Federal Employee Retirement Planning
FERS, the TSP, FEHB and Social Security each have their own rules and deadlines. We bring them together in one retirement plan.
Fiduciary advice for federal employees across Virginia, Washington, D.C. and Maryland, from our office in Vienna, Virginia.
FERS & TSP Retirement Planning
for Federal Employees
From your retirement date and survivor benefit election to TSP withdrawals and FEHB, we help you make the federal decisions that are hard to undo, and coordinate them with the rest of your finances.
The Decisions That Shape a Federal Retirement
Choosing Your Retirement Date
Your Minimum Retirement Age (55 to 57, depending on birth year) and years of service decide whether you leave with an unreduced pension, the FERS supplement or a reduction. MRA+10, 60 with 20 years and 62 with 5 each lead to a different income for life, so we model each date before you file.
FERS Pension & Survivor Benefit
The basic pension is generally 1% of your high-3 salary per year of service, or 1.1% at 62 or later with 20 years. A full survivor benefit costs 10% of the pension, a partial one 5%, and the choice is hard to reverse.
TSP Withdrawals & Rollovers
Installments, partial withdrawals, an annuity or a rollover to an IRA: each changes your taxes, flexibility and investment choices. We plan the order of withdrawals across the TSP, IRAs and taxable accounts, including required minimum distributions.
FEHB, FEGLI & Medicare
To keep FEHB in retirement you generally need five years of coverage before you retire. We help you decide whether to add Medicare Part B at 65 and what to keep or drop from FEGLI as your needs change.
Social Security & the FERS Supplement
The FERS supplement bridges the years to 62 for those who qualify, but it is cut if you keep earning above the Social Security limit. We coordinate it with when you claim Social Security and with your pension's cost-of-living adjustments.
One Government, Different Retirement Rules
FERS is the starting point, not the whole story. Where you work, and in which service, can change your retirement age, your pension formula and your health coverage. We start every plan by confirming which rules are yours.
Foreign Service (FSPS)
- Voluntary retirement at 50 with 20 years
- Pension of 1.7% of high-3 per year for the first 20 years, then 1%
- Mandatory retirement at 65
- High-3 uses the Washington, DC locality rate while posted overseas; hardship and danger pay are excluded
Civil Service (FERS)
- Unreduced retirement at MRA with 30 years, 60 with 20, or 62 with 5
- Pension of 1% of high-3 per year, or 1.1% at 62+ with 20 years
- Annuity supplement until 62, reduced by an earnings test if you keep working
- No cost-of-living increases on the pension before 62
Postal Employees
- Same FERS pension and TSP rules as other federal employees
- Health coverage moved to the Postal Service Health Benefits program in 2025
- Most employees under 64 on Jan 1, 2025 must enroll in Medicare Part B at 65 to keep it
- USPS paused its employer FERS payments in April 2026; your earned benefit is unchanged
Law Enforcement, Firefighters, Air Traffic Controllers
- Retirement at 50 with 20 years, or at any age with 25
- Pension of 1.7% per year for the first 20 years
- Mandatory separation at 57 (56 for air traffic controllers)
- Cost-of-living increases begin right away, not at 62
Veterans in Civil Service
- Military time can count toward your FERS pension through a buyback
- The deposit is 3% of military basic pay, interest-free for about the first two years
- It must be paid in full before you retire
- Military retired pay is usually waived to credit the service; VA disability pay is not affected
Early Retirement, Buyouts and RIFs
- Early retirement (VERA) at 50 with 20 years, or any age with 25, with no age penalty under FERS
- Buyouts (VSIP) remain capped at $25,000 before taxes
- A layoff may qualify you for an immediate annuity or severance pay
- Accepting an offer affects your pension, FEHB and TSP; run the numbers first
Health and Life Insurance
- FEHB and FEGLI continue in retirement only with 5 years of coverage just before you retire
- FEHB enrollee premiums rise 10.9% on average for 2027
- Medicare Part B costs $202.90 a month in 2026, more with income surcharges
- Open Season runs Nov 9 – Dec 14, 2026
Social Security Fairness Act
- Signed January 2025: repealed the WEP and GPO reductions
- Matters most for CSRS retirees and their spouses and survivors
- Benefits were recalculated back to January 2024
- Worth reviewing how it changes your claiming strategy
Not sure which rules apply to you? We confirm your retirement system and model your options before you decide.
BOOK A CALL →Figures as of October 2026, from OPM, IRS, SSA and the Foreign Affairs Manual. Official calculations are made by OPM and your agency's retirement office. This is general information, not individual advice.
The Federal Retirement Time Machine
Pick the year you retire and live through the markets that actually followed. Your FERS pension and Social Security cover part of your spending; the TSP and other savings cover the rest. Then meet your twin: same returns, in reverse order.
Retiring in 2026? Your first year isn't written yet. See how the hardest starts in history played out: or
Your FERS basic pension, Social Security and any other pension. The TSP and savings cover the rest: of savings in year one.
Fixed: the same spending every year, raised with inflation, no matter what markets do.
History cannot tell you which twin you will be. A plan can decide in advance what you will do in either case.
Hypothetical illustration using historical annual returns of the S&P 500 with dividends and 10-year U.S. Treasury bonds (Damodaran, NYU Stern) and CPI inflation (BLS), 1928–2025. Amounts are shown in dollars of your retirement year. Portfolios are rebalanced yearly; withdrawals are taken at the start of each year; guaranteed income is assumed to keep pace with inflation (FERS cost-of-living adjustments can be smaller than inflation and are generally not paid before 62). Indexes cannot be invested in directly; fees and taxes are not included. Past performance does not guarantee future results. This is not investment advice.
Federal Retirement: Common Questions
When can I retire under FERS?
You can retire with an unreduced pension at your Minimum Retirement Age (55 to 57, depending on your birth year) with 30 years of service, at 60 with 20 years, or at 62 with 5 years. At your MRA with 10 to 29 years you can retire with a pension reduced by 5% for each year you are under 62, unless you postpone it. The best date also depends on the FERS supplement, FEHB and your other savings.
How is the FERS pension calculated?
Generally 1% of your high-3 average salary for each year of creditable service, or 1.1% if you retire at 62 or older with at least 20 years. Electing a survivor benefit reduces the pension by 10% for a full benefit or 5% for a partial one.
What is the FERS supplement?
A payment that approximates the Social Security benefit earned during federal service. It is paid from retirement until age 62 to those who retire on an immediate, unreduced pension before 62, for example at MRA with 30 years or at 60 with 20. It is reduced if your earnings exceed the Social Security earnings limit.
Should I roll my TSP into an IRA when I retire?
Not automatically. The TSP has very low costs and allows partial and installment withdrawals; an IRA offers more investment choice and estate planning flexibility. We compare both for your situation, including taxes and required minimum distributions.
Can I keep FEHB in retirement?
Generally yes, if you retire on an immediate pension and were enrolled in FEHB for the five years before retirement, or continuously since you were first eligible. Your FEHB plan also affects whether Medicare Part B makes sense at 65.
Do you work only with federal employees in Virginia?
No. Sovereign Wealth Management is a fiduciary Registered Investment Adviser based in Vienna, Virginia. We work with federal employees and retirees across Virginia, Washington, D.C. and Maryland, in person or by video.
Educational information only, not tax, legal or investment advice. Federal benefit rules depend on your service history and can change; confirm your figures with your agency's benefits office or OPM.
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