For Federal Employees in Fredericksburg, VA
FERS Retirement: A Plain-English Overview
How a federal employee's retirement works under the Federal Employees Retirement System (FERS), with sample numbers for each option.
Fredericksburg sits in the middle of federal country — close to Quantico, Fort A.P. Hill and the I-95 commute into Washington, D.C. — and home to a lot of federal employees and retirees across Fredericksburg, Stafford and Spotsylvania. If that's you, your retirement doesn't run through a typical 401(k) — it runs through FERS, Social Security and the Thrift Savings Plan. This guide walks through how those pieces fit together, in plain English.
Figures current as of October 30, 2026. All examples are hypothetical and rounded. Confirm your own numbers with your agency HR office and an official OPM annuity estimate before making any final decision.
The Big Picture: Three Parts of FERS
FERS is a “three-legged stool”:
| Leg | What it is | Who pays |
|---|---|---|
| 1. FERS Basic Annuity (pension) | A lifetime monthly check based on salary and years of service | Employee pays 0.8%, 3.1%, or 4.4% of pay depending on hire date; agency pays the rest (Federal News Network) |
| 2. Social Security | Same Social Security as private-sector workers | Regular payroll tax |
| 3. Thrift Savings Plan (TSP) | A 401(k)-style account | Employee contributions plus agency 1% automatic contribution and matching (TSP) |
Some employees also get the FERS Supplement, a temporary “bridge” payment for people who retire before 62. It’s covered below.
When Can You Retire? (Eligibility)
Minimum Retirement Age (MRA)
| Birth year | MRA |
|---|---|
| 1953–1964 | 56 |
| 1965 | 56 and 2 months |
| 1966 | 56 and 4 months |
| 1967 | 56 and 6 months |
| 1968 | 56 and 8 months |
| 1969 | 56 and 10 months |
| 1970 and after | 57 |
Source: OPM Eligibility
The Retirement Types
| Type | Age + service needed | Pension reduced? | Supplement? | Keep health and life insurance? |
|---|---|---|---|---|
| Immediate, full | MRA + 30 yrs | No | Yes | Yes (if the 5-year rule is met) |
| Immediate, full | Age 60 + 20 yrs | No | Yes | Yes |
| Immediate, full | Age 62 + 5 yrs | No | No (already 62) | Yes |
| MRA+10 | MRA + 10–29 yrs | Yes, 5% per year under 62, unless postponed | No | Yes, once the annuity starts |
| Early-out (VERA) / Discontinued Service (DSR) | Age 50 + 20 yrs, or any age + 25 yrs | No age penalty | Yes, but not until MRA | Yes |
| Deferred | Left federal service with 5+ yrs, collects later | Depends on age and service | No | No. FEHB and FEGLI are lost |
| Disability | 18 months of service and medically unable to do the job | Special formula | No | Yes |
Source: OPM Eligibility, OPM Computation, Wells Fargo FERS Guide
Not sure which path fits you?
MRA, 60, or 62 each change your pension percentage, your supplement, and your health coverage. Let's map your options against your own service record.
The Pension Formula
Pension = High-3 salary × Years of service × Multiplier
High-3: The highest average basic pay over any 3 consecutive years. Overtime and bonuses don’t count (OPM).
Multiplier:
- 1.0% if you retire before 62, or at 62+ with less than 20 years
- 1.1% if you retire at 62 or later with 20+ years. This is a 10% raise just for waiting.
- 1.7% for the first 20 years, then 1%, for law enforcement, firefighters, and air traffic controllers (OPM)
Sample Pension Projections — all scenarios assume a $100,000 High-3
| Scenario | Formula | Annual pension | Monthly | Plus FERS Supplement? |
|---|---|---|---|---|
| A. Retire at 57 (MRA) with 30 yrs | 1% × 30 × $100k | $30,000 | $2,500 | Yes, until 62 |
| B. Retire at 60 with 20 yrs | 1% × 20 × $100k | $20,000 | $1,667 | Yes, until 62 |
| C. Retire at 62 with 20 yrs | 1.1% × 20 × $100k | $22,000 | $1,833 | No |
| D. Retire at 62 with 30 yrs | 1.1% × 30 × $100k | $33,000 | $2,750 | No |
| E. MRA+10: age 57 with 15 yrs, start now | 1% × 15 × $100k, minus 25% | $11,250 | $938 | No |
| E2. Same person, postpones to 62 | 1% × 15 × $100k, no penalty | $15,000 | $1,250 | No |
These are amounts before the survivor benefit reduction, health premiums, and taxes.
The FERS Supplement (Bridge to 62)
What it is: A temporary monthly payment that stands in for the Social Security benefit you earned during federal service. It covers the gap until Social Security can start at 62.
Formula: (Years of FERS service ÷ 40) × Estimated Social Security benefit at 62 (Wells Fargo FERS Guide)
| Scenario | Est. Social Security at 62 | Calculation | Monthly supplement |
|---|---|---|---|
| A. 30 yrs at 57 | $2,000/mo | 30/40 × $2,000 | $1,500 |
| B. 20 yrs at 60 | $2,000/mo | 20/40 × $2,000 | $1,000 |
What to know:
- It stops at 62 whether or not you claim Social Security, and it never gets a COLA (MyFederalRetirement).
- There’s an earnings test. If you earn wages or self-employment income after reaching MRA, the supplement drops by $1 for every $2 you earn over the limit. The limit is $24,480 in 2026 (OPM BAL 26-101) and $25,560 in 2027 (FedTools).
- Pensions, TSP withdrawals, rental income, and investment income don’t count toward the earnings test (FFEBA).
Cost-of-Living Adjustments (COLA)
2027 FERS COLA: 2.6%. Social Security and CSRS get 3.6% (OPM). Regular FERS retirees get no COLA until age 62. Disability retirees, survivors, and special-provision retirees (law enforcement, firefighters, air traffic controllers) get it at any age (FFEBA).
The “diet COLA” rule (CRS):
| Inflation (CPI-W) | FERS COLA |
|---|---|
| 2% or less | Full inflation |
| 2%–3% | Flat 2% |
| Over 3% | Inflation minus 1% |
Example: A $27,000 pension (Scenario A after the survivor reduction) grows by about $702/year once the retiree is 62+.
Survivor Benefit Options
This is one of the most important decisions, and it is very hard to undo after the first 30 days (OPM RI 90-8).
| Choice | Cost to retiree | Spouse receives after retiree's death | Spouse consent needed? |
|---|---|---|---|
| Full survivor (default if married) | 10% of pension | 50% of unreduced pension, for life | No |
| Partial survivor | 5% of pension | 25% of unreduced pension | Yes, notarized |
| None | 0% | $0 | Yes, notarized |
Source: OPM Survivor Benefits
Example with Scenario A ($30,000 pension):
| Choice | Retiree gets | Surviving spouse gets |
|---|---|---|
| Full | $27,000/yr | $15,000/yr + COLAs |
| Partial | $28,500/yr | $7,500/yr + COLAs |
| None | $30,000/yr | $0 |
Why it matters beyond income: A spouse can keep FEHB health coverage after the retiree dies only if they receive a survivor annuity. Many couples choose the partial option just to protect the spouse’s health insurance (Government Executive).
Survivor benefit decisions are hard to undo
You generally have 30 days after retirement to lock this in. Let's talk through full, partial, or none — and what it means for your spouse's health coverage.
Life Insurance (FEGLI)
The Four Coverage Pieces
| Basic | Option A | Option B | Option C (family) | |
|---|---|---|---|---|
| Amount | Salary rounded up to the next $1,000, + $2,000 | Flat $10,000 | 1–5 × salary | Spouse $5,000 and each child $2,500, per multiple (up to 5) |
| Cost | Employee pays $0.16 per $1,000 biweekly; government pays 1/3 (FFEBA) | Age-based; $6.00 biweekly at 60+ | Age-based per $1,000; climbs steeply after 60 | Age-based per multiple |
Source: OPM FEGLI Premiums, FedTools
To keep FEGLI in retirement, you generally need to retire on an immediate annuity and have been covered for the 5 years before retiring (Federal News Network).
Basic Life in Retirement: Three Choices — example: $100,000 salary gives $102,000 of Basic coverage
| Choice | What happens to coverage | Monthly cost before 65 | Monthly cost after 65 |
|---|---|---|---|
| 75% Reduction | Drops 2%/month starting at 65 until it reaches $25,500 | $35.36 | Free |
| 50% Reduction | Drops 1%/month until it reaches $51,000 | $111.86 | $76.50 for life |
| No Reduction | Stays at $102,000 | $264.86 | $229.50 for life |
Rates: OPM FEGLI Premiums for Annuitants. You can switch from 50% or No Reduction down to 75% later, but you can never move back up (OPM).
Options A, B, and C in Retirement
- Option A: Free after 65 and shrinks 2%/month to $2,500 (MyFederalRetirement).
- Options B and C: For each multiple, choose “Full Reduction” (free after 65 and shrinks to zero) or “No Reduction” (keep paying age-based premiums for life) (OPM Guide).
- Cost example: $300,000 of Option B with No Reduction costs about $312/month at 65–69, $1,170/month at 75–79, and $1,872/month at 80+ (MyFederalRetirement).
Sick & Annual Leave
Sick Leave
It is not paid out in cash. Unused sick leave is added to your service time in the pension formula instead (OPM). FERS gives 100% credit for anyone retiring on or after January 1, 2014 (OPM FAQ).
Conversion: 2,087 hours = 1 year, and about 174 hours = 1 month (FEDweek). Sick leave raises the pension amount, but it can’t help you qualify to retire (for example, it can’t get you to 30 years) and it doesn’t raise the High-3 (FFEBA). It does count toward the 20 years needed for the 1.1% multiplier at 62 (NARFE). Deferred retirements get no sick leave credit (NARFE).
Example: 1,044 hours of sick leave is about 6 months of extra credit. At a $100,000 High-3 and 1%, that adds about $500/year for life, or $550/year at 1.1%.
Annual (Vacation) Leave
Paid out as a lump sum at your final hourly rate when you retire (OPM). Taxed as income (federal, state, FICA), but no retirement or TSP deductions are taken out (NARFE). It usually arrives several weeks after you retire (U.S. Fish and Wildlife Service).
Carryover cap: usually 240 hours. Anything above that is “use-or-lose” at the end of the leave year. The 2026 leave year ends January 9, 2027 (Federal News Network). Accrual is 4, 6, or 8 hours per pay period depending on years of service (Federal News Network).
Example: 240 hours × $47.92/hour ($100,000 ÷ 2,087) = about $11,500 before taxes.
Health Insurance (FEHB / PSHB)
- The 5-year rule: to keep FEHB in retirement, you must have been enrolled for the 5 years right before retiring (or since your first chance to enroll) and retire on an immediate annuity. MRA+10 counts (OPM).
- Same premiums as active employees, paid monthly. Retirees can’t pay premiums pre-tax (FEDweek).
- Medicare at 65: for FEHB enrollees, Part B is optional. Medicare becomes primary and FEHB becomes secondary. Postal retirees generally must enroll in Part B to keep PSHB coverage (Federal News Network).
- Suspend, don’t cancel. Canceling FEHB is permanent. Suspending it (for example, to use Medicare Advantage or TRICARE for Life) keeps the right to return (Government Executive).
- 2027 Open Season: November 9 – December 14, 2026 (Federal News Network).
Thrift Savings Plan (TSP)
| Limit | 2026 | 2027 (expected; IRS notice pending) |
|---|---|---|
| Employee contribution | $24,500 | $25,500 |
| Catch-up (age 50+) | $8,000 | $8,500 |
| Higher catch-up (turning 60–63) | $11,250 | $11,750 |
Source: Government Executive, FedTools
- Free money: contribute at least 5% to get the full agency match (1% automatic + up to 4% matching) (TSP).
- New Roth catch-up rule: starting in 2026, people who earned more than $145,000 in the prior year must make catch-up contributions as Roth (GSA).
- In retirement: you can leave the money in TSP, take installments, buy a TSP life annuity, take partial lump sums, or roll it to an IRA. TSP withdrawals don’t reduce the FERS Supplement (FedTools).
Other Options to Know About
Military Service Buyback
Pay 3% of military basic pay to add your active-duty years to the FERS pension (OPM Service Credit). It must be paid in full before you retire. Start at least 6 months ahead (DFAS). There’s no interest if you pay within the first 2 years of civilian service; after that, interest builds (USGS). Military retirees usually must waive military retired pay for the years to count (Transportation.gov).
This is usually one of the best deals in FERS. 4 years of buyback at a $100k High-3 adds about $4,000–$4,400/year for life.
Civilian Deposits
Some service without retirement deductions (for example, temporary jobs) can be bought back for about 1.3% of salary plus interest (OPM).
Long-Term Care (FLTCIP)
Closed to new applicants since December 2022. The current suspension runs to about December 2026 unless OPM extends it. Existing enrollees keep their coverage (LTCFEDS). Most people will need private long-term care or hybrid life/LTC coverage.
Dental/Vision (FEDVIP) and FSAs
FEDVIP continues into retirement (retiree pays the full premium). FSAFEDS is for active employees only (FFEBA).
Getting Married After Retirement
You have 2 years to elect a survivor benefit for a new spouse. It costs the normal reduction plus an extra actuarial reduction (OPM).
Complete Projection: One Example Employee
Profile: age 57 (born 1969 or later), 30 years of service, $100,000 High-3, married, 1,044 hours sick leave, 240 hours annual leave, $2,000/mo estimated Social Security at 62.
| Item | Amount |
|---|---|
| Pension: 1% × 30.5 yrs (with sick leave) × $100k | $30,500/yr |
| Less full survivor reduction (10%) | −$3,050 |
| Net pension | $27,450/yr ($2,288/mo) |
| FERS Supplement until 62 (30/40 × $2,000) | $1,500/mo |
| Total monthly income, ages 57–62 | about $3,788/mo (before FEHB, FEGLI, and taxes) |
| Annual leave cash-out (one time) | about $11,500 |
| Spouse's survivor benefit if retiree dies | $15,250/yr (50% of $30,500) + COLAs + FEHB continues |
| Basic FEGLI (75% reduction) | $35.36/mo to 65, then free; coverage shrinks to $25,500 |
At 62: supplement ends, Social Security starts (or delay for a larger benefit), COLAs begin.
Key Decisions Checklist
- Retirement date: MRA, 60, or 62? Weigh 1% vs. 1.1%, the supplement, and annual leave timing.
- Survivor benefit: full, partial, or none? Consider the spouse’s health coverage.
- FEGLI: 75%, 50%, or No Reduction on Basic; whether to keep Option B or C; compare with private coverage.
- FEHB: confirm the 5-year rule is met; plan how it works with Medicare at 65.
- Leave strategy: bank annual leave; know the year-end cutoff.
- Service credit: pay any military or civilian deposits before retiring.
- TSP: withdrawal method, Roth vs. traditional, rollover options.
- Social Security: when to claim (62 vs. full retirement age vs. 70).
- Working after retirement: watch the supplement earnings test if you’ll earn wages.
- Long-term care: FLTCIP is closed; look at private coverage.
Before deciding: get an official annuity estimate from your agency HR office and review the OPM survivor and FEGLI calculators.
Schedule Your Free FERS Retirement Review
Talk through your own numbers — pension, supplement, survivor benefit, FEGLI, FEHB and TSP — with The Retirement Smith in Fredericksburg, VA. Pick a time below.
This guide is for general information and planning only and is not tax, legal, or individualized investment advice. Benefit rules and figures change. Verify everything with OPM, the employing agency, and the TSP.