Planning for Retirement? Here’s How Federal Employees Can Combine Their Pension and Social Security

Missy E
November 14, 2025

Key Takeaways

Your federal pension and Social Security benefits can complement each other, helping to build a stable financial future.
Starting to plan early will help you maximize benefits and navigate important federal policies around retirement.

Understanding Your Federal Retirement Options

Federal retirement offers a unique combination of benefits, and if you’re a federal employee thinking about your future, it’s never too early to start planning. Between your civil service pension and Social Security, you have two key sources of income to look forward to, but maximizing their potential means understanding how they work together. With the right timing and strategy, you can increase the income you’ll receive throughout your retirement years.

Step One: The Basics of Federal Employee Pensions

Federal employees are usually covered under one of two retirement systems: the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS). Here’s a brief overview of each:

CSRS: This program, which has been in place since 1920, was replaced by FERS in 1987. If you’re still part of CSRS, you won’t earn Social Security credits based on your federal service, but you may receive benefits if you worked in a private sector job for at least ten years. CSRS pensions are generally more substantial than FERS, but they don’t include Social Security benefits.
FERS: Established in 1987, FERS is now the primary retirement plan for federal employees. It includes three parts: your FERS pension, Social Security benefits, and the Thrift Savings Plan (TSP). Together, these can make for a well-rounded retirement plan, giving you income security across multiple sources.

Each retirement plan has its own nuances, and the more you understand them, the better prepared you’ll be to combine your pension with Social Security for a comfortable retirement.

When Can You Begin Receiving Benefits?

The age at which you start taking Social Security can significantly impact your monthly benefit amount. The full retirement age (FRA) for Social Security depends on your birth year, ranging from 66 to 67. You can start claiming Social Security as early as age 62, but keep in mind that your monthly benefits will be permanently reduced if you start before your FRA.

For FERS employees, you’re eligible for a full, unreduced FERS pension at age 62 with at least five years of service, age 60 with 20 years, or after reaching your minimum retirement age (MRA) with 30 years of service. If you retire under the “MRA+10” option, your pension benefits will be reduced by 5% for each year you’re younger than 62 when you start your pension.

Important: When deciding your timeline, think about how the start date of your pension and Social Security benefits will impact your income and savings over the long term.

The Special Retirement Supplement: A Unique FERS Benefit

One of the biggest advantages FERS employees have is the Special Retirement Supplement (SRS), which bridges the gap between your FERS retirement and Social Security eligibility. The SRS is available if you retire before age 62 and meet certain service requirements. This supplement approximates the amount of Social Security you would receive based on your federal service and is intended to provide a boost to your income until you’re eligible to receive Social Security.

Keep in mind that this supplement isn’t available to those who retire under MRA+10. It also phases out gradually if you earn income above the annual Social Security earnings limit, which is $22,320 for 2024. Once you hit 62, the supplement ends, and you’ll need to switch to Social Security if you’re eligible.

Maximize Social Security Benefits with the Right Timing

Timing plays a significant role in maximizing Social Security benefits. If you delay claiming until age 70, you’ll receive a higher benefit, increasing about 8% per year from your full retirement age to age 70. While it might be tempting to claim as soon as possible, taking Social Security early will reduce your monthly payments. For federal employees with a FERS pension, delaying Social Security while drawing on your pension may provide the most substantial long-term benefits.

If you’re under CSRS, be aware of the Windfall Elimination Provision (WEP), which may reduce your Social Security benefits if you earned a pension from a job that didn’t contribute to Social Security, like most CSRS positions. This reduction affects only Social Security benefits derived from your private sector work, so your CSRS pension remains unaffected.

Thrift Savings Plan (TSP): Your Third Income Stream

Federal employees have access to the Thrift Savings Plan (TSP), which acts as a defined contribution plan similar to a 401(k). This plan lets you save additional retirement funds to supplement your pension and Social Security. With employer matching for FERS employees, maximizing contributions to your TSP is essential to boost your retirement income.

For 2024, the TSP contribution limit is $23,000, with an additional $7,500 catch-up contribution allowed for employees aged 50 or older. And thanks to the SECURE 2.0 Act, these catch-up limits will increase further for employees aged 60-63 starting in 2025. Managing TSP withdrawals in retirement carefully can help you avoid depleting your account too early and give you extra flexibility for expenses that your pension and Social Security may not cover.

Coordinating Benefits for Maximum Impact

Combining your federal pension, Social Security, and TSP withdrawals in a tax-efficient manner can lead to more take-home retirement income. Here are a few strategies to keep in mind:

Withdraw from TSP first: If you can afford to delay Social Security until age 70, consider using your TSP funds in the early years of retirement. This approach maximizes your Social Security benefit and may keep you in a lower tax bracket.
Consider annuities carefully: You may want to consider converting part of your TSP into an annuity for guaranteed income. Federal employees have access to competitive annuity options, but take time to understand the fees and payout structures before committing.
Think about taxes: Depending on your total retirement income, your Social Security benefits may be taxable. Check the federal and state tax implications of each income stream to avoid surprises when tax season rolls around.

How Health Benefits Fit In

Health benefits can be a substantial part of retirement expenses, so it’s crucial to plan for them in advance. As a federal retiree, you can continue your Federal Employees Health Benefits (FEHB) coverage into retirement. Many retirees find that pairing FEHB with Medicare Part A (which covers hospital costs) is a cost-effective solution. Others add Medicare Part B to reduce out-of-pocket costs for outpatient care. Weigh your options and understand the costs, since healthcare expenses will likely increase as you age.

Prepare for Inflation

Planning for retirement doesn’t end once you reach your goal; inflation will continue to impact your finances. Cost-of-Living Adjustments (COLA) for Social Security and FERS pensions help, but CSRS retirees may fare better since their COLAs are typically higher than those for FERS pensions. Building in TSP growth, Social Security delayed credits, and even strategic spending will help buffer your retirement income from inflation.

Building a Secure Future

Combining your federal pension, Social Security, and TSP requires careful planning, but the outcome can be a balanced and resilient retirement income. By understanding your retirement benefits and making strategic decisions on timing, withdrawals, and healthcare planning, you can build a secure financial future.