Financial Advisors for Federal Government Employees

Federal employees have unique needs when it comes to financial and retirement planning. Because of these unique concerns, financial advisors who work with them should have a special understanding of federal government employees’ benefits. These advisors can help U.S. government employees maximize pension income, choose payout strategies for surviving spouses and meet other challenges.

Do you have questions about planning for retirement? Consider speaking with a financial advisor who serves your area.

Why Federal Workers Need Specialized Financial Advice

Federal workers have some of the best benefits among workers in the United States, but their benefits can be complex. As a result, they often need specialized financial advice both while they’re working and after they retire. This should come from someone who is experienced in dealing with similar complex situations.

Here are some of the important and complex situations that you may need advice for:

During your career: Federal employees should be informed even while working so they can make good choices regarding TSP, their Basic Benefit Plan, Federal Employees’ Insurance, the Federal Employees Health Benefits Program (FEHB), etc. With so many choices, it may not be easy for federal employees to determine their best choice of benefits without assistance.
After you retire: When federal employees retire, they can take full advantage of the Federal Employees Retirement System (FERS), the federal employee retirement system. However, federal employees often need help understanding FERS. Unlike the Civil Service Retirement System (CSRS), which has just one component, FERS has three components: a Basic Benefit Plan, a Thrift Savings Plan (TSP) and Social Security.
Managing your Basic Benefit Plan: The Basic Benefit Plan is a pension plan for federal employees. It is calculated using the employee’s “high-3 average pay,” which is the average of their three highest-earning years. Generally, the formula is 1% of the average times their number of years of service.
Managing your TSP: The Thrift Savings Plan is a tax-deferred saving and investment plan similar to a 401(k). These plans reduce taxable income for federal employees and even provide matching contributions.
Social Security: Unlike CSRS, FERS participants pay into Social Security and receive Social Security benefits. These benefits are much like what private-sector employees receive, including monthly benefits after 62 and for disabled people, plus survivorship and death benefits.

Who Can Offer Financial Advice to Federal Workers?

Federal workers have plenty of options when seeking financial advice, including choices in both the public and private sectors. It’s important to find a financial advisor that can deal with the situation that you’re in now, but you’ll also want to make sure that they can meet your financial goals for the future.

Here are some options you have when seeking competent help.

Where Federal Workers Can Find Advice in the Private Sector

Within the private sector, federal employees have many options when seeking financial advice. Here are a few options to consider:

Chartered Federal Employee Benefits Consultants: ChFEBCs are trained in federal benefits and are available in all 50 states plus Washington D.C., Puerto Rico and the U.S. Virgin Islands.
Certified Financial Planner™: CFP® professionals are fiduciary financial advisors who are certified by the CFP Board and specialize in various areas of financial planning. Some CFPs can offer specialized assistance to federal employees.
Other private advisors: There are other private organizations that can help with federal employee benefits, such as Federal Employee Tax Planners and Federal Employee Benefits Advocates.

Public Resources for Federal Workers

There are also several options in the government sector to consider:

Employee Assistance Program: EAP is a private firm under contract to the government that can help federal employees achieve their financial goals.
Office of Personnel Management: OPM is a government agency that offers many services for employees, including information on FERS, CSRS and retirement FAQs.
Robo-resources: Sometimes it helps to just run a quick calculation. The government sector offers resources like GuidedPlanner, the Federal Ballpark E$timate and a FERS eligibility checker.

Maximizing Retirement Income for Federal Employees

financial advisor for federal government employees

Retirement planning can be complex for anyone, but it can be even more complicated for federal employees because they have special types of benefits not available to private-sector employees or even state employees. Federal employees with access to pensions through FERS or CSRS may face complex decisions about benefit timing and Social Security integration.

Federal employees who worked for the government before 1983 may be covered by the CSRS. However, Congress created the FERS, which fully replaced CSRS for federal employees on Jan. 1, 1987. While FERS is now the standard for new federal employees, those enrolled in CSRS prior to 1984 often remain covered under this system.

CSRS, established in 1920, is primarily a defined-benefit pension plan with no TSP component or Social Security coverage. Employees under CSRS generally rely on this pension as their main retirement income, though they can still open personal retirement accounts like IRAs.

FERS, meanwhile, combines three components: a Basic Benefits Plan (pension, Social Security and the TSP. This system offers federal employees a diversified retirement package, with TSP resembling a 401(k)-style account for tax-advantaged growth and employee-employer contributions.

For those in FERS, coordinating TSP withdrawals with Social Security benefits can enhance retirement income while potentially reducing tax liabilities. Advisors knowledgeable in these systems can also explain nuances, such as the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which previously may have affected Social Security benefits for those with federal pensions. However, the Social Security Fairness Act signed into law by President Joe Biden in 2025 repealed both provisions and restored full benefits for affected beneficiaries.

Advisors can also assist in selecting the right TSP funds based on the employee’s risk tolerance, retirement timeline and financial goals. Additionally, they may provide guidance on how to blend TSP savings with other retirement accounts, such as IRAs, to optimize tax efficiency and long-term growth potential.

FERS Payout Strategies for Surviving Spouses

FERS provides a survivorship benefit that varies depending on the circumstances. For example, suppose a federal employee dies while still working. If that person had at least 18 months of service, a surviving spouse will receive a lump sum payment plus the higher of 50% of the annual pay rate or 50% of their high-three average. In other words, surviving spouses collect half of the federal employee’s pay plus a lump sum.

While this is the general rule for what surviving spouses receive, there are several stipulations to keep in mind. For example, the surviving spouse and the federal employee must have been married at least nine months or have a child together. If the death resulted from an accident, that also makes the surviving spouse eligible.

Financial advisers can help spouses navigate all the criteria and stipulations for receiving benefits. Another thing to think about is that survivorship benefits are considered taxable income. So, again, for tax purposes, surviving spouses will need a strategy that considers their own benefits, such as a pension or Social Security.

Bottom Line

Federal employees have one of the most generous benefits packages of any group of employees in the United States. FERS, the retirement system for federal employees, is more complex than the system it replaced, known as CSRS. This means planning for retirement is a little more complicated for federal employees. Financial advisors experienced with federal employees can help them put a plan together that optimizes retirement income, taking things like their income needs and taxes into consideration.

Tips for Retirement Planning

A financial advisor can help you pursue your financial planning goals. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
You should also have some idea of how much money you will have in retirement. However, it can be tough to figure out where you stand with your retirement savings. SmartAsset’s retirement calculator can help you estimate what your retirement income will look like.