Still Under CSRS? This Is the Crucial Retirement Move That Could Define Your Entire Legacy

Key Takeaways

• If you’re still under CSRS in 2025, your retirement decisions carry unique implications that go far beyond just when you stop working.

• Planning how your CSRS benefits interact with survivor options, Social Security, and estate planning could impact your family for decades to come.

Why Your CSRS Status in 2025 Still Matters

While the Civil Service Retirement System (CSRS) officially closed to new enrollees back in 1984, thousands of government workers who entered service before that date are still active or deferring retirement under CSRS. In 2025, staying under CSRS can be both a blessing and a strategic challenge. Your pension is generous compared to FERS, but without proper planning, you risk costly oversights that can affect your legacy.

You’ve likely dedicated over 30 years of your life to public service. Now, what you choose to do in your final working years—or even post-retirement—can shape the future security of your spouse, your heirs, and your charitable causes.

How the CSRS Annuity Works in 2025

You earn 1.5% of your high-3 average salary for the first 5 years of service, 1.75% for the next 5 years, and 2% for all remaining years. With 30 years of service, this adds up to approximately 56.25% of your high-3 average, and with 40 years, up to 80%.

Unlike FERS, CSRS does not include automatic Social Security coverage. Most CSRS employees are not paying into Social Security unless they had significant non-federal employment. That distinction has long-term implications, particularly on survivor benefits and healthcare coordination.

The Legacy Question: What Will You Leave Behind?

Your CSRS pension may be the most stable financial asset you have. But it doesn’t automatically secure your family’s future unless you actively plan around three major factors:

1. Electing the Right Survivor Annuity

The full CSRS annuity ends upon your death unless you elect a survivor benefit for your spouse. Doing so will reduce your monthly payout but will provide your surviving spouse with 55% of your unreduced annuity.

In 2025, the survivor reduction remains the same: your annuity is reduced by approximately 10% to fund this benefit. But many retirees still skip it, especially if their spouse has other income. Before you decide, remember:

• The survivor annuity keeps FEHB coverage alive for your spouse.

• It guarantees a stream of income if your spouse outlives you.

• Without it, your spouse may lose access to federal benefits entirely.

2. Managing the Windfall Elimination Provision (Now Repealed)

Until 2024, if you qualified for Social Security due to private sector work, your CSRS pension triggered the Windfall Elimination Provision (WEP), which reduced your Social Security benefits.

That’s no longer the case. As of 2025, WEP has been repealed. This is a substantial shift. If you had private-sector employment and qualify for Social Security, you will now receive full benefits without reduction, even if you also receive a CSRS pension. But your spouse may still be impacted by the Government Pension Offset (GPO), which remains in effect.

3. Planning Beyond Monthly Income

Your pension isn’t inheritable in a lump sum. If you want to leave something more substantial behind, you’ll need to think beyond CSRS alone:

• Do you have savings outside your pension?

• Have you invested in TSP? (CSRS employees could participate, but without matching contributions.)

• Have you considered life insurance or charitable trusts?

This is where retirement becomes estate planning. And it’s a stage you can’t afford to approach casually.

Healthcare in Retirement: Keep FEHB or Consider Alternatives?

The Federal Employees Health Benefits (FEHB) Program remains available to CSRS retirees as long as you’ve been enrolled for at least 5 years before retirement. This coverage is a lifeline in retirement, especially when paired with Medicare.

If you are Medicare-eligible in 2025, pairing Medicare Part A and B with your FEHB plan can reduce your out-of-pocket costs significantly. Many FEHB plans waive deductibles, coinsurance, and copays once Medicare is primary.

Here’s what to keep in mind:

• Medicare Part B has a premium ($185/month in 2025), but the cost is often worth it to avoid higher out-of-pocket FEHB expenses.

• If you opt out of Medicare Part B, your FEHB plan may charge higher coinsurance and deductibles.

• Having both provides nearly full coverage with minimal gaps.

Timing Your Exit: Should You Retire in 2025?

There is no mandatory retirement age for CSRS employees (except for special categories like law enforcement). But several factors make 2025 a compelling time to consider retirement:

• Cost-of-living adjustments (COLAs) continue to keep pace with inflation. CSRS annuitants still receive full COLAs, unlike FERS retirees.

• WEP repeal now makes dual-income strategies (CSRS + Social Security) far more viable.

• FEHB integration with Medicare is mature and beneficial.

However, waiting longer might add more to your annuity. Every additional year adds 2% of your high-3 salary, up to the 80% cap. The tradeoff? That’s one more year of work versus more years enjoying retirement and benefits.

Your TSP: Still Relevant Under CSRS

If you contributed to the Thrift Savings Plan (TSP), your account can serve as a vital supplement to your pension. In 2025, CSRS retirees often use TSP withdrawals strategically to:

• Bridge gaps before claiming Social Security

• Fund long-term care

• Leave an inheritance

• Manage taxes in retirement

Required Minimum Distributions (RMDs) kick in at age 73 if you’re no longer working. Your withdrawal strategy should account for:

• The tax impact of Traditional vs. Roth TSP balances

• Whether to annuitize, roll over, or take partial withdrawals

• How withdrawals interact with other income streams

Watch for These Overlooked Pitfalls

Retiring under CSRS seems straightforward, but the system’s simplicity masks some risky oversights:

• Neglecting survivor elections can leave your spouse uninsured and underfunded.

• Skipping Medicare Part B can result in lifetime penalties and higher FEHB costs.

• Assuming your pension is enough without considering inflation, healthcare, and longevity.

• Ignoring estate planning may leave your heirs with fewer options than you intended.

These pitfalls aren’t obvious until it’s too late to correct them.

The 2025 Checklist Before You File Retirement Paperwork

If you’re thinking about retiring under CSRS this year or next, ask yourself:

• Have I locked in my high-3 salary with recent years of higher pay?

• Have I calculated the exact monthly annuity with and without a survivor benefit?

• Am I eligible for Social Security, and how will the WEP repeal affect me?

• Have I coordinated my FEHB with Medicare?

• Do I have a withdrawal strategy for my TSP?

• Have I updated my will, power of attorney, and beneficiaries?

Answering these questions now can prevent hard choices later.

Small Adjustments, Big Legacy Impact

When you look beyond your monthly annuity, the decisions you make in 2025 can carry forward for decades. From survivor elections to Medicare coordination to estate planning, every detail matters.

You’ve built a lifetime of service under one of the most secure retirement systems in American history. But that stability is only as strong as the strategy supporting it.

Your pension might be set. But your legacy? That’s still in your hands.

Create a Retirement Strategy That Lasts

Every CSRS retiree has a different situation, but the underlying principles remain the same: clarity, coordination, and preparation. Don’t guess your way through these final decisions. Speak with a licensed professional listed on this website to ensure your legacy is protected and your benefits are maximized.