Federal Employee Retirement Checklist

By: Michael R. Blahusch CFP®, ChFC®, CRPC®, MBA

Planning for retirement as a federal employee has always been important—but in today’s environment of workforce reductions, early retirement offers, and shifting agency policies, it’s absolutely critical. Whether you're considering a Voluntary Early Retirement Authority (VERA) offer, a Voluntary Separation Incentive Payment (VSIP), or thinking about Deferred Resignation, having a clear retirement plan can make all the difference.

At RetireUS, we specialize in helping federal workers like you navigate these complex transitions with clarity and confidence. Here's your simple, updated checklist to retire from federal service the right way.

1. Confirm Your Retirement Eligibility 

Before you begin planning your retirement, it’s essential to verify whether you meet the eligibility criteria under your specific retirement system (FERS or CSRS). Knowing your Minimum Retirement Age (MRA) and the required years of service helps clarify your timeline.

If you're considering early retirement through VERA, the requirements are slightly different. 

You may qualify if: 

• you’re at least 50 years old with 20 years of service, or 
• at any age with 25 years. 

VERA allows you to begin receiving an immediate annuity without the 5% FERS penalty for early retirement. 

Alternatively, if you plan to leave federal service before reaching retirement age, you may opt for Deferred Retirement. This option allows you to apply for benefits later when eligible, but you could lose access to key benefits like FEHB health insurance unless you meet certain conditions.

2. Evaluate Separation Incentives

In times of restructuring, federal agencies may offer incentives to encourage voluntary departures. The most common are VSIP and Deferred Resignation. 

VSIP, or buyouts, provide up to $25,000 in a lump sum for employees who voluntarily separate. However, it’s important to weigh the pros and cons. The payout is taxable, and if you return to federal service within 5 years, you’ll be required to repay the entire amount. 

The newer Deferred Resignation 2.0 programs allow employees to submit their resignation now but continue working (and receiving full pay and benefits) through a future end date. These programs often include benefits like administrative leave or exemption from in-office mandates, providing a more flexible exit strategy.

3. Assess Your Financial Readiness

Understanding your financial situation is one of the most critical steps in retirement planning. Start by calculating your “magic number”—the amount of money you’ll need each month to support your lifestyle. Subtract guaranteed income sources like your pension and Social Security from your estimated expenses. The difference will need to be covered by your TSP and other savings. 

Next, understand how you’ll access your TSP. 

You can:

• take monthly payments
• roll over to an IRA, or 
• opt for an annuity. 

If you're over 59½, you may be eligible for in-service withdrawals.

Also, remember that RMDs begin at age 73, and not planning for them can result in large tax bills. Consider our Tax Mastery subscription or consulting a professional or about Roth conversions. These allow you to move money from a traditional TSP to a Roth IRA, potentially reducing the tax burden from RMDs in future years.

4. Review Health and Insurance Benefits 

Healthcare is one of the largest expenses in retirement, so you need to make sure you’re covered. 

If you’ve had FEHB coverage for the 5 years leading up to your retirement, you can carry your health insurance into retirement. This is a major benefit and can save you thousands per year. 

As you approach age 65, consider how FEHB works with Medicare. Many retirees choose to enroll in Medicare Part A (which is usually free) and consider whether Part B makes sense based on their FEHB plan. 

Also review your FEGLI (life insurance) coverage and whether it’s worth continuing in retirement. Finally, evaluate your need for long-term care insurance and whether it fits into your retirement plan.

5. Prepare Your Documents 

The federal retirement process requires a surprising amount of paperwork—so don’t leave this to the last minute. 

Gather your retirement application forms:

• SF-3107 for FERS
• SF-2801 for CSRS

Be sure to also have recent pay stubs, TSP account statements, your Social Security earnings estimate, and updated beneficiary designations. Being prepared with all necessary documents ensures a smoother process and reduces the chance of delays.

6. Consult with HR and RetireUS Planners 

Before making final decisions, it’s essential to talk to the right people. Your agency’s HR department can help you confirm your official service records, unused leave balances, and retirement eligibility. They’ll also guide you through agency-specific retirement processes. 

At the same time, a Financial Assessment with RetireUS can help you build a personalized plan. Our experts specialize in federal benefits and can help you make sense of your options—from TSP withdrawal strategies to buyout implications. Click here for a FREE Financial Assessment. 

Conclusion: 

Retirement is one of the biggest transitions of your life. With updated programs like VERA, VSIP, and Deferred Resignation options now available, it's more important than ever to approach your decision with a clear strategy. At RetireUS, we’re here to help you map out every step so you can retire with confidence—not confusion.

Sources:

• https://www.opm.gov/policy-data-oversight/workforce-restructuring/voluntary-early-retirement-authority/ 
• https://www.opm.gov/policy-data-oversight/workforce-restructuring/voluntary-separation-incentiv e-payments/ 
• https://federalnewsnetwork.com/workforce/2025/04/what-federal-workers-should-consider-befor e-accepting-deferred-resignation/
• https://www.tsp.gov/withdrawals/ 

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