The Federal Employees Retirement System (FERS) is one of the most generous retirement packages in the country — but it's also one of the most complex. Between pension calculations, TSP strategy, survivor benefits, and Social Security coordination, there are dozens of decisions along the way, and several of them can't be undone once you've made them.
After reviewing thousands of federal retirement cases, our specialists see the same costly mistakes again and again. Here are five of the most common — and how to avoid them.
Choosing a reduced survivor benefit (or none at all) increases your monthly pension check today, but it can leave a spouse with little or no income if you pass away first. Many employees underestimate how much this decision matters until it's too late to change. Before declining full survivor benefits, model out what your spouse's income would look like without your pension — including whether they'd still have access to FEHB coverage.
The TSP offers some of the lowest-cost investment options available anywhere, but many retirees roll it over or withdraw from it without a clear plan, triggering unnecessary taxes or losing access to the G Fund's stability. A well-sequenced withdrawal strategy can significantly extend how long your savings last.
Your retirement date affects your first annuity payment, unused annual leave payout, and even your FERS supplement eligibility. Retiring a few days earlier or later than optimal can mean losing an entire month of annuity accrual or leave payout value. This is one of the easiest mistakes to avoid — and one of the most commonly made.
If you retire before age 62 and are eligible for the FERS Special Retirement Supplement, earning above the annual Social Security earnings limit can reduce or eliminate your supplement. Many retirees who take part-time or consulting work after retiring are surprised when their supplement disappears.
Waiting too long to understand how Medicare interacts with your FEHB plan can mean paying for coverage you don't need — or missing an enrollment window and facing a permanent Part B penalty. The right coordination strategy depends on your specific FEHB plan and can meaningfully lower your health care costs in retirement.
Most of these mistakes share a common thread: they involve decisions that are either irrevocable or costly to reverse. A qualified retirement specialist who understands the FERS system can help you model different scenarios before you file your paperwork — not after.
A GRS retirement specialist can review your FERS elections before they become irrevocable.
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