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Six Federal Employee Benefits You Should Be Using in 2025 to Save Money and Boost Your Retirement Savings

Missy E
November 14, 2025

Key Takeaways

Take full advantage of the benefits available to federal employees in 2025 to reduce your expenses and increase your retirement savings.
Proper planning and awareness of your benefits can significantly improve your financial security both now and in the future.

Maximize the Federal Employees Retirement System (FERS)

If you’re retiring soon or are already a retiree, understanding the full scope of FERS is crucial. This three-part system includes:

Basic Annuity:
- This is the defined benefit portion, calculated based on your High-3 average salary and years of service.
- Ensure you’ve confirmed your creditable service years for an accurate pension calculation.
Thrift Savings Plan (TSP):
- TSP contributions in 2025 have a limit of $23,500, with an additional $7,500 catch-up contribution for those 50 or older.
- Consider rolling over unused annual leave into your TSP account for a bigger retirement cushion.
Social Security:
- As a FERS retiree, you’ll be eligible for Social Security benefits starting at age 62. Coordinate your benefits to maximize income.

Leverage Health Insurance Through FEHB

The Federal Employees Health Benefits (FEHB) program is an essential resource to manage healthcare costs in retirement:

Cost Management:
- With the average premium increase of 11.2% this year, review your plan during Open Season to ensure it meets your needs.
Medicare Integration:
- Once you’re 65 and eligible for Medicare, you can coordinate it with FEHB for reduced out-of-pocket costs and comprehensive coverage.
Coverage for Family:
- Keep family members insured by exploring Self Plus One or Self and Family plans, depending on your circumstances.

Save on Vision and Dental With FEDVIP

Dental and vision expenses can add up quickly in retirement, making FEDVIP a valuable addition:

Dental Benefits:
- Coverage includes routine cleanings, crowns, and dentures. Plans cater to retirees who may need more intensive care.
Vision Coverage:
- FEDVIP includes eye exams, glasses, and contact lenses. Look into this coverage during Open Season to find a plan that aligns with your needs.

Capitalize on Flexible Spending Accounts (FSAs)

If you’re still working, FSAs are an excellent way to save money on eligible expenses:

2025 Contribution Limits:
- You can contribute up to $3,300 for healthcare expenses. This money is tax-free, reducing your taxable income.
Eligible Expenses:
- Use your FSA for prescription medications, medical supplies, and dependent care.
Carryover Option:
- Any unused funds up to $660 can roll over into the next year, ensuring you don’t lose money.

Consider Long-Term Care Insurance (FLTCIP)

Long-term care is one of the biggest financial risks retirees face. The Federal Long-Term Care Insurance Program (FLTCIP) can provide peace of mind:

What It Covers:
- FLTCIP helps pay for assisted living, nursing home care, and home health aides.
Why It’s Important:
- Long-term care costs can quickly deplete savings, so having this coverage protects your retirement funds.
Enrollment Tips:
- FLTCIP enrollment is open throughout the year. Start early to lock in lower premiums.

Optimize Survivor Benefits

Planning for your loved ones is an essential part of your retirement strategy:

Survivor Annuities:
- If you’re married, your spouse can receive a portion of your annuity after your passing. This benefit requires a reduction in your pension, so evaluate its value.
Thrift Savings Plan (TSP):
- Ensure your beneficiaries are up to date. TSP funds can be transferred to a spouse’s account tax-free.
FEHB for Survivors:
- If you’ve chosen a survivor’s benefit, your spouse can continue FEHB coverage after your death.

Plan Ahead During Open Season

Open Season, running from November 11 to December 13, 2025, is your annual opportunity to make critical adjustments:

Review Plan Changes:
- Check updates to your FEHB, FEDVIP, and FSA options. Changes take effect on January 1, 2026.
Evaluate Needs:
- Consider your healthcare usage from the past year and anticipate future needs. Adjust your plans accordingly.
Compare Costs:
- Use tools provided by the Office of Personnel Management (OPM) to evaluate plan premiums, deductibles, and out-of-pocket maximums.

Stay Informed About New Changes

Federal benefits evolve over time. Stay proactive by keeping up with the latest updates for 2025:

Medicare Part D Cap:
- A $2,000 out-of-pocket cap for prescription drugs under Part D is now in place. If you’re enrolled in both FEHB and Medicare, this can reduce costs significantly.
Thrift Savings Plan (TSP):
- Contribution limits have increased, offering more opportunities to grow your retirement savings.
PSHB Transition:
- For Postal Service employees, 2025 marks the first year of the new Postal Service Health Benefits (PSHB) program. Review your options carefully.

Protect Your Legacy With Estate Planning

Retirement is the perfect time to get your estate in order:

Update Beneficiaries:
- Ensure that your FEHB, TSP, and life insurance policies reflect your current wishes.
Consider a Trust:
- A trust can simplify the transfer of assets to your heirs while reducing tax implications.
Financial Power of Attorney:
- Designate someone to manage your finances if you’re unable to do so.

Making the Most of Your Federal Benefits

Your federal benefits are some of the most comprehensive available. By staying informed and proactive, you can enhance your retirement security, reduce costs, and ensure your loved ones are cared for. Take the time to explore your options and make adjustments during Open Season to meet your evolving needs.