Why War Could Hurt Your Pension More Than the Market

June 16, 2025

When war breaks out, everyone watches the market.

Stocks surge. Oil spikes. Gold pops.

Your TSP balance jumps around, and headlines follow every move.

But here’s what almost no one talks about: the damage war can do to your federal pension — and why it’s often far worse than what happens in your portfolio.

War’s Real Cost: The Debt That Puts Your Pension in the Crosshairs

Wars aren’t cheap.

Trillions in new spending piles onto the national debt — fast.

And when the crisis ends and the bills come due, federal retirement benefits are one of the biggest targets in the budget.

We’ve seen it before.

After wars and financial shocks, proposals surface that sound like “reasonable reforms” but hit federal workers and retirees hardest:

👉 Lower COLAs
👉 Later retirement ages
👉 New formulas that reduce annuities over time

These changes don’t show up on your TSP statement.

But they can quietly shrink your lifetime retirement income by six figures or more.

Inflation: The Silent Pension Killer

Every major war in modern history has brought inflation — and this time may be no different.

Expensive oil (Friday’s highs reached $77/barrel), supply chain turmoil, defense-driven demand — all set the stage for prices that keep climbing.

COLA helps, but it rarely keeps pace when inflation sticks around for years. And the longer it lasts, the more your pension’s buying power erodes.

What looks like a safe, predictable benefit today could buy far less a decade from now — even if the number on paper keeps rising.

Why Even the G Fund Isn’t Immune

In a crisis, the G Fund feels like a safe harbor. And in the short term, it can be.

But when massive debt and stubborn inflation enter the picture, the G Fund’s real return often lags behind what you need to preserve your purchasing power.

The danger?

Feeling secure while quietly falling behind.

The Bottom Line

Markets bounce around during war. Your pension doesn’t — and that’s the problem.

War changes more than stock prices.

It reshapes the promises your retirement is built on.

The time to protect yourself isn’t when the cuts come — it’s now, while you still have options.

Markets may recover, but pension promises and benefits can quietly fall behind — especially when inflation and debt reshape the rules.

That’s why some federal employees are exploring TSP rollovers to gold-backed IRAs — as a way to diversify beyond traditional funds and hedge against long-term risks.

Best,
—Federal Wealth Retirement