📘 The 2026 Federal Retirement Master FAQ

 

#TopicQuestion & Detailed Answer1💰 COLAWhat is the 2026 Federal COLA for FERS and CSRS?• Direct Answer: For 2026, CSRS retirees received a 2.8% COLA, while FERS retirees received a 2.0% COLA.• The "Diet COLA" Rule: Because the CPI-W inflation measure fell between 2.0% and 3.0%, the statutory cap for FERS was triggered, limiting those retirees to a flat 2.0%.• Impact: These adjustments went into effect with the payments received in January 2026.2📈 TSPWhat are the 2026 TSP Contribution and Catch-Up Limits?• Elective Deferral Limit: The standard employee contribution limit for 2026 is $24,500.• Catch-Up Limits (Age 50+): The regular catch-up limit for those 50 and older is $8,000.• The "Super Catch-Up" (Ages 60–63): Under the SECURE 2.0 Act, if you turn age 60, 61, 62, or 63 in 2026, your catch-up limit is significantly higher at $11,250.• Mandatory Roth Requirement: If your 2025 wages exceeded $150,000, all 2026 catch-up contributions must be made to a Roth TSP.3💵 EarningsWhat is the 2026 FERS Annuity Supplement Earnings Limit?• Direct Answer: The 2026 earnings limit is $24,480.• The Reduction Rule: For every $2 you earn above this threshold in 2026, your supplement will be reduced by $1.• What Counts: Only wages and self-employment income count toward this limit; TSP withdrawals and investment income do NOT impact your supplement.4🏥 MedicareWhat are the 2026 Medicare Part B Premiums for Feds?• Standard Premium: The monthly premium for Medicare Part B in 2026 is $202.90.• Annual Deductible: The Part B deductible for 2026 is $283.• IRMAA Surcharges: Higher-income retirees (individuals over $109,000 or joint filers over $218,000) will pay an additional surcharge known as IRMAA.5🛡️ SSNWhat is the 2026 Social Security Taxable Maximum?• Direct Answer: The maximum amount of earnings subject to the Social Security tax in 2026 is $184,500.• Actionable Note: Once your 2026 salary hits this cap, the 6.2% OASDI withholding will stop for the remainder of the year.6🏛️ FERSIs the FERS Supplement being eliminated in 2026?• Direct Answer: No. While legislative proposals frequently surface, the FERS Annuity Supplement remains fully active for eligible retirees in 2026.• Eligibility: To qualify, you must retire with an immediate, unreduced annuity (e.g., MRA with 30 years or Age 60 with 20 years).7🩺 FEHBFederal Employees Health Benefits (FEHB) at Retirement• The 5-Year Rule: To keep your health insurance in retirement, you must have been continuously enrolled (or covered as a family member) for the five years immediately preceding your retirement.• Immediate Annuity Requirement: You must retire on an immediate annuity to carry FEHB into retirement. A deferred retirement will cause you to lose eligibility forever.• Survivor Coverage: You must elect at least a partial survivor benefit for your spouse to remain eligible for FEHB after your death.8☂️ FEGLIFederal Employees’ Group Life Insurance (FEGLI) at Retirement• Continuation: Like FEHB, you must have had your FEGLI coverage for the five years prior to retirement to carry it forward.• Reduction Options: At retirement, you choose how your Basic coverage reduces after age 65: 75% reduction (becomes free at 65), 50% reduction, or No reduction (most expensive).• Option B Costs: Be aware that Option B premiums rise significantly in five-year age bands (e.g., ages 50, 55, 60).9🦷 DentalFEDVIP (Vision and Dental) at Retirement• No 5-Year Rule: Unlike FEHB and FEGLI, there is no five-year requirement to carry dental or vision insurance into retirement.• Automatic Continuation: Your coverage typically continues automatically, but premiums shift from payroll to annuity deductions once your retirement is finalized.10💻 ProcessThe New Online Retirement Application (ORA)• Digital Mandate: As of January 1, 2026, all new optional retirement applications must be submitted through the Online Retirement Application (ORA) portal.• Faster Processing: Digital claims in early 2026 were processed significantly faster than paper claims—often in as little as 34 to 48 days once received by OPM.• Status Tracking: The ORA platform allows you to track your application’s progress in real-time through a digital dashboard.11🔐 RothRoth TSP Five-Year Rule and Withdrawals• Roth TSP 5-Year Rule: To withdraw Roth earnings tax-free, the account must have been open for at least five years and you must be at least 59½.• Mandatory Roth Catch-Up: If your 2025 wages exceeded $150,000, all 2026 catch-up contributions must be made to the Roth TSP.12📊 High-3How do I calculate my "High-3" Average Salary?• Definition: Your High-3 is the highest average basic pay you earned during any three consecutive years of service.• Basic Pay Only: This includes your base salary and locality pay but excludes bonuses, overtime, or travel allowances.13📅 LeaveSick Leave vs. Annual Leave at Retirement• Sick Leave: Unused sick leave is added to your service time to increase your pension amount. It cannot be used to make you eligible to retire earlier.• Annual Leave: You receive a lump-sum payment for all unused annual leave hours upon retirement, taxed at your current rate.14🎖️ MilitaryMilitary Service Credit (Buying Back Military Time)• Direct Answer: To have your active-duty military service count toward your federal retirement and pension calculation, you must "buy back" that time by paying a deposit into the civil service retirement fund.• The 3% Rule: For FERS employees, the deposit is typically 3% of your basic military pay, plus interest.• The Deadline: You must complete the payment in full before your final retirement date. You cannot buy back military time after you have already retired.