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Federal Employee Retirement Planning: How the Pieces Fit Together

Six benefits, one retirement date, and a set of elections that interact. This is the map. Each piece has its own page beneath it.

By LaMont Chandler, President and CEO, CFG Wealth Management Inc., Prairie Village, KansasOctober 27, 202613 min read

An advisor reviews retirement paperwork with an older couple at a desk

Federal retirement is not one decision. It is a basic annuity, a savings plan, health and life insurance elections, a possible bridge payment before 62, a survivor election and Social Security, all settled around a single retirement date, and several of them cannot be revisited afterward.

Why it needs its own map

Private-sector retirement planning has two main moving parts: what you saved and when you claim Social Security. Federal retirement has six, they are governed by different agencies and rulebooks, and most of them are decided in the same few weeks around your retirement date.

That concentration is what makes federal planning distinctive. It is not that the arithmetic is harder. It is that the elections arrive together, interact with each other, and several close behind you once made.

This page is the overview. Each section says what the piece is and where the decision actually gets made, and links to the page that covers it properly.

The six pieces

Piece	What it provides	Where the decision sits
FERS basic annuity	A lifetime pension based on service, salary history and retirement age	Your retirement date and service record, computed by OPM
Thrift Savings Plan	The savings component, and usually the flexible piece of the plan	What you do with it at separation, and in what order you draw it
FEHB	Health coverage that can continue into retirement with the government share	Your coverage history in the five years before you retire
FEGLI	Life insurance, with reduction elections made at retirement	The election form, which can be reduced later but not increased
FERS annuity supplement	A bridge payment for some who retire before 62, subject to an earnings test	Eligibility at retirement, and any post-retirement work
Social Security	A federal benefit that FERS was designed around and CSRS was not	Your claiming age, from 62 onward

This page is general information, not tax or legal advice. FERS, CSRS, FEHB, FEGLI, the Thrift Savings Plan, Social Security and Medicare are administered by federal agencies and their rules change. Confirm every figure, deadline and eligibility rule with OPM, your agency benefits office or the administering program before acting.

Which system you are in comes first

Before anything else, establish whether you are FERS or CSRS, because the two produce genuinely different answers and a surprising number of people have service under both.

FERS was built as three legs: the basic annuity, the TSP and Social Security. FERS employees pay into Social Security, so the benefit accrues normally and the pieces add together. CSRS came first, was designed to stand alone, and generally did not include Social Security coverage on that federal work. The repeal of the Windfall Elimination Provision and the Government Pension Offset in January 2025 changed the arithmetic substantially for CSRS retirees and for anyone with significant non-covered employment. We cover that in FERS vs CSRS and in how Social Security coordinates with a federal pension.

The annuity and the date

Your FERS basic annuity is computed from your length of creditable service, your highest average salary over a defined period, and your age at retirement. Minimum retirement age depends on your birth year, and whether you reach an unreduced annuity depends on the combination of age and service you hold on your retirement date.

The date itself carries consequences beyond the computation. It affects your annual leave payout, when the first annuity payment arrives, and whether you qualify for the supplement. Military service can sometimes be credited toward civilian retirement through a deposit, and interest accrues on that deposit after an initial period, so the cost grows the longer it sits. Start that calculation early rather than in your final year.

The TSP is the flexible piece

Of the six, the Thrift Savings Plan is the one that stays adjustable after you separate, which is why it usually ends up funding whatever the other pieces do not. If you retire before Social Security begins, the TSP often bridges those years. If you delay claiming to increase the benefit, the TSP usually funds the delay.

At separation you have several options, and a rollover is one of them rather than the default. Leaving the balance in the plan, taking installments, taking partial withdrawals, purchasing a TSP annuity, transferring to an IRA or eligible plan, and taking cash are all on the table, and they carry different costs, rules and protections. Our page on TSP rollover options compares them.

The elections that close behind you

Three of the six have limited or no ability to be changed afterward, and they are the ones worth working out well before the paperwork.

FEHB eligibility. Carrying coverage into retirement generally requires enrollment, or coverage as a family member, for the five years of service immediately before you retire. The test is met on your retirement date or it is not.
FEGLI reduction. At retirement you elect how Basic coverage reduces after 65. Coverage can generally be reduced or cancelled later, not increased.
The survivor annuity. Elected once, with a short window afterward. It also determines whether your spouse can continue FEHB after your death, which is the connection most often missed.

Those three, and how they interact, are covered in FEHB, FEGLI and survivor elections.

Where this lands in Fairway

Fairway sits just west of State Line Road, a few minutes from our office, and is best known for the Shawnee Indian Mission, which operated as a mission and school in the mid-1800s. Like much of northeast Johnson County it has a steady federal workforce, and the households we meet there are usually working on the same thing: a retirement date already roughly chosen, and six benefit decisions that have not yet been laid out against each other on one page. That is what our federal employee retirement planning produces, alongside your agency benefits office rather than in place of it. See the communities we serve across the Kansas City area.

CFG Wealth Management Inc. is an independent firm based in Prairie Village, Kansas, led by LaMont Chandler, CRD 2794744. We are not affiliated with cfgwmt.com or with any other firm operating under a similar name. LaMont holds FINRA Series 7, 24 and NASAA Series 63, 65 registrations and has been registered in the securities industry since 1996. He is registered in Kansas, Missouri, Texas and Idaho. Securities and advisory services are offered through Madison Avenue Securities, LLC, member FINRA and SIPC, and a registered investment advisor. CFG Wealth Management Inc. and Madison Avenue Securities are not affiliated companies. His record is available on FINRA BrokerCheck.

Common questions

What does federal employee retirement planning involve?

Six pieces settled around one retirement date: the FERS basic annuity, the Thrift Savings Plan, FEHB health coverage, FEGLI life insurance, the FERS annuity supplement where it applies, and Social Security. Several of the elections, particularly FEHB eligibility, the FEGLI reduction and the survivor annuity, are difficult or impossible to reverse once made, which is why they are worked out before the paperwork rather than during it.

Am I under FERS or CSRS, and why does it matter?

FERS covers most current federal workers and was designed with Social Security as one of three legs, so the pieces add together. CSRS came first, stood alone, and generally did not include Social Security coverage on that federal service. The distinction changes the claiming analysis, and the January 2025 repeal of WEP and GPO changed it again for CSRS retirees. Confirm your own coverage with your agency benefits office.

Which federal retirement decisions cannot be changed later?

FEHB eligibility to carry coverage into retirement is set by your coverage during the five years before you retire and cannot be fixed afterward. FEGLI coverage can generally be reduced or cancelled but not increased. The survivor annuity election allows changes only within a limited window after retirement, sometimes with a deposit. TSP choices mostly remain adjustable, apart from purchasing a TSP annuity.

When should a federal employee start planning?

Early enough to fix anything that depends on a five-year lookback, which in practice means at least five years before your intended date. The FEHB continuity test, any military service deposit and its accruing interest, and the service and age combination that determines an unreduced annuity are all easier to address years out than months out.

Do I need an advisor who specializes in federal benefits?

What matters is whether whoever helps you can work from your benefits estimate, your Social Security statement and your TSP balance at the same time, and show how each election affects the others on one page. Ask to see that. Agency benefits officers handle the forms and eligibility rules, and a planner works alongside them rather than in place of them.

The rest of the series

— Start here —

Six decisions, one page, before the forms.

There is no cost and no obligation for a first conversation, and nothing is recommended in it.

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Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this page shall constitute an offer to sell or solicit any offer to buy a security or any insurance product.

Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any decisions. Any references to protection benefits, safety, security, steady and reliable income, or lifetime income streams refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products.

FERS, CSRS, FEHB, FEGLI, the Thrift Savings Plan, Social Security and Medicare are administered by federal agencies, and their rules, rates, deadlines and eligibility requirements change over time. Confirm all figures and elections with the administering agency, OPM or your agency benefits office before acting. CFG Wealth Management Inc. is not affiliated with or endorsed by the Office of Personnel Management, the Federal Retirement Thrift Investment Board, the Social Security Administration, or any other governmental agency.