Federal & VA Employees

Federal and VA employees have access to some of the most valuable retirement and healthcare benefits available. Understanding TSP decisions, eligibility, pension calculations, and survivor benefit elections is essential to building an effective retirement strategy and maximizing the value of your federal benefits.

What is FERS?

The Federal Employees Retirement System (FERS) is the retirement system covering most civilian federal employees. FERS provides retirement income from the combination of a pension benefit, retirement savings through the Thrift Savings Plan (TSP), and Social Security participation. Together, these components create a coordinated retirement framework intended to provide retirement income and financial stability for federal employees.

The FERS pension is a defined benefit pension calculated using an employee’s years of creditable service, high-3 average salary, and retirement eligibility status at the time of retirement. The Thrift Savings Plan functions similarly to a traditional 401(k) plan and allows employees to contribute on either a traditional pre-tax or Roth after-tax basis while also receiving government matching contributions if eligible. Most FERS employees also participate in Social Security and may receive retirement benefits based on their earnings history and eligibility requirements.

Understanding The Thrift Savings Plan (TSP)

The Thrift Savings Plan (TSP) is a tax-advantaged retirement savings plan available to federal employees and members of the uniformed services. The TSP was designed to function similarly to a private-sector 401(k) plan and allows participants to contribute a portion of their pay toward retirement savings on either a traditional pre-tax or Roth after-tax basis.

The TSP offers a range of investment options to accommodate different retirement objectives. Participants may allocate their account balances among several core investment funds, including government securities, fixed income investments, common stock funds, small-cap stock funds, and international stock funds. The TSP also offers Lifecycle (L) Funds, which are professionally allocated portfolios designed to automatically adjust investment allocations over time based on an anticipated retirement date. These funds gradually become more conservative as the target retirement year approaches.

Investment allocation decisions within the TSP can significantly affect long-term retirement outcomes, particularly because factors such as risk exposure, diversification, contribution levels, and time horizon all influence account growth over time.

Finding & Accessing Your Federal Benefits

Employees are encouraged to submit retirement paperwork at least 30 days before their planned separation date, although some agencies may recommend submitting documents earlier. Use the resources outlined below to identify your full benefits and ensure you are ready for retirement:

Key Documents

Before retiring, collect and review key retirement records, including:

• SF-50 forms
• Leave and earnings statements
• TSP account statements
• Retirement benefit estimates
• FEHB and FEGLI information
• Social Security estimates
• Beneficiary designation forms

Helpful Resources:

• OPM Retirement Services: https://www.opm.gov/retirement-services/
• Thrift Savings Plan (TSP): https://www.tsp.gov/
• Social Security Administration: https://www.ssa.gov/
• OPM Forms & Retirement Applications: https://www.opm.gov/forms/

Employees who are missing records or have service history questions may also contact their agency personnel or payroll office.

FERS Pension Calculation

A FERS pension is generally calculated using three primary factors:

• Years of creditable federal service
• High-3 average salary
• Retirement eligibility category

In most cases, the High-3 average salary is based on the highest average basic pay earned during any consecutive three-year period of federal service.

Employees can review additional pension calculation details through OPM: https://www.opm.gov/retirement-services/fers-information/computation/

Survivor Benefit Elections

Federal employees retiring under FERS are generally required to make survivor benefit elections at retirement. These elections determine whether a surviving spouse or eligible beneficiary may continue receiving a portion of the pension after the retiree’s death.

Survivor benefit elections can affect both monthly retirement income and long-term financial protection for family members, making it important to understand available options before retirement paperwork is finalized.

Additional survivor benefit information is available through OPM: https://www.opm.gov/retirement-services/fers-information/survivors/

Experienced Guidance for FERS, TSP, and Federal Benefits

Federal retirement benefits can be complex, and many employees are left trying to understand how multiple systems, rules, and retirement options work together.

At Your Financial Legacy, we offer clear, personalized guidance around federal retirement benefits and long-term financial planning. We understand the unique structure of federal retirement benefits and the important decisions employees face throughout their careers and into retirement. Whether you are early in your career, approaching retirement eligibility, or already retired, we can help you better understand your options and build a strategy designed around your goals.