FERS Retirement Planning for Federal Employees in Boston, Massachusetts

Your FERS Retirement Plan

Your basic pension formula: 1% of your High-3 average salary multiplied by your years of creditable service. Retire at age 62 or older with at least 20 years of service, and your multiplier increases to 1.1% for life.

Massachusetts does not tax your FERS pension. Pensions from U.S. government contributory retirement plans are exempt from Massachusetts income tax.

Retiring before 62? How the FERS Annuity Supplement bridges the gap →

Survivor Benefit Options & the FEHB Factor

At retirement, you select a permanent survivor benefit option:

The FEHB factor: if you waive the survivor annuity, your surviving spouse permanently loses FEHB health insurance coverage upon your death. For a spouse who relies on your coverage and is not yet eligible for Medicare, replacement private insurance can run tens of thousands of dollars.

Military Service Buyback

• Deposit cost is 3% of your military basic pay under FERS
• Interest-free if the deposit is completed within two years of your federal civilian start date
• After two years, interest compounds annually on any remaining balance
• Must be paid in full prior to your official retirement date; it cannot be purchased retroactively

Also check your unused sick leave. It adds service with no buyback →

Understanding the Thrift Savings Plan (TSP)

Your TSP Is Built on Five Passive Index Funds

• C Fund: S&P 500, run by BlackRock and State Street
• S Fund: Small and mid cap, run by BlackRock and State Street
• I Fund: International, run by BlackRock and State Street
• F Fund: Bonds, run by BlackRock and State Street
• G Fund: Government securities

These funds cost very little to own. Expenses run roughly 0.05% a year or less, which is about $5 per $10,000 invested. Some retail index funds cost less, but the difference is a couple of dollars a year per $10,000.

How the L Funds Roll Into the G Fund Over Time

The L Funds mix these same five funds based on your target retirement date. As each L Fund matures, it merges into the L Income Fund, which is heavily weighted to the G Fund (roughly two-thirds as of early 2026, with TSP gradually shifting the targets toward more stock funds). That shift happens automatically. You can't adjust it fund by fund.

The G Fund isn't a typical bond fund. It holds short-term Treasury securities but pays a rate based on longer-term yields, with no risk to your principal — a combination no IRA can offer. The trade-off: it may not keep pace with inflation over time.

Should You Roll Out of the TSP?

Public employees often roll savings into an IRA to escape high fees. The TSP doesn't have an expense problem—it offers low-cost index funds and blended target-date options.

See: What is a reasonable rate of return after retirement? →

Health Insurance in Retirement: FEHB and Medicare

Your FEHB coverage is one of the most valuable parts of your federal benefits, and the one decision you can't fix after you retire.

How FEHB Works With Medicare

Only some FERS employees keep FEHB in retirement. You need both of these:

• The five-year rule: you were covered by an FEHB plan for the five years before you retire.
• An immediate annuity: you were entitled to an annuity when you separated. If you leave with a deferred annuity, FEHB ends when you separate and does not restart at 62. If you postpone an MRA+10 annuity, FEHB restarts when the annuity begins.

Retirees who keep FEHB can add Medicare Part B when they turn 65. Part A covers hospital care. Part B covers doctor visits and outpatient care, and it has a monthly premium.

• Part A is generally premium-free, since FERS employees pay Medicare tax throughout their careers.
• Medicare pays first and your FEHB plan pays second. Many plans reduce or waive deductibles and copays when you have Medicare.
• FEHB isn't a Medigap policy, but it fills in much of what Medicare doesn't cover. How much depends on your plan.

Is Part B Worth It?

Part B is optional. You can keep FEHB without it, but the timing matters.

• While you are still working, your FEHB counts as employer coverage, so you can generally delay Part B without a penalty. Retiree FEHB coverage doesn't work that way.
• If you skip Part B and sign up later, you pay 10% more for every full 12 months you waited, for life.
• Late sign-up is limited to the general enrollment period, January through March, with coverage starting the month after you enroll.

Whether Part B pays for itself depends on your plan's cost-sharing with and without it, any Part B premium reimbursement the plan offers, and your income tier (see IRMAA below). I look at it plan by plan.

Part D Prescription Coverage

FEHB drug coverage is generally creditable, meaning it is at least as good as standard Medicare drug coverage. So you generally don't need a separate Part D plan, and you can join one later without a penalty. Since 2025, Part D caps out-of-pocket drug costs at $2,000 a year, which may matter if your drug costs are high.

Some FEHB plans offer their own Part D option. If you join it, you give up the plan's regular drug coverage. Check your plan's annual notice each Open Season.

Your surviving spouse's FEHB coverage depends on your survivor annuity election above, so I plan these two decisions together.

Social Security and Your Retirement Income

The FERS Retiree Annuity Supplement (RAS) bridges your earned Social Security equivalent until age 62. At 62, the supplement stops immediately, and your permanent Social Security strategy begins.

• Delaying claims toward age 70 permanently grows your benefit up to 124% or more of your Full Retirement Age baseline
• Spousal claiming strategies significantly alter net household lifetime cash flow
• Your FERS pension survivor annuity interacts directly with Social Security survivor rules

I run your numbers side by side: claiming at 62 vs. full retirement age vs. 70, how a spouse's benefit fits in, and how to use TSP withdrawals to cover the gap in the meantime without a big tax bill.

Retirement Income Planner →

IRMAA: Minimizing Taxes on Your Pension and TSP Withdrawals

Your FERS pension, TSP withdrawals, and Social Security combined can push your Modified Adjusted Gross Income (MAGI) over income-related monthly adjustment amount (IRMAA) tiers, triggering steep surcharges on Medicare Parts B and D. I look at where your income and tax brackets are likely to land, and find the years when Roth conversions make sense before required distributions begin.

My Journey to Becoming a FERS Specialist

I've spent years working with Massachusetts public employees on their pensions, tax-sheltered savings plans, and Social Security timing. Over time, federal employees began reaching out looking for that same level of independent fiduciary guidance on FERS and the TSP. I meet with federal employees in person in Boston and Dartmouth, and across Massachusetts.

Building My Federal Expertise

To work with federal employees properly, I completed the Federal Retirement Consultant (FRC℠) coursework and read Dan Jamison's The FERS Guide and The FERS Guide: Special Category Employees to understand the FERS pension, the RAS, and the TSP.

More about me and how I work →

How I Work With You

I don't start from the idea that you should roll over. If leaving your money in the TSP is the right answer for you, that's what I'll tell you.