055 (45% of total claims)
January 2026 — 9,394 (49% of total claims)
February 2026 — 15,494 (49% of total claims)
March 2026 — 8,830 (59% of total claims)
April 2026 — 8,743 (73% of total claims)
May 2026 — 8,288 (73% of total claims)

Total claims received each month so far in FY 2026 (digital and paper combined), compared with the same months in FY 2016:

What the data suggests

For years, warnings about a federal “retirement tsunami” have been overstated. But with far more employees now at or near retirement age, the recent surge in claims suggests that the long-predicted wave may finally have arrived.

Compared with the same period in FY 2016[1], claim volume in FY 2026 is much higher, increasing the workload for agencies, payroll providers and OPM. The delays in processing resulted from the large numbers of separations, including many that did not result in immediate retirement benefits.

Digital applications are becoming more common, but about one in four claims still arrive on paper.

From FY 2007 to FY 2016, the three cabinet agencies with the most retirements were the Department of Veterans Affairs, the Department of the Army and the Department of the Navy. In FY 2025, those agencies saw sharply different workforce changes, which may affect future retirement patterns.

Once OPM receives a retirement case, the average processing time in FY 2026 is 46 days for digital ORA claims and 73 days for all claims. In May, the averages were 66 days for 8,761 digital claims and 87 days for 10,672 paper claims. That suggests many of the claims completed in May likely reached OPM three to four months earlier, around February or March. Some were likely part of the usual year-end retirements effective Dec. 31, 2025, while others may have been Sept. 30 retirements delayed by heavy workloads in agency HR and payroll offices.

Because averages include both fast and slow cases, some claims move much faster while others take much longer. If you want to know whether your case may be delayed, consider the factors OPM says can slow processing:

Court orders such as a divorce decree or property settlement. These require an additional step and are sent to the Court Order Benefits Branch for review.
Service as a law enforcement officer, firefighter, air traffic controller, Capitol Police, Supreme Court Police or nuclear materials courier, as these cases use a special annuity computation.
Past or active workers’ compensation claims.
Service as a part-time or intermittent federal employee.
Federal service at multiple federal agencies.
Missing documents and forms or incomplete or incorrect information in your retirement application.
Moving without updating your address with OPM.

The larger message in these statistics is clear: retirement processing times, claim volume and case complexity all affect how quickly benefits are finalized. Employees who understand these trends can plan more effectively, build a stronger financial cushion and avoid being caught off guard during the transition from paycheck to annuity.

OPM also publishes the total number of CSRS and FERS annuitants added to the Annuity Roll Processing System (ARPS) from FY 2000 through FY 2025. These totals include retirements processed as of Sept. 30, so most deferred resignation retirements from last year are not reflected in the 2025 figure.

So far in FY 2026, OPM has processed 119,451 retirement claims with four months still left in the fiscal year — a record pace for the past 25 years.

Historical ARPS retirement totals (FY 2000-FY 2025)

Fiscal year — total annuitants added as of Sept. 30

2025 — 112,679
2024 — 95,477
2023 — 108,387
2022 — 114,505
2021 — 96,956
2020 — 99,529
2019 — 109,991
2018 — 109,850
2017 — 96,459
2016 — 99,242
2015 — 99,710
2014 — 105,037
2013 — 138,039
2012 — 111,641
2011 — 82,837
2010 — 76,864
2009 — 87,907
2008 — 86,615
2007 — 92,349
2006 — 103,292
2005 — 94,977
2004 — 90,441
2003 — 81,128
2002 — 74,153
2001 — 77,330
2000 — 77,383

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What retiring feds should do before asking for help

Tammy Flanagan — Thu, 28 May 2026 15:00:00 -0400

The transition from employee to annuitant can be stressful, especially when someone is worried about income, benefits, deadlines, taxes or missing paperwork. It helps to get the answers you need when there are delays or a perceived problem with your benefits. These days, it is even harder to get help since many agencies are short-handed and overwhelmed by the number of employees who have retired at the same time. When you find someone who might be able to resolve your problem or explain something that you do not understand, it is important to include the relevant facts and not bury the real issue under too much background information.

One of the best things you can do is present your situation clearly, completely and with supporting documentation. It might be hard to hear this, but when you are speaking to your human resources representative, benefits specialist or government agency, the quality of the help you receive often depends on the quality of the information you are able to provide. Agencies specifically ask applicants to gather identifying records and supporting documents. Missing or incomplete information can delay retirement processing.

Anyone who deals with these issues knows how important it is to separate facts from opinions and to be prepared to provide the evidence that supports your concern. Working with many employees who are transitioning to retirement, one of the basic things we advise is to save copies of all communications, including personnel records on file with your agency, copies of applications and anything else that provides proof of changes in your federal career such as beginning and ending dates, changes in retirement coverage and changes in work schedule. If there is a problem down the road, it is important to have the evidence needed to pinpoint the issue and solve the problem.

Got a question for federal retirement expert Tammy Flanagan? Send to us at newstips@govexec.com and she might answer it during our live webinar on June 18. Stay tuned for details.

Start with the real problem

The first step in asking for retirement help is identifying the actual question. Many people begin with a long story, a list of frustrations or scattered financial details without ever stating exactly what they need. A better approach is to open with a direct statement such as: “I need help understanding when I can retire,” “I need help fixing a pension calculation issue” or “I need help because my benefits application may be missing documents.”

That kind of opening gives the adviser or representative a clear target. It also saves time and reduces the chance of misunderstanding. Clear requests are especially important because retirement issues often involve strict procedures, required forms and eligibility rules. If the core problem is not stated early, the person trying to help must spend valuable time sorting through facts instead of solving the issue.

When I am asked to intervene and help solve a problem, I only agree to help when I can clearly see what needs to be done and the client can provide the details and documents needed to find a solution.

Tell the whole story — but only the relevant story

Besides providing too much information, people sometimes omit important facts because they assume they do not matter, because they are embarrassing or because they do not realize small details are important clues to the solution. Missing facts can lead to bad advice.

There is a fine line between trying not to provide every detail and leaving out important dates, documents or conversations that belong in the discussion.

Organize the information before asking for help

A productive retirement meeting or inquiry usually starts before the conversation ever happens. When my team at Retire Federal counsels current and recently retired federal workers, we begin by asking them to provide specific documentation so we can understand the details of the career the individual is leaving or recently retired from. A comprehensive review of this documentation is essential to identify clues to the root of a problem and often reveals issues the client might not have considered.

Recently, a retiree asked us to review his retirement calculation and compare it to the amount of money he had received from OPM since his retirement date. His concern was that he retired at the end of February 2024 and did not start receiving his full retirement benefit until December 2024. During that time, the amount of his interim payments changed four times and he was having trouble determining whether he had received his earned annuity benefit. He simply wanted a second opinion.

This individual retired under the older Civil Service Retirement System, or CSRS, with close to 52 years of federal service. The first thing that stood out was the fact that he exceeded the maximum amount of service that would provide him with 80% of his high-three average salary by close to 10 years. This only happens under CSRS; the Federal Employees Retirement System, or FERS, does not limit the calculation.

What he did not notice was that he had never been paid for his excess retirement contributions from the years he paid into CSRS beyond the time he had already earned the maximum annuity benefit. He was not aware that, because of his high salary, he had overpaid more than $100,000 into CSRS.

His case appeared to be finalized when he contacted us in February 2026, as he had already been receiving his full retirement benefit for three months. After reviewing the documentation he provided, we were able to reconstruct his retirement benefit and his contributions to CSRS to show him where the problem was.

Once the issue was clearly explained, we submitted a direct request for help to OPM. After several back-and-forth communications, the issue is finally being resolved. We received an email last week from this client saying he had received most of the overpayment amount owed to him but was still waiting for a final payment of more than $17,000. We are getting there, but we will not take this out of the “needs follow-up” file until he is made whole.

Here is what is needed to reconstruct a retirement benefit and determine whether a problem requires attention:

What type of retirement benefit is involved?
What outcome is being sought?
What has already happened?
What deadlines apply?
What records are available?

A timeline is often one of the most useful tools, along with documentation of specific dates and events. This helps the person providing assistance identify patterns, missing steps or contradictions quickly.

Preparation also makes it easier to separate relevant information from noise. Instead of talking in circles, the person can walk through the issue in a logical sequence and allow the adviser to ask focused follow-up questions.

Saying “they calculated my benefit wrong” is far less useful than providing the estimate, prior statements, payroll records, service history or correspondence showing the discrepancy.

In federal retirement matters, supplemental documents such as marriage certificates, military records or court orders can be essential, and federal regulations make clear that required supporting documentation is the applicant’s responsibility. The agency maintains personnel records and the payroll provider keeps track of salary payments and payroll deductions, but only you are likely to notice whether your retirement was computed on 35 years or 36 years of service. We recently assisted an employee who was being underpaid because of a miscalculation involving years of service.

Everyone can make mistakes, but resolving these types of problems can prove challenging without proof of where the error occurred.

Know what documents matter most

Employment history and dates of service
Pension benefit estimates or annual statements
Plan documents and summary plan descriptions
Application forms already submitted
Letters, emails or notices from the employer, plan administrator or agency
Marriage certificates, divorce decrees or beneficiary forms when relevant
Military records, disability records or court orders when applicable

Not every case requires every document, but the person asking for help should bring anything that proves the facts behind the concern. If something is missing, it is important to make note of the missing information.

Be concise and easy to help

People seeking retirement assistance should aim to be complete without using an angry or sarcastic tone when communicating their concerns.

A useful rule is this: Include facts, dates, names and documents that affect the case. Leave out repeated complaints, unrelated family history and background information that does not change the answer.

The person providing help does not need every emotion-filled detail to evaluate a pension formula, application delay, survivor benefit question or eligibility issue. What they need is a clear problem statement, a reliable timeline and records that support the claim.

Being concise is not rude or cold. It is respectful and efficient. It allows the individual trying to help to spend more time solving the problem and less time trying to uncover basic facts.

Asking for help with retirement is not just a matter of reaching out — it is a matter of communicating well. People who need assistance should clearly state the issue, tell the full relevant story, avoid distracting side details and be prepared to provide evidence supporting what they are claiming.

Retirement decisions can affect income, health coverage, survivor rights and long-term security, so vague explanations and unsupported concerns are not enough. The more organized and honest a person is, the easier it is for someone else to give accurate, timely and effective guidance. In retirement matters, clarity is not optional. It is part of the solution.

Most federal employees enjoy a smooth transition to retirement, but when there is a problem, it is important to get help sooner rather than later. It does not help to ignore the issue and hope it resolves itself.

It is sometimes difficult to know who to ask and how to get the help you need. Talk to customer service representatives at the agency from which you need assistance to see whether they can provide direction. Talk to fellow retirees to learn whether they experienced similar issues and how they resolved them. Go back to your agency HR office to see whether it can provide guidance.

The important thing is to ask for help if you think you have a problem and to be as clear and concise as possible so you can improve your chances of a faster and better resolution.

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What federal employees get wrong about divorce and retirement

Tammy Flanagan — Thu, 21 May 2026 15:00:00 -0400

Sometimes, life comes with unpleasant surprises. From a financial planning and retirement preparation perspective, one of the most difficult is divorce.

One person who knows a lot about this topic is Dan Jamison, a CPA and retired FBI special agent. Over the years, he has shared information with me that might help those going through this process. Dan specializes in assisting federal employees and annuitants with the division of retirement benefits in divorce and has written the popular FERS Retirement and Benefits Guide.

CSRS or FERS retirement benefits

The number one misunderstanding, in Dan’s experience, occurs when a former spouse of a federal employee is granted a pro-rata award of a federal retirement benefit, but there is no mention of a survivor annuity that is payable to the former spouse.

Another common oversight is when a survivor annuity is awarded to a former spouse without the level of survivor annuity being defined. In such cases, the Office of Personnel Management interprets it as a full survivor annuity.

Many times, employees don’t fully understand this until after retirement. After the retirement or death of the employee, the survivor annuity portion of a divorce agreement or court order can’t be modified.

Got a question for federal retirement expert Tammy Flanagan? Send to us at newstips@govexec.com and she might answer it during our live webinar on June 18. Stay tuned for details.

Another problem can arise if the former spouse was awarded full survivor benefits and the employee remarries. The survivor annuity is paid on a “first come, first served” basis, which means the former spouse will receive the court-ordered benefit and there may be little to nothing left for the new spouse if the employee dies before either of them.

In this situation, you should elect the survivor benefit for your current spouse that you would have chosen if there wasn’t a court-ordered award to your former spouse.

Remember that your current spouse will not receive the benefit, however, unless the former spouse loses entitlement due to his or her death or remarriage before age 55. If your marriage had lasted 30 years or more, remarriage will not cause the former spouse to lose entitlement.

You also can choose an “insurable interest” survivor election at retirement so your current spouse would be entitled to 55% of your reduced retirement benefit, even if the former spouse is eligible for the court-ordered benefit.

This would cause your retirement to be reduced twice, so it can be expensive. You must select the insurable interest survivor benefit at the time of retirement and prove your insurability, meaning your good health.

Remember, if your current spouse is not entitled to a spousal survivor annuity, they also might lose entitlement to health benefits if you die first unless they are entitled under their own federal employment or retirement benefit.

If an employee provides an insurable interest survivor annuity and the former spouse subsequently loses title to their survivor annuity, the insurable interest survivor annuity can be converted by OPM back to a normal spousal survivor annuity.

Dan says that in most cases the intent of the parties in a divorce is to award a survivor benefit in the same amount as the annuity award so that the former spouse receives the same amount of annuity regardless of whether the retiree is alive or deceased.

For example, if the portion of the retirement annuity payable to the former spouse is $20,000 per year, then the survivor annuity is often spelled out in the divorce agreement as the same amount.

If the employee has not yet retired, the divorce decree can be superseded at OPM by a new court order with revised survivor annuity terms.

Follow-through failure

Another area of concern, according to Dan, is the lack of follow-through after a divorce is finalized.

Upon finalization of a divorce in which a portion of a retirement annuity and/or Thrift Savings Plan funds are awarded to the former spouse, separate court orders for the TSP and OPM must be prepared to divide the funds.

The dividing order for the TSP is called a Retirement Benefits Court Order. The order for OPM to divide the annuity is called a Court Order Acceptable for Processing.

A COAP may award several retirement-related benefits, including survivor annuity, refunds of retirement contributions, health benefits and assignment of life insurance, as well as a portion of the retirement.

If you have been through a divorce, take a moment to locate a copy of your decree and/or settlement agreement.

Ensure that the appropriate court orders have been obtained and sent to the appropriate agencies at least one year prior to your anticipated retirement.

OPM will mail a determination letter to both parties after receipt of a COAP. Locate that letter as well and make sure it reflects your understanding of the award.

Another mistake employees sometimes make is failing to inform their Federal Employees Health Benefits Program carrier about their divorce.

Dan said he recently talked to someone who had been divorced for two years and was still carrying his ex-wife on self-and-family FEHBP enrollment. This is not allowed.

Upon the issuance of a divorce decree, only your current spouse and your dependent children can be covered under your FEHBP plan.

I know of divorced feds who are being sued for tens of thousands of dollars by FEHBP carriers for this mistake.

A former spouse may have rights to carry FEHBP coverage through spouse equity provisions of the law, but he or she must enroll in their own plan and pay both the employer and employee share of the premium.

Causes for delay

Here are a few additional divorce-related factors that can cause delays in processing a retirement application:

OPM automatically rejects a court order that isn’t a certified copy, and an applicant may not even know this has occurred. If you’re unsure whether a court order sent to OPM is certified, call the agency’s Court Order Benefits Branch at 202-606-0222 or email retire@opm.gov.
OPM does not automatically start annuity payments to a former spouse upon an employee’s retirement. The former spouse must apply to OPM by written letter, confirming their marital status, personal identifiers and the status of the COAP.
Many former spouses fail to continue health insurance under the FEHBP temporary continuation of coverage program or coverage under the spouse equity provisions of the Federal Employees Retirement System within the prescribed 60-day period after the marriage ends. This can leave the former spouse without health insurance benefits.
You must notify your agency’s human resources office, and you need to complete SF 2809, the Health Benefits Election Form, if you want to change your enrollment from self and family or self plus one to self only, or vice versa. You must let the health plan know the date of the divorce so that your ex-spouse can be removed from your enrollment.

If you’re facing the possibility of divorce or if you’ve already gone through the process, OPM provides a publication that may come in handy: Court Order Benefits for Former Spouses.

Federal Employees Group Life Insurance qualifying life event

Divorce is a life event under FEGLI when an employee, not a retiree, may elect Basic insurance and all Optional insurance coverage, including up to the maximum number of multiples of Option B and/or Option C coverage.

The time limit for making a life event election is 60 days after the date of the qualifying event.

You must file the election with your employing office using the Life Insurance Election form, SF 2817, or its electronic equivalent, along with proof of the event.

You can either file the election before the event, to be followed up with the necessary proof within 60 days after the event has taken place, or you can file the election and provide the necessary proof no later than 60 days after the date of the event.

Proof of an event is your divorce decree. Your employing office determines what is acceptable proof of the life event, not OPM or OFEGLI.

You may want to consider completing a new designation form.

For example, a divorce does not invalidate a designation that names your former spouse as beneficiary, nor do state laws invalidate a designation unless a valid court order names the former spouse to receive FEGLI benefits.

You need to complete a new SF 2823 to remove a former spouse.

In addition to filing your court order with OPM’s Court-Ordered Benefits Office, if there is a FEGLI benefit provided for in the court order and you are an active employee at the time of filing, a copy of the court order must be filed with your agency, too.

Example: Martin is a married employee with FEGLI coverage. He has no designation of beneficiary form on file. He divorced his spouse, Kayla. They have no children.

The divorce court order provides that Kayla is entitled to a future share of Martin’s retirement annuity and to 100% of his FEGLI insurance.

Kayla’s attorney properly files a copy of the court order for the future annuity share with OPM’s Court-Ordered Benefits Branch but does not file a copy with Martin’s agency. Martin also does not file the court order with his agency.

Martin later dies as an active employee. Because the court order awarding FEGLI benefits is not on file with the appropriate office, in this case his employing agency, at the time of his death, FEGLI proceeds will be paid based on the order of precedence, so his parents will receive the proceeds.

You may assign your insurance to comply with an order issued by a divorce court requiring that a former spouse and/or children from a previous marriage be named as the beneficiary of FEGLI proceeds.

If a court order requires you to make an assignment, you must still complete an assignment form for the assignment to take place. A court order requiring an assignment is not a valid assignment.

You may make an assignment by completing an Assignment, Federal Employees’ Group Life Insurance form (RI 76-10).

Only the insured, or an assignee reassigning the insurance, may assign the insurance. No one may make an assignment on the insured or assignee’s behalf.

The assignment form must be signed by two witnesses. An assignee cannot be a witness to the assignment.

An assignment is effective on the date your employing office receives the properly completed, signed and witnessed form.

The assignment must specify percentages or fractions of the insurance to go to each assignee. The percentages must total 100%, or fractions must equal 1.0.

You cannot name contingent assignees in the event the primary assignee or assignees predecease you. You cannot assign dollar amounts, and you cannot assign specific types of coverage.

The TSP and divorce

Your former spouse could be awarded a portion of your TSP account if a valid Retirement Benefits Court Order to divide your account is issued.

The RBCO can be issued at any time in divorce, annulment and separation proceedings.

Read the TSP booklet Court Orders and Powers of Attorney to learn more about RBCOs and how they can affect your TSP account.

The rules for qualified domestic relations orders that apply to private-sector plans do not apply to the TSP.

A valid RBCO requires the TSP to freeze your account, preventing you from taking any new loans or withdrawals until the award is paid out or the order is otherwise resolved.

However, a freeze will not prevent you from making contributions or changing your contribution allocation or investment choices, and you will still be required to make payments on existing loans.

In addition, the TSP’s Court Order Center provides a booklet, Court Orders and Powers of Attorney.

Social Security benefits for former spouses

If you were married for at least 10 years before your divorce, your ex-spouse may qualify to receive benefits on your record.

Or you may qualify for benefits as an ex-spouse on his or her record if you are not currently married.

Note: If you were married to the same person more than once during a 10-year period, you or your ex-spouse may still qualify.

Social Security can count those marriages as one if you remarried no later than the calendar year after the year the divorce became final.

Contact Social Security or make an online appointment if you want to file for divorced spouse’s benefits.

For more information about spouse benefits, see Who can get Family benefits.

Widow’s and widower’s benefits

If you are the widow or widower of someone who worked long enough under Social Security, you may be eligible for benefits on his or her record.

Social Security will use the information you give about your prior marriage along with your other responses to evaluate whether you can receive benefits on your deceased spouse’s record.

For more information about benefits for widows and widowers, go to Who can get Survivor benefits.

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Waiting to retire could be worth thousands of dollars

Tammy Flanagan — Thu, 14 May 2026 15:00:00 -0400

Federal employees are no different from other workers. Sometimes leaving a 9-to-5 grind can be very enticing, especially if you are eligible to receive your retirement benefits. There is nothing wrong with retirement; in fact, many retirees I talk with wish that they would have done it sooner. However, there are employees who might benefit from sticking around a little longer. The benefit of a few more months, or maybe a couple of years, can be surprising.

For many federal employees, the retirement question isn’t “Can I retire?” so much as “Should I retire now, or is it smarter to wait?” The answer is rarely about being in a hurry. It’s about trade-offs between guaranteed lifetime income, access to health insurance, taxes and lifestyle priorities. Because federal retirement income is typically built from three pillars — your pension (CSRS or FERS), Social Security and the Thrift Savings Plan (TSP) — the best timing choice is often the one that coordinates all three instead of optimizing just one.

1) Your federal retirement benefit: Why waiting can increase lifetime security

Your FERS benefit is retirement income that behaves like a traditional paycheck replacement: It’s predictable and designed to last your lifetime. This is also the benefit where your insurance premiums for FEHB, FEGLI, FEDVIP and FLTCIP will be deducted. That stability is exactly why waiting — when you can — often improves outcomes.

In broad terms, the pension grows in two main ways: (1) by adding more creditable service time and (2) by raising your “high-3” average salary, which is the daily average of your highest basic pay rates paid over 36 consecutive months. Even a modest pay increase in your last few years can permanently increase your annuity because the formula is applied for life.

There is an additional computation “bonus” for employees who retire at age 62 or later with 20 or more years of service (the 20 years can include credit for unused sick leave). Instead of the calculation providing 1% of your high-3 times your years and months of service, the formula changes to 1.1%. This means that 20 years of service is now worth 22% of the high-3 rather than 20%. If the high-3 were $120,000, this is an increase of $2,400 per year or $200 per month.

Where people get caught is not always the formula — it’s the eligibility rules. Under FERS, an “immediate, unreduced” retirement generally happens when you meet one of the big combinations (such as minimum retirement age — or MRA — with 30 years, age 60 with 20 years or age 62 with at least 5 years).

If you separate at your minimum retirement age with at least 10 years but less than the combinations above (often called “MRA+10”), you can be eligible for an immediate annuity, but it may come with a permanent age reduction equal to 5 percent per year you are under age 62, prorated monthly. In many cases, separating at your MRA with 10 or more years of service (but less than 30 years) and then postponing the start of the annuity is a way to avoid some or all that reduction — so “retiring” and “starting the pension” don’t always have to be the same date.

Two other timing issues matter for many FERS employees. First, cost-of-living adjustments (COLAs) on the FERS basic annuity typically do not start until age 62 (with exceptions in certain circumstances). That means leaving at, say, 57 or 60 can create a multi-year period where your pension check stays flat while inflation marches on. Second, some retirees are eligible for the FERS annuity supplement — an additional payment intended to bridge the gap from retirement to age 62, when Social Security becomes available. Eligibility for the supplement depends on your retirement type and timing, so it’s another reason not to retire “in a hurry” without confirming which rule set you are under. The supplement is only payable for employees who retire under age 62 with an immediate, unreduced retirement. MRA + 10 and disability retirements do not qualify and early retirements under VERA and DSR are not eligible for the supplement until reaching the FERS MRA.

That said, retiring sooner can still be a rational choice if you’ve already locked in what you most value — such as eligibility to continue Federal Employees Health Benefits (FEHB) into retirement, or if you’re leaving under an early retirement authority. The key is to separate the emotional reason to retire (time, health, family or burnout) from the financial mechanics and then decide whether the income trade-off is “worth it” for you.

2) Social Security: The strongest “wait” incentive (but not always)

Social Security is where “waiting to claim” can have the biggest impact on the size of your monthly check. You can start as early as age 62, at your Full Retirement Age (FRA) or as late as age 70. Claiming early permanently reduces your benefit; delaying past FRA increases it for each month you wait, up to age 70. For people born in 1943 or later, delayed retirement credits increase benefits by up to 8 percent per year (credited monthly) beyond FRA. After age 70, there is no further increase for delaying. These rules turn Social Security into a longevity hedge: a larger, inflation-adjusted benefit later in life helps protect you if you live longer than average.

How long is average? Consider an unreduced Social Security benefit at FRA of $3,000 per month would be payable at $2,100 per month at age 62 and $3,720 per month by waiting to age 70. Collecting $2,100 per month from age 62 — 82 without adding cost-of-living adjustments or additional earnings after age 62 would add up to $504,000. Collecting $3,000 per month from age 67 — 82 would add up to $540,000; and collecting $3,720 per month from age 70 — 82 would add up to $535,680. Notice that the total amount is not very different. However, if this person lived to age 92, the total amount from age 62 to 92 would be $756,000; from age 67 would be $900,000 and from age 70 would be $982,080. That is more than $225,000 difference in the total received at age 62 compared to waiting until age 70. Cost-of-living adjustments begin at age 62, regardless of the age you claim your benefit.

Work plans matter, too. If you claim Social Security before FRA and continue working, the retirement earnings test can temporarily withhold some benefits when earnings exceed annual limits. This limit is $24,480 in 2026 if under your FRA. Your benefit is reduced by $1 for every $2 earned over this limit. In the year you reach your FRA, the 2026 limit is $65,160 and your benefit is reduced by $1 for every $3 earned over this limit before reaching your FRA. This can surprise new retirees who expected a Social Security check right away while still earning wages. The important nuance is that withheld benefits are not necessarily “lost forever” — your benefit is recalculated later to reflect months when payments were withheld. Still, cash flow timing matters, so it’s wise to consider whether you’re retiring from federal service but continuing in another job.

Social Security claiming is often a household decision, not an individual one. Spousal and survivor benefits can change the best answer — especially if one spouse has a significantly higher earnings record. A practical starting point is to review your Social Security statement and estimate benefits at different start ages. If you’re trying to decide whether you’re “in a hurry,” remember you can retire from federal employment without immediately turning on Social Security, and many people do exactly that to let their Social Security benefit grow. If you can afford to do this without reducing your retirement savings by too much or by working part-time to supplement your FERS retirement, then it is worth considering.

3) TSP: The flexible lever — and the one most affected by taxes

If the pension is the “foundation” and Social Security is the “longevity insurance,” TSP is the flexible middle: It can fill gaps, fund big one-time expenses or provide steady monthly income. That flexibility is also why the timing question isn’t simply “Should I retire?” but “When should I start taking money — and from which bucket?”

Your TSP distributions may include taxable and tax-free payouts. If you receive a TSP distribution or withdrawal before you reach age 59½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10% of any taxable portion of the distribution or withdrawal not rolled over.

If you are a public safety employee as defined in section 72(t)(10)(B)(ii) of the Internal Revenue Code, payments made after you separate from service during or after the year you reach age 50 or have 25 years of service under the TSP.
Up to $5,000 of any payment received within one year following a birth or qualified adoption in accordance with section 72(t)(2)(H) of the Internal Revenue Code.
Annuity payments.
Automatic enrollment refunds.
Payments resulting from total and permanent disability.
Payments resulting from death.
Payments made from a beneficiary participant account.
Up to $1,000 per calendar year of payments used for emergency personal expenses.
Up to $10,000 (or 50 percent of the vested account balance, whichever is less) of any payment received within one year following domestic abuse.
Payments made to an individual with a terminal illness.
Payments made in a year you have deductible medical expenses that exceed 7.5 percent of your adjusted gross income.
Payments made as a qualified disaster recovery distribution as defined and limited by section 72(t)(11) of the Internal Revenue Code.
Payments ordered by a domestic relations court.
Substantially equal payments over your life expectancy.

In addition, you will be subject to Required Minimum Distributions (RMDs) April 1 of the year after you turn 73 or older and have left federal service if you were born before 1960 (age 75 if born in 1960 or later). A required minimum distribution (RMD) is calculated as illustrated in the following example: If a retired participant reaches age 73 in 2027.

As of Dec. 31, 2026 (the last day of the calendar year immediately preceding the RMD year), the value of the participant’s TSP account is $265,000. Based on the Uniform Lifetime Table for Calculating Minimum Distributions table that can be found on page 23 of the "TSP Tax Rules About TSP Payments" booklet, the expected distribution period (in years) for a 73-year-old individual is 26.5, so the RMD is $265,000 divided by 26.5. Through this calculation, the participant determines that the 2027 RMD is $10,000. RMDs cannot be rolled over to an IRA or eligible employer plan.

If you choose to roll over all or part of a distribution in a year in which you have an RMD, the TSP is required to make sure you satisfy the RMD before any rollover takes place. Distributions of Roth money won’t count toward satisfying your RMD because Roth money in your account isn’t subject to RMDs. In addition to TSP funds, you may also consider other retirement savings and investments that may supplement your lifetime FERS and Social Security retirement benefits.

Because tax rules are complex, you may also wish to speak with a tax advisor or the Internal Revenue Service (IRS). The TSP can assist you with your withdrawal but cannot provide tax advice.

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A week of recognition, and a career of service

Tammy Flanagan — Thu, 07 May 2026 15:00:00 -0400

Celebrated annually during the first week of May, Public Service Recognition Week (PSRW) honors the people who serve our nation as federal, state, county, local and tribal government employees.

“Public Service Recognition Week is a chance to thank the people who keep government running and deliver results for the American people every day,” OPM Director Scott Kupor said. “Federal employees take on some of the most important challenges in the country, from protecting our national security to improving how government serves citizens. Their work matters, and this week is about recognizing the impact they make.”

The Partnership for Public Service introduced this celebration 41 years ago, and over the past 25 years they have honored some of the most outstanding public servants. This year’s group includes honorees who revolutionized dairy cattle breeding to improve milk production and animal health, recovered billions of dollars from multinational corporations that schemed to artificially lower their tax liability, halted sophisticated cyber intrusion to the State Department’s email accounts and accomplished groundbreaking methods of addressing air pollution.

Although the number of honorees in 2026 was reduced to only four, over the past 25 years there have been more than 800 civil servants recognized for their remarkable accomplishments that benefit our country and build trust in our government. Despite the disruptions in the federal workforce, federal employees continue to work across the country and around the world to find ways to prevent drugs from killing our citizens, prevent diseases from destroying our families, find solutions to transportation problems, forecast weather to minimize the loss of lives when a natural disaster strikes, protect our nation and countless other ways they help keep our nation safe and continue building our strong democracy.

There are countless federal workers who have a record of steady promotions to higher grade levels and increasing responsibility, but those records do not always show the sense of accomplishment felt at each advancement. Federal service has allowed eager young employees to move through the ranks by showing hard work and dedication to their mission. Federal workers build on their years of experience to become mentors to younger workers and examples to the public. There are countless opportunities for advancement and the option of doing many different types of work requiring hundreds of different skill sets, educational prerequisites and levels of experience.

Federal employees are often recognized for exemplary performance by receiving time off awards, pay increases and cash bonuses as a tangible way of showing thanks for a job well done. But a pat on the back by a fellow employee or a word of praise from a supervisor or a member of the public can also go a long way toward making that employee feel appreciated.

From my perspective of meeting employees near the end of their federal careers, I have noticed their sense of pride when looking back over the years of dedicated public service. When federal workers are ready to move on to a new chapter of their lives, they never seem to regret the choice that they made to enter a career of serving the American public. Federal employees prepare for retirement through diligent savings and thoughtful planning to produce a comfortable life after government. Retirement from federal service is not only a reward, but a well-deserved benefit.

Thank you to all the federal workers and employee annuitants who have crossed my path either in my everyday life or in my work of helping understand and obtain their retirement benefits. I have admired your dedication to your goals and the many accomplishments you have achieved.

I have often been on the receiving end of professional, patient and caring assistance from employees at the Office of Personnel Management, the Social Security Administration and the Federal Retirement Thrift Investment Board. The retirement specialists and payroll office workers are the unsung heroes of the retirement process. If you are a federal employee planning to retire or who has already transitioned into retirement, know that despite the challenges faced by an overwhelming workload, the employees who are working for you deserve your appreciation, not only this week, but throughout the year.

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Sorting through Medicare myths in federal retirement decisions

Tammy Flanagan — Thu, 30 Apr 2026 15:00:00 -0400

One of the most common questions I am asked is “What should I do about Medicare when I retire ... or turn 65?” I love to answer this question; however, the reason it is so complicated is because there is so much misinformation floating around. Here are some of the things I hear, along with reasons why it is important to take time to consider the pros and cons of adding Medicare to FEHB.

Myth: Adding Medicare Part B is too expensive.

It is true that adding Medicare Part B will add a minimum of $202.90/month in premiums to your monthly expenses. It is also true that this isn’t a self-plus one enrollment, as each spouse pays this premium individually. What is also true is that the cost of Part B of Medicare can be offset by the benefits of enrollment. With many FEHB plans, your deductible, copayments and coinsurance costs are waived for outpatient medical care when Part B is your primary payer. This means that you may save up to the catastrophic cap that you would have otherwise paid out of pocket for your care. In addition, there are a handful of plans that provide a partial rebate of the premium: BC/BS Basic (Plan Code 11) provides $800/year per eligible individual; MHBP HDHP (Plan Code 43) provides a $1,200 health fund that is eligible to be sued for Part B reimbursement; and Aetna Direct (Plan Code N6) provides a $900/year health fund per eligible individual.

Myth: Since I am subject to Income Related Monthly Adjustment Amount (IRMAA) surcharges, it is not worth adding Part B.

In 2026, IRMAA affects Medicare enrollments when your Modified Adjusted Gross income from two years prior to the current year exceeds $109,000 (single taxpayer) or $218,000 (married filing jointly). This adds an additional premium of $81.20/month, up to as much as $487/month, to the $202.90 standard premium.

In this situation, it is not all about “getting your money’s worth,” but more of an issue of “pay me now” or “pay me later.” If you decide to forego enrollment in Medicare Part B, be sure that you are prepared to pay an increasing amount of out of pocket costs if your health care needs increase as you get older.

It is hard to imagine, if you are healthy at age 65 and not currently suffering from chronic health problems, why adding a cost that is more than you would typically spend out of pocket for health care could possibly be a good idea.

Try to consider that at age 65, you may have decades of life left to live and some of those years you may suffer from serious and chronic health conditions requiring ongoing care and treatment. According to the Kaiser Family Foundation, 20% of women who are age 85 and older report that they are in poor health, with 24% reporting five or more chronic health conditions and 54% reporting at least one functional limitation where assistance may be needed with dressing, bathing, feeding, toileting or incontinence.

Consider also that items such as home health are covered under Medicare Part B as follows:

In most cases, “part-time or intermittent” means you may be able to get skilled nursing care and home health aide services up to eight hours a day (combined), for a maximum of 28 hours per week. You may be able to get more frequent care for a short time (less than eight hours each day and no more than 35 hours each week) if your provider decides it’s necessary.

Under FEHB plans, the coverage is not as generous. For example, Standard Option BC/BS provides coverage for home health care as follows:

Home nursing care (skilled) for two hours per day when: a registered nurse (R.N.) or licensed practical nurse (L.P.N.) provides the services; and a physician orders the care. You pay: 15% of the Plan allowance using preferred providers; 35% of the Plan allowance using participating providers or non-participating providers. In addition, you will pay any difference between our allowance and the billed amount. Benefits for home nursing care are limited to 50 visits per person, per calendar year.

Check Section 5 of your FEHB plan brochure to see how this type of care is covered in your plan. When Medicare is primary, BC/BS Standard Option will waive your deductible and coinsurance for this care. If you need more than two hours per day, Medicare will cover 80% of the cost up to eight hours per day, up to 28 hours per week for as long as medically necessary.

Another example of a medical need that may increase with older adults is physical, occupational or speech therapy. Benefits are limited to 75 visits per person, per calendar year for a combination of all three types of therapy with BC/BS Standard Option; however, coverage under Medicare is not subject to this type of limitation. In other words, there are types of coverage that Medicare offers beyond the plan limits of your federal health coverage.

Myth: It is better to keep your current health plan instead of enrolling in Medicare Part B.

Every federal health plan carrier provides a plan or option that coordinates with Medicare. This may not be the plan that has served you and your family in the past. Instead of limiting your decision to whether Medicare Part B is necessary, consider that plans that cater to the needs of older adults with Medicare will often be less expensive and reduce your out of pocket costs enough to offset the premium for Medicare Part B. Check your health plan website, where you will find information about the plans offered by each carrier that work best with Medicare. You can find your plan brochures and links to your plan on OPM's website.

Myth: By enrolling in Part B, I won’t be able to see the providers I want to see.

According to the Kaiser Family Foundation, virtually all (98%) non-pediatric physicians participate in the Medicare program. Furthermore, Medicare beneficiaries report access to physician services that is equal to, or better than, that of privately insured individuals.

In 11 specialties, the share of physicians who have opted out of Medicare is 0.5% or lower, with the lowest shares seen among emergency medicine physicians (0.1%), oncologists (0.1%), radiologists (0.1%) and pathologists (<0.1%).
Psychiatrists account for the largest share (39.0%) of all non-pediatric physicians who opted out of Medicare in 2024, followed by family medicine physicians (21.5%) and internal medicine physicians (13.0%).
Less than 2% of non-pediatric physicians have opted out of Medicare in 47 states. The rate is slightly higher in three states and the District of Columbia: Alaska (2.8%), Colorado (2.3%), Idaho (2.2%) and the District of Columbia (2.9%).

Consider the following numbers reported on the 60th anniversary of Medicare and Medicaid in 2025:

Over 1.5 million doctors, health care providers and suppliers participate in Medicare.
380,063: The number of Medicare intuitional providers, including hospitals, labs and skilled nursing facilities.
163.1 million: The number of unique individuals who have been entitled to Medicare at any point in program history (1966-2024).
62.7 million: The number of Americans enrolled in Medicare in 2024, up from 19 million when the program began.
The Centers for Medicare and Medicaid Services estimates that Medicare enrollment will reach 80 million within the next 10 years, and 100 million by 2075.
Medicare Fee-for-Service processes over 1.1 billion claims each year — about 3 million per day, or 35 per second.
62.9 million: People currently enrolled in Medicare Part B, which covers doctor visits, outpatient care, some home health and preventive services.

Myth: I will wait until I’m older, and I need more health care to enroll in Part B.

In most cases, if you missed your Part B Initial Enrollment Period (IEP), which runs from the three months before the month of your 65th birthday through the three months after the month of your 65th birthday, you will face a late enrollment penalty if you decide to enroll at a later time during the annual General Enrollment Period (GEP), which runs from January through March. The penalty equals 10% of the standard monthly premium for each 12-month period that you delayed enrollment and will be added to your premium costs for the remainder of your enrollment.

If you did not enroll for Part B during your IEP, you may qualify for a Special Enrollment Period (SEP) to sign up for Part B (and/or Part A) anytime as long as you or your spouse is working and you’re covered by a group health plan through that employment. For people age 65 or over who have coverage through a group health plan, there is also an eight-month SEP, which starts the month after the employment ends, or the group health plan coverage ends. If you sign up during SEP, the late enrollment penalty will not apply.

Myth: Federal retirees do not need Medicare Part D prescription drug coverage.

In most FEHB plans, members with Medicare Part A and/or Part B primary are eligible for the benefits under the plan’s Employer Group Waiver Plan (EGWP) - Medicare Prescription Drug Program (MPDP). This coverage is optional for FEHB members. Before opting out of this benefit, there are some important reasons to stay enrolled, such as:

Equal or better coverage for every drug covered by your traditional FEHB plan
Coverage for numerous drugs not covered on the traditional FEHB plan
Lower out of pocket costs under each drug tier
A more expansive 90-day retail pharmacy network
An annual maximum of $2,100 on what you pay for Part D-covered prescriptions

There are a few downsides to enrollment in an FEHB MPDP program.

These plans, like Medicare Parts A and B, have no coverage for drugs obtained and/or purchased overseas.
Although there is no additional premium for enrollment in FEHB MPDP, you may need to pay an Income-Related Monthly Adjustment Amount (IRMAA) of $14.50/month, up to $91.00/month in 2026, to Social Security for this Part D coverage.
Learn more about the income thresholds and IRMAA amounts.
Your FEHB plan website has specific information on the MPDP offered by your FEHB plan option.

FEHB Medicare PDP EGWP allows members — who might otherwise forgo Medicare drug coverage — to benefit from the Medicare system they paid into, often for decades. Auto-enrollment is intended to make the process easier; however, both the Office of Personnel Management and Medicare rules allow FEHB plans to auto-enroll eligible members. Auto-enrolled members may opt out within 21 days or may disenroll at any time.

Myth: FEHB plans that offer Medicare Employer Group Waiver Plan (EGWP) Advantage plans are the same as individual Medicare Advantage plans.

Since the introduction of Medicare Advantage more than 20 years ago, the number of people choosing these plans has been steadily increasing. In 2023, 51% or 30.8M of all Medicare beneficiaries signed up, up from 33% in 2018. By 2033, 62% are expected to join. Medicare Advantage, known as Part C, covers the same services as Original Medicare Parts A and B and often includes additional benefits — on average, $600 worth of supplemental benefits to each participant.

Most FEHB plan carriers now offer Medicare Advantage Employer Group Waiver Plans (MA-EGWP) to maintain or enhance coverage for beneficiaries, while reducing both immediate costs and long-term liabilities. There is no additional cost to enrollment in a MA-EGWP through an FEHB plan offering this option; however, there is a second step that you must take to enroll in this option, where the plan requires proof of your enrollment in Medicare A and B. These plans include a reduction in your Part B premium, Medicare Part D prescription drug benefits. Most provide dental and vision benefits, along with perks such as free gym membership, meal delivery following a hospital stay and transportation to a limited number of non-emergency medical care visits.

Unlike individual MA plans, the FEHB MA-EGWP plans allow you to return to your FEHB plan by disenrolling in the option. The FEHB MA-EGWP plans may also provide nationwide coverage. For example, the Compass Rose High Option plan offers the following regarding its MA-EGWP option:

The Compass Rose Medicare Advantage Plan is a UnitedHealthcare Group Medicare Advantage Preferred Provider Organization (PPO) plan, which means you have flexibility in choosing a provider. You have access to providers nationwide and receive the same level of benefits in network and out of network. You may see any provider that accepts Medicare. You can see any out-of-network doctor or health care provider that participates in Medicare and accepts the plan. Accepting the plan means the doctor is willing to treat you and bill UnitedHealthcare. If a doctor or hospital refuses to directly bill UnitedHealthcare, they may ask that you pay the full allowable amount. In that case, you can pay the doctor and then submit your claim to UnitedHealthcare. You will be reimbursed for the cost of the claim, less your copay. The FEHB BC/BS plans do not offer an EGWP-MA option currently.

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They did everything right and still haven’t been paid

Tammy Flanagan — Thu, 23 Apr 2026 15:00:00 -0400

I was planning to write about the number of TSP millionaires for this week’s column — until I started getting messages from former federal employees, all who retired on September 30, 2025, and are still waiting for their retirement benefit from the Office of Personnel Management (OPM) to be finalized.

It is not completely surprising that retirement processing has slowed down, and for some former employees, they continue to wait for their retirement benefits to be finalized. But for the employees who have reached out for assistance, many have not received any money since their last paycheck was received in October 2025.

It has been almost six months with very little or, in some cases, no money and little communication to help them understand how long they will have to continue to wait.

Here are the stories that I received this week:

Angie retired from the USDA Farm Service. Angie represents one of the thousands of federal employees who accepted the Deferred Resignation Program (DRP) and agreed to resign or retire at the end of the fiscal year in 2025.

Angie told me that she has been preparing for retirement by attending pre-retirement training, and she saved her annual leave so that she would have some money to hold her over while her retirement was being processed. She also saved extra money so that she could pay her bills for up to six months should her retirement be delayed. She considered herself as prepared as she could be.

After numerous calls to OPM, with many hours spent waiting on hold, she finally found out what appears to be the reason why she has not received any of her retirement benefits since her last day of work.

Angie was divorced 13 years ago. Her court order clearly stated that she and her ex-spouse would not share any of their retirement benefits. She answered “no” to the question on the retirement application regarding her former spouse having any entitlement to her retirement and/or survivor benefits.

She did not include a copy of her divorce agreement, as the application required that the document be included only if he were entitled to benefits. Unfortunately, a copy of her court order had been sent to OPM, presumably by her HR specialist. For some reason, a copy had been filed in her personnel file.

The first thing she was told by OPM was that the copy was emailed and was not a “certified copy” of the order. Unfortunately, Angie was not informed of this until months after her retirement date. She stated that she would have been happy to provide a certified copy had she known the reason for the delay.

She was also informed that there were “red flags” because she had a name change during her career and a change in health insurance from self plus one to self only. The OPM customer service representative told her that her retirement package was sent to the Court Ordered Benefits Branch, where it sat waiting for review.

Angie recently requested assistance from her congressional representative, and she thinks that this may have helped. She received promising news on her latest phone call to OPM earlier this week.

She was told that her case is now showing that it is “ready for payment!” Angie hopes that she will soon see a large deposit in her bank account, with her first regular payment on May 1. However, she said, “I will believe that when I see the money!”

Laura, who retired from the IRS, shared with me that she spoke with a benefits specialist at her former agency who told her that her paperwork wasn’t sent to the National Finance Center (NFC) until Feb. 1.

In addition, she was informed that, from that date, it would likely be an additional 90-day wait before her retirement package would be forwarded to OPM. The reason why her retirement wasn’t sent to NFC until February was unclear.

Other than that, she was told that it wasn’t assigned to a retirement specialist in her human resources office until Dec. 31. She received her lump-sum annual leave payout in early February from NFC, which was promising, but nothing else.

She has not yet received any communication from OPM. She has now submitted a request to her elected representatives in Congress in hopes that it will help her to receive her overdue benefits soon.

Shawn, who also retired on Sept. 30, has also been waiting for his retirement benefits since his last day on the job on Sept. 30, 2025.

He stated that he retired as a 37-year IRS revenue officer advisor, GS-13, one of the most senior in the country. He accepted the DRP 2.0 in response to the mandate in 2025 requiring him to return to his physical office. He had been working from home since 2021.

He stated that he consistently received outstanding performance ratings and did not want to change his remote work arrangement. As of this week, he has not received any annuity payments.

He understands that the IRS Human Capital Office (HCO) has a massive backlog, as does OPM. IRS HCO informed him that OPM has his retirement package now. However, when he contacted OPM, they told him that they had not received his retirement package.

Shawn, like many others, contacted his congressman’s office, but so far they could not get the package pushed through.

He informed me that he has had to take two large distributions from his Thrift Savings Plan to pay bills. He is now at the point where he may have to take another.

It appears that the delays may stem from the payroll provider, NFC. After HR completes work on the retirement application, it must go through payroll processing before OPM can begin work on the claim.

As Laura related above, there were extraordinary delays reported regarding the processing of the thousands of retirement cases that descended on NFC since Sept. 30, 2025.

Susan, another Sept. 30 retiree, related to me that her retirement application has been in NFC since Jan. 12 — no movement, no communication.

She made a request for assistance but only received a canned response that was not helpful in letting her know how long she will have to continue waiting.

“I planned for a long wait,” she said, “but it is now just short of eight months since my retirement date.”

She, like Shawn and Laura, retired from the IRS. Her career lasted more than 25 years. I mentioned some of the possible reasons for her case being delayed, such as being hung up in the Court Ordered Benefits Branch at OPM, but she stated that she has been married for more than 40 years and has never been divorced.

I mentioned that paper applications take longer to process. However, she applied using the new ORA. It appears that the hang-up, like the others, hasn’t been with OPM, but with her payroll provider, NFC.

She hasn’t received any interim retirement benefits or other communications from OPM. It is possible that her retirement package has not yet been submitted to OPM.

Stacy retired from U.S. Citizenship and Immigration Services (USCIS), where she worked for eight years after spending 18 years working for the U.S. Equal Employment Opportunity Commission (EEOC).

NFC does the payroll for USCIS under the Department of Homeland Security (DHS). She is more fortunate than some of the others, since her retirement landed at OPM much earlier. She received her Civil Service Active (CSA) number in November 2025, and she has been receiving interim retirement payments and still is in interim pay as of this week.

When she called OPM, she was told they were waiting on an NFR from June 1999 to December 2001. Stacy was not sure what they needed. They told her that OPM had asked her former employer to provide this information.

Her retirement has been assigned to a Legal Administrative Specialist (LAS) at OPM, but they won’t share the name or contact information.

Her former agency informed her everything was sent, including all her Individual Retirement Records (IRR). The Individual Retirement Record (SF 2806/SF 3100) is maintained by the agency for each employee subject to CSRS or FERS.

The Individual Retirement Record is used by OPM as the basic record for determining the retirement benefits payable to a separated employee or his or her survivors. It is, therefore, important that each SF 2806 and SF 3100 be correct, complete, clear in every detail, and properly certified so that, when the record is received in OPM, claims may be processed expeditiously.

Stacy is frustrated with the lack of transparency and seeing so many others who are receiving full retirement while she is stuck in a holding pattern. It appears that the holdup is with her payroll provider, which, as you may have guessed, is NFC.

Stacy learned that her HR office contacted NFC and sent the missing information on Nov. 3, 2025. They were told the information was sent along with a register number. A Register and Separations Report is sent to OPM by each payroll provider.

Payroll offices are required to send the register number and date to the separated employee, indicating that the payroll office has completed their separation from the former agency.

She sent a request for information to OPM’s general email, hoping they would get it. The generic response she received, however, is a “do not reply” email.

The last employee who contacted me recently only wants to be identified as a Sept. 30 retiree from the Department of State, where she has worked since 1999.

She previously served for nine and a half years in the military and “bought back” the military service, giving her a long career of more than 36 years, which would be a full career of federal service by any definition.

Initially, things went well, as she received her OPM CSA number and started to receive interim retirement payments within two months of her retirement. By February, she learned that her case had not been assigned to an LAS yet.

No one has reached out to her, and her help requests have not received a response. She calls OPM almost daily but rarely gets through.

She was divorced, but it was prior to her civilian federal service and does not believe that this could be the cause of the delay in processing. She submitted her retirement application last May using GRB software, not the new ORA system.

She submitted all the documentation required, proving she paid her military service credit deposit, along with her DD-214, her discharge certificate for her active duty.

She is without a clue as to when she will be made “whole” and said that this delay is causing her family a severe financial hardship.

She took the Voluntary Early Retirement at age 54 and did not turn 55 until 2026. This means that the withdrawals she has needed to take from her TSP account are subject to an early withdrawal penalty of 10%, in addition to the regular income tax she must pay in the year she receives the payments.

Legal Administrative Specialist

According to an OPM job posting, an LAS employee at OPM is responsible for processing claims, reviews and program evaluations intended to maintain the integrity of retirement benefits arising under the federal retirement systems and enunciation of program policy.

They are the employees responsible for adjudicating and/or making determinations of eligibility and entitlement on cases of retirement annuities and survivor benefits.

They analyze records and imaged documents to make decisions that may involve any feature of eligibility for retirement benefits or for health and life insurance benefits related to retirement.

They may also act on allegations of fraud or impropriety concerning the receipt of payments or benefits under retirement programs.

They respond to inquiries from congressional sources, agency and union officials, retirees and survivors. They also assist employees with higher salary grades in the preparation of regulation packages, bill reports, drafting of instructional issuances or similar material.

Providing advisory and information services to agencies through formally established channels on legislative changes. The estimated salary range for this position is $39,226 to $50,492.

As I have shown in these examples, the delays may stem from the HR office or the payroll providers that were buried under mountains of separations and retirements that had to be processed at the same time.

When a federal employee resigns or retires, the payroll office is responsible for processing final pay, issuing lump-sum payments for unused annual leave and certifying retirement records for OPM. They calculate and pay out unused annual leave, often within four to six weeks, audit leave accounts and submit the Individual Retirement Records to OPM.

Why do some cases move quickly while others sit?

In my experience, retirement processing is less like flipping a switch and more like closing out a file with dozens of tabs. One missing document or unresolved question can stop forward progress.

Common culprits include late or incomplete payroll certifications, missing service history, unposted deposits or redeposits for prior service, unresolved military service credit, periods of leave without pay that need to be documented, name discrepancies, incomplete beneficiary or survivor elections, or court orders that require special handling.

None of these problems are rare, and when thousands of cases arrive at once, the odds go up that more people land in the exception pile.

According to OPM’s “Retirement Processing Quick Guide,” these are the factors that might delay your retirement processing. While most retirement cases will be straightforward, certain circumstances can significantly delay the process, including:

Court orders such as a divorce decree or property settlement. These require an additional step and are sent to the Court Order Benefits Branch for review.

Service as a law enforcement officer, firefighter, air traffic controller, Capitol Police, Supreme Court Police or nuclear materials courier, as these cases use a special annuity computation.

Past or active workers’ compensation claims.

Service as a part-time or intermittent federal employee.

Federal service at multiple federal agencies.

Missing documents and forms, or incomplete or incorrect information in your retirement application.

Moving without updating your address with OPM.

Even when everything is perfect on the employee’s side, the reality is that OPM and agency partners are balancing staffing, training and competing priorities — while retirees are balancing mortgages, insurance premiums and everyday life.

A delay of a few weeks can be irritating. A delay of several months can be destabilizing.

What makes this especially hard is the information gap. Retirees often don’t know whether their case is waiting in their former agency, sitting in a queue at OPM or stuck because of a specific missing item from the payroll provider that nobody has clearly explained.

What you can do while you wait

If you retired and you have not received payments, or you are receiving interim payments that don’t look right, here are a few practical steps that can help you diagnose where the delay is and, in some cases, speed up resolution:

Confirm that your separation was processed correctly. Ask your former HR or payroll office whether your retirement package was submitted to OPM and on what date.

Ask whether your Individual Retirement Record, SF 2806 for CSRS or SF 3100 for FERS, has been certified and forwarded. If it’s still at the agency, OPM can’t finalize what it doesn’t have.

Request the missing item list in plain language. If your case is pending because of military deposit documentation, a redeposit or a court order, you need to know exactly what is being requested and where to send it.

Keep a simple contact log: date, phone number or email, who you spoke with and what you were told. It helps when you follow up or request that your case be escalated.

If you’re in interim pay status, compare what you’re receiving to your estimated annuity. Interim pay is often lower, but if it is dramatically lower, it may signal that OPM is missing service or hasn’t credited key items.

If the delay is creating a cash flow crunch, think carefully about any bridge income you use while you wait. Many retirees tap the TSP, savings or part-time work to cover the gap.

That can be a reasonable short-term fix, but be mindful of withholding and taxes, and remember that pulling from the TSP earlier than planned can change the long-term trajectory of your retirement income. If you’re unsure, a tax professional or fee-only financial planner can help you run the numbers.

If you are getting nowhere, escalation is appropriate, but it works best when you bring specifics. Start with OPM’s Retirement Services and ask whether your case is received, in pay status or waiting on something from your former agency.

If OPM indicates the issue is on the agency side, go back to your HR or payroll office and ask for the status of the exact item OPM says is missing.

If weeks pass with no movement, a congressional inquiry can sometimes help surface where a case is stuck, especially when the problem is a missing document or an unanswered request between offices. It won’t guarantee instant processing, but it can improve visibility and accountability.

What I keep hearing from the 9/30/25 retirees is not just frustration, it is fatigue.

People did what they were supposed to do. They submitted paperwork, attended pre-retirement counseling, verified service history and planned budgets around an expected start date.

When the annuity doesn’t show up, retirees are forced into a holding pattern: delaying travel, postponing home repairs and rethinking health and family expenses.

And because the process is opaque, many begin to worry that they made a mistake, when the reality may be that their file is simply one of many thousands that are moving through a bottleneck.

Ultimately, this is why retirement processing delays are more than an administrative headache. They are a real-world test of whether the system can deliver a promise earned over a career of service.

OPM employees and agency payroll teams can’t solve a surge with good intentions alone. They need staffing stability, modernized processes and clear handoffs that reduce exception cases.

In case you were wondering, the number of TSP participants with account balances over $1 million is 184,532, and these participants have an average of close to 28 years of contributions.

The number of participants with less than $50,000 in their TSP accounts is 4,200,274, and these people only have an average of a little more than six years of contributions.

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When retirement calculations don’t move on the same timeline

Tammy Flanagan — Thu, 16 Apr 2026 15:00:00 -0400

One of Henry Ford’s famous quotes, “Coming together is a beginning; keeping together is progress; working together is success,” describes how the business of providing retirement counseling to federal employees should work.

In the 40-plus years I’ve been helping federal employees through the process of retirement, I have learned from many experts along the way.

The late Mike Causey, one of my heroes in this business, wrote a column more than 26 years ago in The Washington Post titled “In-House Personnel Helpers Are Harder to Find.” The column began: “Downsizing has reduced the number of personnel specialists available to help federal workers get the most from their benefits package. Buyouts and early retirements also have taken away some of the most experienced people in the shrinking field of human resources, which provides counseling to workers on health and life insurance and retirement planning.”

He could have written that same column today, don’t you agree?

Although there are still experienced and caring retirement specialists throughout the federal government, many are overwhelmed by the volume of retirements they process in their agencies, and some lack the depth of experience needed to provide effective assistance. They can call the Office of Personnel Management for help; however, many employees still rely on resources like this column and outside experts to prepare for retirement.

Fortunately, I am honored to have colleagues with vast experience in this area, and I can turn to them when I need help answering questions from federal employees and annuitants.

I have a saying: “No one on this earth knows everything there is to know about federal retirement benefits.”

When a recent question stumped me, I knew just who to contact for help.

Allen, a reader of this column, wrote recently:

“I have never seen an article addressing this, so I will ask here. The USPS newest union contract was settled in April 2025. However, the Office of Personnel Management already had my monthly annuity configured on my last high-3 years prior to those new wage rates being instituted and back pay received in August 2025.

“So, I let OPM know that they needed to subtract my COLA computed for 2025 pension and then refigure my high-3 with the new contract rates and reassess my correct annuity. So far, I’ve sent two letters to OPM, and nothing has been done.

“However, in a discussion with one of the OPM reps, she agreed with my analysis and said OPM needed to correct this oversight before processing other future retirees so it can avoid additional administrative work in the future.”

I understood the question involved a retroactive pay increase dating back before Allen’s retirement. It makes sense that the increased pay rates should be included in his high-3, but I was not sure how the correction would be handled. Given the current volume of retirement applications, any adjustment could take time.

To find clarity, I first reviewed information from the National Association of Letter Carriers regarding the newest Postal Service union contract.

In 2025, the Postal Service implemented the first six wage increases under the 2023–2026 National Agreement. These include four cost-of-living adjustments and two general wage increases. Career letter carriers will receive full back pay covering the period between Aug. 26, 2023 — the effective date of the first COLA — and April 18, 2025.

Next, I turned to my longtime colleague, Joni Montroy, who specializes in helping postal workers retire across the country. She explained: “A retiree does not have to ask. The Postal Service sends registers to the Office of Personnel Management when retroactive pay is issued, including retiree names and salary adjustments. That would have occurred after August 2025 for the National Association of Letter Carriers.

“It can take up to a year after the Office of Personnel Management receives the information to review and adjust a retiree’s high-3. There are simply too many cases at once.”

She added that rural carriers and postal workers have also recently received similar adjustments, making the workload substantial across multiple bargaining units. Each contract settlement requires significant processing time and patience.

Postal retirees are also facing additional uncertainty beyond back pay issues.

A recent Postal Service Board of Governors report said the agency will temporarily suspend employer contributions for Federal Employees Retirement System annuities, effective April 10.

The Postal Service said the move is intended to conserve cash and preserve liquidity amid ongoing financial strain, with potential insolvency projected as early as February 2027.

Employee contributions to FERS will continue to be withheld and transmitted to OPM. Employer automatic and matching contributions, as well as Thrift Savings Plan and Social Security contributions, will also continue.

The Postal Service said there will be no immediate impact on current or future retirees.

In response, William Shackelford, president of the National Active and Retired Federal Employees Association, issued the following statement:

“The U.S. Postal Service’s decision to suspend its contributions toward employee retirements is legally questionable — at best, detrimental to the future retirement security of its employees, premature given USPS does not face imminent insolvency, and only serves to delay when Congress must craft a solution to maintain USPS operations due to its financial situation.
“Federal statute 5 U.S.C. § 8423 imposes a clear obligation to make employer contributions to CSRDF. It is not clear what legal authority the Postal Service Board of Governors is claiming to make this unilateral decision to ignore that obligation.

“While this pause does not pose an immediate threat to the payment of retirement annuities, it sets a dangerous precedent for the funding of postal and federal retiree pensions. Continued failure to pay employer contributions would create an unfunded liability that would need to be addressed in the future.

“USPS is not projected to run out of cash until February 2027. That should prompt Congress to act to ensure solvency. But it does not justify this action at this time.

“Congress must consider a financially viable path forward for the Postal Service while honoring commitments to postal retirees. They should start by extending the borrowing limit, which remains capped at 1990 levels. The organization is also open to a more balanced approach to retirement and health fund investment, as long as pension payments remain guaranteed.”

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