If you work at the Engineer Research and Development Center in Vicksburg, you’ve got a retirement setup most people in the private sector would envy. A real pension, a savings plan with a government match, and Social Security on top of it.

But having good benefits and knowing how to use them are two different things. The federal system has a lot of moving parts, and the decisions you make in the last few years before you retire can matter more than anything you did in the twenty years before that.

Here’s what’s worth understanding.

Your Retirement Has Three Parts

Most current ERDC employees are covered by FERS, the Federal Employees Retirement System. FERS covers most federal employees hired after 1983, and it rests on three sources of income: the FERS basic annuity, which is a pension based on your years of service and your high-3 average salary, Social Security, which you pay into like any other worker, and the TSP, which is the only one of the three you control directly.

If you were hired before 1984, you may be under CSRS instead, which works differently. CSRS is a stand-alone pension that does not include Social Security coverage for that federal work.

Knowing which system covers you determines almost everything else about your planning.

Your Pension Is Smaller Than People Assume

This catches a lot of federal employees off guard.

The pension formula is 1% times your high-3 average salary times your years of service. If you’re 62 or older with 20 or more years, that goes up to 1.1%. High-3 means your highest three consecutive years of base pay. Not overtime, not bonuses, just base pay. 

Run that math and you’ll see the issue. The FERS annuity replaces about 30% of final salary. The older CSRS system gave retirees roughly 56% from the pension alone. FERS cut that and added two other pillars to make up the difference. Which means your TSP has to do a lot of heavy lifting.

Your TSP Is Probably the Weak Spot

The average FERS TSP balance is around $220,400. Under the 4% rule, that generates about $733 a month.

That’s not nothing, but it’s also not what most people picture when they think about the savings side of their retirement.

Two things are worth checking. First, are you getting the full match? The maximum agency contribution is 5% of your basic pay when you contribute at least 5% yourself, made up of a 1% automatic contribution plus a 4% match. If you contribute less than 5%, you may be leaving part of that match on the table.

Second, how is your money actually invested? A lot of people set their allocation early and never look at it again. Federal employees who haven’t reviewed their fund allocation may find their contributions have been sitting in the G Fund by default. That’s a conservative place to be if you still have fifteen or twenty years of growth ahead of you.

If You’re in Your Late Fifties or Early Sixties, Pay Attention

There’s a window here that a lot of people miss.

The TSP elective deferral limit for 2026 is $24,500. Employees age 50 and older can add a catch-up contribution of $8,000. And under the SECURE 2.0 Act, participants turning 60, 61, 62, or 63 during 2026 have a higher catch-up limit of $11,250.

That’s a meaningful amount of extra room, and it lines up with the years when your salary is usually at its peak and your high-3 is being set.

One thing to know if you’re a higher earner: for participants whose prior-year FICA wages exceeded $150,000, catch-up contributions must be made as Roth contributions once they hit the annual pre-tax limit.

The FERS Supplement Bridges the Gap

If you retire before 62, there’s a benefit that helps carry you until Social Security starts. The FERS Supplement bridges your income until age 62, and Social Security replaces it after that, so your income doesn’t drop.

Not everyone is eligible, and understanding whether you are can change your retirement date.

Good News on Social Security

If you’ve heard about the Windfall Elimination Provision or the Government Pension Offset, you can mostly stop worrying. Both WEP and GPO were formally repealed by the Social Security Fairness Act. Your FERS pension and Social Security are separate, additive income streams. One doesn’t reduce the other.

Healthcare Is the Piece People Underestimate

You can continue FEHB coverage in retirement with a government contribution, which is one of the best parts of the federal package.

But it isn’t free, and the costs move. FEHB premiums rose 12.3% in 2026 while the FERS COLA was 2%. If you retire before Medicare eligibility, plan on healthcare taking 15 to 20% of your retirement income during those years.

Mississippi Treats You Well on Taxes

Here’s a real advantage of retiring here. Mississippi completely exempts all retirement income from state income tax, including Social Security, public and private pension income, IRA and 401(k) distributions, and annuity income. There is no income or age limit on this exemption.

Your TSP withdrawals and your FERS annuity come through free of Mississippi income tax. One thing to watch: early distributions may not qualify as retirement income and could be subject to tax and a penalty.

Federal taxes are a different story. FERS pensions are generally taxable as ordinary federal income, with only a small portion treated as tax-free recovery of your own contributions. Traditional TSP withdrawals are usually taxable, while qualified Roth TSP withdrawals can be tax-free.

Where We Fit In

We’re in Clinton, which is about forty minutes from Vicksburg. We’ve worked with a number of folks who retired from the Corps over the years.

We’re not going to pretend we’re the only people who understand federal benefits. What we will tell you is that we’re close by, you can drive over and sit down with us, and we’ll take the time to walk through your specific numbers instead of handing you a generic answer.

If you’re within five years of retiring from ERDC, that’s the right time to start figuring this out.

Give us a call at 601-925-8099 or visit mascagniwealth.com to set up a time to talk.