Most retirement advice assumes two people, two incomes and two Social Security checks. If you’re single, divorced or widowed, that advice doesn’t fit. There’s no second paycheck to fall back on and no partner to absorb a bad year in the market.
The good news: as a federal employee, you have one of the strongest retirement systems in the country. FERS gives you a lifetime pension, Social Security and the TSP. When you’re retiring on one income, the goal is to make those three pieces work harder, and to plan for the risks you’ll face alone.
Your FERS benefits, built for one
Your FERS pension. This is your guaranteed paycheck for life. The formula is 1% of your high-3 salary times your years of service, or 1.1% if you retire at 62 or later with at least 20 years. If you’re single at retirement, you don’t need to elect a spousal survivor benefit, so you keep the full annuity. That extra 5% to 10% stays in your pocket every month. You can still name an “insurable interest” survivor, like an adult child or sibling who depends on you, but it comes at a cost.
The FERS supplement. If you retire at your minimum retirement age (MRA) with 30 years, or at 60 with 20, you get a supplement until 62 that approximates the Social Security you earned while in FERS. For a single retiree it can be an important bridge, but it’s subject to an earnings test if you work.
Social Security. For a single person, this is often your only other inflation-adjusted lifetime income. Delaying from 62 to 70 can raise your monthly benefit by roughly 75% or more. Because there’s no spousal benefit to coordinate, your own claiming age is the biggest Social Security decision you’ll make.
The TSP. With one income, the TSP has to cover everything the pension and Social Security don’t. That means it needs to last as long as you do, and it carries all the market risk. How you invest it and how fast you draw it down matter more than they do for a couple.
If you’re a widow or widower
Losing a spouse changes your finances in ways that are easy to miss in the middle of grief. Three areas deserve attention.
The FERS survivor annuity. If your spouse elected a survivor benefit at retirement, you’ll receive 50% (full) or 25% (partial) of their unreduced annuity for life. If you remarry before age 55, the survivor annuity generally ends; remarrying at 55 or later lets you keep it. If your spouse died while still working, you may qualify for the Basic Employee Death Benefit and a survivor annuity based on their service. Contact OPM promptly to start the claim.
Social Security survivor benefits. You can claim survivor benefits as early as 60, though they’re reduced before your full retirement age. The key strategy: survivor and retirement benefits are separate. Many widows take one first and switch to the other later, for example claiming the survivor benefit early and letting their own benefit grow until 70, or the reverse. Picking the right order can add tens of thousands of dollars over a lifetime.
The “widow’s tax trap.” You can file jointly for the year your spouse died. After that, you’ll usually file as single, unless you have a dependent child. Single brackets are roughly half as wide as joint brackets, and the standard deduction is half too. So you can end up with somewhat less income but a higher tax rate. Medicare IRMAA thresholds drop as well, which can raise your premiums. Planning for this, sometimes with Roth conversions while still filing jointly, can soften the blow.
Building your one-income plan
- Cover your essentials with guaranteed income. Add up housing, food, insurance, utilities and transportation. Then see how much your pension, supplement and Social Security cover. The smaller the gap, the less your plan depends on the stock market.
- Set a sustainable TSP withdrawal rate. With no backup income, a bad market early in retirement hurts more. Keep one to two years of spending in safer funds like the G Fund so you’re not forced to sell stocks in a downturn.
- Keep FEHB into retirement. You must be enrolled for the five years before you retire to carry FEHB with you. For a single retiree, a Self Only plan usually makes sense. If you’re widowed, confirm your survivor enrollment is in place.
- Plan for long-term care. Without a spouse to help at home, the odds of needing paid care rise. Look at long-term care insurance, a dedicated savings bucket or a hybrid policy, and decide early. The Federal Long Term Care Insurance Program is currently closed to new applicants.
- Name who makes decisions for you. A durable power of attorney and a health care proxy are essential when there’s no spouse to step in by default.
- Update every beneficiary. Check your TSP, FERS, FEGLI and unpaid compensation designations. After a divorce or a spouse’s death, outdated forms are one of the most common and costly mistakes we see.
- Rethink life insurance. If no one depends on your income, you may be able to reduce FEGLI coverage and cut premiums that rise sharply after 60.
The bottom line
Retiring on one income means every decision carries more weight: when you claim Social Security, how you draw from the TSP, and how you protect yourself against health costs. FERS gives you a strong foundation. A clear plan makes sure it holds up for one.
If you’re single, divorced or widowed and want a second set of eyes on your retirement, book a Fit Call with Haws Federal Advisors. We’ll walk through your pension, Social Security and TSP and help you build a plan that works on your own terms.
This article is for educational purposes only and isn’t tax, legal or investment advice. Rules for survivor benefits vary by situation; confirm your eligibility with OPM and the Social Security Administration.