The Social Security changes in 2026 aren’t making big news, but they’ll hit your retirement income. Federal employees need to think about how this fits with the Federal Employees Retirement System (FERS) and the Thrift Savings Plan (TSP) timing, plus what happens to a surviving spouse.
Here’s what’s different.
Born 1960 or later? Full retirement age is 67. File at 62, and that’s a permanent 30% haircut. Wait till 70, and you’re adding 8% annually after 67.
Whether you claim early or delay depends on your situation. If you need income now or health concerns make waiting risky, claiming early makes sense. Delaying works better when you want a bigger monthly check and stronger survivor protection. Either way, run the numbers before you decide.
The 2026 cost-of-living adjustment (COLA) is projected around 2.6%, lower than the bumps we saw in 2022 and 2023. COLAs compound over time, so a smaller increase now means less income every year going forward, including what a surviving spouse receives.
If you claim before 67 and keep earning a paycheck, Social Security withholds benefits once you cross the annual income threshold. You’re not losing that money permanently. It gets added back in later. But it can create cash flow headaches if you’re not expecting it. Consulting income or a big leave payout? Plan around those thresholds.
Up to 85% of your Social Security gets taxed, depending on your other income. For federal retirees pulling from FERS and TSP, that can nudge you into a higher bracket faster than you’d think. Timing your withdrawals smartly makes a difference.
Most federal employees already have the 40 work credits needed to qualify for benefits. Where things get interesting is spousal and survivor benefits. Spousal benefits can be worth half of your spouse’s benefit at full retirement age. Survivor benefits are calculated differently and increase if the higher earner waits to claim. These options fly under the radar all the time, even though they can change someone’s financial picture completely.
Trustee reports keep flagging funding issues in the 2030s. At some point, Congress will step in, but nobody knows what that’ll look like yet. You can’t plan around maybes, but you can test your plan against different scenarios. Model a 10% benefit cut or slower COLAs. If things still work, you’re covered. If they don’t, adjust now instead of later.
When one spouse’s benefit is way higher, delaying can mean the survivor gets a much bigger check later. For federal employees, this matters when you’re trying to coordinate everything with FERS and TSP.
Start with your full retirement age – know what it is. Then look at taxes, especially when FERS and TSP withdrawals are happening at the same time. Run the numbers on a few different ages before you file. Planning to work after you claim? Watch out for the earnings test cutting into your benefit. Once you file, you can’t undo it. The 2026 adjustments seem minor, but they stack up over 20 or 30 years.
Want help sorting through how Social Security fits with your federal retirement? Reach out to the team at Serving Those Who Serve at [email protected].
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
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The Fed15 Podcast is your weekly 15(ish)-minute briefing on federal benefits and financial planning, built specifically for federal employees and retirees. Hosted by Dan Sipe and Katelyn Murray of Serving Those Who Serve, each episode delivers clear, actionable guidance on topics like FERS and CSRS retirement, TSP strategies, FEHB, survivor benefits, tax planning, and more! Whether you’re five years from retirement or already there, The Fed15 helps you cut through the noise, avoid costly mistakes, and make confident decisions about your federal benefits.
