Government Executive - Authors - Tammy Flanagan

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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How to ensure your federal retirement benefit is correct

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

Over 33,000 retirement claims were processed at the Office of Personnel Management's Retirement Operations Center in January and February this year, according to the agency. The digital claims that were processed in February were finished in 34 days, and paper claims were processed in 95 days. This processing time begins when OPM receives your application from your agency. About one-half of February’s 31,240 new retirement claims were digital and the remaining 15,746 were paper. To learn more about how your retirement is processed, visit the following pages of OPM's website:

OPM Retirement Quick Guide
Retirement Processing Times
How OPM is Preparing for the Surge in Retirements FAQ
Retirement Processing Status Statistics
Check Your Interim Pay Status
Also on Services Online you can find your annuity statements, 1099-Rs, adjust your tax withholdings, make direct deposit changes, update your contact information and verify your life insurance (FEGLI).

It pays to know how much your gross and net annuity amounts should be before you retire! Your FERS retirement benefit is computed using a deceptively, simple formula:

One percent of your “high-three” average salary, times your years and months of creditable service, including credit for your balance of unused sick leave.

If you retire at age 62 or older with a minimum of 20 years of service (which may include a combination of actual creditable service and your balance of unused sick leave), the factor for the computation is 1.1% instead of 1.0%, resulting in a 10% higher basic benefit.

After computing the unreduced benefit, then there may be reductions applied in the following order and will result in a reduced “gross” amount of your benefit.

Age reduction: Reduction for age when retiring under early deferred retirement or MRA + 10 provisions. There is no reduction for age for an employee who retires on a disability retirement or on an immediate annuity for employees retiring under early retirement provisions for VERA (Voluntary Early Retirement Authority), DSR (Discontinued Service Retirement) or special groups such as law enforcement officers, firefighters, etc.
Reduction:
- Reduction to provide a survivor annuity to a person with an insurable interest.
- Reduction to provide a survivor annuity to a spouse and/or former spouse(s); and/or
Alternative annuity reduction (AFA): The only employees who may now elect the AFA are those who are eligible for a non-disability annuity and who have a life-threatening affliction or other critical medical condition.

Once your gross annuity is determined, then federal tax, state tax, court ordered apportionments and insurance premiums for FEHB, FEGLI, FEDVIP and FLTCIP may be withheld.

Learn more about court ordered benefit payments
To establish/change withholdings and allotments, visit Services Online or call the Retirement Information Office at 1-888-767-6738.
For more information on taxes, visit tax information for annuitants.
For more information on life insurance in retirement, visit life insurance coverage.
OPM publishes biweekly and monthly FEHB premiums and PSHB premiums.

You are not expected to know all of the rules for crediting your service for eligibility and computation of your CSRS or FERS retirement, but if you are not sure about whether your service is creditable or whether you must pay a deposit or a redeposit to receive credit, it is very important to find out BEFORE you separate from your federal career. Ask questions and educate yourself about the creditability of your federal service. These rules are very technical and can be complicated if you are not familiar with them.

Military service: Service that is included in your “leave” Service Computation Date that is published on your Notification of Personnel Action statements (form SF 50) is not always creditable for retirement. Here are the rules for crediting military service to your retirement:
Creditable military service: Chapter 22, CSRS and FERS Handbook
Service credit payments for post-56 military service: Chapter 23, CSRS and FERS Handbook
Benefits Administration Letter 23-105, Subject: Military service deposit eligibility notification requirement
Benefits Administration Letter 21-101, Subject: Payment of interest on post-56 military deposit or Peace Corp or VISTA service deposit with an administrative error
Benefits Administration Letter 17-101, Additional guidance on military deposits
Civilian service credit: In general, all federal and District of Columbia employment is considered creditable under the Civil Service Retirement System (CSRS). The FERS Act provides that, with certain exceptions, service creditable under CSRS is potentially creditable under FERS. However, there are some important conceptual differences. These differences are discussed in the following chapters of the CSRS and FERS Handbook and in the Benefit Administration Letters that were issued after these chapters were published in 1998 (28 years ago!). Beware that when you see the word “general” or “generally” that means that there are exceptions!
Creditable civilian service: Chapter 20, CSRS and FERS Handbook
Service credit payments for civilian service: Chapter 21, CSRS and FERS Handbook
Benefits Administration Letters dating back to 1995

Here are some additional ways to find the answers to your questions:

Be careful when relying on secondhand information from well-meaning friends, family and coworkers! Do additional research before applying undocumented information to your situation.
If you are working with a financial advisor, be sure that they routinely work with federal employees like yourself so they may spot areas of concern when helping you plan your financial future.
If you attend a pre-retirement planning workshop, be sure to look for a reference to a resource or the law or regulation that backs up the information. Feel free to ask the presenter for references to the information presented when it may impact an important decision that you will make for your own retirement.
Organizations such as the National Active and Retired Federal Employees Association have federal retirement specialists available to help members understand the value of their benefits through monthly live webinars, as well as an archived library of recent presentations, a monthly magazine and an email address to answer individual questions.
Retirees with a Civil Service Active (CSA) number can contact the Office of Personnel Management by submitting a “help request” or writing or calling Customer Service team: contact OPM.
Visit OPM's Federal Retirement Support Center.

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Traveling soon? What federal health plans actually cover

Tammy Flanagan — Thu, 02 Apr 2026 15:00:00 -0400

It’s the peak tourist season in Florida thanks to our sunny and warm weather and surprisingly low humidity this time of year. Saturday, March 21, was the busiest day of the year at our local Sarasota Bradenton International Airport (SRQ), with up to 16,000 departing passengers — nearly double the daily average of 8,020 — airport officials told the Herald-Tribune — our local newspaper. That would mark the airport’s second-busiest day on record. With so many people traveling, I thought it might be time to review your health insurance coverage and how it works when you are traveling out of town or out of the country. It’s important to know how your insurance plan works should you need care during an emergency when you are traveling overseas. Here are some of the important features to look for:

Are you responsible for converting the currency to dollars and translating the bills into English? You can find out by reviewing your plan brochure (generally this information is found in Section 7) or by contacting your plan’s customer service.
Be prepared to pay up front if you need care. Your insurance coverage is likely to reimburse you, but not until after you file the claim.
Most plans will reimburse at the in-network level of coverage when you travel overseas.
Note if there is a special number you will need to call if you are traveling outside of the U.S.
If you are enrolled in a Medicare Advantage option of your FEHB plan, be sure to contact the plan to see how coverage will work overseas.

If you have FEHB coverage, do you still need to purchase travel insurance?

The coverage that is available with commercial travel plans varies from one plan to another, but the best annual travel insurance plans include protection for common mishaps. Your FEHB (and PSHB) plans generally cover medical emergencies while you’re traveling. The one thing that most health plans don’t cover is a medical evacuation back to the U.S. This is sometimes referred to as a “repatriation benefit.” Check for travel plans that cover this benefit.

Travel insurance also covers non-medical problems such as unexpected cancellations and trip interruption benefits. Check your policy for coverage for baggage delays, loss, theft and damage. Travel delay benefits may reimburse you for meals, accommodation and other expenses during a covered delay. If you rent a car, your policy may have car rental protection. Some plans include additional benefits, such as business equipment coverage and change fee coverage.

Let’s look at the nationwide FEHB fee-for-service plans, some of the larger HMOs and Medicare.

APWU:

Outside the U.S.: For covered services you receive by providers and hospitals outside the United States and Puerto Rico, send a completed Claim Form and the itemized bills to the following address. Also, send any written inquiries concerning the processing of overseas claims to:

High Option: APWU Health Plan, P.O. Box 8660, Elkridge, MD 21075

Consumer Driven Option: UnitedHealthcare at the claims address shown on the back of your UnitedHealthcare ID card.

Note: Overseas claims, including emergency claims, will be paid as out-of-network.

Nationwide coverage: You can get care from any “covered provider” or “covered facility.” How much APWU will pay — and you pay — depends on the type of covered provider or facility you use. If you use preferred providers, you will pay less. APWU uses UnitedHealthcare PPO providers. When out of your state of residence, if you do not use a UnitedHealthcare PPO provider or a UnitedHealthcare PPO provider is not available, standard non-PPO benefits apply. For assistance in identifying a provider in the network, call the APWU Health Plan at 800-222-2798.

Blue Cross and Blue Shield Service Benefit Plan:

Outside the U.S.: If you travel or live outside the United States, Puerto Rico and the U.S. Virgin Islands, you are still entitled to the plan benefits. Unless otherwise noted in the plan’s brochure, the same definitions, limitations and exclusions also apply. Costs associated with repatriation from an international location back to the United States are not covered. We may request that you provide complete medical records from your provider to support your claim. If you plan to receive healthcare services in a country sanctioned by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury, your claim must include documentation of a government exemption under OFAC authorizing care in that country.

Please note that the requirements to obtain precertification for inpatient care and prior approval for those services listed in the plan brochure do not apply when you receive care overseas, except for admissions to residential treatment centers and skilled nursing facilities. Prior approval is required for all non-emergent air ambulance transport services for overseas members. Protections offered under the No Surprises Act do not apply to overseas claims. Members enrolled in the FEP Medicare Prescription Drug Program have no coverage for drugs obtained and/or purchased overseas. Please visit www.fepblue.org/overseas-coverage for additional information.

BC/BS has a network of participating hospitals overseas that will file your claims for inpatient facility care for you — without an advance payment for the covered services you receive. We also have a network of professional providers who have agreed to accept a negotiated amount as payment in full for their services. The Overseas Assistance Center can help you locate a hospital or physician in our network near where you are staying. You may also view a list of our network providers on our website, www.fepblue.org. You will have to file a claim to us for reimbursement for professional services unless you or your provider contacts the Overseas Assistance Center in advance to arrange direct billing and payment to the provider.

Nationwide coverage:

Under Standard Option, you can go to any covered provider you want, but in some circumstances, we must approve your care in advance. How much BC/BS pays — and you pay — depends on the type of covered provider you use. If you use our Preferred, Participating or Member providers, you will pay less.

Under Basic Option, you must use Preferred providers to receive benefits, except under situations listed in Section 4 of the plan brochure. In addition, we must approve certain types of care in advance. Under Basic Option, you must use those “covered professional providers” or “covered facility providers” that are Preferred providers for Basic Option to receive benefits. Please read further in Section 4 of the plan brochure for exceptions to this requirement.

You must use those “covered professional providers” or “covered facility providers” that are Preferred providers for FEP Blue Focus to receive benefits. Benefits are not available for care from non-preferred providers, except in very limited situations.

Compass Rose Health Plan:

Outside the U.S. coverage: When work or travel takes you overseas, the High and Standard Compass Rose Health Plan has you covered. You can see any health care provider or visit any hospital, and you will be reimbursed at the in-network level of benefits. When you use a provider outside the United States, you will pay them up front, then submit the receipt and detailed billing invoice for claims processing and reimbursement. Our overseas customers receive the same PPO benefits and prompt customer service as their stateside counterparts. There may be additional claims processing time for foreign claims. Claims may also be filed online. We will provide translation and currency conversion services for claims overseas and foreign services.

Optional travel insurance for Compass Rose Health Plan members:
UnitedHealthcare Global provides Compass Rose Health Plan members with access to Safe Trip travel insurance plans — an optional layer of protection designed specifically for international travel. These Safe Trip travel plans provide added protection when traveling abroad, covering unexpected trip cancellations, medical emergencies, evacuations and repatriations.

Nationwide coverage: You can get care from any “covered provider” or “covered facility.” How much we pay — and you pay — depends on the type of covered provider or facility you use. On the High Option, if you use our preferred providers, you will pay less. The Compass Rose Health Plan is powered by the UnitedHealthcare Choice Plus network. To help keep out-of-pocket costs low, our contract with UnitedHealthcare limits what doctors, hospitals and other facilities in the network are allowed to charge you. The Standard Compass Rose Health Plan does not provide coverage for out-of-network care.

Foreign Service Benefit Plan:

Who may enroll in this plan: You must be, or become, a member of the American Foreign Service Protective Association. New membership in the FSBP is limited to American Foreign Service personnel and certain Civil Service direct hire employees (i.e., eligible for FEHB insurance) working for the following government organizations: (1) Department of State (Foreign Service and Civil Service); (2) Department of Defense; (3) Department of Homeland Security; (4) USAID (Foreign Service and Civil Service); (5) Foreign Commercial Service (Foreign Service and Civil Service); (6) Foreign Agricultural Service (Foreign Service and Civil Service); (7) CIA, NSA and other intelligence organizations; and (8) Executive Branch civilian employees assigned overseas or to U.S. possessions and territories, and the direct hire domestic employees assigned to support those activities.

Outside the U.S. claims: When you are overseas you have access to a translation service, 24 hours a day, 7 days a week to assist you in discussing your urgent health-related conditions (such as accidents and medical emergencies that require immediate attention) with a foreign healthcare professional. You may call 855-411-9916. The Foreign Service Benefit Plan pays claims for providers outside the 50 United States at the same in-network coinsurance rate as in-network providers in the 50 United States, except in Guam, which is part of the plan’s network and subject to in- and out-of-network benefits. Note: We will provide translation and currency conversion services for claims for overseas (foreign) services. We have direct billing arrangements with providers in many countries, including China, Colombia, France, Germany, Great Britain, Italy, Japan, Korea, Panama, Russia, Switzerland, Thailand and Turkey. In addition, overseas Seventh-day Adventist hospitals and clinics participate in our direct billing arrangement. Please see our website (www.AFSPA.org/FSBP) for the most up-to-date information.

Nationwide coverage: You can get care from any “covered provider” or “covered facility.” We do not require referrals to see a specialist. How much we pay — and you pay — depends on the type of covered provider or facility you use. If you use in-network providers, you will pay less. The out-of-network benefits are the standard benefits of this plan. In-network benefits apply only when you use an in-network provider. Provider networks may be more extensive in some areas than others. In-network benefit levels also apply to providers outside the 50 United States.

GEHA:

Outside the U.S. claims: For covered services you receive by physicians and hospitals outside the United States and Puerto Rico, send a completed Overseas Claim Form and the itemized bills. Eligibility and/or medical necessity review is required when procedures are performed, or you are admitted to a hospital outside of the United States. Covered providers outside the United States will be paid at the in-network level of benefits, subject to the deductible, copays and/or coinsurance. We will provide translation and currency conversion for claims for overseas (foreign) services. The conversion rate will be based on the date services were rendered. You may be required to pay for the services at the time you receive them and then submit a claim to us for reimbursement. Proof of payment is required to be submitted with an overseas claim form. Canceled checks, cash register receipts or balance due statements are not acceptable. All foreign claim payments will be made directly to the enrollee.

Nationwide coverage: If you utilize an out-of-network provider, out-of-network benefits would apply on the Elevate Option. The Elevate Plus Option does not provide benefits for out-of-network providers, except in cases of emergency medical care. This plan uses the UnitedHealthcare network.

MHBP:

Outside the U.S. coverage: Overseas will be paid at the network level of benefits for covered services. Overseas hospitals and physicians are under no obligation to file claims for you. You may be required to pay for the services at the time you receive them and then submit a claim to us for reimbursement. MHBP will provide translation and currency conversion services for claims for overseas (foreign) services. For inpatient hospital services, the exchange rate will be based on the date of admission. For all other services, we will apply the exchange rate for the date the services were rendered. All foreign claim payments will be made directly to the enrollee except for services rendered to beneficiaries of the United States Department of Defense third party collection program. Canceled checks, cash register receipts or balance due statements are not acceptable.

Nationwide coverage: MHBP is a fee-for-service plan that allows you and your covered dependents to choose your health care providers. However, when you use an out-of-network provider, you may incur higher out-of-pocket expenses. The out-of-network benefits are the regular benefits of the plan. Network benefits apply only when you use a network provider. We cannot guarantee the availability of every specialty, or their continued participation in a specialty, in all areas. Out-of-network benefits are based on the plan’s out-of-network allowance. The out-of-network allowance depends on the type of care you receive, whether you receive care in an area that has a fully developed network and other factors. Aetna is the brand name used for products and services provided by one or more of the Aetna group of companies, including Aetna Life Insurance Company and its affiliates (Aetna). A single annual $52 associate membership fee makes all MHBP plans available to you.

SAMBA Health Benefit Plan:

Outside the U.S. coverage: For covered services rendered by a hospital or by a doctor outside of the United States, the plan will pay eligible charges at PPO benefit levels, limited to the plan’s allowance established for the Washington, D.C., metropolitan area. The member is responsible for the difference between the plan’s allowance and the provider’s charge. We will provide translation and currency conversion services for claims for overseas (foreign) services. Charges for overseas (foreign) claims will be converted to U.S. dollars using the exchange rate applicable to the date the service was rendered. For inpatient hospital services, the exchange rate will be based on the date of admission. When you must file a claim — such as for services you received overseas or when another group health plan is primary — submit it on the CMS-1500 or a claim form that includes the information shown in Section 7 of the plan brochure. Bills and receipts should be itemized.

Nationwide coverage: SAMBA’s fee-for-service plan offers services through a PPO. This means that certain hospitals and other healthcare providers are “preferred providers.” We have entered an arrangement with Cigna to offer the Cigna Open Access Plus (OAP) network to serve as the plan’s PPO for SAMBA enrollees in all states. When you use our PPO providers, you will receive covered services at reduced cost. The non-PPO benefits are the regular benefits of this plan. PPO benefits apply only when you use a participating Cigna OAP network provider. We cannot guarantee the availability of every specialty in all areas and continued participation of any specific provider cannot be guaranteed. When you phone for an appointment, please remember to verify that the healthcare provider or facility is still a Cigna OAP network provider. The nature of the services (such as urgent or emergency situations) does not affect whether benefits are paid as PPO or non-PPO. If you reside in the PPO network area and no PPO provider is available, or you do not use a PPO provider, the regular non-PPO benefits apply.

Aetna:

Aetna offers seven unique plan options: Aetna Saver, Open Access Plan, Aetna Value Plan, HDHP w/HAS, CDHP, Aetna Direct and Aetna Advantage.

Aetna Advantage

Outside the U.S. coverage: You should provide an English translation and currency conversion rate at the time of services for claims for overseas (foreign) services. When you must file a claim, such as when you use non-network providers, for services you receive overseas or when another group health plan is primary, submit it on the Aetna claim form.

Nationwide coverage: This plan is a health maintenance organization (HMO). We require you to see specific physicians, hospitals and other providers that contract with us. These plan providers coordinate your health care services. We are solely responsible for the selection of these providers in your area. Contact us for a copy of our most recent provider directory or visit our website at www.AetnaFeds.com. We give you a choice of enrollment in a High, Basic or Saver Option.

If you live or work in our service area, you can go directly to any network specialist for covered services without a referral from your primary care provider. Note: Whether your covered services are provided by your selected primary care provider (for your PCP copay) or by another participating provider in the network (for the specialist copay), you will be responsible for payment, which may be in the form of a copay (flat dollar amount) or coinsurance (a percentage of covered expenses). If you go directly to a specialist, you are responsible for verifying that the specialist is participating in our plan. If your participating specialist refers you to another provider, you are responsible for verifying that the other specialist is participating in our plan.

Aetna Saver, Aetna High Option, Aetna Basic Option

Outside the U.S.:
If you are traveling outside your Aetna service area, including overseas/foreign lands, or if you are a student who is away at school, you are covered for emergency and urgently needed care. For non-emergency services, care may be obtained from a walk-in clinic, an urgent care center or by calling Teladoc. Urgent care may be obtained from a private practice physician, a walk-in clinic or an urgent care center. Certain conditions, such as severe vomiting, earaches or high fever are considered “urgent care” outside your Aetna service area and are covered in any of the above settings. All follow-up care should be coordinated by your PCP or network specialist. Follow-up care with non-participating providers is only covered with a referral from your primary care provider and preapproval from Aetna. Suture removal, cast removal, X-rays and clinic and emergency room revisits are some examples of follow-up care.

Nationwide coverage: Large nationwide Aetna network, 24-hour/7-days-a-week access to doctors with CVS Virtual Care, no referrals to network specialists.

See www.aetnafeds.com for additional plans that Aetna offers, including Aetna Open Access Plan, Aetna HDHP w/HSA, Aetna CDHP and Aetna Direct plans.

Kaiser Permanente:

Outside the U.S.: Most overseas providers are under no obligation to file claims on behalf of our members. You may need to pay for the services at the time you receive them and then submit a claim to us for reimbursement. To file a claim for covered urgent or emergent care received outside the United States, send a completed Overseas Claim Form and itemized bills to: Mid-Atlantic Claims Administration, Kaiser Permanente, P.O. Box 371860, Denver, CO 80237-9998. We will do the translation and currency conversion for you. You may obtain the Overseas Claim Form by calling Member Services toll-free at 877-KP4-FEDS (877-574-3337) or from our website at www.kp.org/feds, Members/Forms and Information.

Nationwide coverage: You must receive your health services at Kaiser Permanente plan facilities, except if you have an emergency, authorized referral or out-of-area urgent care. If you are visiting another Kaiser Permanente or allied plan service area, you may receive healthcare services at those Kaiser Permanente facilities. Under the circumstances specified in this brochure you may receive follow-up or continue care while you travel anywhere. If you have an urgent care claim (i.e., when waiting for the regular time limit for your medical care or treatment could seriously jeopardize your life, health or ability to regain maximum function, or in the opinion of a physician with knowledge of your medical condition would subject you to severe pain that cannot be adequately managed without this care or treatment), we will expedite our review and notify you of our decision within 72 hours.

If your plan is not listed, you can check out all other FEHB and PSHB plans by visiting https://www.opm.gov/healthcare-insurance/healthcare/.

TRICARE:

Outside the U.S. proof of coverage: Learn how to travel. Filling prescriptions overseas: We recommend that you fill all your prescriptions before you travel. If you must fill a prescription while you’re traveling, keep in mind that TRICARE retail network pharmacies are only located in the U.S. and the U.S. territories of Puerto Rico, Guam, the U.S. Virgin Islands and the Northern Mariana Islands. Also, if you’re using home delivery, you must have a prescription from a U.S.-licensed provider and an APO or FPO address. Learn more about filling prescriptions overseas.

Air evacuations: To be medically necessary means it is appropriate, reasonable and adequate for your condition. International SOS will provide cashless, claimless air evacuation services to the closest safe location. This applies only to active-duty service members and their families. For all others, TRICARE will still cover the safest circumstances. However, you should be prepared to pay up front and submit a claim for reimbursement. TRICARE doesn’t cover all air evacuations back to the U.S. Learn more about air evacuation coverage.

Nationwide coverage: TRICARE is the uniformed services health care program for active-duty service members, active-duty family members, National Guard and Reserve members and their family members, retirees and retiree family members, survivors and certain former spouses worldwide.

TRICARE brings together the health care resources of the Military Health System — such as military hospitals and clinics — with a network of civilian health care professionals, institutions, pharmacies and suppliers to foster, protect, sustain and restore health for those entrusted to their care. You can also seek care from a civilian network of TRICARE-authorized providers. This network depends on what region you’re in. Find your region and learn more about network providers. Note: You may be able to see a non-network TRICARE-authorized provider, depending on your TRICARE plan. But you may have higher costs and you may have to file your own claims.

Medicare:

Medicare usually doesn’t cover medical care outside the U.S. and its territories. However, Original Medicare and Medicare Advantage plans must cover care you receive outside the U.S. in some very limited certain circumstances:

Medicare will pay for emergency services in Canada if you are traveling a direct route, without unreasonable delay, between Alaska and another state and the closest hospital that can treat you is in Canada.
Medicare will pay for medical care you get on a cruise ship if you get the care while the ship is in U.S. territorial waters. This means the ship is in a U.S. port or within six hours of arrival at or departure from a U.S. port.
In limited situations, Medicare may pay for non-emergency inpatient services in a foreign hospital (and any connected provider and ambulance costs). Your care is covered if the hospital is closer to your residence than the nearest available U.S. hospital. This might happen if, for example, you live near the border of Mexico or Canada.

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The Social Security clock is ticking faster than expected

Tammy Flanagan — Thu, 26 Mar 2026 15:00:00 -0400

Did you know that the “Doomsday Clock” was founded in 1947 by scientists associated with the Manhattan Project, including Albert Einstein and J. Robert Oppenheimer? According to this “clock,” it is now 85 seconds to midnight.

Fortunately, today’s column will not focus on disruptive technologies, nuclear risk, climate change or biological threats that are the focus of the Bulletin of the Atomic Scientists. Instead, I will focus on projections of the insolvency of Social Security, including analysis from the University of Pennsylvania’s Penn Wharton Budget Model (PWBM) and the official projections from the Social Security Trustees.

The official annual report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds will not be released for a few more months. The most recent report was released on June 18, 2025.

For someone like me who looks for the silver lining in every cloud, I don’t like to make dire predictions or assume a problem cannot be solved. Today’s column discusses both the projections and the potential policy paths forward.

The PWBM analysis is grounded in microeconomics, which refers to how individuals, households and firms make decisions to allocate limited resources. In this case, the limited resource is the funds available to pay Social Security benefits to retirees, survivors and individuals who are unable to work due to disability.

The PWBM projects that Social Security could face depletion in the early 2030s under certain assumptions. At that point, available revenues would be sufficient to pay only a portion of scheduled benefits.

This aligns broadly with the Social Security Trustees’ projections, though the exact timing differs slightly depending on the assumptions used. The Trustees have projected depletion of the combined trust funds in the mid-2030s if no changes are made to current law.

The OASI and DI Trust Funds operate separately under current law. The Disability Insurance Trust Fund is generally projected to remain solvent longer than the Old-Age and Survivors Insurance Trust Fund. Combined projections are often used as a general indicator of the system’s overall financial status, even though the funds cannot be merged without a change in law.

According to the Trustees, several factors are contributing to the long-term imbalance. One is recent legislation that increased benefits for some workers by repealing provisions that had reduced benefits for certain public-sector employees.

Another factor is demographics. Lower birth rates mean fewer workers paying into the system in the future, while the population of beneficiaries continues to grow. The total fertility rate in the United States has declined to historic lows in recent years, contributing to this long-term pressure.

A third factor is the share of income going to wages versus other forms of compensation. Changes in that balance can affect payroll tax revenues, which fund Social Security.

Understanding these drivers is necessary to understand the policy options available to address the shortfall.

The PWBM outlines several policy levers that could address the gap, though any changes would require action by Congress. These include adjustments to the payroll tax rate, the taxable maximum, cost-of-living adjustments, benefit formulas and the full retirement age.

The combined OASDI payroll tax rate is 12.4 percent, split evenly between employers and employees. Only earnings up to a certain annual limit are subject to the payroll tax, with that taxable maximum increasing over time. Benefits are adjusted annually for inflation through cost-of-living adjustments, and the benefit formula is based on a progressive structure tied to lifetime earnings.

The full retirement age is 67 for workers born in 1960 or later, though individuals can claim reduced benefits starting at 62 or delay claiming until age 70 to receive higher monthly payments.

The PWBM presents several illustrative policy options to address the long-term imbalance. These scenarios are modeling exercises, not legislative proposals, and each combines different changes to taxes and benefits.

Option A focuses primarily on revenue increases, including a higher payroll tax rate and an increase in the taxable maximum, along with adjustments to the cost-of-living formula.

Option B combines revenue increases with modest benefit reductions by adjusting the benefit formula and cost-of-living calculations.

Option C shifts more toward benefit reductions, including a gradual increase in the full retirement age.

Option D blends both revenue increases and benefit adjustments.

Option E relies primarily on benefit reductions without increasing the payroll tax rate.

Time will tell whether any of these approaches will be adopted. The reality is that the options generally fall into three categories: raising revenue, reducing benefits or some combination of the two.

The advantage of phasing in changes over time is that it gives workers and retirees more time to adjust. Congress has acted before to stabilize Social Security, though often at the last possible moment. The question is whether it will act again before time runs out.

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How federal retirement benefits have changed over the years

Tammy Flanagan — Thu, 19 Mar 2026 15:00:00 -0400

It has been more than 20 years since I began writing this “retirement planning” column and more than 40 years since I started studying federal benefits so that I could teach and counsel federal employees about their retirement and insurance benefits. As the old saying goes, “time flies when you’re having fun!” During the past four decades, I have seen changes in federal retirement and insurance benefits due to changes in laws and policies. As I look back to 1985 (the year I was assigned to work in the Federal Bureau of Investigation’s “retirement office”), here are some of the changes that have stood out that impact the Federal Employees Retirement System (FERS), which was being created and implemented in the 1980s, and the older Civil Service Retirement System (CSRS), which dates back to its creation in 1920:

Federal Employees Retirement System Act of 1986 — Title I: Federal Employees Retirement System

Establishes FERS for federal employees, postal employees and members of Congress who began service after Dec. 31, 1983. Declares that benefits payable under the system are in addition to those payable under the Social Security Act. Includes the following provisions:

Eligibility for an annuity after five years of creditable service
Entitlements to retirement based on age and years of service
Formulas for computing an annuity
Survivor election reductions
Funding

The FERS Act also provided for:

Mandatory retirement for air traffic controllers, law enforcement officers and firefighters
A Thrift Savings Plan under which participants make contributions from their basic pay
A formula to determine the appropriate contribution by the employing agency
Payment of benefits, lump sum or annuity, at separation from service
Establishment of the Thrift Savings Fund in the Treasury
Investment of funds
Survivor annuities under FERS
Disability benefits for employees with 18 months of creditable service
The Office of Personnel Management to administer benefits and adjudicate claims
Annual adjustments in basic pensions based on increases in the Consumer Price Index
Withholding of state income taxes from retirement annuities
Protection of annuities, survivor annuities and disability benefits from legal process, unless otherwise provided by federal law
Creation of the Federal Retirement Thrift Investment Board to oversee the Thrift Savings Fund
Creation of an Employees Thrift Advisory Council
Appointment of an executive director to carry out board policies and administer the plan

Public Law 103-353, the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)

Approved Oct. 13, 1994, this law made two substantial amendments to FERS and CSRS provisions under Title 5. It made certain National Guard service creditable and addressed service credit deposits required for certain military service that interrupts civilian federal service. Both provisions apply to certain past service.

Bailey v. State of North Carolina (1998)

This class-action lawsuit resulted in a North Carolina Supreme Court decision that affected taxation of certain retirement benefits. As a result, North Carolina may not tax certain retirement benefits received by retirees of the state who meet specific criteria. The ruling applies to certain defined benefit plans, including FERS and CSRS, for qualifying service. It also applies to certain state retirement plans. Retirees are advised to check with their state tax office regarding how their benefits will be taxed.

The National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84)

Signed Oct. 28, 2009, this law provided several changes under CSRS and FERS, including:

Credit for unused sick leave under FERS, with phased implementation (50 percent effective Oct. 28, 2009, and 100 percent effective Jan. 1, 2014)
Expanded ability to use actuarial reductions instead of cash redeposits for certain prior service
Changes to annuity calculations for part-time service
Authority to deposit refunds under FERS
Credit for certain District of Columbia service transferred to federal service
Retirement equity adjustments for employees in non-foreign areas, allowing a phased shift from cost-of-living allowances to locality pay

Public Law 112-96, the Middle Class Tax Relief and Job Creation Act of 2012

Established FERS-Revised Annuity Employee (FERS-RAE). Employees hired after Dec. 31, 2012, who were not excluded from FERS coverage became subject to higher employee contribution rates. While most benefits did not change, the law increased contributions and included exceptions allowing some employees to remain under original FERS rules.

The Social Security Fairness Act (2025)

Signed into law on Jan. 5, 2025, this act ended the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions had reduced or eliminated Social Security benefits for millions of workers who also received pensions from non-covered employment, including many federal employees under CSRS.

Future changes

H.R. 1522, the Federal Retirement Fairness Act, would allow civilian service in temporary positions after Dec. 31, 1988, to be creditable under FERS. It has been proposed for years but has not gained broad support.
Recent proposals in the “big beautiful bill” of 2025 included potential changes to federal retirement and benefits, such as:
- Reducing the federal government’s contribution to FEHB plans through a voucher model
- Eliminating cost-of-living adjustments for FERS retirees
- Reducing COLAs for CSRS retirees by 0.5 percent
- Reducing returns on the Thrift Savings Plan G Fund
- Increasing employee retirement contributions
- Converting new employees to at-will status unless they accept higher contributions
- Charging fees for Merit Systems Protection Board appeals
- Calculating annuities based on the highest five years of salary instead of three
- Eliminating the FERS annuity supplement

Employee and retiree organizations continue to play a significant role in shaping these outcomes. Groups like AFGE and NARFE have successfully influenced legislation and helped prevent proposed cuts to federal retirement and insurance benefits.

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Women in federal service still face retirement gaps

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

Updated at 4:08 p.m. on March 13.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How women save compared to men

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

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

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

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

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

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

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

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

Why women face greater retirement challenges

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

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

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

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

How women federal employees can prepare for retirement

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

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

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

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

Looking forward

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

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

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

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

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

CORRECTION: An earlier version of this story incorrectly identified Johnnie Mae Gibson as the first Black female FBI agent. Ms. Gibson was among the first Black female FBI agents, but not the first.

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

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

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

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

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

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

Survivors’ benefits

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

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

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

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

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

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

Spousal benefits

Requirements to qualify for Social Security spousal benefits include:

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

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

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

NARFE member example

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

Charles divided impacted individuals into two groups:

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

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

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

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

Retroactive benefits rules

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

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

Congressional review

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

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

Filing for reconsideration

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

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

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

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

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

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

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

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

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

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

Preparing for retirement

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

FERS basic retirement benefit
Social Security
Thrift Savings Plan

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

FERS basic retirement benefit

Formula:
- 1% × high-three average salary × years and months of creditable service
- 1.1% × high-three average salary × years and months of creditable service for age 62+ with 20+ years of service
High-three average salary: Highest average pay during any three consecutive years of service. Includes increases for retirement deductions. Excludes overtime, bonuses, annual leave payout, and cash awards.
Creditable service: Includes federal covered service, pre-1989 service if a deposit is paid, unused sick leave, and generally military service if a deposit is made.

Reductions and withholdings:

Age reduction for early retirement
Survivor benefits election
Alternative annuity election
Deductions for FEHB, FEGLI, FLTCIP, FEDVIP, federal and possibly state taxes

Social Security and TSP

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

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

Other planning considerations

Taxes on traditional TSP withdrawals and some Social Security benefits
Health care costs, including Medicare premiums and prescription drugs
Long-term care expenses
Seeking professional financial advice when needed

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

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Federal workers delay retirement as savings gaps persist

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

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

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

Some troubling responses included:

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

On the other hand:

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

Additional survey responses:

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

How would your answers compare with the survey?

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

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

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

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

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

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

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

What do the professionals think?

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

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

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

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

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

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

What is an in-plan Roth conversion?

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

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

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

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

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

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

Using the TSP’s Roth conversion calculator

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

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

The basics to use the calculator:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Pay and Retirement Benefit Adjustments

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

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

Lump Sum Annual Leave Payment

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

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

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

Retirement Cost-of-Living Adjustments (COLA)

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

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

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

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

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

Social Security COLA

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

FERS Special Retirement Supplement (SRS) Earnings Limit

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

Social Security Earnings Limit

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

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

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

Medicare

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

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

Federal Employees Health Benefits

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

Thrift Savings Plan

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

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

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

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

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

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

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Could this be true?

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

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

Retirement Processing

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

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

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

Some other things to remember including:

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

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

Communicating with OPM

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

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

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

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

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

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

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

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

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

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

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

FEHB Coverage Requirements

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

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

OPM canceled health insurance coverage for many employees

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

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

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

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

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

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

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

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

Receive a VSIP; or

Take early optional retirement; or

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

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

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How federal retirement benefits are calculated and where estimates go wrong

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

• Federal income tax
• State income tax

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

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

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

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

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

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OPM inspector general flags top management challenges for fiscal 2026

Tammy Flanagan — Thu, 08 Jan 2026 15:00:00 -0500

On Nov. 24, 2025, the Office of Personnel Management's inspector general released its list of top management challenges for Fiscal Year 2026.

Recent retirees and federal employees working with reduced staffing may be affected by these challenges, particularly those who separated using last year's Deferred Resignation Programs.

The OIG noted concerns about OPM losing more than 1,000 employees, or about one-third of its staff, by the end of 2025. The Retirement Services office is working to reduce retirement application processing times and improve customer service for annuitants, but the loss of more than 100 staff members due to the deferred resignation program, regular retirements, and canceled hiring actions could slow progress and affect the office’s ability to respond to roughly 6,000 calls each day.

Retirement processing

OPM administers federal retirement programs, serving roughly 2.8 million active employees, including Postal Service workers, and more than 2.7 million annuitants and eligible family members. In fiscal 2024, OPM paid more than $106 billion in CSRS and FERS defined-benefit retirement payments. The Office of Management and Budget has identified OPM Retirement Services as one of the federal government’s 38 high-impact service providers.

Between January and July 2025, OPM processed 66,385 retirement claims, more than 11,000 over the same period in 2024.

December retirement processing statistics

	Dec. 2024	Dec. 2025
Claims received	5,020	13,174
Claims processed	4,988	9,428
Inventory	13,876	50,566
Monthly average processing time (days)	57	67
Fiscal year-to-date processing time (days)	58	71

Source

For all of 2025, OPM processed 112,368 retirement claims, up from 88,393 in 2024, an increase of more than 25%. Claims submitted through the new Online Retirement Application (ORA) were processed faster than paper applications:

October: 45 days (digital) vs. 79 days (paper)
November: 38 days (digital) vs. 66 days (paper)
December: 40 days (digital) vs. 67 days (paper)

During this period, OPM received two to three times more paper applications each month as ORA continues to be phased in.

Improper payments

Preventing improper payments remains an ongoing challenge. Over the last five years, OPM reported more than $1.24 billion in improper payments through PaymentAccuracy.gov. In fiscal 2024, $243.7 million of overpayments were within OPM’s control.

While OPM understands the root causes of improper payments, outdated systems complicate program integrity efforts. Reducing improper payments depends on modernizing retirement systems. Effective planning and decision-making will be critical to ensure the programs continue to meet obligations to annuitants.

The Deferred Resignation Program, along with various Voluntary Early Retirement offers across agencies, has made this one of the largest mass-retirement events in federal government history.

Retirement Services’ customer service

Customer service remains a concern. Annuitants, especially survivor annuitants, often call the OIG hotline when frustrated by long hold times.

With the surge of retirees from the Deferred Resignation Program and the increased use of Voluntary Separation Incentive Payments and Voluntary Early Retirement Authority—contributing to the federal workforce shrinking by about 300,000 employees, or 12.5%—OPM must anticipate increased customer contacts while continuing to serve annuitants.

Tip for retirees: Call OPM Retirement Services at 7:40 a.m. EST when lines open. This does not guarantee immediate service but improves the chance of reaching a helpful representative.

Contact OPM by phone:

Phone: 1-888-767-6738
TTY: 711
Hours: Monday through Friday, 7:40 a.m.–5:00 p.m. ET (closed on federal holidays)
Busiest time: 10:30 a.m.–1:30 p.m. ET

Call if you cannot find an answer on OPM.gov, cannot sign in to Retirement Services Online, or need assistance with special or complex cases.

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Retiring soon? Key decisions every federal employee must make

Tammy Flanagan — Thu, 18 Dec 2025 15:00:00 -0500

If you are retiring soon, you should have submitted your retirement application, usually through the Online Retirement Application (ORA) system. Retirement involves important, sometimes irreversible decisions. Here’s a reminder of decisions that cannot be changed once you leave your agency.

Date of final separation

Your retirement date is your final separation date.

Changing your mind after filing

An employee who recently retired discovered her agency overestimated her retirement and wanted to “cancel” it. While agencies provide estimates, OPM determines the actual annuity based on law and certified service history.

According to chapter 41 of the CSRS and FERS handbook, filing a retirement application is like submitting a resignation. Employees may withdraw an application before the effective date unless the agency provides a valid written reason.

If not reinstated, an employee can return as a “reemployed annuitant.” Working at least five more years may qualify them for recomputed retirement based on total service and high-three average salary.

Returning to federal employment

If receiving a regular retirement, payments continue and salary is reduced accordingly. Retirement due to disability or job elimination may affect eligibility. Provide OPM details about the new position (title, grade, salary, tour, retirement coverage) to confirm impact.

If retirement ends, health benefits and life insurance stop. You may enroll for benefits in your new employment. Life insurance eligibility follows rules for new employees.

Lump sum leave payments

Unused annual leave above 240 hours is forfeited unless restored for administrative error, exigency of public business, or sickness. The federal leave year ends Jan. 10, 2026, but most employees’ last date to schedule “use or lose” leave was Nov. 29.

Many employees plan to retire Dec. 31, 2025, to receive a lump sum payout of unused 2025 leave.

Annuity election / survivor benefits

You must make an annuity election to provide a survivor benefit for a spouse, former spouse, or person with an insurable interest.

Election changes can be made within 30 days after the first annuity payment.
Certain changes allowed within 18 months of retirement carry a 24.5% charge plus interest.
Insurable interest elections usually cannot be canceled.

All married retirees must elect a spousal survivor benefit unless the spouse consents to a lesser or no benefit. Single retirees with no financial dependents generally elect a lifetime annuity with no survivor benefit.

If married retirees fail to elect, applications default to maximum spousal benefits. Changes after divorce or death follow court orders or employee election.

Military service credit

Pay your military service deposit in full before retirement and keep documentation. Agencies must provide accurate counseling. Consider two retirement estimates: with and without military service credit. Interest accrues on deposits after three years of civilian service.

Health insurance continuation

Eligibility requires:

Immediate annuity under a civilian retirement system
Continuous FEHB enrollment for five years before annuity starts

Canceling coverage after retirement limits reinstatement. MRA+10 retirees may temporarily continue coverage up to 18 months, paying full premium plus 2% admin fee. Post-annuity, coverage resumes if requirements are met. Choose a start date carefully, no later than the month you turn 62.

Life insurance continuation

Eligibility requires:

Immediate annuity under a civilian retirement system
Five years of coverage before annuity
Enrollment in FEGLI at retirement
No conversion to individual policy

Basic insurance choices after 65:

75% reduction: reduces 2% per month to 25%, free after retirement
50% reduction: reduces 1% per month to 50%, extra premium after 65
No reduction: no reduction, 100% payable, extra premium after 65

Option A automatically reduces 2% per month after 65. Option B and C multiples require election for Full Reduction or No Reduction. MRA+10 postponed annuities terminate life insurance temporarily; coverage resumes when annuity begins.

Thrift Savings Plan (TSP)

Accounts with $200+ remain active after separation. Transfers allowed post-retirement. Withdrawals can begin later, subject to required minimum distributions (age 73 if born 1951–1959; 75 if born after 1959).

TSP annuity election

Purchase through MetLife. Factors affecting payments: amount used, your age, joint annuitant age, chosen option, and interest rate index. Purchases are irrevocable.

Social Security

After filing, benefits can be canceled within 12 months (once) or suspended after full retirement age (67 for those born 1960 or later). Suspended payments earn delayed retirement credits.

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OPM’s retirement application pile remains large as the year draws to a close

Tammy Flanagan — Thu, 11 Dec 2025 15:00:00 -0500

As 2025 is winding down and many federal employees are in the transition period between federal employment and retirement. There are thousands of employees who have entered retirement since the Fork in the Road began the process of massive federal downsizing but have not yet begun to receive their full retirement benefits.

Retiree applications pile up as year-end approaches

Tom Hanks, playing Jim Lovell in Apollo 13, used this modified version of the astronaut's famous quote, "Houston, we have a problem!" I wonder if these words have been spoken at the Office of Personnel Management's Retirement Operations Center in Boyers, Pa., where an astounding 43,737 applications arrived by mail, FedEx or electronic ORA system from federal agencies across the country and around the world during October and November.

In comparison, in the same two months of 2024, OPM received only 13,680 applications for processing. At the end of November 2024, OPM had an inventory of 13,844 retirement applications waiting for final processing. At the end of November 2025, OPM had an inventory of 48,396 retirement applications (both paper and digital) awaiting final processing.

OPM shifts retirement applications fully online

A May 7, 2025, memo from then-Acting Director of OPM Charles Ezell declared that effective June 2, 2025, all new retirement applications started on that date or later, along with any supporting documents, must be submitted electronically. For those and all future applications, any newly created paper retirement packages would not be accepted and would be sent back to the agency for digital resubmission. Effective July 15, 2025, OPM would facilitate applications through OPM's Online Retirement Application (ORA) and no longer accept paper submissions.

Apparently, not everyone got the memo — or at least there were exceptions made to this directive. In November, OPM received 7,833 digital retirement applications using the ORA system, but they also received 15,560 paper applications for a total of 23,393 applications received in November (it is likely that most of these were employees who retired at the end of the initial Deferred Resignation Period on Sept. 30, 2025).

All of this has left OPM with a paperwork bottleneck at precisely the wrong time of year, with thousands of retirees still waiting to receive their full benefits.

So happy holidays everyone. Unfortunately, you may need to celebrate as the Whos in Whoville did when the Grinch Stole Christmas.

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Just days remain to lock in 2026 health and benefit choices

Tammy Flanagan — Thu, 04 Dec 2025 15:00:00 -0500

If you want to take advantage of all the benefit choices available to you and your family, you have much to think about during the current Open Season that ends at midnight (EST) on Monday, Dec. 8.

Let’s review the ways you can make the right Open Season choices and how you can save money and enjoy excellent coverage for you and your family in the new year.

Hopefully, you have begun to review your health insurance coverage under the Federal Employees Health Benefits (FEHB) program or the Postal Service Health Benefits (PSHB) program. The new PSHB program went into effect during the 2024 Open Season and is now near the end of the first year. PSHB was established for you if you are an eligible United States Postal Service (USPS) employee or USPS annuitant and includes your eligible family members. PSHB was established by the Postal Service Reform Act of 2022.

Your plan choices:
FEHB plans
PSHB plans (2026 premiums). Additional PSHB program information can be found here and here. Please contact the PSHB Helpline at 844-451-1261 for assistance.

All the FEHB and PSHB plans have websites with up-to-date formulary information, comparison of carrier plan options and features of each plan and option. Most plan websites have links to the FEHB and PSHB programs. NALC is only available under PSHB for 2026.

Federal couples

Sometimes it is less expensive for married federal employees or retirees without dependent children to carry two individual self-only plans. Keep in mind that employees do not have to pay income tax on premiums for health benefits, but retirees have premiums withheld after tax withholding. Because of this, if one spouse retires before the other, consider having the spouse who remains employed carry self and family coverage.

In addition, if you or your spouse is 65 or older, Medicare Part B enrollment can be delayed without incurring a late enrollment penalty if you are covered by health insurance through current employment (if the employer has 20 or more employees). This can be another benefit for the spouse who is employed to carry the coverage for a federal couple. Here is a reference that includes detailed information about this option: FEHB Enrollment Coordination for Married Federal Employees and Annuitants.

If you have changed your coverage from being covered under your spouse’s +1 or family enrollment to a self-only enrollment and you are within five years of retirement, be sure to let your retirement specialist at your agency know that you were under your spouse's self and family plan. To continue FEHB or PSHB coverage into retirement, you must have been continuously covered by an FEHB or FEHB enrollment for the five years immediately preceding your retirement. This includes time you are covered as a family member under another person's enrollment.

Acceptable evidence of coverage under a family member’s FEHB or PSHB must be included with your retirement submission and can be uploaded onto the Online Retirement Application (ORA). This evidence includes a copy of the family member’s SF 2809 or a statement of coverage letter from the FEHB or PSHB insurance carrier. See Documenting a Retiring Employee’s Eligibility to Continue Federal Employees Health Benefits (FEHB) Enrollment into Retirement (page 2 for other acceptable forms of proof).

For a spouse to continue FEHB or PSHB coverage as a surviving spouse, they must be entitled to a survivor annuity (at least a partial survivor benefit) and must be covered as a family member on the deceased spouse’s enrollment. If your spouse is eligible for his or her own CSRS or FERS annuity, it is not necessary to leave a survivor benefit for your spouse to carry health benefits. If you die while in a self and family plan, your CSRS or FERS spouse may continue coverage through their own federal salary or retirement benefit. They must enroll within 31 days of the date of your death.

High-deductible health plans (HDHP) with a Health Savings Account (HSA)

HDHPs are a way to lower taxable income for those eligible to have an HSA. Although there is a higher deductible, the premiums for HDHP plans are generally less expensive than many other plans. These plans tend to attract younger enrollees who may have less need for expensive health care. High utilization is one of the drivers that increases premiums.

The minimum deductible for a health plan to be considered an HDHP in 2026 is $1,650 for self-only enrollment and $3,300 for a +1 or family enrollment.

If you choose to enroll in an HDHP for the 2026 plan year, be sure to take full advantage of your ability to contribute tax-free dollars to the HSA. In addition, HDHP plans in the FEHB or PSHB program provide a premium pass-through, which funds your HSA with money that can be used to meet your deductible and is included in IRS contribution limits.

If the money in your HSA is not spent, it stays in the account. This money belongs to you and earns interest. If you leave the HDHP, you may maintain the HSA account but cannot make additional contributions.

The maximum HSA contribution for 2026, including both the plan’s contribution and yours, is $4,400 for an individual (up from $4,300 in 2025) and $8,750 for +1 or family enrollment (up from $8,550 in 2025). HSA users age 55 and older can make an extra $1,000 contribution. If you are contributing to an HSA in 2025, you have until April 15, 2026, to make 2025 contributions.

To determine your contribution amount, subtract the amount the plan will contribute from the IRS maximum.

Before contributing, confirm that you are eligible. The IRS requires that:
• You are enrolled in a qualified HDHP
• You are not covered by any other non-HSA-compatible health plan such as Medicare Parts A and B or a spouse’s non-federal plan
• You are not covered by TRICARE
• You are not claimed as a dependent on another person’s tax return

Preventive care is covered 100 percent in HDHP plans without a deductible or copayment, so healthy enrollees may keep a balance from year to year and allow funds to grow.

HDHP plan examples for 2026 (FEHB and PSHB)

(All original plan details retained and standardized; no deletions)

GEHA Benefit Plan High-Deductible Health Plan
Self Only in-network deductible of $1,800 with HSA contributions of $1,000; out-of-pocket maximum of $6,000 for in-network and $8,500 for out-of-network benefits.
Self Plus One or Self Plus Family in-network deductible of $3,600 with HSA contributions of $2,000; out-of-pocket maximum of $12,000 for in-network and $17,000 for out-of-network benefits.
FEHB enrollment codes:
341 Self Only $81.62 biweekly or $176.84 monthly
343 Self Plus One $175.47 biweekly or $380.18 monthly
342 Self Plus Family $215.63 biweekly or $467.19 monthly
PSHB enrollment codes:
39A Self Only $84.88 biweekly or $183.92 monthly
39C Self Plus One $182.50 biweekly or $395.43 monthly
39B Self Plus Family $224.27 biweekly or $485.91 monthly

Aetna HealthFund HDHP with HSA
Self Only in-network deductible of $1,800 with HSA contributions of $800
Self Plus One or Self Plus Family in-network deductible of $3,600 with HSA contributions of $1,600
FEHB enrollment codes:
224 Self Only $154.76 biweekly or $335.31 monthly
226 Self Plus One $325.85 biweekly or $706.01 monthly
225 Self Plus Family $279.69 biweekly or $606.00 monthly
PSHB enrollment codes:
G3D Self Only $195.63 biweekly or $423.87 monthly
G3F Self Plus One $424.38 biweekly or $919.49 monthly
G3E Self Plus Family $391.19 biweekly or $847.58 monthly
Note: The family option is less expensive than +1.

MHBP Consumer Option HDHP with HSA
Self Only in-network deductible of $2,000 with HSA contributions of $1,200
Self Plus One or Self Plus Family in-network deductible of $4,000 with HSA contributions of $2,400
FEHB enrollment codes:
481 Self Only $95.99 biweekly or $207.97 monthly
483 Self Plus One $212.42 biweekly or $460.25 monthly
482 Self Plus Family $223.04 biweekly or $483.25 monthly
PSHB enrollment codes:
74A Self Only $133.53 biweekly or $289.32 monthly
74C Self Plus One $312.13 biweekly or $676.29 monthly
74B Self Plus Family $305.80 biweekly or $662.56 monthly

There are other regional HDHP plans you can locate using OPM’s Plan Information tool (click your state for available HDHP plans).

Limited Expense Flexible Spending Account (LEX-FSA)

Employees who contribute to an HSA may also contribute to a Limited Expense Flexible Spending Account. The annual FSA limit for 2026 health care and LEX FSAs will be $3,400 (up from $3,300 in 2025). This pre-tax account helps you save on eligible dental and vision expenses while taking advantage of HSA savings.

If you re-enroll in FSAFEDS during Open Season, you can carry over up to $660 from one plan year to the next. There is no use-or-lose risk.

Health Care FSA (HCFSA) and Dependent Care FSA (DCFSA)

The IRS has announced the 2026 FSA contribution limits:
• The maximum HCFSA or LEX HCFSA contribution is $3,400, an increase of $100 from 2025
• You may carry over up to $680 into 2027 if you re-enroll
• The 2026 Dependent Care FSA maximum contribution is $7,500 per household or $3,750 per person, including married individuals filing separately
• Minimum annual election remains $100

More information: www.fsafeds.gov

DCFSA or Dependent Care Tax Credit?

Learn more in the FAQ section of the FSAFEDS website: https://www.fsafeds.gov/support/faq/dcfsa.

The Dependent Care Tax Credit Worksheet (PDF) can help determine which option is best. If the federal tax credit is a better option, file IRS Form 2441, Child and Dependent Care Expenses, with your federal tax return. Your DCFSA election amount will appear in box 10 on your W-2 form.

Some federal agencies do not participate in FSAFEDS but may offer their own FSA program. These include:
• District of Columbia Government
• Farm Credit Administration
• Farm Credit System Insurance Corporation
• Federal Reserve System
• National Science Foundation
• Office of the Comptroller of the Currency
• The Federal Judiciary
• The Supreme Court of the United States
• United States Institute of Peace
• United States Postal Service
• Postal Regulatory Commission

Dependent care FSA funds may be used for a dependent under age 13 for before- and after-school care, babysitting, nanny expenses, daycare, nursery school, preschool and summer day camp. You may also use funds for the care of a spouse or relative who is physically or mentally incapable of self-care and lives with you.

Federal Employees Dental and Vision Insurance Program (FEDVIP)

FEDVIP premiums are deducted on a pre-tax basis for active federal employees, which lowers taxable income. Retirees and annuitants pay premiums after tax.

For 2026, there are seven national and international and five regional dental plans. There are also five vision plans.

Virtual Benefits Fair

The Virtual Benefits Fair continues through Dec. 8. Register here to learn more and to view archived webinars recorded during the 2025 Open Season.

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Mailbag Week: Retirement applications and processing

Tammy Flanagan — Thu, 20 Nov 2025 15:00:00 -0500

This week’s column will answer a variety of questions related to the ever-popular “black hole” of retirement processing. As this has been a recurring topic, you will see references to other articles that relate to the questions.

In addition, you might want to read Office of Personnel Management Director Scott Kupor’s “Secrets of OPM” blog post from last Friday, Shutdown Reflections. In it he explains why federal agencies couldn’t pay the 800,000 furloughed and excepted employees during a shutdown, in case you were wondering!

Retirement processing delays

Q. I was terminated and forced into retirement, but I'm still waiting for my agency to complete my retirement application. That means I have not been paid for several months.

A. OPM cannot begin processing your application until your agency HR and payroll provider sends your full employment and pay history to OPM. On average, this can take about 30 days after your retirement date. Due to the shutdown/furlough, this can take much longer if your application was still at the HR or payroll processing point and couldn’t continue moving through the system during this time. If your application did make it to OPM but is missing required documents or signatures, your agency will need to correct those issues before OPM can start processing your case.

If you used the Online Retirement Application (ORA) to process your application, you could see where in the process your application sits prior to being received by OPM.

According to OPM retirement statistics, the average processing time for retirements to be finalized has increased to 79 days. Initial retirement cases that were finalized in less than 60 days, on average, took 45.8 days to complete, and retirement claims received at OPM that were finalized in more than 60 days, on average, took 97.8 days to complete. So, that’s about a month and a half to as much as more than three months to finalize a retirement claim after it is received at OPM. This does not account for how long it takes from the date an employee spends their last day on the job until the retirement application is submitted to OPM.

A few things to keep in mind:

About 20% of applications OPM receives are missing required documents or signatures. These are called “unhealthy” applications.
OPM will work with your agency's HR team to resolve it as quickly as possible.
You may receive a request for additional documents (such as a divorce decree, military service records or signatures).
This can delay the start of interim pay, so ensuring your application is complete before submission is key.

Once OPM receives the application package, they will send you a case number associated with your retirement application. This is called your Civil Service Active (CSA) number and will be your identification number you will use when contacting OPM for future needs.

OPM is working on getting recent retirees at least a partial retirement payment. OPM uses interim pay to help get funds to retirees as quickly as possible.

Within 30 days: About 75% of retirees are placed into interim pay within 30 days of OPM receiving their completed application.
Within 60 days: The remaining 25% — usually those with more complex cases, such as court-ordered benefits or service credit issues — typically enter interim pay within 60 days.
Interim pay: Interim pay is generally 80% of your estimated final annuity. Once your application is fully processed, OPM will adjust the payment up or down as needed and issue any backpay owed.

For more information, see these past columns:

OPM’s new blog touts modernization while retirees wait for answers during the shutdown, Nov. 6, 2025

What to expect while you’re expecting (your retirement benefit, that is), Oct. 9, 2025

The end of the 'Fork in the Road', Sept. 25, 2025

Applying for postponed and deferred retirement

Q. What does OPM say about how (or whether) to use the ORA process if one is applying for a postponed or deferred retirement? Is that still a paper process? If so, is this expected to change?

A. The application for a deferred or postponed retirement, RI 92-19, continues to be used by former employees who left before they were eligible for immediate retirement, or they chose to postpone applying for their “MRA + 10” retirement benefit to avoid a substantial age-based reduction. Employees leaving federal employment at their Minimum Retirement Age (MRA) or older with at least 10 years but less than 30 years of creditable service, or between age 60 and 62 with 10 years but less than 20 years of service, have their FERS retirement benefit reduced by five percent for every year they are under age 62 (prorated monthly) unless they postpone applying for this benefit. The instructions for completing and submitting this application are included in the form. Additional information can be found in the pamphlet, Applying for Deferred or Postponed Retirement under the Federal Employees Retirement System (FERS).

Here are a few past columns that discuss this type of retirement:

The unplanned retirement dilemma, Feb. 6, 2025

Federal retirement planning during uncertain times, March 27, 2025

Resigning instead of retiring, April 11, 2024

Online retirement application

Q. So, I retired from my agency and was notified that the GRB system was down, and my retirement was not processed. So today they reached out and told me I need to use a whole new system called the ORA. Why didn’t they use the old system to send my application to OPM? Why should I be required to do my application over again?

A. According to a May 12 memo from former Acting OPM Director Chuck Ezell, paper retirement applications stopped being accepted earlier this year. Starting on June 2, 2025, all agencies served by the National Finance Center (NFC) and Interior Business Center (IBC) were required to submit retirement applications via ORA. OPM Director Scott Kupor writes about it in more detail in his Oct. 3 blog post, We’re Going Back… to the Mine (not to Abu Dhabi).

He explains that ORA automates the front end of the retirement process. It converts a paper-based/snail mail-based application process into a seamless online experience. Applicants, HR departments and payroll providers now have an online system to perfect a retirement application and deliver it — electronically — to OPM. ORA integrates with a digital file system (DFS) that enables the OPM team to review all of the required documents online (vs. on paper) and with an online annuity calculator (JANUS) that helps compute the annuitants' monthly check amount.

For more information, see these past columns:

OPM’s digital retirement application is live. What that means for feds planning to retire, July 17, 2025

OPM touts 'fully paperless' retirement application, though concerns remain, May 12, 2025

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How federal employees over 65 can navigate Medicare, FEHB and TRICARE

Tammy Flanagan — Thu, 13 Nov 2025 15:00:00 -0500

According to Office of Personnel Management data, as of September 2024, around 5% -- or roughly 100,000 -- of the federal workforce was older than 65.

Considering the large number of employees taking advantage of retirement under the Deferred Resignation Program, some of this group may have retired in 2025.

It was estimated that 60,000 new retirements occurred on Sept. 30, with 20,344 of them arriving at OPM for processing in October. The rest may be in process with the agency HR office or payroll provider.

Many requests for assistance to understand the relationship between Medicare and FEHB have arrived in the Retire Federal email box, so today is a good day to review this information.

One of the reasons individuals delay enrollment in Medicare Part B is that they are covered by “current employment” group health insurance such as FEHB.

While covered under your own or your spouse’s current employment health insurance, there is generally no reason to enroll in Part B since no late enrollment penalty is assessed during this period.

Part B would pay as the secondary payer during this time, so after the FEHB plan pays its share, there is little left for Medicare to cover. There are no incentives provided by FEHB carriers to enroll in Medicare until Medicare becomes the primary payer.

To enroll in Medicare Part B without a late enrollment penalty after employment ends if you are over age 65, there is a Special Enrollment Period, or SEP, that allows enrollment during employment and up to eight months after employment ends.

To document your “current employment” health coverage, you must provide evidence that you were covered by your own or your spouse’s current employment coverage since age 65 or since you canceled your Part B enrollment to be covered under a current employment plan.

CMS Form L-564 can help facilitate this process. In lieu of this document, Social Security will also accept the following documents, according to the Social Security Program Operations Manual: income tax returns showing health insurance premiums paid; W-2s reflecting pre-tax medical contributions; pay stubs showing health insurance premium deductions; health insurance cards with a policy effective date; explanations of benefits paid by the group health plan; and statements or receipts reflecting payment of health insurance premiums.

The evidence may be in any form if all the following are present: there is no question that the evidence comes from the employer or the group health plan, except where they cannot provide such evidence; the evidence indicates, or can be determined, when the beneficiary had group health plan coverage based on current employment; and the evidence indicates, or can be determined, where applicable, the end date of coverage.

Learn more about the SEP from this fact sheet: How to Apply for Medicare Part B (Medical Insurance) During Your Special Enrollment Period.

For military retirees eligible for TRICARE for Life, those eligible to participate in both TRICARE or Medicare/TRICARE For Life (TFL) and FEHB programs should keep in mind that when a TRICARE beneficiary has other health insurance, by law, TRICARE pays only after all other health insurance, with limited exceptions.

While working under 65 and enrolled in FEHB, FEHB pays first and TRICARE second. While working at 65 or older and enrolled in FEHB, FEHB pays first, Medicare second, and TRICARE last.

Because Medicare and TFL are a great combination, a federal employee over 65 who is eligible for TRICARE must decide between delaying TFL and Medicare enrollment or canceling FEHB to use TFL and Medicare.

Although an employee can be covered under FEHB, TFL, and Medicare while employed, FEHB as the primary payer will generally be the only one of the three that pays for most medical needs.

To have FEHB in retirement, an employee must be covered by FEHB on the day of retirement and have coverage for the last five years prior. TRICARE can be used to meet part of the five-year requirement; however, the individual must be enrolled in FEHB before retirement and have it effective on the last day of employment.

It is common for federal employees who work beyond 65 to delay Medicare/TFL, use FEHB during employment, and then enroll in Medicare/TFL using the Medicare Part B SEP.

If you are retired, over 65, and no longer eligible for your IEP or an SEP based on current employment, you may want to learn about Medicare Part B enrollment during the annual General Enrollment Period, or GEP, which runs from January 1 through March 31, with coverage effective the month after enrollment.

To enroll during the GEP, contact Social Security: call +1 800-772-1213, available in most U.S. time zones Monday through Friday, 8 a.m. to 7 p.m., in English, Spanish, and other languages. For an office near you, visit SSA.gov/locator. Tell the representative you need help enrolling in Part B during the GEP.

One of the problems with waiting past 65 to enroll during a GEP is that you might face a late enrollment penalty of 10% for every 12 months you could have been enrolled in Part B but weren’t. This is counted from the end of your IEP, which ends three months after your 65th birthday month, or the end of your employment or your spouse’s employment when you had health coverage through current employment.

There is no limit on this penalty. If you had five 12-month periods before your enrollment is effective, you would be charged a penalty of 50% of the standard rate for Part B every year for the rest of your life.

For example, if you turned 65 in February 2023, your IEP ended in May 2023. If you enroll in Part B during the GEP in January 2026, your coverage would be effective in February. From the end of your IEP until your coverage takes effect includes June–December 2023 (7 months); January–December 2024 (12 months); January–December 2025 (12 months); and January 2026 (1 month), for a total of two full 12-month periods, with the additional eight months not causing another penalty. The penalty would be 20% of the standard Part B premium, or $206.50 × 20% = $41.30 per month.

The premium may also include an IRMAA surcharge if your modified adjusted gross income from your 2024 tax return was higher than $109,000 for a single taxpayer or $218,000 for married filing jointly. The first IRMAA level would add another $82.60 to the monthly premium. The next IRMAA level is for a 2024 MAGI above $137,000 (single) or $274,000 (joint), with a surcharge of $206.50. Higher IRMAA levels exist for income exceeding $171,000 (single) and $342,000 (joint).

The Centers for Medicare and Medicaid Services has a short video explaining the late enrollment penalty.

Is it still worth signing up for Medicare if you are subject to IRMAA or a late enrollment penalty? There is no one-size-fits-all answer, but consider the following:

If you reach your FEHB plan’s catastrophic out-of-pocket cap regularly, this can add $6,000, $10,000, or in some plans more than $20,000 in out-of-pocket medical expenses in addition to premiums.

Considering the proposed annual standard rate for Part B in 2026 is $2,478 per person ($206.50 × 12), having an FEHB plan that waives cost-sharing can be worth considering. For someone paying a 20% or 30% late enrollment penalty, the savings could outweigh the cost of enrolling in Part B.

Many individuals won’t realize this benefit until later in life when the cost of Part B can more than double.

According to the Kaiser Family Foundation, the percentage of Medicare beneficiaries with the following conditions is:

Four or more chronic conditions: 45%
Functional impairment (1+ ADL): 28%
Fair or poor health status: 21%
Cognitive impairment: 17%

You may be able to enroll in a less expensive FEHB plan that waives your cost-sharing (deductible, copayments, and coinsurance) when Medicare A and B become primary. These plans may also provide a partial Part B premium rebate. Examples include Aetna Direct, BC/BS Basic, and GEHA High Option.

Several other plans waive cost-sharing but do not provide a rebate, including APWU High Option, BC/BS Standard Option, Compass Rose High Option, Foreign Service Benefit Plan High Option (restricted), GEHA Elevate Plus Option, MHBP Standard Option, MHBP High Deductible Option, and SAMBA High and Standard Options.

Some FEHB plans provide a Medicare Advantage (Part C) benefit, which can reduce monthly Part B premiums by $75, $100, $125, or more. Medicare Advantage plans may also include incentives such as free gym memberships, dental, vision, hearing aid benefits, meal delivery after hospitalization, and non-emergency transportation, as well as Part D prescription drug coverage. To enroll, you must be enrolled in Medicare Parts A and B. Nationwide FEHB plans offering these benefits include Aetna Advantage, APWU High Option, Compass Rose High Option, Foreign Service Benefit Plan High Option, GEHA Standard and High Options, MHBP Standard Option, and SAMBA High and Standard Options.

Many regional plans and HMOs also have “wrap-around” benefits coordinating Medicare and FEHB coverage. Learn more by visiting plan websites or reviewing Section 9 of the FEHB plan brochure.

Consider plan comparisons using OPM 2026 Plan Comparison or Consumers' Checkbook Guide to Federal Health Plans.

For Postal employees and annuitants, Part B rules differ and may require retirees to enroll to maintain PSHB coverage. Learn more here: Finding the right Postal Service Health Benefits (PSHB) Program coverage starts here.

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OPM’s new blog touts modernization while retirees wait for answers during the shutdown

Tammy Flanagan — Thu, 06 Nov 2025 15:00:00 -0500

Have you read Office of Personnel Management Director Scott Kupor’s weekly blog titled, “Secrets of OPM?” If you haven’t, you may find it is written with a healthy sense of humor but also with a sense of accomplishing a huge goal of making the government more efficient and focusing on the other meaning of the acronym OPM: Other People’s Money. It’s a reminder that the government is funded by taxpayers’ dollars.

Despite the government’s historic shutdown, the new director’s blog posts do not address how recent retirees will be impacted by delays in retirement processing or with directions on how they should participate in the health benefits open season that will begin on Monday. Many of these individuals are in the transition from being an employee to becoming an annuitant and they are in the dark wondering who they can contact for information and not knowing if their retirement application has even left their agency.

Scanning through some of these recent blog posts from Kupor, who took the agency’s helm in July, there were many references to improving the efficiency of retirement processing. Although five of the posts were published since the start of the shutdown, curiously, there was no mention of the shutdown or the impact it is having on the recent retirements or the upcoming open season. Here are a few of the ideas that were mentioned:

Oct. 20: Today, the government has deployed 119 (there may be more, but that’s all we could in fact find) distinct core HCM (‘Human Capital Management’) systems -- none of which integrate effectively with each other. For example, when a federal employee retires, we at OPM spend an excessive amount of time and money working with multiple agencies’ HR staff to assemble the “golden file” of that employee’s work history. This is costly, error-prone and leads to unnecessary delays in enabling a seamless transition to retirement. The ideal “to be” state is a single, pan-government core HCM system that gives the federal government full, real-time visibility into its workforce and drives effective workforce management on behalf of the American taxpayer.

Oct. 10: Sometimes you just need to ask “why?” Why are we doing things this way? Why can’t we change it? We love paper and are premium customers of the U.S. Postal Service -- neither of which is good thing! In our retirement services division alone, we spend about five million dollars per year on paper mailings to our annuitants -- e.g., sending out 1099-R forms and notices of cost-of-living adjustment, mailing postcards for open enrollment season, etc. This, despite the fact we have email addresses for about two thirds of our annuitants!

Oct. 3: For the past 50-plus years (and even longer), retirement applications have been processed in one way -- on paper. Retirees worked on paper applications, human resources (HR) departments completed paper forms and payroll providers sent OPM paper employment/pay histories -- each delivered courtesy of snail mail. And the dedicated OPM team literally thumbed through these physical papers to manually calculate (with the help of our friends at Microsoft Excel) the final benefits owed to a retiree. Today, ORA (Online Retirement Application) automates the front-end of the retirement process. It converts a paper-based/snail mail-based application process into a seamless online experience. Applicants, HR departments, and payroll providers now have an online system to perfect a retirement application and deliver it -- electronically -- to OPM. ORA integrates with a digital file system (DFS) that enables the OPM team to review all of the required documents online (vs on paper) and with an online annuity calculator (JANUS) that helps compute the annuitants' monthly check amount.

State of Retirement Processing

Changing the process of retirement is a huge undertaking, especially in a year when the federal government’s workforce shrinks from 2.4 million employees down to 2.1 million employees. Estimates have shown that approximately 100,000 federal employees left their government careers on Sept. 30 alone; the deadline for most resignations and retirements resulting from the Deferred Resignation Programs that began early this year. Approximately 60,000 of those separations are retirements with retirement applications that will be arriving at OPM’s Retirement Operations Center (ROC) in Boyers, Pa. Here is a sample of some emails received from recent retirees:

I took DRP2 on 9/30/25. I didn't receive an estimated annuity on November 3 as expected, and the retirement specialist name that I was given is not responding. I completed my retirement application in GRB on April 21 and then the new ORA in early July. I am concerned about my health insurance. Do you have any insights on this topic? I kept up my end of the bargain and left under VERA.

I am currently a federal employee on furlough. I submitted my retirement application through ORA in July with a retirement date of Oct. 31, 2025. I have verified my years of service, and I received notice that my application has been certified and is currently in payroll review. Should the shutdown continue past Oct. 31, how will my retirement application be affected?

OPM’s Retirement Services recently posted a video on what to expect after retirement. Once OPM receives your application, they will send you a passcode and a welcome letter. You will be able to access OPM’s Services Online system. OPM has published some information regarding retirement processing that states:

Within 14 days of OPM receiving your application interim pay is authorized for applicants who apply for immediate retirement. Interim pay processing starts once OPM receives the complete retirement application package from the agency. There are rare situations where an applicant may not be authorized to receive interim payments.

Within 76 days, immediate retirement will be finalized. Immediate retirements include voluntary, early voluntary, and discontinued service/involuntary separation retirements. This also includes disability retirement applications approved by OPM. This processing time does not include deferred or postponed retirement applications.

Why such specific number of days? Processing days reflect the cases processed in September 2025. The Retirement Quick Guide can also provide you with information about the overall retirement application process when you retire from federal service.

Before the retirement applications can be submitted to OPM for processing, the employee must complete the ORA and submit it to the agency Human Resources Office for approval. This must be completed before the application moves to the payroll provider for processing the employee off the agency payroll.

One problem is that due to the government shutdown and furloughs, many of those applications have not left the agency and this will undoubtedly cause significant delays despite the new Online Retirement Application (ORA) designed to speed up the front end of the retirement process. OPM is expected to publish the number of retirement claims received in October (which would mostly be the Sept. 30 retirement claims) any day now. It will be interesting to see how many of those 60,000 retirement claims have arrived at OPM to begin processing.

Fortunately, despite the shutdown, some OPM functions are not funded by the annual appropriations process and are exempt from a shutdown. For example, OPM's Retirement Services division is funded by a trust fund (Civil Service Retirement and Disability Fund), allowing it to operate normally during a lapse in appropriations.

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What federal employees need to know about Medicare enrollment

Tammy Flanagan — Thu, 30 Oct 2025 15:00:00 -0400

Most federal employees and annuitants know they are eligible for Medicare benefits at age 65. What’s less clear is how and when to enroll in the different parts of Medicare. Here’s what to keep in mind as you approach eligibility.

1. Initial Enrollment Period (IEP)
If you are not receiving Social Security or Railroad Retirement Board benefits when you near age 65, you can enroll in Medicare starting three months before your 65th birthday month and up to three months after. That’s your initial enrollment period.

If you enroll during the first three months, coverage begins in your birth month. If you enroll in your birthday month or in the last three months of the IEP, coverage starts the following month.

2. Medicare Part A (Hospital Insurance)
Part A is available to people who are 65 or older, those with disabilities, and those with end-stage renal disease. To qualify for premium-free Part A, you must have earned enough quarters of coverage through your own or a spouse’s, parent’s, or child’s Social Security record.

If you are not already receiving Social Security or Railroad Retirement Board benefits, you will need to file an application for Medicare by contacting the Social Security Administration at 1-800-772-1213 or through ssa.gov/medicare.

CSRS employees paid only the Part A portion of the FICA tax. Their quarters of coverage count toward premium-free Part A but not toward Social Security retirement benefits.

The number of quarters required depends on whether you qualify by age, disability or end-stage renal disease. Most workers who pay full FICA taxes earn quarters that count toward both Social Security benefits and premium-free Part A.

If you begin receiving Social Security at least four months before turning 65, you do not need to apply separately — you will be automatically enrolled in premium-free Part A. Coverage starts the month you turn 65 if you apply for Part A or Social Security within six months of that month. If you wait longer, coverage is retroactive for six months.

If you are 65 or older and not yet receiving Social Security retirement benefits, you can delay enrolling in all parts of Medicare if you want to keep contributing to a health savings account under a high-deductible health plan.

Note: If your 65th birthday falls on the first day of the month, Parts A and B coverage begins on the first day of the prior month. For example, if your birthday is Dec. 1, your coverage starts Nov. 1.

3. Medicare Part B (Outpatient or “doctor’s insurance”)
You can only sign up for Part B during certain enrollment periods. If you do not enroll when you are first eligible, you may have to pay a permanent late enrollment penalty.

If you are already receiving Social Security benefits, you will be automatically enrolled in both Parts A and B starting the first day of the month you turn 65 — or, if your birthday is the first day of the month, the month before.

If you are under 65 and have a disability, you will automatically get Parts A and B after receiving Social Security disability benefits for 24 months. You will also get automatic enrollment if you receive certain Railroad Retirement Board disability benefits or if you have ALS — in that case, Parts A and B begin the month your disability benefits start.

4. Premiums for Medicare Parts A and B
Part A is financed by payroll taxes — 1.45% from the employee and 1.45% from the employer. Self-employed people pay both shares, or 2.9%. Because you have already paid these taxes, there is usually no monthly premium for Part A.

Part B is funded mainly by monthly premiums, which are deducted from Social Security benefits or paid directly if you are not yet receiving them. Details on payment methods are available at medicare.gov.

The standard Part B premium is projected to rise to $206.50 per month in 2026, up from $185.00 in 2025. Beneficiaries with higher incomes may pay more through the income-related monthly adjustment amount, or IRMAA. For 2026, individuals with 2024 modified adjusted gross income above $109,000 (or couples filing jointly above $218,000) will pay the surcharge.

5. General Enrollment Period (GEP) for Part B
If you do not enroll during your initial enrollment period, you can sign up between Jan. 1 and March 31 each year. Coverage starts the first day of the month after you sign up.

A late enrollment penalty may apply for as long as you have Part B — your premium increases 10% for each 12-month period you were eligible but did not enroll.

6. Special Enrollment Period (SEP)
If you are covered by an employer group health plan through current employment — yours or your spouse’s — you can delay enrolling in Part B without penalty.

You can enroll any time while covered under that plan or during the eight-month window that begins the month after employment or coverage ends, whichever comes first.

7. How Medicare coordinates with FEHB and PSHB
Under the new Postal Service Health Benefits program, if you are under age 64 on Jan. 1, 2025, you must enroll in Medicare Parts A and B at age 65 to continue PSHB coverage. For everyone else in FEHB or PSHB, enrolling in Medicare remains optional.

Most retirees choose Original Medicare (Parts A and B). Once retired, Medicare becomes the primary payer and your FEHB or PSHB plan is secondary.

Some plans waive cost sharing when Medicare is primary, or even offer rebates on your Part B premium. After 65, look for plans with low prescription copays, strong therapy and hearing benefits, and generous coverage for durable medical equipment and skilled nursing care.

8. Medicare Advantage (Part C)
Many FEHB and PSHB plans offer Medicare Advantage options that add benefits like gym memberships, meal delivery after hospital stays, dental and vision coverage, and transportation to nonemergency medical appointments.

You can generally see any provider that participates in Medicare and accepts the plan. If a doctor refuses to bill the plan, you can pay the provider directly and submit a claim for reimbursement.

Note: Medicare Advantage options through FEHB and PSHB are not the same as those advertised on television or shown on the Medicare.gov plan finder.

9. Medicare Part D (Prescription Drug Coverage)
If Medicare is your primary coverage and your FEHB or PSHB plan includes Part D, your prescription coverage will automatically convert to a Part D plan. That could lower your out-of-pocket drug costs.

Starting in 2026, out-of-pocket costs for prescription drugs will be capped at $2,100. After that, you pay nothing for covered drugs.

However, higher-income enrollees may owe an IRMAA surcharge for Part D. You also cannot use manufacturer discount coupons under Part D coverage. PSHB enrollees eligible for Medicare Part D must enroll in a Part D plan, including newly eligible annuitants and covered family members.

Typically, Part B covers drugs administered in a doctor’s office or hospital outpatient setting — such as Leqembi, a monoclonal antibody treatment for early Alzheimer’s disease. Its list price is about $26,500 per year, leaving a 20% coinsurance of about $5,300. Your FEHB or PSHB plan may cover this if it is on the plan’s drug list.

Part D covers most outpatient prescription drugs not included under Part B.

If you have Original Medicare, you can join a drug plan and check its formulary — the list of covered drugs — for specifics. Part D also covers all adult vaccines recommended by the Advisory Committee on Immunization Practices, including vaccines for RSV, shingles, whooping cough, and measles, with no copay or deductible.

Examples of drugs covered under Part B include:

Monoclonal antibodies for early Alzheimer’s disease such as Leqembi.
Drugs administered through durable medical equipment like an infusion pump or nebulizer.
Certain allergy antigen tests and treatments.
Injectable clotting factors for hemophilia.
Intravenous immune globulin (IVIG) for people with primary immune deficiency disease, when prescribed for home use.

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Shutdown or not, there are things to do

Tammy Flanagan — Thu, 23 Oct 2025 15:00:00 -0400

It is that time of the year when many federal employees, as well as retirees, must make some important decisions regarding their federal retirement and insurance benefits. I thought it might be a good time to make a checklist of things that you may be facing this fall. It might be especially important this year as many of you are furloughed due to the lengthy government shutdown.

CSRS or FERS Retirement

I have been getting questions about retirement at the end of 2025. Although it has been a year like none other, many federal workers are taking advantage of skirting the use or lose deadline by planning to retire before the end of the 2025 “leave year.” For most federal workers, the leave year will end on Saturday, Jan. 10, 2026.

Due to a variety of circumstances, not the least of which is the furlough and the fear of losing your job involuntarily due to threats (and for some, a reality) of a major reduction in force, you may find you have a lot of annual leave in your account and enough service to retire on your own terms from your federal career.

If you are in the eight-hour leave category, you will accumulate 208 hours of annual leave by Jan. 10 and you may have carried over 240 hours from 2024. If you haven’t used any leave this year, that is a potential lump sum payout of 448 hours of annual leave. Of course, the catch is that you have to retire before the end of the 2025 leave year to be paid a lump sum for this unpaid compensation. For example, if your salary is $125,220, then your hourly pay rate is $60/hour ($125,220/2087 hours). If you have a balance of 448 hours of leave in your account on the day of your separation from federal employment this would be a gross payout of $26,880 (before federal, state FICA, and Medicare tax withholding).

If your plan is to leave between now and Jan. 10, now is the time to submit your Online Retirement Application. The mandate to use the digital electronic application was implemented in two phases:

June 2, 2025: All agencies served by the National Finance Center and Interior Business Center were required to begin submitting applications through ORA.
July 15, 2025: The ban on paper applications became effective for all federal agencies. Any new application started on or after this date had to be submitted electronically.

The ORA took the place of the standard forms previously used to apply for retirement. If you are unable to reach your HR office due to the shutdown, you can still prepare by completing the SF 2801 (CSRS Application for Immediate Retirement) or SF 3107 (FERS Application for Immediate Retirement). You can find most forms at www.opm.gov/forms.

Although you will be required to complete the ORA once the furlough has ended, filling out the paper application will give you an idea of the information you will need and decisions that must be made at the time of submitting your retirement request. Before you retire, it would be good to obtain a final retirement estimate for your planned retirement date along with a summary of your federal service prepared by a retirement specialist in HR. The Summary of Service will be part of the ORA and you should also receive a final retirement estimate once your HR office is back to work.

If you are planning to postpone applying for retirement under the MRA + 10 provisions of FERS, it is important to review the Application for Deferred or Postponed Retirement, RI 92-19, that you will complete and submit about 60 days before you would like your benefit to begin in the future. At that time, you will not have access to your agency’s human resources to assist you. If possible, request a retirement estimate of your future benefit and make copies of your personnel records that show your insurance coverage (you will need to have the last five years of your career covered under FEHB and FEGLI if you plan to reinstate these benefits later). Also, maintain copies of records of the beginning and ending dates of your periods of federal service and any change in retirement coverage or work schedule.

Life Insurance: FEGLI

If you are covered by FEGLI, you will be asked to upload the Continuation of Life Insurance form SF 2818 along with your retirement application using the ORA System.

Retirement Processing

During a shutdown/furlough, retirement processing can be delayed, see the Q&A below copied from OPM’s Guidance for Shutdown Furloughs. The normal retirement processing can be reviewed using OPM’s Quick Guide for Retirement Processing found at https://www.opm.gov/retirement-center/apply/quick-guide/.

Be sure to maintain copies of your completed applications and copies of your records of federal service that show your beginning and ending dates of employment, changes in retirement coverage as well as changes in your work schedule (these documents are in your eOPF). Be sure that you also have documentation of your health and life insurance coverage showing that you have been covered during the last five years of your federal service. Update your CSRS or FERS, FEGLI and TSP beneficiary designations, if necessary, as well. The beneficiary forms can be found at www.opm.gov/forms - SF 3102, SF 2821 and for the TSP, go to https://www.tsp.gov/forms/ where you can learn how to add or update a beneficiary designation.

Thrift Savings Plan

Learn about your distribution options that are available at https://www.tsp.gov/withdrawals-in-retirement/

You can learn how much income you might generate from your savings by computing a TSP annuity estimate using the TSP Annuity Calculator: https://www.tsp.gov/calculators/tsp-annuity-calculator/#panel-1

There are many options for managing and using your TSP funds in retirement, and to learn more, check out the TSP YouTube channel.

Federal Long Term Care Insurance Program

OPM suspended new applications for FLTCIP in December 2022 for an indefinite period. There has been no indication when this will end but watch for possible news during the upcoming Open Season that begins on Nov. 10. If you are currently enrolled, you can also review your coverage online in your My LTCFEDS account. If you need additional information to help you make your decision, call from 8 a.m. to 6 p.m. EST:

1-800-LTC-FEDS (1-800-582-3337)

TTY 1-800-843-3557

Intl. 1-571-730-5938

Federal Employees Health Benefits program and the Postal Service Health Benefits program

The PSHB for Postal employees and annuitants was implemented during last open season and has now been in use for almost a year. It is time to review the information that is currently available prior to the Open Season.

Open Season will be held from Nov. 10 through Dec. 8, 2025, for FEHB and the new PSHB.

The 2026 premiums have been released for both FEHB and PSHB and prices have gone up more than average on some of the popular plans. Check out the 2026 FEHB rates for 2026 here: https://www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums/ The PSHB rates are different; find those rates for 2026 here: https://www.opm.gov/healthcare-insurance/pshb/premiums/

If you do nothing else this open season, review your 2026 plan brochure once they are released and on the front cover, you will find a reference to pages in the brochure that provide the changes in your plan for 2026, a summary of benefits and the new premiums. You will begin to see the 2026 information popping up on the plan websites.

Federal Employees Dental and Vision Insurance Program

After you have selected your FEHB/PSHB coverage for 2026, check to see if your health plan provides dental or vision care benefits. If not, or if you need more coverage, select one of the national/international dental plans. There will be a series of webinars and a virtual health fair available at www.benefeds.gov where you can learn more about this program.

Federal Flexible Spending Account Program

Employees should also consider the amount of money to set aside in a tax-free flexible spending account program offered through the Federal Flexible Spending Account Program. Visit https://www.fsafeds.gov/support/eligibleexpenses for all of the eligible expenses where you can spend your allocated funds. It is not too late to use the funds that you have contributed in 2025. Check out the options for health care, dependent care and one for dental and vision expenses specifically for individuals covered under a high deductible health plan who use a Health Savings Account.

The Office of Personnel Management has provided the following guidance for retirements during a shutdown: https://www.opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/

Question 1: If a shutdown furlough occurs during the employee’s highest years of salary, what effect will time in a furlough status have on an employee’s high-3 average pay?

Answer: Once the lapse in appropriations ends, employees who would have been in pay status but for the lapse will receive retroactive pay for furlough periods pursuant to 31 U.S.C. 1341(c)(2). Thus, there will be no effect on such an employee’s high-3 average pay.

Question 2: Are the retirement rules concerning the effect of a shutdown furlough the same for employees under the Civil Service Retirement System and the Federal Employees Retirement System?

Answer: Yes.

Question 3: What will happen to employees who have retired during a shutdown?Answer: For employees who, on or before the requested retirement date, submitted some notice of their desire to retire, agencies should, when the lapse in appropriations ends, make the retirement effective as of the date requested. The retirement request may be informal (such as a letter requesting retirement), and can be either mailed or personally submitted to the agency. Any additional required paperwork, such as the formal retirement application, may be completed when the agency reopens. No time spent by the retiree in such actions after the effective date of the retirement may be considered as duty time, since the individual would no longer be an employee of the agency.

Question 4: If an employee is scheduled to retire before the end of the leave year with an annual leave balance of over the maximum leave ceiling (e.g., 240, 360 or 720 hours, as applicable) and the furlough prevents the employee’s retirement from getting processed until January, does the employee lose his or her annual leave above the maximum leave ceiling?

Answer: No. The employee’s retirement would be retroactively applied to a date prior to the end of the leave year, and the employee would receive the full amount of accumulated and accrued annual leave in a lump-sum payment.

The following Q&A are for retirees who are wondering how the government closure will impact their retirement:

Question 5: I’m a federal retiree. Will I still receive my monthly annuity payment during a government shutdown?

Answer: Yes. Federal retirees under the CSRS and FERS retirement systems will still receive their scheduled annuity payments on the first business day of the month.

Question 6: How can I make updates or changes to my retirement benefits?

Answer: OPM’s Retirement Services is available to assist you with your retirement benefits. As always, you can make many of these changes online through Services Online or by calling Retirement Services at (888) 767-6738. The lines open at 7:40 am EST, try calling early. Due to the volume of calls, we recommend that you first use the online services site to make immediate updates and changes. You can also find general information online.

Question 7: How do I report the death of a family member during a government shutdown?

Answer: You can refer to our website Annuitant Death Index - RS Reporting (opm.gov) for information on reporting the death of a current retiree and applying for any benefits, or by calling us directly at (888) 767-6738. If the family member was a federal employee at the time of death, survivors must contact the agency for which the deceased worked. If the employing agency is closed, you may need to wait until after the shutdown ends to begin the process.

Question 8: I recently retired from federal service. Will my retirement application be delayed by a government shutdown?

Answer: If your agency or payroll center submitted your retirement application to OPM, you will begin receiving interim annuity payments while OPM Retirement Specialists process your application. Because OPM Retirement Services is funded by the trust fund it manages, OPM Retirement Services employees will still be working normal operating hours during a government shutdown.

If your agency or payroll center has not yet submitted your retirement application or the application is incomplete, you will likely experience some delay as OPM must wait on other agencies to submit all the information needed to process your retirement. Some functions of these agencies may not be operating during a government shutdown.

Question 9: I applied for disability benefits. Will my application still be processed?

Answer: Employees in Retirement Services at OPM will continue working on your application. If the application requires additional information from other agencies, expect delays during a government shutdown.

Question 10: Can I submit a court order that awards a retirement benefit to OPM during a government shutdown?

Answer: Yes. OPM employees will continue working to process court ordered retirement benefits.

Payments upon separation from Federal Service

Question 11: If there is a shutdown furlough, how does this impact a separating employee’s lump-sum payment for their unused annual leave?

Answer: In the event of a shutdown furlough, any payments incurred by the agency for an employee’s lump-sum payment will be delayed until funds are available.

Question 12: How are separated employees’ entitlements to severance pay affected by a shutdown furlough?

Answer: Funds for severance pay are obligated on a day-to-day basis as the recipient accrues continuing entitlement to severance pay by not being reemployed by the government of the United States. (Severance pay is suspended or terminated when the individual is reemployed by the federal government.) Severance pay is paid at the same pay period intervals as if the recipient were still employed. Any severance payment (on payroll payday) is linked to the corresponding pay period during which the recipient accrued continuing entitlement to severance pay. If the recipient is reemployed by the federal government during a pay period, he or she is entitled to a prorated severance payment covering the days in the period prior to reemployment (e.g., 2/5 of one week’s pay if the recipient was reemployed on the third workday of the pay period).

Thus, in the case of a shutdown furlough, accrued but unpaid severance pay represents an obligation to be paid from funds available before the lapse in appropriations occurred. Just as payroll checks for work performed prior to a lapse in appropriations can be processed as part of the orderly suspension of nonexcepted activities, severance pay checks covering days before the lapse may also be processed. No funds may be authorized for severance payments for days during the lapse until an appropriation is enacted.

See additional information on severance pay (including eligibility criteria and payment formulas). https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/severance-pay

Editor's note: This article has been updated to clarify that the leave year for most federal workers will end on Saturday, Jan. 10, 2026.

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