Civilian Employees at Scott AFB

Secure Your Retirement Amid Uncertainty and Market Volatility

If you’re a civilian employee at Scott Air Force Base, you’re likely feeling the pressure of uncertainty. Rumors of budget shifts and workforce changes are no longer just speculation, they’re backed by a recent memo from Defense Secretary Pete Hegseth outlining voluntary separations and early retirement options across the Department of Defense. ¹

Employees in their 50s and 60s are seriously evaluating retirement. Younger
professionals in their 30s and 40s are considering severance packages, expected through fall 2025, and exploring opportunities in the private sector. Meanwhile, a volatile market has added another layer of pressure, making retirement decisions more urgent and complex.

This isn’t just noise: it’s a call to action. Older employees are reassessing their Federal Employees Retirement System (FERS) pensions and Thrift Savings Plan (TSP) balances, trying to decide if now is the time to make a move. Younger workers are weighing on the long-term consequences of leaving federal service early, including the loss of FERS accruals and TSP matching.

The risks are real: retire too early, and your pension (calculated at 1% or 1.1% at age 62+ with 20 or more years of service) of your “high-3” salary per year ² . This could fall short of your income needs. Mishandle your TSP, and you could face a painful tax bill or miss out on the market rebound. Severance can help, but it’s fully taxable and often overestimated in terms of how long it will last.

Now for the strategic opportunity: When markets are down, that opens a window to optimize your tax position, especially for Roth conversions. If your TSP has declined in value, converting at today’s lower balance could allow you to pay less in taxes now while locking in tax-free growth for the future.

In addition, in-plan Roth conversions inside TSP will become available starting January 1, 2026. ³ That’s confirmed and on the books. While you can’t convert within the TSP in 2025, this year is the ideal time to model your strategy, especially if you’re retiring soon or anticipating a drop in income.

For some, it may make sense to roll over part of your TSP to a Roth IRA this year. For others, waiting for the 2026 in-plan Roth TSP conversion option may be the better path. Either way, the lead time gives you a rare opportunity to prepare your tax brackets, optimize your conversion timing, and take full advantage of the market cycle.

That’s where we come in. Our firm is located just minutes from Scott AFB, and we specialize in federal employee retirement strategies. For those nearing retirement, we’ll help you analyze your FERS pension, review your eligibility for the Special Retirement Supplement, and develop a custom Roth conversion strategy that aligns with your income goals and tax outlook. If you’re considering a severance offer, we’ll guide you through your TSP rollover options and help build a plan that keeps your long-term trajectory on course.

We’ve worked with civilian federal employees for years and understand the intricate rules of TSP, FERS, and government benefits, along with how to integrate them into a smart, adaptable financial plan.

Don’t let job uncertainty or market volatility dictate your future. Contact us today, right here near Scott AFB, and let’s put a strategy in motion that takes advantage of today’s opportunities while preparing for tomorrow’s changes.

¹https://www.defense.gov/News/News-Stories/Article/Article/4138965/hegseth-orders-civilian-workforce-
realignment-in-dod-reopens-drp/
² https://www.opm.gov/retirement-center/fers-information/computation/

³ https://federalnewsnetwork.com/tsp/2024/11/4-key-updates-tsp-participants-should-know-about/