Essential Insights on FERS Retirement

Apr 11, 2025

Key Points on FERS Retirement

Introduction

  • Presenter: Chris Barfield
    • Credentials: CPA, FERS expert, former law enforcement officer
  • Topic: Top 10 things to know about FERS (Federal Employees Retirement System) retirement

Top 10 Essential Facts

  1. Exact Retirement Date

    • Knowing the exact date you can retire is crucial (e.g., 25th anniversary of hiring, age 50, age 57, or after 30 years of service).
    • Common misconception among retirees about their actual retirement date.

  2. Minimum Retirement Age (MRA)

    • MRA varies between individuals; typically between ages 55-57.
    • Example: Eligible to retire at 50, but MRA is 57.

  3. FEGLI Coverage

    • Understanding your Federal Employees' Group Life Insurance (FEGLI) coverage in dollars.
    • Many people are unaware of their actual coverage amount.

  4. FEGLI Cost

    • How much you are paying monthly for FEGLI.
    • Common error: Calculating monthly expenses based on bi-weekly pay periods should consider 26 pay periods a year, not 24.

  5. Annuity Cost

    • Your FERS annuity is funded through periodic payments.
    • Rates vary: 1.3%, 1.35%, 3.1%, etc.
    • Important to confirm correct rate is being paid to avoid future financial discrepancies.

  6. High-Three Salary Components

    • Not all salary elements count toward the high-three average salary.
    • Exclusions: Overseas allowances, most overtime, cash awards, some bonuses.
    • Specific inclusions for certain positions (e.g., law enforcement availability pay).

  7. Penalty-Free TSP Withdrawals

    • Knowing the age to begin penalty-free withdrawals from the traditional Thrift Savings Plan (TSP).
    • Varies by role (sometimes 50, 55, or 59.5 years).

  8. Tax-Free Roth Withdrawals

    • Different rules apply for Roth TSP, needing to be 59.5 years and the account must be open for 5 years.

  9. High-Three Earnings Percentage

    • What percentage of your high-three salary contributes to retirement annually.
    • Could be 1%, 1.1%, or 1.7%, sometimes a combination.

  10. Retiree Annuity Supplement (RAS)

    • Whether the RAS affects future Social Security payments.

Bonus Information

  • Continuous FEHB Coverage
    • Must be covered by Federal Employees Health Benefits (FEHB) for a specific period before retirement to carry it into retirement.

Conclusion

  • Encouragement to seek further information if needed.
  • Resources for more information: Barfield Financial website, OPM.gov, Dan Jamison's FERS Guide books.
  • Invitation to comment, like, subscribe, and share.