The Ultimate Guide To Financial
Planning For Federal Employees

By Jay Shareef ChFEBC℠  and Chris Rhoads  ChFEBC℠ 


Federal employees have access to benefit offerings and retirement plans that are unique to government workers. If you’re a federal employee, read about the basics of your benefits and retirement saving options and how they can fit into your overall financial plan.

Overview Of CSRS And FERS

If you were hired to a federal job on or before December 31, 1983, then you are eligible for the Civil Service Retirement System, or CSRS, which provides retirement, disability, and survivor benefits. Because Social Security taxes aren’t deducted from your paycheck, you won’t be eligible for Social Security benefits based on your work record with the federal government.

Were you hired after 1984 or later? Then you are covered under the Federal Employee Retirement System (FERS), which does provide Social Security benefits, as well as a pension and access to the Thrift Savings Plan (TSP).

The Thrift Savings Plan is a defined contribution retirement plan similar to the 401(k) plans that workers in the private sector save money into. In TSP, you decide how much to contribute and how you want to invest the money in the investment options offered. You can choose to contribute the money on a pre-tax or after tax-basis. If you choose after-tax, your contributions won’t provide you with a tax break today but can be withdrawn tax-free in retirement.

Note that if you leave a federal job, you are eligible to apply for a refund of the money you contributed to your retirement plan.

Life Insurance For Federal Employees

Another benefit of being a government employee is access to Federal Employees’ Group Life Insurance, which is life insurance for federal employees. Through FEGLI, workers are automatically signed up for a basic life insurance policy that is partially subsidized by the government. Workers can also choose among several options for additional coverage. Life insurance is a critical part of your financial plan if other people rely on your income. The OPM website offers a calculator where you can calculate premiums, coverage levels, and how the FEGLI coverage carried into retirement will change over time.

Survivor Benefit Plan Basics

If you are enrolled in a FERS plan, then you are eligible to receive a pension in retirement, which can be passed down to your heirs after your death. However, you have options in how you can receive your pension and/or pass down to loved ones. If you prefer, you can maximize how much money you receive from your pension and leave nothing after you pass away, or take a smaller pension payment up front in exchange for being able to have your heirs receive 25% or 50% of your pension payout after you die. A trusted financial advisor can help you explore your options and arrive at a decision that benefits you and your heirs.

Financial Advice Tailored To Federal Employees

The government’s Office of Personnel Management website is a wealth of information for federal employees searching for detailed information on their retirement and other benefits.

If you need more tailored advice, consider working with a qualified financial advisor. But because federal employees have unique retirement and benefit plans, work with an advisor who is familiar with your situation. I’m a former federal employee who has helped many federal workers build a bulletproof financial plan. I also hold the Chartered Federal Benefits consultant (ChFEBC℠) credential, which means that I hold both specialized knowledge about federal benefits and financial planning.

We offer you multiple services that are beneficial to your retirement planning, including free consultations, a retirement readiness evaluation, and a federal employee benefits report that will help you understand all of the benefits available to you. Visit our website at Certa Advisors to start the conversation, or to register to attend an upcoming seminar.

About Jay

Jay Shareef is vice president, financial advisor, federal benefits consultant, and co-founder at Certa Advisors. As a U.S. Army veteran, Jay is passionate about helping federal employees create a bulletproof plan for retirement and navigate the often confusing and complicated federal benefits landscape. He spends his days educating and providing clients with unbiased insurance benefits and retirement strategies to help his clients create guaranteed income for life. As a problem-solver and trustworthy resource, Jay always puts his clients and their needs first so they can find financial peace of mind. He graduated from the University of Maryland with a degree in finance and holds the Chartered Federal Benefits consultant (ChFEBC℠) credential. To learn more about Jay, connect with him on LinkedIn.

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