As a federal employee, you’ve got some pretty solid benefits coming your way. But here’s the thing – many government workers are leaving money on the table without even realizing it. Whether it’s overpaying for insurance, missing out on tax savings, or timing things wrong, small mistakes can add up to thousands of dollars over your career.

Don’t worry though. We’re going to fix that right now. These five straightforward hacks will help you squeeze every dollar of value from your federal benefits package. No complicated financial jargon – just practical steps you can take today.

Hack #1: Audit Your FEGLI Life Insurance Coverage

Let’s start with something that might be costing you hundreds of dollars every year: Federal Employees’ Group Life Insurance (FEGLI). While it’s convenient to have life insurance automatically deducted from your paycheck, FEGLI isn’t always your best deal.

Here’s what happens: FEGLI premiums increase as you get older, and they can get pretty expensive. Meanwhile, your actual insurance needs might be decreasing. If your kids are grown up, your mortgage is paid off, or you’ve built up substantial savings, you might not need as much coverage as you once did.

What to do: Pull out your latest pay stub and see exactly how much you’re paying for FEGLI. Then ask yourself: Do I really need this much coverage? If you’re healthy and under 60, you might find cheaper options in the private market. Even if you keep some FEGLI coverage, reducing it could save you significant money.

Quick tip: Don’t cancel your FEGLI coverage until you have replacement insurance in place. And remember, if you drop FEGLI completely, you might not be able to get it back later without going through medical underwriting.

Hack #2: Get Smart About TSP Withdrawals

Your Thrift Savings Plan (TSP) is probably going to be a major source of retirement income, but how you take money out can make a huge difference in how much you actually get to keep.

The big mistake? Taking large lump sums that push you into higher tax brackets. Let’s say you need $50,000 for a major expense and you withdraw it all at once from your traditional TSP. That entire amount gets added to your other income for the year, potentially bumping you into a higher tax bracket and costing you thousands in unnecessary taxes.

What to do instead: Plan your withdrawals strategically. Consider taking smaller amounts over multiple years to stay in lower tax brackets. If you have both traditional and Roth accounts, you can mix and match withdrawals to manage your tax liability.

Pro move: If you’re still working, contribute to both traditional TSP (for current tax savings) and a Roth IRA (for tax-free growth). This gives you flexibility in retirement to choose which account to tap based on your tax situation each year.

Hack #3: Time Your Social Security Like a Pro

This might be the biggest money decision you’ll make in retirement, and most people get it wrong. You can start collecting Social Security at 62, but that doesn’t mean you should.

Here’s the deal: For every year you delay claiming Social Security past your full retirement age (up to age 70), your benefit increases by about 8%. That’s guaranteed growth you can’t get anywhere else. Plus, if you’re married, your claiming strategy affects your spouse’s benefits too.

The math: Let’s say your full retirement benefit would be $2,000 per month at age 66. If you claim at 62, you’d get about $1,500 per month. But if you wait until 70, you’d get about $2,640 per month. Over a 20-year retirement, that’s a difference of about $274,000.

What to consider: Your health, financial needs, and whether you plan to keep working all factor into the decision. If you’re in poor health or desperately need the income, claiming early might make sense. But if you can afford to wait, the numbers usually work in your favor.

Hack #4: Coordinate FEHB with Medicare (Don’t Wing It)

When you turn 65, you’ve got some important decisions to make about health insurance. Many federal employees just stick with their Federal Employees Health Benefits (FEHB) plan without considering how Medicare fits into the picture. That’s often a costly mistake.

Here’s what most people don’t know: You can keep your FEHB plan and add Medicare Part A (hospital insurance) at no extra cost. Medicare Part A is free for most people who’ve worked and paid into the system. When FEHB and Medicare work together, Medicare typically pays first, and FEHB acts as secondary coverage. This can significantly reduce your out-of-pocket costs.

The tricky part: Medicare Part B (medical insurance) comes with a monthly premium, and if you don’t sign up when you’re first eligible, you might face late enrollment penalties. However, as long as you have FEHB coverage, you can generally delay Part B without penalty.

Bottom line: Don’t just assume keeping FEHB alone is your best option. Take time to understand how Medicare coordination works, or consider meeting with a benefits counselor who can walk you through the numbers for your specific situation.

Hack #5: Consider Strategic Relocation

This hack isn’t for everyone, but it can be a game-changer if you’re open to it. The purchasing power of your federal benefits varies dramatically depending on where you live. Your TSP dollars, FERS pension, and Social Security payments go a lot further in some places than others.

Let’s look at some real numbers: Say you’re currently spending $3,000 per month on housing in the Washington D.C. area. Move to a place like Knoxville, Tennessee, and that same quality of living might cost you $1,800 per month. That’s $14,400 per year in savings – money that could go straight into your retirement accounts or emergency fund.

Federal employee advantage: Many agencies have offices in lower-cost areas, so you might be able to transfer to a similar position without taking a pay cut. Even better, if you’re close to retirement, you could relocate and immediately start enjoying the lower cost of living while your benefits catch up.

Things to consider: Climate, proximity to family, healthcare quality, and state tax policies all matter. Some states don’t tax retirement income at all, while others have higher property taxes. Do your homework before making a big move.

Bonus Tip: Don’t Put All Your Eggs in the Government Basket

While your federal benefits are solid, diversifying beyond just your TSP and pension can provide extra security and growth potential. Consider opening an IRA for additional retirement savings, especially if you max out your TSP contributions. You might also look into real estate investment or other vehicles that can complement your federal benefits.

Remember: The key is to start where you are and take action on what you can control. You don’t need to implement all these hacks at once. Pick one or two that make the most sense for your situation and get started.

Take Action Today

The best time to optimize your federal benefits was yesterday. The second-best time is today. Start by reviewing your most recent Leave and Earnings Statement to see exactly what you’re paying for various benefits. Then prioritize which of these hacks could save you the most money.

Consider scheduling a benefits review to get personalized guidance on your specific situation. Small changes now can lead to thousands of dollars in savings over your career.

Your federal benefits are valuable – make sure you’re getting every dollar of value from them.