Federal Pensions vs. Social Security — Who’s More Exposed to Benefit Risk?

With Social Security’s trust fund now projected to be depleted by 2034, benefit reductions of about 20% or more could become a reality unless legislative action is taken.

For federal retirees and those nearing retirement, a key question arises:

Will a cut to Social Security hit me hard—or am I insulated?

The answer depends on whether you’re covered under CSRS or FERS.

CSRS Retirees: More Pension, Less Exposure to Social Security

• Not eligible for Social Security from federal service

• Larger civil service pension with full COLAs

• May receive some Social Security from outside work, but often subject to Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)

• Minimal reliance on Social Security benefits

Risk Level if Social Security is cut: Low to Moderate

You may feel little impact — unless you rely on outside Social Security benefits.

FERS Retirees: More Balanced Income—But More Vulnerable

• Three-legged retirement: Pension + Social Security + TSP

• Social Security typically makes up 20% to 40% of total income in retirement

• Smaller pension than CSRS, and partial COLAs before age 62

• Higher reliance on TSP for income flexibility

Risk Level if Social Security is cut: Moderate to High

Cuts could reduce income significantly, especially for those with smaller TSP balances or early Social Security claims.

At a Glance: CSRS vs. FERS

What Should You Do?

If You're Under FERS:

• Log in to SSA and review your benefit estimate

• Model a potential 20% benefit cut to test your retirement budget

• Consider delaying your Social Security claim to age 70 for increased monthly income

• Revisit your TSP drawdown strategy — can it sustain a higher burden?

If You're Under CSRS:

• Review your pension's survivor benefit election to ensure family security

• Check if WEP or GPO will affect any outside Social Security benefits

• Evaluate your TSP's role as a supplement, especially for legacy planning or healthcare expenses

Final Thought

While CSRS retirees are largely insulated from Social Security cuts, FERS retirees are much more dependent on those benefits — and therefore more at risk.

Now is the time to evaluate your exposure, explore mitigation strategies, and build flexibility into your retirement plan.

Best,
—FWR