FERS Retirement Planning for DoD Civilian Employees
With 750,000+ civilian employees across every state and 80+ countries, DoD is the largest civilian employer in the federal government. The rules are the same FERS rules, but the decisions are bigger: military service credit, early-out authorities, FEHB versus Tricare, and TSP allocations that have to last 30 years in retirement.
If you are a DoD civilian, you have spent your career around complexity. Your retirement deserves the same rigor you brought to the mission. The problem is that most financial advisors do not understand the FERS pension, do not know how prior military service rolls into civilian time, and have never heard of a CSRS Offset or a military deposit.
PlanWell was built for federal employees. Both of our founders hold the Chartered Federal Employee Benefits Consultant (ChFEBC) designation in addition to the CFP. That means when we sit down with a DoD civilian, we know the acronyms, the forms, and the traps.
Why FERS planning matters more for DoD civilians
DoD civilian retirement decisions are rarely simple. A typical DoD workshop attendee has served 25 to 35 years, often with prior active-duty time, a mid-career PCS move or two, and a TSP balance between $400,000 and $1.5 million. The wrong survivor benefit election, the wrong TSP withdrawal order, or a missed military deposit can cost six figures over a 30-year retirement.
The FERS retirement system is generous, but it is not automatic. Every DoD civilian should pressure-test their plan against four questions: Am I retiring on the right date? Am I taking the survivor benefit that fits my spouse, not the default? Is my TSP allocation actually giving me the income I need? And have I coordinated FEHB, Medicare, and any Tricare eligibility correctly? Our free 3-hour workshop covers all four.
What makes DoD retirement planning different
Military service credit
If you served on active duty before your DoD civilian career, that time likely counts toward your FERS pension, but only if you make a military deposit before you retire. We calculate whether the deposit pays off for your specific service dates and high-3.
VERA and VSIP offers
DoD components routinely offer Voluntary Early Retirement Authority and Voluntary Separation Incentive Payments during reorganizations. The math on whether to take them is non-trivial. We break down the break-even, the FERS supplement impact, and the tax treatment of the VSIP.
Overseas and hardship service
Time at an overseas post or a designated hardship duty station can affect your high-3 in unexpected ways if you receive locality-free pay. We make sure your high-3 is calculated correctly before you lock in a retirement date.
Tricare coordination for former military
If you are a military retiree now working as a DoD civilian, you have a Tricare-FEHB-Medicare three-way decision to make. Most advisors cannot navigate this. We do it every week.
Who we work with at DoD
Common positions
- Engineers and logistics specialists
- Acquisition and contracting (1102 series)
- Intelligence analysts
- IT and cybersecurity specialists
- Financial managers
- Base operations and facilities
Primary duty locations
- Pentagon (Arlington, VA)
- Fort Meade, MD
- Norfolk Naval Station
- San Diego Naval Base
- Wright-Patterson AFB, OH
- Hanscom AFB, MA
- Huntsville (Redstone Arsenal)
Common questions we hear
The three questions we hear most from DoD civilians in the workshop are: "Should I pay my military deposit?", "Can I take the VSIP and still get my full pension?", and "Do I keep FEHB or switch to Tricare in retirement?" The answer to each depends on your exact service history, age, and health. We help you run the numbers.
Upcoming Workshops for DoD Employees
Three hours. No cost. CFP®-led. Join federal employees who walked away with a real plan.
DoD Retirement FAQs
Are DoD civilian employees in FERS?
Yes. Civilian employees hired after January 1, 1984 are in the Federal Employees Retirement System (FERS). A small number of longer-tenured employees remain in CSRS or CSRS Offset. Your retirement plan coverage is listed in your SF-50 under "Retirement Plan."
Should I make a military deposit for my active-duty service?
Usually yes, but not always. Post-1956 military service counts toward your FERS pension only if you buy it back by paying a military deposit (3% of base pay plus interest). The deposit typically pays for itself in 2 to 5 years of retirement, but if you are close to retirement and have a short life expectancy or no survivor, the math can tilt the other way. We run the calculation in the workshop.
Can I take VSIP and still collect my full FERS pension?
Yes, if you meet the regular FERS retirement requirements on your separation date (MRA with 30 years, age 60 with 20, or age 62 with 5). VSIP does not reduce your pension. DoD's VSIP cap is $40,000 per employee (raised in 2017), versus $25,000 at other federal agencies. VSIP is fully taxable as ordinary income in the year you receive it, which can push you into a higher bracket. Planning the tax year matters.
How does DoD service abroad affect my high-3?
Your high-3 is based on your three highest consecutive years of basic pay including locality pay. Overseas assignments typically pay a post allowance and cost-of-living allowance (COLA), but those do not count toward your high-3. If you took an overseas assignment in your final years, you may have accidentally lowered your high-3. We catch this regularly.
Do DoD civilians keep FEHB in retirement?
Yes, if you have been continuously enrolled in FEHB for the 5 years immediately before retirement (or since you were first eligible). FEHB in retirement is the single most valuable federal benefit after the pension itself. Most DoD retirees should keep it. Former military retirees with Tricare have additional coordination options we cover in the workshop.
What is the FERS supplement and do DoD civilians qualify?
The FERS supplement is a bridge payment designed to replace Social Security until you reach age 62. DoD civilians who retire under regular FERS at MRA with 30 years, or age 60 with 20 years, qualify. Special-provision employees (law enforcement, firefighters, ATC) qualify regardless of age. It is subject to an earnings test if you go back to work.
Related resources
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