FERS Retirement Planning for HHS Employees
HHS spans CDC, NIH, FDA, CMS, HRSA, SAMHSA, and more, and its workforce ranges from epidemiologists with NIH salaries north of $200,000 to benefits examiners processing Medicaid claims at $55,000. The retirement planning questions are just as varied. What is consistent is that HHS employees often underestimate their FERS annuity because they overestimate how complicated the calculation will be, and that hesitation costs them planning time they cannot get back.
NIH is one of the best-compensated scientific agencies in the federal government, and its senior researchers often approach or exceed the GS pay cap. FDA scientists and reviewers in the DC metro area earn significant locality pay. CDC epidemiologists and public health professionals span a wide salary range depending on their grade and posting. For all of them, the high-3 calculation, TSP strategy, and FEHB continuation decision are the same structural questions, but the dollar amounts matter a lot.
HHS also includes the U.S. Public Health Service Commissioned Corps, a uniformed service whose officers are not in FERS. If you are a Commissioned Corps officer, your retirement is under the PHS retirement system, not FERS, and this workshop is not the right starting point. If you are a civil service employee at an agency that also employs Commissioned Corps officers (CDC, FDA, IHS, NIH), you are in FERS and everything we cover applies to you.
Why FERS planning matters more for HHS civilians
For CMS employees who administer Medicare and Medicaid, the irony of being unclear on their own federal health benefits in retirement is not lost on them. CMS benefits examiners and policy analysts often know more about the healthcare system than any other group of federal employees, yet many have not run their own FEHB plan comparison or modeled their Medicare Part B premium in retirement. The enrollment decisions you make at age 64 and 11 months have lasting cost implications.
NIH scientists and FDA medical officers who earn six-figure salaries need to think carefully about the tax treatment of their retirement income. A researcher with a $210,000 high-3 and a $1.1 million TSP balance will have a combined FERS annuity and RMD income that exceeds $150,000 per year in many scenarios. At that income level, Roth conversions in the first few years of retirement, before RMDs begin, can reduce lifetime tax exposure by $50,000 or more. Most federal employees are not running this analysis.
What makes HHS retirement planning different
NIH scientists and the federal pay cap
Many NIH Principal Investigators and branch chiefs are compensated through Title 42 appointments that allow pay above the GS scale. If you are on a Title 42 appointment at NIH, your retirement may not be under standard FERS. Some Title 42 positions carry FERS coverage; others do not. Confirm your retirement coverage code on your SF-50 before assuming your NIH service is all counting toward a FERS pension.
FDA user fee salary supplementation
FDA employees in certain centers have historically had salary levels supplemented by prescription drug user fee revenues, which can create pay structures different from standard GS. If your pay has been set through user fee supplementation or special hiring authority, confirm that all pay components count toward your high-3. Your HR specialist can pull your official basic pay history from the payroll system.
FEHB and Medicare coordination planning
HHS employees who spend their careers administering Medicare have unique expertise here, but expertise does not always translate into personal action. The decision of when to enroll in Medicare Part B (and whether to keep FEHB or downgrade to a lower premium plan) is one of the highest-dollar retirement decisions HHS employees make. An FEHB plan that costs $300 per month in retirement paired with Medicare Part B at $174.70 per month in 2025 may or may not be worth $5,700 per year compared to Medicare Advantage alternatives.
CDC deployments and emergency response pay
CDC employees who are deployed to disease outbreak responses or public health emergencies may receive additional pay, travel, or per diem during surge periods. Per diem and travel reimbursements are not income and never affect high-3. Overtime and hazard pay do not count toward high-3. Only basic pay and locality pay feed your pension calculation. A CDC epidemiologist who worked extensive overtime during a response year may misestimate their high-3 by 20% or more if using gross W-2 income.
Who we work with at HHS
Common positions
- NIH researchers and program officers
- FDA medical officers and drug reviewers
- CMS policy analysts and benefits examiners
- CDC epidemiologists and public health analysts
- HRSA and SAMHSA program officers
- HHS IT specialists and administrative staff
Primary duty locations
- Bethesda, MD (NIH campus)
- Rockville, MD (FDA HQ)
- Atlanta, GA (CDC campus)
- Baltimore, MD (CMS HQ)
- Washington, DC (HHS Humphrey Building)
- Research Triangle Park, NC
- Dallas, TX and Kansas City, MO (regional offices)
Common questions we hear
The questions HHS employees ask most often are: "I am at NIH on a Title 42 appointment, am I in FERS?", "How do I coordinate FEHB with Medicare when I retire?", and "My high-3 is over $180,000 from my NIH salary, how do I minimize taxes on my TSP distributions?" Each requires a specific answer based on your appointment type, retirement date, and income projection.
Upcoming Workshops for HHS Employees
Three hours. No cost. CFP®-led. Join federal employees who walked away with a real plan.
HHS Retirement FAQs
I am at NIH on a Title 42 appointment. Am I in FERS?
It depends on how your Title 42 appointment was structured. Most Title 42(b) scientific research appointments at NIH include FERS coverage, but some Title 42(f) senior biomedical research service positions do not. Check block 30 of your SF-50. If it shows retirement coverage code "6" (FERS) or "K" (FERS-FRAE), you are in FERS and accruing toward a pension. If it shows "0" (not covered), your NIH service is not building a FERS annuity.
How do FEHB and Medicare Part B work together in retirement?
Most federal retirees keep FEHB and also enroll in Medicare Part B at age 65. When you have both, FEHB becomes secondary to Medicare, which often dramatically reduces your out-of-pocket healthcare costs. Many FEHB plans waive cost-sharing entirely when Medicare is primary. The combined premium (FEHB plus Part B) typically runs $450 to $650 per month in 2025. The question is whether the reduced cost-sharing is worth the total premium outlay compared to Medicare Advantage alternatives, which we model for your specific plan.
My CDC salary was $145,000 during outbreak response years when I worked significant overtime. What is my high-3?
Your high-3 is based on basic pay only. Overtime, hazard pay, and surge-response premium pay are excluded. Pull your leave and earnings statements for your three highest-pay years and use the basic pay line, not the total pay line. For a CDC GS-14 step 10 in Atlanta, basic pay plus Atlanta locality in 2025 is approximately $155,000 to $162,000. That is your high-3 ceiling if those were your peak years, regardless of what overtime added to your W-2.
I have 28 years at HHS and I am 59. Should I retire now or wait until 62 for the 1.1% accrual rate?
The 1.1% rate applies if you retire at age 62 or later with 20 or more years of creditable service. At 59 with 28 years, your annuity is calculated at 1.0% per year. Waiting until 62 with 31 years at 1.1% gives you a 7.7% higher annuity base (3 more years at 1.1% vs. 1.0%). On a $160,000 high-3, that is a difference of approximately $12,300 per year for life. Whether 3 more years of working earns that premium depends on your salary, the FERS supplement, and your personal circumstances.
Does the U.S. Public Health Service Commissioned Corps count as FERS service?
No. PHS Commissioned Corps officers are in the uniformed PHS retirement system, not FERS. However, former Commissioned Corps officers who transitioned to civil service positions at HHS, CDC, or FDA can sometimes count their uniformed service toward FERS through a military deposit, similar to the process for Army or Navy veterans. The deposit is 3% of base pay for the uniformed service period. Confirm with your HR office whether your specific PHS service qualifies.
I worked at CMS for 20 years and am considering leaving for a private insurance company. What happens to my FERS?
If you leave federal service before your Minimum Retirement Age, you can either take a refund of your FERS contributions (forfeiting the pension) or leave your contributions in place for a deferred annuity starting at age 62. The deferred annuity preserves all 20 years of creditable service at the 1.0% formula. On a $130,000 high-3, that is $26,000 per year starting at 62. Do not take the refund unless you need the cash and have run the long-term math against what you are giving up.
Related resources
Ready to plan your federal retirement?
Join HHS civilians who have taken control of their retirement with expert, fee-based guidance.