With President Trump’s plan to cut 107,000 federal jobs from non-defense agencies in 2026, federal employees face uncertainty about job security. This may prompt some to seek retirement earlier than they expected. To gauge retirement readiness amidst these changes, here are key tips to assess your financial preparedness.
Confirm Retirement Eligibility
Understand your eligibility under the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS). For FERS, you may retire at your Minimum Retirement Age (MRA, 55-57) with 30 years of service, age 60 with 20 years, or age 62 with 5 years. You are also eligible for retirement at your MRA with 10 years of creditable service, but this results in a reduced annuity. Check for Voluntary Early Retirement Authority (VERA) if offered by your agency. Contact HR or use OPM’s website to verify service credits.
Estimate Your Pension
Calculate your FERS annuity (1% of your high-3 salary times years of service, or 1.1% at 62 with 20+ years). Keep in mind the proposal on the table to eliminate the Retiree Annuity Supplement; this benefit could disappear for those retiring in 2028 and after. Use OPM’s retirement calculator to project income.
Review Thrift Savings Plan (TSP)
Check your TSP balance and ensure you’re maximizing the 5% agency match. Shift to conservative funds (e.g., G Fund) if nearing retirement to protect against volatility. Use TSP calculators to estimate safe withdrawals (e.g., 4% rule).
Project Social Security
Estimate Social Security benefits at ssa.gov, noting higher payments if you can wait to file until age 70. If facing job cuts, weigh claiming at 62 versus bridging any budget gaps with other income.
Know Which Benefits Carry Over
Federal Employees Health Benefits (FEHB) eligibility requires five years of coverage before retirement. Compare Federal Employees’ Group Life Insurance (FEGLI) costs with private options, as premiums rise in retirement.
Analyze Expenses and Income
Budget your retirement expenses, including healthcare and discretionary spending. Total up your annuity, TSP, Social Security, and other income, and then identify gaps. Remember that any accrued unused annual leave will be paid to you in a lump sum. Establish a 6-12 month emergency fund to avoid prematurely draining your retirement savings.
Get a Comprehensive Benefits Analysis
One of the most important tools at your disposal is a free Comprehensive Benefits Analysis. This will give you a clear picture of how much your federal benefits will cost you in retirement. Using this data, you can work with a thoroughly vetted Federal Retirement Consultant (FRC®) to identify gaps, test your retirement readiness, and create a strategy for a successful future.
