In 39 years in financial services — the last 18 of them specifically with federal employees — I’ve learned one uncomfortable truth: most of the damage that gets done to a federal retirement isn’t done in the year after retirement. It gets done in the 18 months before it.

By the time someone walks into my office holding their SF 3107 or pulling up their Annuity Estimate on their phone, the big levers have usually already been pulled. The Thrift Savings Plan allocation is locked in to whatever it’s been for a decade. The survivor election is about to be made under time pressure. The FEHB and Medicare clocks are already ticking and nobody has explained them clearly.

These are the three mistakes I see most often. Each one is fixable. None of them are fixable on the day you retire.

1. Treating “getting to retirement” as the same thing as “getting through retirement.”

For most of your career, the math has been simple: contribute to TSP, try not to look at it in down markets, and let the matching do its work. The whole game is accumulation.

The 18 months before retirement is when that game flips. You move from an accumulation problem to a distribution problem, and the rules are not the same. In accumulation, volatility is your friend — market dips let your contributions buy more shares. In distribution, volatility is your enemy. If the market drops 20% in your first two years of withdrawals, every dollar you pull out is a dollar that’s no longer there to recover.

Most feds I see have not made that switch in their head. Their TSP allocation looks exactly like it did when they were 45. Their L Fund is still glide-pathing down, but it isn’t doing the more sophisticated thinking that “sequence-of-returns risk” actually requires — what cash buffer should you hold? Where will your first three years of withdrawals come from? Are you drawing the right account first?

2. Picking the FERS survivor election like it’s a checkbox.

Of every irreversible decision in your federal retirement, the FERS survivor annuity election is the one I see the most regret about — in both directions.

Here’s the part nobody tells you cleanly: at retirement, you will be asked to choose between a full survivor annuity (which costs roughly 10% of your gross annuity and leaves your spouse with 50% of it for the rest of their life), a partial survivor annuity (about 5% cost, 25% to your spouse), or no survivor annuity. The decision is functionally permanent. After retirement, you can only change it downward in very narrow circumstances — not upward.

And every part of the decision matters:

  • Your spouse’s FEHB. If you elect no survivor annuity, your spouse loses access to FEHB the moment you pass away. That single sentence is the most important sentence in this whole article. It is also the one I most often have to repeat three times before anyone hears it.
  • Your spouse’s age and health. The 10% cost is a known number. The 30 years your spouse might live after you is not.
  • The math of life insurance “in lieu of” works on paper. It rarely works in practice. Term insurance ends. Permanent insurance is expensive at retirement-age underwriting. And neither solution restores FEHB.

I’m not telling you which way to go. I am telling you that this is not the kind of decision that should be made between bites of cake at the retirement party.

3. Sleepwalking through the FEHB ↔ Medicare coordination.

We could write a whole article on this one alone — and we have. But it earns a spot on this list because the planning for it has to happen before you retire, not after.

The pre-retirement questions that matter:

  • Have you had FEHB continuously for the five years immediately before retirement (or since your earliest opportunity to enroll)? This is the five-year rule and there are essentially no waivers.
  • Are you and your spouse going to be Medicare-eligible at or near your retirement date? Most federal employees become eligible for Medicare Part A at 65 — whether they retire then or not.
  • Have you done the actual arithmetic on Part B premiums, IRMAA surcharges based on your income, and what your FEHB plan does or does not do when Medicare is primary?

Nobody from OPM is going to call you and walk you through these. Your agency’s HR specialist may or may not understand them. Your TSP coordinator certainly doesn’t. This is the area where federal retirees lose the most money to silence.

What 18 months actually buys you.

Eighteen months sounds like a long runway. It isn’t. By the time you account for one full open season window for FEHB, a tax year of income visibility (which drives IRMAA two years later), and the simple reality that you will be busy with the job you’re still working — 18 months is exactly enough to do this right and not a day more.

What it gets you is the only thing that matters: options. The ability to reposition your TSP without panic. The ability to model your survivor election against real life-insurance quotes. The ability to enter the FEHB five-year window with months to spare instead of weeks.