7 Things We’ve Learned So Far This Year

If you feel like New Year’s Day was last week, you’re not alone. We’re a quarter of the way through 2023 already, which seems like a good moment to take a breath and look back at some things we’ve learned this year. Here are seven of them.

The 2023 pay boost has a positive side. The 4.6% average federal pay increase for 2023 may not seem all that generous given the rate of inflation, but at least in all likelihood it will boost the high-three average salary rate that’s used to compute your retirement benefit. President Biden wants another 5.2% pay boost next year. And don’t forget, even having a defined benefit component to your retirement package is a rarity in today’s world. 

Be prepared to ride the Thrift Savings Plan rollercoaster.  All of the funds in the federal government’s 401(k)-style retirement savings program began this year on strong footing, with every offering finishing January in the black. The S Fund led the way, with a 10.82% gain in January. Then the TSP went south in February, with almost every fund finishing in the red. The G Fund alone stayed positive, increasing 0.28%. It’s likely the rest of the year will see more swings in TSP performance. 

You should invest a minimum of 5% of your salary in the TSP.  Otherwise you don’t get the full agency matching contribution, and you’re just leaving money on the table. And try to avoid borrowing from your TSP savings. 

Some people are still waiting for their retirement application filed at the end of 2022 to be finalized. You have little choice but to be patient when you retire, especially at the end of the year. When you get ready to go, be prepared to wait. 

This year, it may pay to wait a little while to retire. Employees can earn one additional accumulation of annual leave during the 2023 leave year by waiting to retire until Jan. 12 or 13, 2024. For a full-time employee, the extra amount will be four, six or eight hours, depending on the employee’s leave earning category. Of course, the size of your lump sum payment for unused annual leave is just one consideration in picking a retirement date. 

Theoretical and actual changes to federal benefits are on the horizon. The Equal COLA Act, which was recently reintroduced in Congress, aims to provide the same annual adjustments for retirees under the Federal Employees Retirement System and the Civil Service Retirement System. And the Office of Personnel Management is encouraging Federal Employees Health Benefits Program carriers to offer Medicare Advantage Prescription Drug Employer Group Waiver Plans, which are designed to maximize value to enrolled individuals under FEHB and Medicare.

Sometimes, collecting your retirement benefit involves proving you’re not dead. If OPM can’t find you on Google, then you may need to provide evidence that you’re still among the living.