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A Simple Checklist That Could Change the Way You Retire from Federal Service

Missy E
November 14, 2025

Key Takeaways

Creating a federal retirement checklist helps ensure you don’t miss critical steps, especially as new rules and changes take effect in 2025.
From understanding annuity calculations to coordinating Medicare with FEHB or PSHB, every stage of planning matters for long-term financial security.

Why a Retirement Checklist Is More Important Than Ever

Retiring from federal service is a milestone, but in 2025, it comes with more complexity than ever. With shifting policies, rising healthcare costs, and changes in annuity rules

, you need more than a general plan—you need a detailed checklist. A structured approach allows you to confirm eligibility, project income, and coordinate benefits so your transition into retirement is smooth and financially sound.

A retirement checklist doesn’t just help you stay organized. It helps you avoid costly oversights—such as forfeiting FEHB coverage or missing your Thrift Savings Plan (TSP) withdrawal window.

1. Confirm Your Eligibility for Immediate Retirement

To retire with an immediate annuity under the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS), you must meet specific age and service requirements:

For FERS employees:

Minimum Retirement Age (MRA) with at least 30 years of service
Age 60 with 20 years of service
Age 62 with 5 years of service
MRA with 10 years of service (reduced annuity under MRA+10)

For CSRS employees:

Age 55 with 30 years of service
Age 60 with 20 years of service
Age 62 with 5 years of service

If you’re retiring under early retirement or disability provisions, additional conditions apply. Check these closely.

2. Calculate Your Retirement Annuity

For FERS, your annuity is based on your “High-3” average salary and years of creditable service. The basic formula:

1% of High-3 x years of service (or 1.1% if retiring at age 62 with at least 20 years)

CSRS offers a more generous formula, but fewer employees remain under that system. If you transferred from CSRS to FERS, understand how your benefits are blended.

Estimate your monthly income early—at least two years before retirement—to ensure your financial needs will be met.

3. Review Your FEHB or PSHB Eligibility

You must be continuously enrolled in the Federal Employees Health Benefits (FEHB) or the new Postal Service Health Benefits (PSHB) Program for the five years before retirement—or from your first opportunity to enroll—to continue coverage into retirement.

For Postal employees and annuitants, 2025 marks the full transition to PSHB. If you are Medicare-eligible, you are required to enroll in Medicare Part B to keep PSHB coverage, unless you qualify for an exemption.

Key points:

PSHB plans may reduce or waive deductibles if you have Medicare Part B
FEHB continues for life if eligibility is maintained

4. Coordinate Medicare Enrollment

If you are turning 65 or are already Medicare-eligible, enrolling in Medicare Part A is usually automatic and premium-free if you have sufficient work credits.

For Part B, the 2025 premium is $185 per month with a deductible of $257. Enrolling during your Initial Enrollment Period (3 months before to 3 months after your 65th birthday) avoids late penalties.

Medicare coordination checklist:

Enroll in Part A at 65
Evaluate the cost-benefit of Part B, especially if you have FEHB
For PSHB annuitants, Part B may be mandatory

5. Evaluate Your TSP Withdrawal Strategy

In 2025, the elective deferral limit is $23,500, with additional catch-up contributions allowed based on your age. But once you retire, the focus shifts to how and when you withdraw your savings.

TSP options include:

Installment payments
Partial or full lump-sum withdrawals
Life annuity purchases
Transfers to IRAs or other retirement plans

Important timing rules:

Required Minimum Distributions (RMDs) begin at age 73
TSP beneficiaries must also follow RMD rules, or face penalties

You should also evaluate whether converting some of your TSP to a Roth IRA benefits your long-term tax situation.

6. Confirm Survivor and Life Insurance Elections

FEGLI (Federal Employees’ Group Life Insurance) policies remain in effect into retirement only if you:

Were enrolled for at least 5 years prior to retirement
Elect to continue coverage during the retirement process

You must also choose the level of coverage and whether it reduces over time. Premiums increase with age, so balance affordability with protection.

If you are married, review your survivor annuity election:

Full, partial, or no survivor benefit
Must be chosen at retirement, and affects annuity amount

Survivors must also be enrolled in FEHB or PSHB to continue coverage after your death.

7. Maximize Unused Sick Leave

Under FERS and CSRS, unused sick leave is converted to additional service credit in your annuity calculation. This does not help you meet the minimum service threshold but boosts your pension amount.

One year of sick leave equals 2,087 hours. Every hour adds up, so check your leave balance before your retirement date.

8. Understand the FERS Annuity Supplement

If you retire before age 62 with at least 20 years of service, you may be eligible for the FERS Annuity Supplement. This payment bridges the gap between your retirement and eligibility for Social Security.

It ends at age 62, even if you delay Social Security.

Key considerations:

Subject to an earnings test if you work after retirement
Not available for MRA+10 retirees

9. Track the Impact of COLAs on Your Benefits

Cost-of-living adjustments (COLAs) apply differently under FERS and CSRS. In 2025, the COLA is 2.5%:

FERS retirees get a reduced COLA if inflation exceeds 2%
CSRS retirees get full COLA matching the Consumer Price Index

Make sure to factor in COLA formulas when projecting long-term retirement income.

10. Finalize Your Application and Set a Retirement Date

Submit your retirement paperwork to your agency at least 2–3 months before your planned retirement date. Forms to include:

SF 3107 (FERS) or SF 2801 (CSRS)
FEHB continuation forms
FEGLI election forms
TSP withdrawal forms (if applicable)

Choose your retirement date carefully:

Retiring at the end of the month ensures no gap in annuity payments
End of leave period may allow full accrual of annual leave

11. Plan for the Interim Period Before First Annuity Check

After you retire, OPM processes your annuity claim. Interim payments usually begin within 6–8 weeks but may be partial. Final processing can take several months.

Steps to prepare:

Maintain an emergency fund covering 3–6 months of expenses
Track your application status with your agency and OPM
Avoid major financial decisions until full benefits begin

12. Use Annual Leave to Your Advantage

You’ll receive a lump-sum payment for any unused annual leave. To maximize this benefit:

Retire at the end of the leave year if possible
Review leave carryover limits (typically 240 hours for most employees)

This lump sum is taxable in the year it’s paid, so time your retirement accordingly to manage your tax bracket.

13. Review Taxes on Retirement Income

Federal retirement income is subject to taxation, including:

Your pension (FERS/CSRS annuity)
Social Security (if income exceeds certain thresholds)
TSP withdrawals (unless Roth)

In 2025, some states continue to exempt federal pensions, while others do not. Review both federal and state implications to avoid surprises.

14. Secure Your Spouse’s Retirement and Healthcare Rights

If you are married, your spouse’s access to FEHB/PSHB after your death depends on your:

Survivor annuity election
Spouse being enrolled at the time of your death

Also consider survivor benefits for Social Security and TSP beneficiaries. Keep all designations up to date.

15. Get a Second Opinion

Before submitting your paperwork, it helps to review your entire plan with someone experienced. This could be:

Your agency’s HR retirement specialist
A licensed financial professional

Having a second set of eyes can help spot:

Inaccurate service computation dates
Missing documentation
Overlooked benefits

Your Retirement Could Be Smoother Than You Think

Retiring from federal service doesn’t have to be overwhelming. With a well-structured checklist, you can simplify every decision—from verifying benefit eligibility to aligning your healthcare with Medicare. But don’t leave it all to paperwork. A trusted expert can help connect the dots between your goals and your actual retirement timeline.

If you need help applying any of these steps to your personal situation, get in touch with a licensed professional listed on this website. Make your retirement the result of informed decisions—not surprises.