Federal Retirement Advice You Didn’t Know You Needed—Until Now

aaron steele
December 24, 2025

Key Takeaways:

Retirement planning doesn’t stop the day you leave your job—it’s a lifelong journey, and there are many tips and strategies you might not know you need until you’re knee-deep in the process.
Whether you’re already retired or on the brink of leaving the workforce, paying attention to your federal benefits now could mean the difference between a smooth retirement and one full of surprises.

You’ve Worked Hard—Now, Let’s Make Your Retirement Work Harder for You

You’ve spent decades serving in the public sector, and now it’s time to kick back and enjoy the fruits of your labor. But as you’ve probably learned by now, retirement isn’t as simple as turning in your badge or clocking out one last time. There are decisions to be made—ones that can have a lasting impact on your financial health for years to come.

Retirement planning doesn’t end the day you retire. Whether it’s navigating your federal benefits, adjusting to life on a fixed income, or deciding when to take Social Security, there are more choices ahead than you might expect. And some of those choices? They can sneak up on you if you’re not careful. Let’s talk about the federal retirement advice you didn’t know you needed—until now.

FERS Benefits: More Complex Than You Might Think

The Federal Employees Retirement System (FERS) is your ticket to a financially secure retirement, but it’s not a set-it-and-forget-it system. While you’ve likely been contributing to your Thrift Savings Plan (TSP) and counting down the days until you can access your pension, have you considered how these benefits interact with one another once you’re retired?

Thrift Savings Plan
The TSP is a major part of your retirement, but knowing when and how to withdraw those funds can make or break your retirement strategy. In 2024, TSP contribution limits have increased to $23,000, with an extra $7,500 in catch-up contributions for those 50 and older. If you’ve been taking advantage of these higher limits, fantastic! But remember, your TSP can be subject to withdrawal penalties if you don’t follow the rules.

Once you hit the age of 59½, you can start withdrawing from your TSP without a 10% early withdrawal penalty, but that doesn’t mean you should. Pulling out too much too early can shrink your nest egg faster than you realize. Meanwhile, at age 72, Required Minimum Distributions (RMDs) kick in, forcing you to withdraw a certain amount each year, whether you need the money or not.

Your FERS Annuity
Your FERS pension will provide a steady income, but it’s not adjusted for inflation as aggressively as Social Security. In 2024, FERS retirees are receiving a 2% cost-of-living adjustment (COLA), which is nice, but it won’t keep pace with rapid inflation. The longer you live in retirement, the more purchasing power you may lose if you rely solely on your annuity. That’s where your TSP and Social Security come in—if managed wisely, these sources can fill the gaps.

Don’t Underestimate Healthcare Costs

Healthcare is a wildcard in retirement. You might be in great health now, but things can change over the years, and healthcare costs are only going up. FEHB (Federal Employees Health Benefits) plans are a great resource, but even these don’t cover everything.

FEHB and Medicare
Many federal retirees don’t realize how important it is to coordinate FEHB with Medicare when they turn 65. By enrolling in Medicare Part B, you can significantly reduce your out-of-pocket costs and ensure that you’re not hit with huge medical bills later in life. But here’s the thing—Medicare Part B isn’t free. In 2024, premiums are set to increase, and you’ll need to budget for these costs along with your regular FEHB premiums.

Keep in mind that while FEHB premiums rose by 13.5% in 2024, this still offers some of the best coverage out there. However, if you don’t properly manage your healthcare plans, it can chip away at your retirement income faster than you think.

Social Security Timing: The Key to Maximizing Your Benefits

You’ve probably heard that Social Security is a big piece of the retirement puzzle, but when you decide to start taking it can have a huge impact on the size of your checks. You can start collecting as early as age 62, but every year you delay taking Social Security up to age 70 increases your monthly benefits by about 8%. This means if you wait until age 70, you’ll get the maximum benefit—something to think about if you’re healthy and have other income to rely on in the meantime.

For those in the FERS system, Social Security integrates with your federal pension, giving you multiple streams of income. But be aware of the earnings limit if you decide to work while claiming benefits before reaching full retirement age—earnings above the limit will reduce your Social Security payouts.

Inflation: The Sneaky Retirement Saboteur

One thing you can’t ignore in retirement is inflation. Even if you’re receiving a pension and Social Security, inflation can quietly erode your buying power year after year. As mentioned earlier, your FERS pension adjusts for inflation, but not as aggressively as it should. While the COLA in 2024 stands at 2%, inflation is often higher.

This is where your TSP comes back into play. You’ll need to keep some money invested in growth assets to help your retirement savings outpace inflation. Relying solely on fixed income sources like your annuity and Social Security can leave you financially stagnant in the long term. A balanced approach, where you keep a portion of your TSP in stocks or bonds, can help mitigate the impact of inflation over time.

Survivor Benefits: Protecting Your Loved Ones

It’s not the most fun part of retirement planning, but it’s crucial to think about what happens to your benefits if you pass away. Survivor benefits ensure your spouse or loved ones continue to receive income after you’re gone, but it’s not automatic—you have to opt into it.

Under FERS, you can choose to leave a portion of your annuity to your spouse, but you’ll receive a reduced pension in return. It’s important to weigh this trade-off. How financially secure is your spouse? Will they have other sources of income to rely on? Consider this carefully when making your decision.

Tying It All Together

Retirement planning is an ongoing process, and as a public sector retiree, you have access to some of the best benefits out there. But knowing how to navigate those benefits—your FERS annuity, TSP withdrawals, Social Security timing, and healthcare costs—can mean the difference between just getting by and truly enjoying your retirement years.

You’ve worked hard to earn these benefits. Now, it’s time to make them work for you, and with the right strategies, you can ensure your financial stability well into the future. So don’t wait—take control of your retirement now, because trust me, you’ll be glad you did.

Get Ready for the Retirement You Deserve

As you can see, retirement is about more than just collecting a pension. It’s about making smart decisions with your money, timing your benefits correctly, and planning for the unexpected. The good news? With a little effort and attention to detail, you can set yourself up for the comfortable, worry-free retirement you’ve always wanted. So why not start today?

Aaron Steele

After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure: Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.