Savings for Federal Retirees You May Not Have Considered

Perhaps you will not need as much in retirement as you think. Here a few ways you will save money in retirement that you may not have considered–from a retired federal employees.



by Gary Koca


You may be aware of the experts who predict that retirees need to have a certain percentage of their pre-retirement income in order to live comfortably in retirement – whether that is 50, 60, or 70 percent, as this figure seems to vary between experts.

I have always thought that the 70 percent was rather high, if not for most Federal employees, at least for most Americans who plan to retire at some point in their lives. Most of the individuals I have spoken with do not have post-retirement incomes equaling 70% of their pre-retirement earnings.

That caused me to do some thinking about costs that retired Federal employees do not have to worry about as they enter their retirement years. Here are nine ideas of mine, including some that you may not have thought about:

  1. You no longer have to pay into the retirement system, which is 7% percent under the CSRS system.
  2. You no longer have to contribute to the Combined Federal Campaign
  3. You no longer have to worry about commuting expenses to your job. If you commute by commuter train, for example, that could be $150.00 per month plus three hours of lost time daily.
  4. You don’t have to go out for lunch every day. In Chicago, for example, where I live, a sandwich and soft drink are around $10.
  5. You can make your own coffee or tea instead of stopping at Starbucks and paying $5 for a grande chocolate latte inferno, or whatever
  6. Your budget for clothes goes way, way down. Shorts, tee-shirts, and jeans cost a lot less than dress shirts, sport shirts, nice slacks, skirts, and pants suits. And you can wear them over and over and over, because your dog – and maybe your spouse – doesn’t care how you look during the day
  7. You don’t have to contribute to a variety of miscellaneous gifts regarding your co-workers. This would include:
  • Birthdays
  • Funerals – I could swear I had a co-worker whose grandmother passed away on a quarterly basis
  • Anniversaries
  • Weddings
  • Retirements
  • Gifts for someone under the weather or going on vacation

8. You don’t have to treat your staff to lunch at holidays, or buy a present for a co-worker during the holidays. After all, you don’t have any subordinates or co-workers

9. You won’t spend a lot of money going out for drinks after work with your co-workers

Here are two other considerations:

First, at least for those of you under the CSRS system, you receive a defined pension with annual cost of living increase. I have read that only 20% of U.S. companies now have a defined pension plan, and even fewer receive annual cost of living increases.

Second, you pay the same for your health benefits as current employees. That is a rare notion, even for companies that allow their employees to carry their health benefits into retirement.

So, I believe there are a number of hidden savings in retirement that Federal employees thinking about retirement don’t consider but certainly should. It should make you breathe a bit easier when considering retirement.


Gary Koca is an experienced federal personnel specialist, having worked for OPM and for FPMI, and a retired federal employee. He is currently Vice President for Operations Support at GRA, Inc. GRA provides human resources management consulting services to Federal agencies. You can contact Gary at 630.837.6385 or send him an e-mail message.