The Old D.I.Y. Approach to Federal Retirement: Will it Work for FERS Employees?

The author says that under CSRS, a do-it-yourself approach to retirement was more practical for federal employees, but those under FERS may face bigger obstacles trying to go it alone.

The number of FERS employees approaching retirement within the next 24 months is growing quickly. Many of them intend to implement the “Do it Yourself” (DIY) technique to retirement planning.

Historically, large percentages of Civil Service Retirement System (CSRS) federal employees utilized a kind of “DIY retirement plan.” This was not a difficult routine to follow, which is what made it so common. It included leaving non-matched retirement savings in the TSP and receiving a substantial federal pension.

Educational Opportunity

Heraclitus was a Greek philosopher that pre-dated Socrates. He is probably best known for giving us, “The only thing that is constant is change.” More recently the great philosopher Kevin Cronin of REO Speedwagon wrote, “…Oh, you got to learn to roll with the changes…”

Blended Inference – Everything changes, roll with it or be left behind.

Example: I grew up in the household of one of the most impressive (shade tree) mechanics ever. My father could diagnose and fix virtually any automobile problem with (seemingly) little effort.

However, as the years passed, his mechanical acuity seemed to deteriorate. This noticeable regression wasn’t due to a loss in his wrench turning skills or knowledge. It was brought on by the hi-tech modernization of car building. A good ear, a timing light and an impressive set of hand tools was no longer sufficient. Newer cars were built with a greater dependency on electronics and CPUs. It now takes state-of-the-art computerized equipment to diagnose and repair most car problems.

As with cars, federal retirement benefits have also experienced significant renovations. The FERS retirement benefits are more complex than their CSRS predecessors. For FERS employees, the difficulty components (inherent in retirement preparations) have been ratcheted up. This leaves less room and (unfortunately) more opportunities for errors.

The CSRS employee has/had the security of knowing their retirement income would remain pretty sound throughout their retirement years. This was true even if they didn’t prove to be great savers and/or money managers. This comfort level was reinforced by an outstanding pension designed to handle the bulk of a federal employee’s retirement income needs. CSRS retirees could get a lot wrong and still have a smooth running retirement.

However, for FERS employees, if there is just one-cylinder misfiring, they could suffer a major retirement breakdown.

How are CSRS and FERS different?

Potential CSRS Retirement Income Benefits include:

  • CSRS Pension – for many, this represents the bulk of their anticipated retirement income.
  • Non-matched TSP savings – typically, not a large portion of future retirement income.

Potential FERS Retirement Income Benefits include:

  • FERS Pension – roughly only half as attractive as the CSRS pension.
  • Supplemental Retirement System – bridge income lasting from retirement date to age 62.
  • Social Security income – available to FERS in addition to FERS pension.
  • Employer matched TSP savings – A more vital piece to a FERS employees’ retirement income.

Today there is more accountability placed on FERS employees. They carry more responsibility concerning their retirement income, retirement planning and personal control. Yet, their typical knowledge base remains equivalent to that of their CSRS predecessors.

With virtually no planning or investment experience, outside of making “dartboard” choices within the Thrift Savings Plan (TSP), an alarming number of FERS employees will do it themselves. Admittedly, this pursuit of independence and self-reliance is admirable.

It may be admirable for the owner of a new Jaguar to learn about the complexities of a needed transmission repair. Yet, they would likely hesitate to tear apart their high-priced automobile on their own. For something this important, the owner would want a mechanic that specializes in Jags to connect it to the right diagnostic equipment, get their hands dirty and fix it properly. On their own, there are just too many opportunities for costly mistakes.

Craig, a retired D.I.Y. FERS employee, recently met with a Qualified Financial Advisor (FFA). Craig retired 4 years ago and was already concerned about his “retirement plan.” He could see his retirement assets were shrinking faster than he anticipated. He also noticed he was spending a little more each month than he had planned just to maintain his lifestyle.

His personal Federal Retirement Readiness Review showed him 3 common and potentially damning mistakes he had made:

  • He neglected to calculate the possible long-term impact of inflation.
  • He poorly invested for his long term needs, risk tolerance and age.
  • He had practiced poor distribution configuration.

After the review, he asked how the FFA found these issues so quickly whereas Craig hadn’t been able to detect them at all. The FFA explained, “Feds only retire once. FFA’s see these issues every day.”

It’s likely FERS employees that have tried to self-educate themselves feel more informed about both the investment and retirement planning worlds than their CSRS predecessors did. However, this extra knowledge and confidence may not be working in their best interest. The phrase, “I know just enough to be dangerous” comes to mind.


Regardless of whether the topic is automobiles or federal retirement, the “Shade Tree” approach appears to be most suitable when applied to older vehicles. In most cases, maintenance of newer cars and FERS retirement planning should be placed in the hands of qualified professionals.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Investing involves risks, including the loss of principal.  No strategy assures success or protects against loss. 

Securities offered through LPL Financial, member FINRA/SIPC.  

About the Author

Randy Silvey is the published author of You FIRST, Federal Employees Retirement Guide, one of the bestselling books of its kind on Amazon and Kindle. For over 18 years, he’s been educating and guiding Feds in pursuing wealthier retirement lifestyles. Randy can be reached at 816-524-1515 or visit his website at Securities offered through Infinity Financial Services. Member FINRA/SIPC.