By: Jeff Brown
After spending years helping federal employees transition into retirement, one of the questions I hear is: “Can I still work after I retire—and if so, how does it affect my benefits?”
The short answer is yes, you can work. But whether it’s part-time consulting, joining a contractor, or jumping into a brand-new career, how you return to work matters—especially if it’s with the federal government. Here’s what I’ve learned from years of helping clients navigate this next chapter.
Working in the Private Sector After Federal Retirement
If you retire under FERS or CSRS and take a job in the private sector, you’re generally in the clear.
- Your federal pension continues unaffected.
- Your TSP and Social Security (if eligible) also remain intact, though earned income might affect Social Security if taken before your full retirement age.
This is a popular option for many retirees who want to stay active or supplement their income. Some even use it as a way to bridge into full retirement gradually.
Returning to Federal Employment (Reemployment)
Now, if you’re thinking about going back to work for the federal government, this is where things can get complicated. In most cases:
- Your pension will be reduced (or even temporarily suspended) by the amount you earn from your new federal salary.
- This is known as the “salary offset rule”—you can’t double-dip unless you’re in a specially approved position.
However, OPM allows certain waivers or exceptions—usually in positions deemed “hard to fill” or in emergency situations. These are limited, require agency approval, and aren’t guaranteed.
What About Working as a Federal Contractor?
This is a sweet spot for many of my clients.
- You stay involved in your field and continue making an impact.
- You avoid the pension offset rule because you’re working for a private company (even if you’re still supporting a federal agency).
- Pay can be competitive, and flexibility is often better than during your federal years.
Just keep in mind: contractor work doesn’t build new federal benefits—no additional pension, TSP contributions, or federal insurance.
Self-Employment or Consulting
Starting a business or doing freelance consulting is another great option for retirees.
- You control your schedule and income.
- No impact to your federal retirement benefits.
- Many former federal employees find high demand for their expertise in areas like compliance, training, or project management.
If you’re considering this route, it’s smart to consult a financial advisor or tax planner to understand business deductions and self-employment taxes.
Key Considerations Before Going Back to Work
- Know Your Break-in-Service Requirements: If you retire under a regular FERS retirement, you generally need to wait at least 30 days before accepting reemployment.
- Understand the Earnings Test: If you’re drawing Social Security before full retirement age, your benefits could be temporarily reduced if you earn above certain thresholds.
- Health Insurance: If you keep FEHB into retirement, working again could create coordination issues with employer coverage.
- Long-Term Planning: Will working again change your tax situation? Your RMDs? Your estate plan?
Final Thoughts
Retirement doesn’t always mean “stop working.” For many federal employees, it’s simply a new beginning—one with more freedom and choice. Whether you want to stay sharp, stay social, or just pad your nest egg a bit longer, there are smart ways to work after you retire without jeopardizing the benefits you’ve earned.
As someone who has spent years helping federal employees like you prepare for this next chapter, my advice is simple: Make a plan. Know the rules. And build your second act on your terms.
