CAREER NAVIGATOR: ROAD TO RETIREMENT

NEXT STOP, RETIREMENT
The retirement process can be overwhelming. Being prepared and remaining well-informed about proper retirement planning can ease anxiety and help retirees adjust and enjoy their new lifestyle. (Photo by ESB Professional, Shutterstock)

Navigating processes and steps for federal civilian retirement.
by Rebecca Wright

The joy of retirement. When soon-to-be retirees look forward to having more free time to spend with family and friends, or the freedom to explore new hobbies and pursue other passions after decades of daily grind.

While many look forward to the additional free time in their day, getting through the retirement process can also be challenging and overwhelming. For civilians retiring from the federal government, it can be daunting due to its complexity and often takes a long time to complete.

In fiscal year 2023, 108,387 federal civilians retired from the government. So far in 2025, more than 33,500 federal employees have retired—approximately 3,800 more than the number who left in the first three months of 2024. Due to the changing political climate and the impact on the federal workforce, the average number of federal employees retiring in 2025 is uncertain. Being prepared for retirement sooner rather than later can offer more flexibility and greater peace of mind, especially during uncertain times.

WHAT’S YOUR PLAN?
There are two main retirement plans that cover federal employees: the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS). The CSRS—a legacy program—is a standard pension plan that covers federal employees who were hired before 1987. Employees covered by CSRS were offered a one-time opportunity in 1987 to switch to FERS, which offers multiple income sources, employer contributions and flexible savings options.

The CSRS program is a defined benefit that guarantees an income to an employee throughout their retirement years through designated annuity payments. Employees covered by CSRS contribute 7, 7.5 or 8% of their pay with the employee’s agency matching those contributions. Annuities are determined by an employee’s age, length of service and an average of the highest three years of base salary, commonly referred to as the “high-3.” Once the average high-3 salary is determined, a formula is applied using different percentages based on years of service to calculate the annuity amount: 1.5% of the average high-3 for the first five years, 1.75% for the next five years then 2% for all years greater than 10, with the maximum benefit received being 80% of the high-3 salary. For those covered by CSRS, the minimum retirement age (MRA) is 55 with at least 30 years of civil service, age 60 with at least 20 years of service or age 62 with at least five years of service. If you retire before the age of 55, the annuity is reduced by 1/6 of a percent for each month under age 55.

Employees covered by this plan generally do not contribute to Social Security and, therefore, are not eligible for Social Security retirement benefits. However, an employee may be eligible for Social Security benefits if they previously held other jobs that required a Social Security tax contribution.

FERS was enacted in 1987 as a replacement to CSRS. All federal civilian employees hired after this date are covered by FERS, which is both a defined benefit and a contributory retirement plan. It is designed as a three-part retirement system that includes a basic pension plan, Social Security benefits and the Thrift Savings Plan (TSP). FERS employees have Social Security deducted from their pay, which entitles them to Social Security benefits upon retirement. They also contribute a portion of their salary towards their FERS pension plan. The amount withheld depends on when the employee was hired: Employees hired prior to 2013 contribute 0.8% of their salary, employees hired in 2013 contribute 3.1% and those who were hired in 2014 or later contribute 4.4%. Agencies also contribute a percentage towards their employees’ FERS.

Similar to CSRS, the FERS plan has a calculated annuity based on length of service and an employee’s average high-3 salary; however, the annuity is calculated using a different formula. Employees under the age of 62, or employees who are 62 or older with less than 20 years of service, are entitled to 1% of their high-3 salary for each year of service. If an employee retires at age 62 or older with more than 20 years of service, they are entitled to 1.1% of their average high-3 for each year of service. In addition, those covered by FERS must meet an MRA, which is determined by birth year. If you decide to retire at your MRA with at least 10 years of service, but less than 30, your annuity will be reduced.

To supplement Social Security and the FERS basic pension plan, employees may also contribute to the TSP—the federal government’s version of a 401(k) plan, similar to those offered by the private sector. Employees may opt to contribute up to the maximum pretax amount allowed by the Internal Revenue Service (IRS) each year, and those age 50 and older may also make catch-up contributions. Agencies automatically contribute 1% of an employee’s salary to their TSP, whether or not the employee opts to contribute. Agencies also match up to 5% of an employee’s contribution.

There are also different types of retirement other than voluntary, which is the most common. Some employees may be eligible for early retirement, disability, deferred retirement or a phased retirement.

ALWAYS AN EXCEPTION TO THE RULE
There are circumstances where annuities for certain federal employees will be calculated differently. Law enforcement officers and firefighters have a higher contribution rate into FERS, so their basic annuities are calculated at a higher rate. Law enforcement officers and firefighters that have 20 years of service will receive 1.7% of their average high-3 salary for each of those 20 years, plus an additional 1% of their average high-3 salary for each year served over 20 years. Employees hired prior to 2013 contribute 1.3% of their salary, employees hired in 2013 contribute 3.6% and those who were hired in 2014 or later contribute 4.9%. Those covered under CSRS will receive 50% of their average high-3 salary plus an additional 2% of their average high-3 for every year over 20 years.

Law enforcement officers and firefighters have earlier MRAs along with mandatory retirement ages, as do air traffic controllers. Whether covered under CSRS or FERS, law enforcement officers and firefighters have an MRA of 50 and a mandatory retirement age of 57, or as soon as 20 years of service has been completed after the age of 57. Those covered by FERS have the option to retire at any age if they have 25 years of service. Air traffic controllers are required to retire by the age of 56.

All employees who retire under CSRS or FERS will have their unused sick leave converted into creditable service. Unused sick leave is converted into additional months of service, which is then applied to your creditable service; this can result in a higher annuity calculation. It is important to note that sick leave is added to creditable service for annuity purposes only and not used towards years in service for eligibility to retire.

Those who served in the military may be able to have their military service count towards their civilian retirement. To do this, the employee typically pays a deposit—usually around 3% of their basic military pay. This is referred to as a military service buy-back.

NEVER TOO EARLY TO PLAN
As with any big decision-making task, many people may ask themselves where to begin. However, when planning retirement from the federal government, the question is not just where to begin but also when to begin. The retirement system in which you are covered will help determine the ideal age to start your retirement planning.

Retirement planning and saving is something that should be done throughout your career. The Office of Personnel Management (OPM) recommends that serious planning should begin approximately five years prior to your targeted retirement date. This recommendation stems from several factors such as providing the opportunity to maximize TSP contributions (if covered by FERS), including catch-up contributions for those over the age of 50, ample time for financial planning to determine if you can afford to retire and to verify if all personnel files are accurate and available (including both civilian service and military service, if applicable). This can be reviewed and verified through the Electronic Official Personnel Folder (eOPF).

The most significant reason for the five-year recommendation concerns health insurance coverage. To continue health insurance after retirement, you must be covered at the time of your retirement and have maintained coverage for five consecutive years beforehand without any gaps and begin your annuity payments within 30 days of retirement. Health insurance premiums are deducted from your annuity payments.

Planning this far ahead also provides the opportunity for the retiring employee to begin transferring job responsibilities to others and to offer training and mentoring to junior employees.

TAKE IT ONE STEP AT A TIME
As you approach your retirement eligibility date (within one year), it is important to verify the date you will begin receiving your retirement benefits. At the same time, you should determine your desired retirement timeframe and inform your supervisor of your plans.

According to OPM, the entire process typically takes three to five months. Begin by requesting your estimated annuity statement and your SF-50. You can download both documents from the Government Retirement & Benefits platform or from eOPF. Alternatively, you can request them directly from your human resources (HR) department. Once you have chosen your exact retirement date, you should complete the retirement application—either SF-2801 for CSRS or SF-3107 for FERS—and submit it to your HR department. You will also need to fill out an SF-2818, which is the Federal Employee Group Life Insurance retirement form. This form allows you to continue your employee life insurance and elect a beneficiary.

If you are planning to withdraw from your TSP upon retirement, keep in mind that it may take up to eight weeks to receive your first payment. You are not required to withdraw your TSP funds immediately and can choose to do so at any time. FERS employees should contact the Social Security Administration approximately three months prior to becoming eligible to apply for benefits.

CONCLUSION
Everyone’s experience with the retirement process—before, during and after—will be different. The important thing to keep in mind is there is always help available to navigate the process, either from your agency’s HR representatives or from OPM. The OPM website has several resources including application tips, quick guides, FAQs and retirement calculators. OPM has also digitized the CSRS and FERS retirement handbook. Many agencies offer pre-retirement seminars that can be helpful with planning for those who are still mid-career and for those much closer to retirement age.

Once retired, many will need to adjust to their new lifestyle. Financial insecurity, a changing routine and social isolation are a few factors that may lead to potential mental and emotional stress among retirees. Having support systems in place can be helpful during this life-changing transition. Working with a financial planner and sticking to a budget will help keep you on track to ensure your retirement savings lasts. Establishing a new routine can bring comfort after your previous one is disrupted. Feelings of social isolation can be avoided by spending time with family and friends and engaging in hobbies. You may also enjoy volunteering within your community or pursuing jobs that align with your passion.

Additionally, never underestimate a healthy diet and exercise. Maintaining a well-balanced diet and a daily workout not only provides a positive impact on your physical health but your mental and emotional health as well. Staying healthy, both physically and mentally, can help you enjoy every day like it’s Saturday.

For more information, go to www.opm.gov or contact your agency’s HR department.

REBECCA WRIGHT is a writer and editor with Army AL&T and the U.S. Army Acquisition Support Center at Fort Belvoir, Virginia. She has more than 15 years of experience writing and editing for DOD and the U.S. Department of Justice.