Social Security

The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) were permanently eliminated in January 2025, significantly benefiting federal retirees. WEP previously reduced Social Security benefits for those who also received pensions from work where Social Security taxes weren't paid (affecting some older federal employees). GPO reduced spousal and survivor Social Security benefits for those receiving government pensions. With both provisions eliminated, affected federal retirees can now receive full Social Security benefits alongside their FERS pension, substantially increasing retirement income for many families.

The FERS supplement is a bridge benefit that approximates the Social Security benefit you earned while under FERS. You receive it from retirement until age 62 (when you can claim actual Social Security). To qualify, you must retire at your Minimum Retirement Age with 30+ years of service, or at age 60 with 20+ years. The supplement is subject to an earnings test — if you work after retirement and earn more than $23,400 (2025 limit), benefits are reduced $1 for every $2 over the limit. The supplement automatically ends at age 62, regardless of when you actually claim Social Security.

Federal employees have unique considerations for Social Security timing. You can claim as early as 62 (with permanent reductions) or delay until age 70 (with delayed retirement credits). Key factors include: (1) FERS supplement ends at 62, potentially creating an income gap, (2) Your FERS pension provides income security, allowing flexibility in Social Security timing, (3) Spousal benefits coordination, and (4) Tax implications of combined FERS and Social Security income. Many federal retirees benefit from claiming Social Security at full retirement age (66-67) to bridge the gap when the FERS supplement ends.

Federal employee spouses can claim Social Security based on their own work record or receive spousal benefits (up to 50% of the worker's full retirement age benefit). With WEP/GPO eliminated, spousal benefits are no longer reduced by government pensions. Strategic claiming includes: (1) Higher-earning spouse potentially delaying to age 70 for maximum benefits, (2) Lower-earning spouse claiming spousal benefits while their own benefit continues growing, (3) Survivor benefit planning — the surviving spouse gets the higher of the two Social Security benefits. Coordination with FERS survivor benefits requires careful analysis.

Social Security, FERS pension, and TSP withdrawals must be coordinated for tax efficiency. All three can create taxable income, potentially pushing you into higher tax brackets or triggering IRMAA Medicare surcharges. Strategic approaches include: (1) Managing the timing of TSP withdrawals based on Social Security and FERS income, (2) Using Roth TSP or Roth IRA withdrawals to minimize taxable income in high-income years, (3) Coordinating the start of Social Security with TSP withdrawal strategies, and (4) Planning for Required Minimum Distributions from traditional TSP/IRA accounts starting at age 73.