CSRS Isn’t Dead Yet—But Here’s What Every Pre-1984 Federal Worker Should Be Thinking About Now

Key Takeaways

• If you’re still covered under CSRS in 2025, you hold one of the most generous retirement packages in government employment, but certain missteps now can erode those advantages.

• Your decisions on survivor benefits, Medicare coordination, and life insurance can have lasting consequences for you and your family.

Why CSRS Still Matters in 2025

The Civil Service Retirement System (CSRS), established in 1920, may no longer accept new members, but it’s far from irrelevant. If you entered federal service before January 1, 1984, and didn’t transfer to FERS, you’re likely among the last cohort still benefiting from CSRS. While this legacy program provides substantial annuities and doesn’t rely on Social Security, that doesn’t mean you’re set for life.

In 2025, only about 44,000 federal employees remain under CSRS. But even if you’re now retired, nearing retirement, or evaluating survivor planning, there are serious issues you need to think through today.

1. Your Annuity Might Not Be Enough by Itself

CSRS retirees receive an average monthly annuity of $4,464. While that’s strong compared to FERS, inflation, healthcare costs, and the absence of Social Security coverage can take a toll. If you didn’t pay into Social Security for 40 qualifying quarters, you may not receive any Social Security benefits, or if you do, they may be reduced by the Government Pension Offset (GPO).

If you’re eligible for Social Security, the 2025 repeal of the Windfall Elimination Provision (WEP) means you may now receive higher monthly payments than in the past. However, GPO remains active and can reduce spousal or survivor benefits.

Key considerations:

• Assess whether your annuity keeps pace with your actual expenses, not just projected inflation.

• Review your eligibility for Social Security or spousal benefits.

• Consider whether long-term care coverage is necessary to fill any protection gaps.

2. Survivor Benefits Require Serious Thought

When you retire under CSRS, you elect whether to provide a survivor annuity for your spouse or other eligible beneficiaries. This decision permanently reduces your annuity, and reversing or adjusting it later is often impossible.

As of 2025, you can elect:

• A full survivor annuity of up to 55% of your unreduced annuity.

• A partial survivor annuity (less than 55%).

• No survivor benefit at all (requires spousal consent).

You must also weigh whether:

• Your spouse will need continuing health coverage under FEHB (which generally requires a survivor benefit election).

• Other insurance or retirement income can adequately support your spouse in your absence.

• You wish to ensure survivor coverage for a former spouse, which may be required by a divorce court order.

Failing to plan carefully here can put your spouse or family at risk of losing both income and health benefits.

3. FEHB: Coordination with Medicare Matters

CSRS retirees are eligible to maintain Federal Employees Health Benefits (FEHB) coverage for life, assuming you meet eligibility requirements and continue paying premiums. But as you turn 65, your decisions about Medicare have financial implications.

In 2025, Medicare Part B premiums have increased to $185 per month, and many CSRS retirees are questioning whether it’s worth enrolling. The answer depends on your health needs and financial strategy.

Reasons to enroll in Medicare Part B:

• Most FEHB plans reduce or waive cost-sharing for enrollees who have Part B.

• You gain broader provider access and lower out-of-pocket costs in many cases.

• Delaying enrollment may lead to lifelong late penalties if you later change your mind.

Reasons you might delay or decline Part B:

• If your FEHB plan offers strong coverage on its own.

• If you’re managing chronic conditions within a known network that doesn’t require Medicare coverage.

In either case, review your plan’s 2025 brochure to understand exactly how it coordinates with Medicare.

4. You Still Have RMD Obligations if You Have a TSP

While CSRS doesn’t include a mandatory Thrift Savings Plan (TSP) component, many CSRS employees contributed to TSP voluntarily. If you did, then you must begin Required Minimum Distributions (RMDs) at age 73 (assuming you turned 72 after January 1, 2023).

The 2025 RMD rules remain unchanged from the prior year:

• RMDs must begin by April 1 of the year following the year you turn 73.

• You must withdraw at least the IRS-mandated minimum each year to avoid a steep penalty.

Even if you’re relying primarily on your annuity, failing to take timely RMDs can trigger a penalty of up to 25% of the amount not withdrawn. Make sure your TSP is set to auto-distribute, or work with a licensed professional to create a tax-efficient drawdown plan.

5. Don’t Overlook FEGLI Adjustments

The Federal Employees’ Group Life Insurance (FEGLI) program remains active into retirement for CSRS retirees who elected coverage. But by 2025, the cost structure increases significantly with age.

Here are some updated facts for 2025:

• Basic coverage continues into retirement with no premium if you elect the 75% reduction option.

• Option B and Option C premiums rise sharply every five years.

• Many retirees now reassess Option B coverage at age 65 or 70, when the cost becomes prohibitive.

Evaluate:

• Whether you still need the level of coverage you once did.

• Whether private life insurance (if already in force) offers a better value.

• Whether canceling Option B is the right financial move now that you’re no longer protecting income from salary.

6. COLAs and Inflation Protection Are Not Guaranteed

CSRS retirees do receive annual cost-of-living adjustments (COLAs), but those increases are not always in line with inflation. In 2025, the COLA for CSRS annuitants is 2.5%, which equals the Social Security COLA. However, past years have seen disparities, and high inflation can still erode purchasing power.

While FERS retirees receive diet COLAs, CSRS retirees get full adjustments. Still, inflation can outpace your annuity increase in years of sharp economic change.

Take these steps:

• Consider delaying large withdrawals from savings during high-inflation years.

• Monitor how Medicare and FEHB cost increases affect your real income.

• Consider annuitizing other assets or investing more conservatively to avoid erosion.

7. Don’t Assume You Have “Set It and Forget It” Retirement

One of the myths around CSRS is that everything takes care of itself once you retire. That’s only partly true. While your annuity is predictable, the rest of your retirement picture—healthcare, taxes, life insurance, spousal needs, and income coordination—requires active management.

Stay updated by:

• Reviewing your annual SF-50 or retirement statement.

• Updating your beneficiary designations for CSRS, FEGLI, and TSP.

• Watching for legislative changes that may impact GPO, federal healthcare contributions, or TSP rules.

The CSRS landscape is stable, but your personal situation isn’t static. Your needs, expenses, and policy environment are always evolving.

8. How Divorce Orders Can Affect Your Benefits

CSRS annuitants may be surprised to learn how much divorce can impact retirement benefits, even years after retirement.

Court orders can direct:

• A share of your annuity to a former spouse.

• Continuation of FEHB coverage for a former spouse.

• FEGLI proceeds distribution.

It is critical to ensure:

• You have copies of all court orders filed with OPM.

• Your current spouse understands your existing obligations.

• You revisit your retirement and insurance elections if your life circumstances change.

Final Steps You Should Be Taking in 2025

If you’re a CSRS retiree or still working under CSRS, 2025 is the right time to revisit decisions you may have made years ago. Your annuity is the foundation, but it shouldn’t be your only focus.

Ask yourself:

• Do I have the right Medicare and FEHB combination?

• Am I overpaying for life insurance I no longer need?

• Are my survivor benefits up to date and properly documented?

• Have I planned for long-term care needs?

• Am I making required withdrawals from any TSP or IRA accounts?

The CSRS program is strong but finite. As the last group to benefit from it, your planning must be sharper than ever.

Secure What You Worked For

If you’ve earned a CSRS pension, you deserve to protect it and make the most of your retirement. But that only happens when you treat retirement planning as ongoing, not one-time.

Speak with a licensed professional listed on this website for help understanding how CSRS interacts with Medicare, FEHB, survivor options, and your full retirement income. A small oversight now could become a costly regret later.