Fed Pilot

Fed Pilot Federal Retirement Benefits Education for Federal Employees

09/11/2026

Patrick, who works at HHS, left our federal retirement benefits workshop with three things on his list. The first one was telling his coworkers to go.

"This course should be mandatory for each employee," he told us afterward. Then: "I'd tell my coworkers they need to sign up if they haven't yet."

What he took away was specific rather than general. He is going back to look again at his allocations in the TSP, the fund mix he had not revisited in a while. And he booked his Part 2, the follow-up review where the numbers get personal.

That is what a workshop can actually do. It does not hand you a finished plan. It shows you which of your own documents you have not read closely enough, and which decisions you have quietly been deferring. Patrick came in for information and left with a short list of his own making.

If you are a federal employee anywhere near retirement, five years out or fifteen, the questions tend to be the same ones. FERS. TSP. FEHB. FEGLI. Survivor elections. The timing of your last day. Our workshops walk through how those pieces sit together, in plain language, with time for questions.

Register for a free Fed Pilot workshop: fedpilot.com/

Almost every federal employee carries FEGLI Basic. Few can say what their coverage is actually worth, because the figure...
09/11/2026

Almost every federal employee carries FEGLI Basic. Few can say what their coverage is actually worth, because the figure is not a round number you chose — it is derived from your salary by a formula with a rounding quirk in it.

OPM states the rule directly: your Basic Insurance Amount is equal to the greater of your annual rate of basic pay rounded up to the next even $1,000 plus $2,000, or $10,000.

Three steps. Start with your annual rate of basic pay — the salary for your position, including increases for which retirement deductions are withheld, excluding overtime, bonuses and awards. Round it up to the next $1,000, always up. Then add $2,000.

A worked example. An employee earning $97,400 rounds up to $98,000, then adds $2,000: a Basic Insurance Amount of $100,000. At 16 cents biweekly per $1,000 of coverage, that costs $16.00 biweekly, about $34.67 a month. The rate is identical at every age — OPM notes a 25-year-old employee and a 64-year-old retiree pay the same Basic rate per thousand, because Basic uses a composite premium structure set by law.

The rounding quirk is worth noticing. Salaries of $97,001 and $97,999 produce the same $100,000 BIA and the same premium. A raise from $97,999 to $98,001 pushes the BIA to $101,000 and the premium up 16 cents a pay period.

Then the part most employees have never heard of. OPM describes an additional Basic provision called the Extra Benefit, which doubles the amount payable at no extra cost for enrollees age 35 or younger. From the 36th birthday it decreases 10 percent each year until age 45, after which there is none. OPM's illustration: an employee aged 40 is five years under 45, so the benefit rises 50 percent, turning a $48,000 BIA into $72,000 of coverage. A 30-year-old with a $48,000 BIA is carrying $96,000 — and on their 45th birthday coverage steps down, with no premium change and no notice.

Why the number matters at retirement: every FEGLI figure downstream is a percentage of it. Under the 75 percent reduction, coverage falls 2 percent a month from 65 until it reaches 25 percent of the BIA in effect when you retired. A $100,000 BIA leaves $25,000 of free lifetime coverage. A $60,000 BIA leaves $15,000.

Free Fed Pilot workshops cover FEGLI and the rest of the benefits package. Register at fedpilot.com/

09/09/2026

Rachelle works at VHA. Her advice after our federal retirement benefits workshop was about timing, and it was blunt.

"I'd tell my coworkers to attend, and to plan now — not one year out from retirement."

Then she listed what she was going to do. Download her LES. Pull her TSP statement. Get her Social Security statement. Review her FEGLI. Schedule her Part 2 review.

Notice what is on that list. Three documents she already has access to and had not read closely. One insurance line she had never questioned. One appointment. None of it required a new product or a new adviser. It required an afternoon, and someone to explain what she was looking at.

That is the case for going early rather than late. A year out, most of the choices have already been made for you. Five or ten years out, there is still room to ask whether a policy you have carried for decades is doing what you assume it is, or whether a beneficiary form still says what you meant it to say.

If you are a federal employee, come and go through your own paperwork with us.

Register for a free Fed Pilot workshop: fedpilot.com/

IRMAA is not a tax bracket. It is a cliff. Cross a threshold by one dollar and the surcharge for the whole year steps up...
09/09/2026

IRMAA is not a tax bracket. It is a cliff. Cross a threshold by one dollar and the surcharge for the whole year steps up, which makes the question of exactly which dollars count unusually consequential.

The Social Security Administration states the definition plainly: your MAGI is your total adjusted gross income and tax-exempt interest income.

Two things follow. This is AGI — the bottom line of the front page of your return — not taxable income, so deductions below the AGI line do not reduce it. And tax-exempt interest is added back, which surprises people who bought municipal bonds precisely because the interest was not taxable.

For 2026 the first thresholds sit at MAGI above $109,000 for an individual and above $218,000 for a couple filing jointly. Below them you pay the standard Part B premium of $202.90 a month. Just above, Part B becomes the standard premium plus $81.20, and the Part D adjustment adds $14.50 to your plan premium.

So what lands in the figure? For a federal retiree, typically: your FERS or CSRS annuity in full; traditional TSP withdrawals including RMDs; Roth conversions, as ordinary income in the conversion year; the taxable portion of Social Security; capital gains; and tax-exempt interest.

What does not count: qualified Roth distributions, which are not income at all; the return of your own after-tax contributions; and anything that never enters AGI. The item people most expect to help and which does not is itemized medical expenses. Those sit below the AGI line, so they can cut your tax bill substantially while leaving your MAGI, and your IRMAA tier, untouched.

Then there is the timing. SSA uses the most recent federal tax return the IRS has provided, stating that to determine 2026 adjustments the information is generally from a return filed in 2025 for tax year 2024. That two-year lookback is why the thresholds so often catch people in their first years of retirement — the 2026 determination reflects a year in which many new retirees were still drawing a full federal salary, and some also took a lump-sum annual leave payout in the same tax year.

If income has since dropped, SSA will consider a new decision where a qualifying life-changing event caused it. Retirement is on that list, under stopping work. The request goes on Form SSA-44 with documentation.

Free Fed Pilot workshops cover IRMAA alongside TSP withdrawal timing and Medicare coordination. Register at fedpilot.com/

09/07/2026

"I'm two years out from planned retirement."

Jack works at PBGC, and two years is the window where federal retirement stops being a someday topic and starts being a calendar.

He came to a Fed Pilot workshop with questions he had been carrying for a while. His summary afterwards was measured rather than dramatic: it was a great experience, and the workshop answered many of the questions he had. Many, not all — which is honest, and which is usually what two hours can do.

The one thing he named as a next step was his FEGLI. That is a common place to land at this stage. Federal life insurance does not simply continue unchanged into retirement; the Basic coverage steps down under an election you make at retirement, and the optional coverage is priced by age in a way that looks very different at 62 than it did at 42. It is the kind of decision that is cheap to review early and expensive to discover late.

Nothing here is advice about your own coverage, and Jack's situation is his. But two years out is a reasonable time to look.

Fed Pilot runs these workshops free for federal employees. Register at fedpilot.com/

09/05/2026

"You were correct — my mind is blown."

Erika works at NOAA, and that was her reaction after sitting through a Fed Pilot federal retirement workshop.

What moved her was not a single headline fact. It was realising how much of her own record she had never looked at closely. She left with three things she intended to do, and she named them herself: request a personalized comprehensive report, take part in military buyback for her earlier service, and go back through her TSP.

Military buyback is the one federal employees most often find out about late. Time served in the armed forces can, in some circumstances, be credited toward a federal annuity — but it takes a deposit, and the paperwork is not automatic. Nobody sends a reminder.

Erika's advice to her own coworkers was simpler than any of that: take the training, and get started today. Not because a workshop settles anything, but because it is hard to make a decision about a number you have never seen.

Every federal employee's situation is different, and nothing here is advice about yours. What Erika got was a clearer view of her own.

Fed Pilot runs these workshops free for federal employees. Register at fedpilot.com/

Turning 65 as a federal retiree puts one question in front of you with no universally right answer: add Medicare Part B ...
09/05/2026

Turning 65 as a federal retiree puts one question in front of you with no universally right answer: add Medicare Part B on top of FEHB, or keep FEHB alone?

Start with what is not in dispute: you are not required to take Part B to keep FEHB. Some retirees carry both for fuller coverage. Others keep FEHB alone to avoid a second premium. The rules allow either.

The mechanics. When you have both, Medicare generally becomes the primary payer at 65 and FEHB pays second. Together they can leave little or nothing owed on many covered services.

The cost. The standard 2026 Part B premium is $202.90 per month for most enrollees, and your FEHB premium continues on top of it. So the trade-off is genuinely a trade-off: pay more in premiums now for lower out-of-pocket costs later, or pay one premium and accept normal cost-sharing. Keeping FEHB alone costs less month to month. It can cost more if you use a lot of care. The decision is a bet on your future health spending, and nobody outside your household can place that bet for you.

The penalty piece. If you delay Part B past your initial window without qualifying coverage, Medicare can add a 10% penalty to the premium for each full 12-month period you could have enrolled, and the surcharge is usually permanent. It is not automatic in every case, though. Federal employees who keep working past 65 with active FEHB through employment are often protected during that time, and recent guidance has created relief for some retirees. This penalty is also separate from the income-related IRMAA surcharge, and it is possible to owe both.

Two more inputs. First, keeping FEHB into retirement at all depends on the five-year rule, generally being enrolled for the five years immediately before you retire. Missing it can end coverage at retirement, which changes the entire analysis before it starts. Second, plans differ. Some now offer incentives, such as a partial premium rebate or reduced cost-sharing, for members who enroll in Part B. Two plans can handle the same situation very differently, so the brochure matters as much as the general rule, and Open Season each fall is when brochures change.

Couples face this twice, once for each spouse, and mixed decisions are allowed.

Register for a free Fed Pilot workshop at fedpilot.com. Free workshops, no sales pitch.

09/04/2026

"Can my spouse stay on my federal health insurance when I pass away?"

Michael asked that during a Fed Pilot workshop. The answer has two parts, and most people only know the first one.

Part one: a surviving spouse keeps FEHB only if a survivor annuity was elected. OPM's own wording on the no-survivor-annuity option is blunt — "No survivor annuity will be paid to your spouse upon your death, and any health benefits will cease."

It does not have to be the maximum election. OPM's handbook says coverage "can only be retained if some annuity has been elected," so a partial survivor benefit protects the health coverage as fully as a full one does.

Part two is the one that catches people. The enrollment type matters just as much. If the retiree was enrolled Self Only at death, there is no eligible family member to continue the coverage — full survivor annuity or not.

Two boxes, and both have to be right. Most people have only ever checked one of them.

Fed Pilot runs free federal retirement benefits workshops for federal employees. Three hours, no cost.

Register at fedpilot.com/

The FERS pension multiplier is the least glamorous number in your retirement file. It may also move the most money.Your ...
09/04/2026

The FERS pension multiplier is the least glamorous number in your retirement file. It may also move the most money.

Your annual FERS pension comes from three inputs: your high-3 average salary, your years of creditable service, and a multiplier. For most retirees that multiplier is 1% per year of creditable service. So 30 years of service produces a pension worth 30% of your high-3.

One exception is written into the computation rules. If you retire at age 62 or later with at least 20 years of creditable service, the multiplier rises to 1.1%. Those same 30 years now yield 33%. That is roughly a 10% larger pension for the same service.

Put numbers on it. Take a high-3 of $100,000 and 20 years of service. At 1%, the annual pension is $20,000. At 1.1%, it is $22,000. That $2,000 gap repeats every year for life, and cost-of-living adjustments build on the larger base, so it widens as the years stack up.

Change the example and the pattern holds. A $90,000 high-3 with 25 years yields $22,500 at 1%, and $24,750 at 1.1%.

Two details catch people off guard. First, when you qualify, the 1.1% rate applies to your entire length of creditable service, not only the years worked after age 62. Second, unused sick leave does not change the multiplier at all. It converts into extra creditable service, which changes the years figure the multiplier is applied to. The conversion uses an OPM chart based on hours, so even a few hundred hours add a small slice of service.

And if you retire before 62? The standard 1% rate applies, even with 20 years of service. Retiring early can also affect access to the special retirement supplement and the timing of your health coverage. Some federal employees work a few extra months to cross the age-62 line. Others value the earlier date more than the higher rate. Both are valid, and the only way to see the difference is to run the math for each date with your own figures.

One thing worth doing first: confirm your service history. Gaps from temporary or part-time work are easy to miss, some service requires a deposit before it counts, and the three consecutive years that set your high-3 are worth verifying. An error caught before you retire is far easier to fix. Register for a free Fed Pilot workshop at fedpilot.com. Free workshops, no sales pitch.

In your final year of federal service, the arithmetic on your sick leave balance stops being abstract. Every hour you us...
09/04/2026

In your final year of federal service, the arithmetic on your sick leave balance stops being abstract. Every hour you use is an hour that will not convert into pension credit. Every hour you save is an hour you spent at work while unwell.

Start with what an hour is worth. OPM converts unused sick leave into additional creditable service in the annuity computation. About 174 hours equals one month; roughly 2,087 hours equals a full year. Leftover fractional months are dropped.

Put a number on it. A FERS employee with a $95,000 high-3 and the 1 percent multiplier gains about $950 a year, for life, from a full 2,087-hour balance. An 80-hour block — two weeks — is roughly $36 a year. That figure is worth sitting with: two weeks of sick leave, used while you are genuinely ill, costs about three dollars a month in retirement income.

Three factors decide the rest.

Factor one is whether the balance changes your multiplier, and this is where the calculation stops being linear. A FERS employee separating at 62 or older with at least 20 years of service is computed at 1.1 percent of high-3 per year instead of 1 percent. Sick leave counts toward the years used in that computation. So an employee at 62 with 19 years and 8 months of actual service, holding enough unused sick leave to cross 20 years, does not gain a slice of a year — they flip the multiplier on every year of service. On a $95,000 high-3 with 20 years, that is $19,000 versus $20,900 a year. Near that line the balance is doing something categorically different. Away from it, it is adding a month.

Factor two is a distinction people get wrong at real cost. Unused sick leave is added to service for computation, not for eligibility. An employee at MRA with 29 years and 6 months, holding a year of sick leave, is still not eligible for an unreduced MRA-with-30-years retirement. It enlarges the annuity once they qualify; it cannot get them to the door. Nor does it touch your high-3.

Factor three is the one no formula answers. Sick leave has no cash value at separation, unlike annual leave, so the alternative use is not money. It is medical appointments and recovery time, in the year people most often defer both.

Free Fed Pilot workshops walk through the FERS computation with your own service history. Register at fedpilot.com/

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