As we enter 2025, federal employees face potential changes under the new administration. From changes to retirement plans, healthcare premiums, and savings opportunities, navigating these shifts can feel overwhelming. However, at Benchmark Financial Group, we believe that change is an opportunity—especially for federal employees nearing retirement. With the right guidance and perspective, you can take advantage of these changes to secure the retirement you deserve.
Adapting to Policy Updates
With every administration change, policies impacting federal workers see both adjustments and opportunities. For example, 2025 brings a modest 2.5% cost-of-living adjustment (COLA) for Civil Service Retirement System (CSRS) retirees and a 2% COLA for Federal Employee Retirement System (FERS) retirees. While this reflects lowered inflation, tying increases to the Consumer Price Index ensures that federal pensions continue to maintain purchasing power for retirees in an evolving economy.
Beyond pensions, policies such as expanded health benefits under the Federal Employee Health Benefits (FEHB) plan—including newly added fertility treatments and anti-obesity medication—continue to demonstrate that federal programs are competing with private industry to deliver better coverage to employees and retirees. These enhancements, while subtle at first glance, offer long-term value by focusing on health and quality of life in retirement. Federal employees who carefully review their FEHB coverage during open enrollment can take proactive steps to optimize their healthcare for the retirement years ahead.
Leveraging Retirement Savings Opportunities
One of the most impactful updates for federal employees in 2025 is the introduction of higher Thrift Savings Plan (TSP) contribution limits. While the base contribution cap has risen to $23,500, those aged 60 to 63 can now contribute an additional $11,250 annually. This is a unique policy designed to allow employees at this life stage to bolster their retirement savings during their final earning years. This adjustment provides a critical window for those approaching retirement to supercharge their savings and take further advantage of employer-matching contributions.
Higher contribution opportunities aren’t just about saving more money, they’re about creating flexibility, building wealth, and ensuring that you’re financially prepared for the retirement lifestyle you envision. By maximizing contributions in these crucial years, retirees take control of their financial future and minimize risks associated with market fluctuations or unexpected costs during retirement.
Changing Healthcare Costs as an Opportunity
Admittedly, changes such as the 13.5% increase in FEHB premiums for 2025 have sparked frustration among federal employees. Yet, even with these cost increases lies opportunity. By reevaluating FEHB plans annually, employees can make informed decisions regarding coverage and associated expenses. Additionally, for those transitioning into Medicare, dual coverage strategies—like combining Medicare Part B with FEHB—may offer enhanced benefits with lower overall costs.
Understanding how these systems work together and using comparison tools (like those recommended by organizations such as the Office of Personnel Management) can help retirees find a plan that works best for their circumstances, ultimately allowing for smarter healthcare spending in retirement.
Stability and Forward-Thinking in Retirement Planning
While there’s some uncertainty with a new administration, it’s worth noting that many federal benefits remain dependable. Programs such as the Federal Employee Group Life Insurance (FEGLI) program, Medicare Part B, and children’s or spousal survivor benefits remain essential staples of federal employee retirement packages with no significant cuts or changes in 2025. These stable pillars provide financial security and allow employees to plan effectively, even as new opportunities emerge.
At Benchmark Financial Group, we encourage our clients to view these changes in context. Instead of focusing solely on increased costs or policy adjustments, it’s essential to see the big picture. These shifts allow you to adapt your strategy, stay informed, and fine-tune your retirement plan to align with your goals.
Maximizing the Benefits of Change with a Strategy
The headline message for federal employees in 2025 is simple: you have control. Whether it’s making the most of the stretched TSP contribution limits, reviewing your FEHB plan with a new lens, or leveraging cost-of-living adjustments, the key is to take action. Change doesn’t have to mean chaos—it can mean opportunity when you partner with knowledgeable professionals who understand the nuances of federal benefits.
At Benchmark Financial Group, we specialize in helping federal employees turn uncertainty into confidence. Through personalized strategies, educational tools, and one-on-one consultations, we empower you not just to navigate these changes but to thrive because of them. It all starts with gathering your information, discussing your goals, and preparing a plan so that we may help you maximize your income in retirement. With the right strategy, you may get your income equal to or exceed your pre-retirement net income. To get started, schedule an appointment today with Benchmark Financial Group by filling out the form online or calling David Raetz at 913-534-8256 to discuss your financial needs. Benchmark Financial Group will help you navigate your options and determine the best path toward your financial goals. Remember: Change isn’t an obstacle, it’s an opportunity. Let’s seize it together.
*Securities and Advisory Services Offered Through CreativeOne Securities, LLC Member FINRA/SIPC and an Investment Advisor. Benchmark Financial Group, LLC and CreativeOne Securities, LLC are not affiliated.
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