{"id":1118651,"date":"2026-07-29T19:26:12","date_gmt":"2026-07-29T19:26:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1118651\/"},"modified":"2026-07-29T19:26:12","modified_gmt":"2026-07-29T19:26:12","slug":"common-misconceptions-about-federal-retirement-benefits","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1118651\/","title":{"rendered":"Common misconceptions about federal retirement benefits"},"content":{"rendered":"

The Office of Personnel Management is still catching up from increased retirement applications, stemming from the\u00a0high number of federal employees<\/a>\u00a0who opted into the Voluntary Early Retirement Authority (VERA) and the deferred resignation program (DRP). In February 2026, OPM released a justification statement for a\u00a0recent contract award<\/a>\u00a0to modernize its human resources systems. In the statement, OPM referred to an \u201cexpected doubling of the retirement application backlog.\u201d As of May 2026, the average time for OPM to process federal retirement applications is 76 days (50 days for digital applications and 100 days for paper applications).\u00a0<\/p>\n

It\u2019s always a good time for federal employees to improve their understanding of the retirement process, including separating facts from common misconceptions.\u00a0<\/p>\n

Misconception: Retirement pay begins right away<\/p>\n

Fact:<\/b>\u00a0A retiree\u2019s agency doesn\u2019t send their retirement packet to OPM until the date of their retirement. At that point, OPM begins processing the retirement packet. OPM does have a processing backlog; it can take up to 90 days for them to begin.<\/p>\n

Retirees can expect their first, estimated annuity payment within two to three months. OPM refers to this as \u201cinterim\u201d pay: Usually, it\u2019s about 60-80% of what your actual annuity will be.<\/p>\n

Misconception: TSP is all you need after retirement<\/p>\n

Fact:<\/b>\u00a0Federal employees will have three main sources of income in retirement: their pension, Social Security and their Thrift Savings Plan account.<\/p>\n

When planning their budget for retirement, they can easily calculate how much the first two will provide each month. Their TSP will need to bridge the gap between that amount and the monthly cost of the lifestyle they intend to live during retirement. That\u2019s why there\u2019s no easy answer to how much feds should have in their TSP accounts when they retire. It differs for every person.<\/p>\n

In addition, the TSP offers different ways to withdraw: partial, full, installment or annuity. It\u2019s recommended that any federal employee within the retirement horizon transfer some or all of their TSP balance into an IRA or Roth IRA in the private sector. As long as they transfer the funds an IRA or Roth IRA, there are no taxes, penalties or fees.<\/p>\n

Misconception: Federal Employee Health Benefits (FEHB) go away at retirement, or become more expensive.<\/p>\n

Fact:<\/b>\u00a0Under certain eligibility requirements, federal employees can continue their FEHB coverage into retirement. These requirements include enrollment in FEHB for at least five consecutive years leading up to, and having coverage on, the retirement date. It is important to note that qualified spouses, dependent children, and children with disabilities can be covered without meeting this five-year rule. Employees become classified as annuitants upon retiring, at which point the government will continue to cover about 72% of the FEHB premium.<\/p>\n

In addition, retirees can also enroll in Medicare parts A and B, offering nearly comprehensive coverage, with Medicare as the primary payer and FEHB as secondary. To reduce costs, some retirees opt for a basic FEHB plan.<\/p>\n

Misconception: Federal Employee Group Life Insurance (FEGLI) will remain the same price after retirement<\/p>\n

Fact:<\/b>\u00a0Basic FEGLI insurance costs between $10-$30 per pay period. It\u2019s very inexpensive while employed, but the price increases dramatically in retirement. How much it increases in price depends on the plan; there are four FEGLI options, including Basic, Option A, Option B and Option C. Federal employees often don\u2019t know what plan they have, or how much they\u2019re paying for it. Understanding their plan can help prospective retirees\u00a0maximize their FEGLI benefits<\/a>\u00a0in retirement.<\/p>\n

Misconception: Survivor\u2019s benefits are automatic and free<\/p>\n

Fact:<\/b>\u00a0Federal employees will need to make some\u00a0decisions about survivor\u2019s benefits<\/a>\u00a0on their retirement application. The pension is the main place where retirees need to consider their options along with their potential beneficiaries \u2014 these will primarily be spouses, except in a few special circumstances. Each of these options comes with a cost, in the form of a monthly percentage deducted from the overall pension. The options and percentages vary between the Federal Employees Retirement System and the Civil Service Retirement System.<\/p>\n

Misconception: Spouses will automatically continue to be covered by FEHB into retirement<\/p>\n

Fact:<\/b>\u00a0This is the biggest caveat about survivor\u2019s benefits: If survivors were on the federal retiree\u2019s health insurance plan, that health insurance will cease if there is no survivor\u2019s benefit. Any amount of survivor\u2019s benefit will continue the health insurance plan, so prospective retirees and their spouses should speak with a federal retirement consultant, and consider the holistic picture of their assets, the spouse\u2019s income, their needs and budget, life insurance, and whether they have any additional financial obligations, like debt or a child in college.<\/p>\n

Demystifying Your Federal Retirement Benefits<\/p>\n

August 4 at 6:30 pm ET | August 6 at 1 pm ET<\/strong><\/p>\n

Register here<\/a><\/p>\n