The Coming Retirement Wave That Could Shrink Your Benefits (Even If You're Not Retiring Soon)

July 23, 2025

In the next 3 to 5 years, federal agencies are facing one of the largest retirement waves in U.S. government history.

Some departments—like the SSA, USDA, and DoD—are looking at the potential loss of 30–50% of their workforce.

That might sound like a staffing issue.

But here’s the part most headlines won’t tell you:

This wave could quietly reduce the retirement benefits you’re counting on.

Why It Matters Even If You're 10 Years Away

When retirement surges happen, here’s what typically follows:

1) Budget tightening. With more payouts due, there’s increased pressure on FERS, FEHB, and agency retirement budgets. Congress tends to “reform” benefits—usually not in your favor.

2) COLAs may flatten. Lower-than-inflation Cost-of-Living Adjustments are easier to justify politically when payouts balloon. You might get 2% raises in 5% inflation years—again.

3) FEHB premiums may rise. A mass exodus of working-age, healthy contributors raises the average cost per enrollee. Translation: higher premiums, especially for annuitants.

4) The FERS supplement is in the crosshairs. The Office of Management and Budget has floated multiple cuts to this benefit in recent years. When thousands retire at once, it’s easier to slip a cut into broader reform.

The Hidden Danger: Processing Delays

While benefits get trimmed in the background, another crisis is quietly building: HR and OPM processing delays.

We’re already seeing 6–12 month delays in:

  • Pension calculation adjustments

  • Military service credit applications

  • Sick leave conversions

  • Interim payment corrections

And this is before the tidal wave hits full force.

Even small inconsistencies—like a misdated SF-50 or an uncredited buyback—can delay your annuity and cost you tens of thousands over time.

Your retirement isn’t just about your contributions.

It’s about timing, paperwork, and being one step ahead of a system that wasn’t built to process 30,000 retirements in one year.

That wave is coming.

And the more you prepare before it crashes, the more you protect what you’ve earned.

—FWR