Pay Raises: Small Increase for Most Federal Employees
Most federal workers on the General Schedule (GS) got a 1% across-the-board pay raise starting in January 2026. That’s the smallest bump since 2021, and there was no extra locality pay adjustment, so your take-home pay rise depends mostly on that base 1%. (Law enforcement roles got a higher 3.8% in some cases to match military pay.)
For retirees: Social Security benefits increased by 2.8% (COLA), adding about $56/month on average. FERS annuitants get a lower 2% (due to the formula cap when inflation is moderate), while CSRS retirees get the full 2.8%.
TSP (Thrift Savings Plan) Changes: Higher Limits and New Options
You can now contribute up to $24,500 in 2026 (up from $23,500 last year).
- If you’re 50 or older: Add $8,000 catch-up (or $11,250 if you’re 60–63).
- New feature (started late January 2026): You can convert traditional TSP funds to Roth inside your account. This makes future withdrawals tax-free, but it counts as taxable income this year, so talk to a tax advisor first to avoid surprises.
Tax forms like your TSP 1099-R and Social Security SSA-1099 came out early this season. Check your online accounts (TSP.gov or mySocialSecurity) right away; many are paperless now.
Retirement Processing: Big Delays Right Now
A flood of federal employees filing for retirement (over 100,000+ in late 2025, driven by workforce changes) has created major backlogs at OPM.
- As of early 2026, over 54,000 claims are pending.
- Average wait for immediate retirements: Around 77 days (but some drag on months longer due to agency HR/payroll reviews).
- The Online Retirement Application (ORA) helps speed things up for digital submissions, but many are still stuck in paper or agency stages. This means new retirees might face months without full annuity payments, only interim pay in the meantime. It’s causing real financial stress for some.
What You Should Do Now (Quick Action Steps)
- Log in and update your info today: Check addresses, bank details, and login credentials on login.gov, OPM.gov, TSP.gov, and Social Security sites.
- Watch for tax forms: If you’re a 2025 retiree and haven’t seen your 1099s, contact the agencies.
- Stay on top of retirement apps: If retiring soon, use ORA if possible and double-check every document for accuracy.
- Get advice if needed: For TSP Roth conversions or tax impacts, consult a professional.
- Follow official sources: Stick to OPM, TSP, and SSA websites/newsletters, avoid rumors.
These changes add up to more admin work this year, especially with the backlog. For federal employees and retirees, staying proactive helps avoid missed payments or surprises.
