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A NARFE PUBLICATION FOR FEDERAL EMPLOYEES AND RETIREES

JANUARY/FEBRUARY 2026 VOLUME 102 ★ NUMBER 1

P. 20

Key Benefits Decisions for your Next Chapter

P. 32

Understanding the Latest in Homeownership

MEMBERSHIP HAS ITS PERKS As part of your membership with NARFE, you and qualifying family members have opportunities to save on senior living. You may be eligible for exclusive discounts that can help you and your family get the lifestyle and care you deserve.

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Contents JANUARY/FEBRUARY 2026 COVER STORY PAGE 20

KEY BENEFITS DECISIONS FOR YOUR NEXT CHAPTER Retiring at a much younger

FEATURE PAGE 32

UNDERSTANDING THE LATEST IN HOMEOWNERSHIP Why is homeownership so

age means that, although the federal career may have ended in 2025, a new job is needed. We look at the retirement implications.

widespread in the United States, and what are the advantages and disadvantages of owning a home?

Washington Watch

6 Record-Long Government Shutdown Ends

7 The End of the DRP 8 NARFE’s Legislative Update: What

We Did, How We Stand and Where We’re Going

10 Rep. Walkinshaw Carries

Connolly’s Legacy on Federal Workforce Bills

11 TSP to Add Roth Conversions Beginning in January 2026

11 Bill Tracker

Columns

4 From the President 18 Benefits Brief

A NARFE PUBLICATION FOR FEDERAL EMPLOYEES AND RETIREES

JANUARY/FEBRUARY 2026 VOLUME 102 ★ NUMBER 1

P. 20

Key Benefits Decisions for your Next Chapter

40 Managing Money P. 32

Understanding the Latest in Homeownership

Departments

14 Questions & Answers 15 Countdown to COLA

ON THE COVER Illustration by TGD

42 NARFE News 46 NARFE Perks 48 The Way We Worked

Connect with us! Visit us online at www.narfe.org Like us on Facebook NARFE National Headquarters Follow us on X @narfehq

REGIONAL VICE PRESIDENTS REGION I Jeff Anliker JANUARY/FEBRUARY 2026 VOLUME 102 ★ NUMBER 1 EDITORIAL DIRECTOR Jenn Rafael CREATIVE SERVICES MANAGER Beth Bedard SENIOR CONTENT MANAGER Matt Sanderson ADDITIONAL GRAPHIC DESIGN TGD EDITORIAL BOARD William Shackelford, Cindy Reneé Blythe

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NARFE’S MISSION STATEMENT To support legislation and regulations beneficial to federal civilian employees and annuitants and potential annuitants under any federal civilian retirement system and to oppose those detrimental to their interests. To promote the general welfare of federal civilian employees and annuitants and potential annuitants, to advise and assist them with respect to their rights under retirement, health and other employee and retiree benefits laws and regulations, and to represent their interests before appropriate authorities. To cooperate with other organizations and associations in furtherance of these general objectives.

NARFE Magazine (ISSN 1948-4453) is published monthly except in February and July by the National Active and Retired Federal Employees Association (NARFE), 606 N. Washington St., Alexandria, VA 22314. Periodicals postage paid at Alexandria, VA, and additional mailing offices. Members: Annual dues includes subscription. Nonmember subscription rate $48. Postmaster: Send address change to: NARFE Attn: Member Records, 606 N. Washington St., Alexandria, VA 22314. To ensure prompt delivery, members should also forward changes of address without delay. Because of the volume involved, NARFE cannot acknowledge nor be responsible for unsolicited pictures and manuscripts, although every reasonable precaution is taken. All submissions become the property of NARFE. Copyright © 2026, NARFE. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in NARFE Magazine, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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From the President

Dusting Off 2025 and Remaining Vigilant

irst, let me wish everyone a Happy New Year for 2026. With the deadline for submitting my column to the NARFE Magazine a couple of months before publication, I am writing this column on the 20th day of the government shutdown, testing the resilience of agencies and employees. I don’t have

to tell you that 2025 was a very political year, with extremely heated debates on both sides of several issues significant to federal employees and retirees. At press time in October 2025, there was still some uncertainty about a resolution, but we remain confident we can continue to protect federal employee and retiree benefits. Throughout 2025, the administration took various steps through numerous executive actions, proclamations, and memoranda to reshape the federal government structure. The current administration continues its efforts to trim the size of the federal government. There are a variety of opinions on these efforts. Still, I believe there is a consensus we can all agree on, and that any methods to achieve a better, more responsive government bureaucracy should not have a devastating impact on families and their daily lives. While Congress has been making headlines, John Hatton, staff vice president for NARFE policy and programs, has been working diligently to protect the interests of all federal civilian employees and annuitants. As we head into the campaigns and the November 2026 mid-term election, everyone should be fully aware that the results could change both houses of Congress, especially the House of Representatives. As a loyal and dedicated NARFE member, your “homework” assignment is to become an “educated elector” and, when it comes time to vote, cast a vote for the person who best meets the criteria that will support NARFE issues. Please be assured that the Advocacy Department at NARFE Headquarters will remain diligent in the elections and will continue to work to solidify our relationship with both new members and returning members. I hope all members will remember in 2026 that, while NARFE is political, we are nonpartisan and will continue to work with all members of Congress who support our members and goals. We must be vigilant as we prepare for the 120th Congress.

FEDERATION PRESIDENTS’ MEETING

During the joint Federation Presidents’ and National Executive Board (NEB) meeting held from August 12–14, 2025, NARFE federation presidents made several recommendations to me. Several of 4

NARFE MAGAZINE JANUARY/FEBRUARY 2026

the recommendations requires assistance from our marketing firm, Street Level Studio (SLS), Inc., and its public relations partner, BRG Communications, to aid NARFE. The overall strategy is to increase our membership by enhancing visibility within the many federal agencies, bureaus, and commissions. We’re increasing our focus on attracting new members among younger federal employees by making them aware of the benefits of joining NARFE. If you believe that your chapter or federation area may benefit from SLS and BRG’s work in implementing these initiatives, please get in touch with me or Nora MacDonald, senior director for member engagement. I believe our organization is positioned to meet the membership challenge, better serve our membership, and attract new members.

MARK YOUR CALENDARS

Now it’s time to start planning for the next NARFE Biennial National Conference – FEDcon26. Your NEB selected the Hyatt Regency, located at One South Capitol Street in Indianapolis, IN, as the conference location. The dates for all FEDcon26 events are August 19-26, 2026. The federation presidents and NEB meetings will be held from August 19-22, 2026. NARFE’s annual meeting is on the morning of August 23, and the opening of FEDcon26 is during the afternoon of August 23. Thank you for all your continued support. On behalf of everyone at NARFE Headquarters, I wish you a very Happy New Year, and I look forward with hope and determination to what can be accomplished in 2026. As always, stay healthy and stay safe! WILLIAM SHACKELFORD NARFE NATIONAL PRESIDENT natpres@narfe.org

NARFE MEMBER BENEFITS

Active and Retired Federal Employees– Join NARFE (or Renew) Today! The only organization dedicated solely to protecting and preserving the benefits of all federal workers and retirees, NARFE informs you of any developments and proposals that affect your compensation, retirement and health benefits, AND provides clear answers to your questions.

Who Should Join NARFE? If your future security is tied to federal retirement benefits—federal retirees, current employees, spouses and individual survivors—you should join NARFE. Membership expiring? Renew now!

• Understand benefit changes and key aspects to stay on top of with NARFE’s monthly webinars, held on a variety of topics such as Thrift Savings Plan, health insurance options and long term care insurance updates • Direct access to Federal Benefits Institute experts who can answer your most pressing questions and help you get answers you need from OPM • Topical and robust articles on new legislation, and topics like car buying tips and finding your path in retirement, and the ever popular Q&A section addressing your most burning benefit questions in NARFE Magazine • Support from your peers with access to FEDHub, the only national online community for the federal community, and local chapters, where you can meet feds in a neighborhood near you • Weekly news roundup email called Newsline, with helpful tips and updates from NARFE on the work we are doing to support you • Discounts on popular national brands with NARFE Perks • Powerful advocacy and alerts to take action on important legislation pending in Congress and our advocacy team that protects your benefits every day! 1Q6

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Washington Watch Washington Watch

Record-Long Government Shutdown Ends

43-day government shutdown ended in mid-November after Senate Republicans reached a deal with a group of 8 Senate Democrats to pass three full-year

appropriations bills (Agriculture, Rural Development and Related Agencies; Military Construction, Veterans Affairs, and Related Agencies; and Legislative Branch), and extend funding for the rest of the government through January 30, 2026 at fiscal year 2025 levels. The full-year appropriations bills reasserted congressional authority over federal government operations, and Senate Appropriations Committee Chairwoman Susan Collins, R-ME, indicated that the Senate would move to pass additional full-year bills in the coming weeks. The compromise ending the shutdown ensured backpay for excepted and furloughed federal employees. It reversed the reductions in force (RIFs) initiated in response to the lapse in appropriations – both provisions NARFE supported. The

deal also included the promise from Majority Leader John Thune, R-SD, for a vote on an extension of enhanced Affordable Care Act subsidies by mid-December, a key ask for Democrats. NARFE had long called for good-faith, bipartisan

negotiations. Once those occurred, the negotiating parties each gave enough to allow a deal to emerge to end the shutdown. NARFE supported the agreement, as it restored pay to federal employees who had assumed significant financial costs, risks, and uncertainties due to the lack of political consensus in Washington, D.C. It also provided back pay to all federal employees, clarifying that funds are available and shall be paid to furloughed federal employees in a manner consistent with existing law. Critically, this bill also directed the reversal of the RIFs initiated in response to the government shutdown and prohibited RIFs through the end of the continuing resolution, which extended funding through January 30. The Trump Administration initiated RIFs

JANUARY/FEBRUARY ACTION ALERT: URGE CONGRESS TO REASSERT ITS POWER AND CHECK MAJOR REORGANIZATION EFFORTS!

Visit NARFE’s Legislative Action Center at www.narfe.org to send a message to your lawmakers urging them to cosponsor H.R. 5249, the Limit on Sweeping Executive Reorganization Act. This bill would restore Congress’s ability to oversee the executive branch, promote the best interests of the American public, and protect the federal workforce by closing statutory loopholes that the Trump administration is currently exploiting. Specifically, H.R. 5249 would require the executive branch to secure congressional approval before any major reorganizations, establish mandatory transparent reporting processes, and enforce penalties for violations. President Donald Trump and his administration have spent too long putting millions of citizens at risk and endangering the livelihoods of thousands of public servants. Contact your representative today and urge them to support H.R. 5249 so that Congress can reassert its power, hold the executive branch accountable, and restore governmental integrity to the American people.

NARFE MAGAZINE JANUARY/FEBRUARY 2026

MYTH VS. REALITY MYTH: Annual pay raises for federal employees and annual cost-of-living adjustments (COLA) for federal retirees are calculated similarly. REALITY: The annual change to federal pay rates and the annual COLA to federal retirement annuities use different percentages, are based on different measures, and are determined by different processes. The default change in federal pay rates is based on the change in private-sector wages and salaries, while the COLA is based on the annual change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). COLAs go into effect automatically, by law, based on the change in consumer prices. Neither the president nor Congress is required to affirmatively approve them. In contrast, the president may create an alternative pay plan to change the default across-the-board federal pay increase and identify the average locality pay increase. Congress is involved in the budgeting process, ensuring agencies have the funds required to provide for pay increases, and in some cases, Congress specifies the pay increase in law. If Congress remains silent, the president’s pay raise goes into effect.

of federal employees engaged in several “programs, projects, and activities” that were “not consistent with the President’s priorities.” A district court blocked that action as illegal, but full court proceedings had not yet concluded. NARFE strongly opposed the action, which penalized federal employees for the failure of political leadership in Washington, D.C., to reach a consensus. The Senate passed the stopgap and minibus bill on Monday,

November 10. Speaker of the House Mike Johnson, R-LA, then brought the House of Representatives back to Washington, DC, after a 54-day absence to pass the bill on November 12. President Trump signed the bill into law on November 12 Meanwhile, during the 43-day shutdown, approximately 730,000 federal employees continued to work without pay (generally missing more than two paychecks), while another 670,000 were

CLOSURE OF THE PROGRAM

The End of the DRP n January 2025, the Trump Administration launched the controversial Deferred Resignation Program (DRP). First announced in the “Fork in the Road” email, it offered approximately two million federal employees the option to resign from federal service, effective Sept. 30. Employees in the program would be placed on paid administrative leave from the end of February until the effective resignation date while continuing to receive full pay, benefits, retirement accruals and annual leave. The goal was to reduce federal staff by voluntary means, providing employees with a transition period.

The government-wide DRP formally closed on February 12. After that time, resignations under the DRP would no longer be accepted. Before that, legal challenges temporarily delayed the initial Feb. 6 deadline (e.g., a temporary court stay in Massachusetts), which prompted a revised acceptance window. Some agencies, such as the U.S. Department of Agriculture (USDA), later reopened or relaunched agency-specific versions of the DRP for their own employees as they began planned reductions in force (RIFs).

furloughed. In total, about 3.1 million paychecks were not paid on time, according to the Bipartisan Policy Center. The final economic cost of the delayed pay and government spending has yet to be tallied. But wasting more than a month of work due to political dysfunction displayed a waste of taxpayer dollars and a lack of appreciation for the work of federal employees. —BY JOHN HATTON, STAFF VICE PRESIDENT, POLICY AND PROGRAMS

THE EFFECTS OF THE DEFERRED RESIGNATION PERIOD AND LEGAL CHALLENGES Employees approved under the DRP were exempted from in-person work requirements and generally were not required to report to duty during this period. Employees eligible to retire who separated from service through the DRP could apply for an immediate annuity, effective as of the date of separation (or earlier, if desired). Also, the program drew great legal and policy scrutiny. Critics questioned whether the promise SEE DRP ON P. 10 NARFE MAGAZINE www.NARFE.org

Washington Watch Washington Watch

NARFE GRASSROOTS ADVOCACY LEARN MORE about how you can take action to protect your earned pay and benefits by reviewing NARFE Grassroots materials at www.narfe.org/advocacy.

NARFE’s Legislative Update: What We Did, How We Stand, & Where We’re Going

ARFE remains unwavering in its commitment to tirelessly advocate for a future that is both secure and equitable for all federal workers and retirees. Presented below is a recap of our achievements in 2025, an update on the current status of several of our most pivotal legislative campaigns, and the following steps to be an effective advocate heading into 2026.

WHAT WE DID

Windfall Elimination Provision/ Government Pension Offset One year ago, President Biden signed the Social Security Fairness Act, H.R. 82, into law, repealing the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), ending 40 years of unfair penalties imposed on thousands of people for simply earning a pension through public service. In the 118th Congress, the bill collected 330 House cosponsors—the most of any bill—and 62 in the Senate. It was forced to a floor vote after its discharge petition garnered the necessary 218 signatures and was passed 32774 in the House before passing the Senate 76-20. The repeal went into effect this year, and those affected began receiving retroactive payments in late

February and saw their March benefits adjusted in April. H.R. 1, the“One Big Beautiful Bill Act.” Budget reconciliation legislation posed a significant threat to earned federal health and retirement benefits—the blueprint for the bill, H.Con. Res.14, called for $4.5 trillion in tax cuts and increased defense and border security spending. To mitigate the deficit increases from the bill, alternative spending cuts were needed to offset these costs. The budget resolution required at least $50 billion in cuts to the mandatory spending under the jurisdiction of the House Committee on Oversight and Government Reform, whose only significant mandatory spending is federal benefits. The potential options for cuts included moving to a voucher system for FEHB instead of a cost-share model, which would have increased enrollee costs substantially, changing the calculation of FERS and CSRS annuities by using the highest five years of salary instead of the highest three years, eliminating the FERS annuity supplement, and increasing FERS contributions with no added benefit, among other changes. However, thanks to our advocacy efforts, NARFE is proud that the final budget

NARFE MAGAZINE JANUARY/FEBRUARY 2026

reconciliation bill, H.R. 1, included no federal workforce provisions previously opposed by NARFE, a massive relief for the federal community.

HOW WE STAND

Disclaimer: This information was gathered before the magazine’s print deadline in November 2025; some numbers may have changed. Please check NARFE’s website for additional information. Now let’s take a look at our progress building support for some of our other top priorities, from protecting the merit-based civil service to ensuring full cost-of-living adjustments to FERS annuities, to limiting sweeping executive reorganizations without the consent of Congress. Saving the Civil Service Act (H.R. 492/ S. 134) This bill would prohibit the establishment of Schedule Policy/Career (formerly Schedule F) of the excepted service (or similar schedules), to ensure merit-based hiring and firing of civil servants. Cosponsors: H.R.492: 78 (76 D, 2 R); S.134: 22 (20 D, 2 R) Equal COLA Act (H.R. 491, S. 624) This bill would provide full cost-of-living adjustments

to FERS annuities based on changes in consumer prices. Cosponsors: H.R.492: 53 (52 D, 1 R); S.134: 14 (12 D, 2 I) Federal Adjustment of Income Rates (FAIR) Act (H.R. 493/ S. 126) This bill would provide federal employees with a 3.3% across-the-board pay raise in 2026, plus a 1% average increase to locality pay rates. Cosponsors: H.R. 493: 32 (31 D, 1 R); S.126: 14 (13 D, 1 I) Limit on Sweeping Executive Reorganization Act (H.R. 5249) This bill, introduced in September by newly elected Congressman James Walkinshaw, D-VA, would require the president and the executive branch to provide Congress with a Reorganization

Impact Report, which Congress must approve before the President may enact major federal employee terminations. Cosponsors: 2 (2 D)

WHERE WE ARE GOING

NARFE is dedicated to continuing our advocacy efforts into 2026 by encouraging cosponsorship for the above bills, fighting for increased transparency from the executive branch, and demanding accountability for actions taken against public servants. At press

time, we were also focused on urging an end to the government shutdown, providing near-term support to federal employees affected by it, opposing layoffs of federal employees due to it, and ensuring backpay for furloughed federal employees. We are encouraging our members to subscribe to Newsline, stay active on FEDHub, read their magazine, and continue to engage with NARFE as we fight for the federal community. —BY NICOLE BLACKSTONE, GRASSROOTS AND POLICY MANAGER

HAVE QUESTIONS ABOUT THE SOCIAL SECURITY FAIRNESS ACT? Visit NARFE’s Federal

Benefits Institute to find frequently asked questions our staff is compiling at https://www.narfe.org/advocacy/ social-security-fairness-act-frequently-asked-questions/. Members may also call 1-800-456-8410, and press 2 for federal benefits experts, or email fedbenefits@narfe.org.

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To comply with federal law, we must use our best efforts to obtain, maintain and submit the name, mailing address, occupation and name of employer of individuals whose contributions exceed $200 each calendar year. NARFE-PAC is for the benefit of political candidates and activities on a national level. NARFE members have the right to refuse to contribute without reprisal, and NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or failure to make a voluntary contribution. The suggested amounts are only suggestions and not enforceable. Only members of NARFE may contribute to the PAC. Contributions from non-members will be returned. NARFE-PAC contributions are not deductible for federal income tax purposes. NARFE MAGAZINE www.NARFE.org

Washington Watch LEGISLATIVE RESOURCES NARFE NewsLine – A weekly newsletter that goes out to NARFE members on Tuesdays and includes weekly recaps of legislative news, compiled by NARFE’s advocacy and communications teams. LEGISLATIVE ACTION CENTER – A one-stop site to send a letter to Congress, and more, at www.narfe.org.

Rep. Walkinshaw Carries Connolly’s Legacy on Federal Workforce Bills

n Sept. 18, 2025, just eight days after being sworn in to the House of Representatives, Congressman James Walkinshaw (VA-11) announced he would be carrying on the legacy of his predecessor, the late Congressman Gerry Connolly, by taking over as lead sponsor of federal workforce bills previously led by Congressman Connolly. Specifically, Walkinshaw is the new lead sponsor on the Equal COLA Act, H.R. 491, Saving the Civil Service Act, H.R. 492, the Federal Adjustment of Income Rates (FAIR) Act, H.R. 493, and the

Family Building FEHB Fairness Act, H.R. 1670. The Equal COLA Act would provide Federal Employees Retirement System (FERS) retirees with full cost-of-living adjustments, equal to the measured change in consumer prices. The Saving the Civil Service Act would block the return of Schedule F (also known as Schedule P/C). The FAIR Act would deliver a 4.3% federal average pay increase in 2026. Finally, the Family Building FEHB Fairness Act would require FEHB plans to cover in vitro fertilization and

other assisted reproductive technologies. The passing of Connolly was a loss of a true champion for the federal community and an exemplary public servant. NARFE is grateful that Rep. Walkinshaw has taken up the mantle for these issues, all of which affect thousands of our members. We have action letters on the Legislative Action Center to support the bills, available online at http://www. narfe.org/advocacy/legislativeaction-center/, and encourage our members to urge their members of Congress to sign on as cosponsors. —BY NICOLE BLACKSTONE, GRASSROOTS & POLICY MANAGER

DRP FROM P.7

of substantial pay and benefits without appropriated funds violated federal law. Others said the short window and pressure to leave could amount to coercion. In the Massachusetts ruling, Judge George O’Toole removed an initial legal hurdle to the program by determining that unions “lacked the standing they’d need in order to meet the legal standard for a temporary restraining order.” Some agencies also made errors in implementing the DRP.

MOVING FORWARD

By mid-2025, more than 150,000 federal employees had accepted the deferred resignation offers. With many of those eligible for retirement, approximately 60,000 10

retirement applications are expected to arrive at the Office of Personnel Management (OPM) in 2025. However, as the program wound down on Sept. 30, federal human resources offices faced numerous challenges, including large volumes of final separation paperwork, the need to ensure retirement applications and benefit processing, and potential delays exacerbated by the government shutdown. Some agencies might also struggle if turnover leaves gaps in their mission. The DRP’s implementation triggered debates over legality, fairness, workforce impact, and, according to some critics, the negative

NARFE MAGAZINE JANUARY/FEBRUARY 2026

reshaping of the federal civilian workforce. In the near term, OPM’s team of 400 retirement benefits specialists will have an enormous task ahead. Fortunately, as OPM Retirement Services operations are funded through the Civil Service Retirement and Disability Fund, the government shutdown didn’t limit operations. However, OPM currently has an inventory of more than 24,000 unprocessed claims, with an average processing time of approximately 70 days – and that was when they were receiving between 5,000 and 17,000 claims per month. —BY ELLIE DORSEY, FEDERAL BENEFITS INSTITUTE MANAGER

TSP to Add Roth Conversions Beginning January 2026

s of January 2026, the Thrift Savings Plan (TSP) will include an in-plan Roth conversion option. NARFE advocated for the new option, which provides additional flexibility for federal employees and retirees in tax planning. Under the new option, investors can convert funds from their traditional TSP balance to Roth status within the TSP.

Under the traditional TSP plan, contributions are pre-tax and are taxable on withdrawal. Roth contributions are aftertax but generally tax-free on withdrawal, including earnings if certain conditions are met. Additionally, Roth balances are not subject to required minimum distributions starting at age 73. Converted amounts will be treated as taxable income for the year of conversion, and taxes must be

paid from personal funds outside the TSP. If you are considering making the switch, TSP strongly recommends reaching out to a tax advisor to understand how it would affect your taxable income fully. This conversion option will be available to active and separated participants and spousal beneficiaries, with a $500 minimum per transaction. —BY ABBY MILLER, POLICY AND PROGRAMS ASSISTANT

NARFE BILL TRACKER

THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO LEGISLATION NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. ISSUE

BILL NUMBER / NAME / SPONSOR H.R. 1: One Big Beautiful Bill Act / Rep. Jodey Arrington, R-TX-19

WHAT BILL WOULD DO

LATEST ACTION(S)

The Senate-amended, final version of the bill that passed both chambers and was signed into law by the president did not contain any of the objectionable federal workforce provisions NARFE opposed throughout the process.

Senate-amended version (without objectionable federal workforce provisions) passed the Senate on 7/1/25, passed the House on 7/3/25, and was signed into law by the president on 7/4/25.

The House-passed version of this budget reconciliation bill, passed pursuant to the instructions of H.Con.Res.14, would (i) eliminate the Federal Employees Retirement System (FERS) annuity supplement as of January 1, 2028, cutting back vested benefits earned based on past service for individuals at or approaching retirement eligibility age; (ii) require new federal employees to choose between retaining merit systems protections or accepting a 5% pay cut via increased contributions toward retirement without any additional benefit; and (iii) institute a fee to appeal adverse actions to the Merit Systems Protection Board (MSPB).

FEDERAL BENEFITS

The original version of the bill would have also (i) increased employee contributions toward retirement by up to 3.6% without any added FERS benefit, and (ii) calculated federal annuities under FERS and the Civil Service Retirement System (CSRS) based on the highest five years of salary rather than the highest three years of salary. Those provisions were eliminated via amendment prior to House floor consideration.

POSTAL SERVICE

NARFE’s Position:

H.Res. 70 / S.Res.147: Rep. Stephen Lynch, D-MA-8 / Sen. Gary Peters, D-MI

Expressing the sense that Congress should take all appropriate measures to ensure that the United States Postal Service remains an independent establishment of the federal government and is not subject to privatization.

Referred to the Committee on Homeland Security and Governmental Affairs. 03/27/2025

Cosponsors: H. Res. 70: 205 (D) 16 (16) S. Res. 147: 4 (R) 3 (D) Support

Oppose

Referred to the House Committee on Oversight and Government Reform. 01/28/2025

No position

NARFE MAGAZINE www.NARFE.org

NARFE BILL TRACKER ISSUE

BILL NUMBER / NAME / SPONSOR H.R. 2550/S.2837: Protect America’s Workforce Act / Rep. Jared Golden, D-ME02 / Sen. Mark Warner, D-VA Cosponsors: H.R. 2550: 216 (D), 7 (R) S. 2837: 44 (D), 2 (I), 1 (R) H.R.492/S.134: Saving the Civil Service Act of 2025 / Rep. Gerry Connolly, D-VA-11 / Sen. Tim Kaine, D-VA Cosponsors: H.R. 492: 73 (D) 2 (R) S. 134: 20 (D) 2 (I)

FEDERAL PERSONNEL POLICY

WHAT BILL WOULD DO Overturns a recent executive order that targeted certain unions due to opposition to administrative actions via public statements and lawsuits, ending collective bargaining for covered federal employees.

Referred to the House Committee on Oversight and Government Reform. 4/01/2025

Prohibits the establishment of Schedule F of the excepted service, to ensure merit-based hiring and firing of civil servants.

Referred to the House Committee on Oversight and Government Reform. 1/16/2025

Read twice and referred to the Committee on Homeland Security and Governmental Affairs. 09/17/25

ASSUMING FIRST SPONSORSHIP - Mr. Walkinshaw asked unanimous consent that he may hereafter be considered as the first sponsor of H.R. 492, a bill originally introduced by Representative Connolly, for the purpose of adding cosponsors and requesting reprintings pursuant to clause 7 of rule XII. Agreed to without objection. Action By: House of Representatives 09/16/2025 Read twice and referred to the Senate Committee on Homeland Security and Governmental Affairs. 1/16/2025

H.R. 5249: Limit on Sweeping Executive Reorganization Act / Rep. James Walkinshaw D-VA-11

Requires the President and Executive Branch to provide Congress with a Reorganization Impact Report to which Congress must approve before the President may enact major federal employee terminations.

Referred to the House Committee on Oversight and Government Reform. 09/10/2025

H.R. 5676: Stop Stealing To prohibit any Executive Our Jobs Act / Rep. Sheila agency from terminating Cherfilus-McCormick D-FL-20 employees during any period in which there is a lapse in appropriations, Cosponsors: and for other purposes. H.R. 5676: 16 (D)

Referred to the House Committee on Oversight and Government Reform. 10/03/2025

Cosponsors: H.R. 5249: 2 (D)

NARFE’s Position: 12

LATEST ACTION(S)

NARFE MAGAZINE JANUARY/FEBRUARY 2026

Support

Oppose

No position

NARFE BILL TRACKER ISSUE

BILL NUMBER / NAME / SPONSOR H.R. 491 /S.624: Equal COLA Act/ Rep. Gerry Connolly, D-VA-11 / Sen. Alex Padilla, D-CA Cosponsors: H.R. 491: 52 (D) 1 (R) S. 624: 12 (D) 2 (I)

WHAT BILL WOULD DO Provides full cost-of-living adjustments, based on the relevant change in consumer prices, to Federal Employees Retirement System annuities.

LATEST ACTION(S) Referred to the House Committee on Oversight and Government Reform. 1/16/2025 ASSUMING FIRST SPONSORSHIP - Mr. Walkinshaw asked unanimous consent that he may hereafter be considered as the first sponsor of H.R. 491, a bill originally introduced by Representative Connolly, for the purpose of adding cosponsors and requesting reprintings pursuant to clause 7 of rule XII. Agreed to without objection. Action By: House of Representatives 09/16/2025 Read twice and referred to the Senate Committee on Homeland Security and Governmental Affairs. 02/18/2025

FEDERAL ANNUITIES H.R. 1522: Federal Retirement Fairness Act / Rep. Emily Randall D-WA06

Provides that civilian service in a temporary position after December 31, 1988, may be creditable service under the Federal Employees Retirement System, and for other purposes.

Cosponsors: 99 (D) 16 (R)

ASSUMING FIRST SPONSORSHIP - Ms. Randall asked unanimous consent that she may hereafter be considered as the first sponsor of H.R. 1522, a bill originally introduced by Representative Connolly, for the purpose of adding cosponsors and requesting reprintings pursuant to clause 7 of rule XII. Agreed to without objection. 07/22/2025 Referred to the House Committee on Oversight and Government Reform. 02/24/2025

H.R. 493/ S. 126: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerry Connolly, D-VA-11 / Sen. Brian Schatz, D-HI Cosponsors: HR 493: 31 (D) 1 (R) S. 126: 13 (D) 1 (I)

Provides federal employees with a 3.3% across-the-board pay raise in 2026, plus a 1% average increase to locality pay rates.

FEDERAL COMPENSATION

Referred to the House Committee on Oversight and Government Reform. 1/16/2025 ASSUMING FIRST SPONSORSHIP - Mr. Walkinshaw asked unanimous consent that he may hereafter be considered as the first sponsor of H.R. 493, a bill originally introduced by Representative Connolly, for the purpose of adding cosponsors and requesting reprintings pursuant to clause 7 of rule XII. Agreed to without objection. Action By: House of Representatives 09/16/2025 Read twice and referred to the Senate Committee on Homeland Security and Governmental Affairs. 1/16/2025

NARFE’s Position:

Support

Oppose

No position NARFE MAGAZINE www.NARFE.org

Questions Questions&&Answers Answers

EMPLOYMENT

THE FOLLOWING QUESTIONS & ANSWERS were compiled by NARFE’s Federal Benefits Institute experts. NARFE does not provide legal, financial planning or tax advice or assistance.

FEDERAL EMPLOYEE HEALTH BENEFITS (FEHB): CHILD REACHING THE AGE OF 26 NEXT MONTH

Our youngest child is coming off our FEHB plan when she reaches the age of 26 next month. My spouse and I noticed that we are under one of the plans where the Self and Family premium is less expensive than the Self Plus One premium. Can we keep the Self and Family plan even after our child is no longer on it, or are we required to switch to a Self Plus One plan?

Your child’s coverage will continue at no cost for 31 days starting from the date the child turns 26 years old. Then, the health carrier will remove your child as a family member under your plan. Note, only a child incapable of selfsupport may be eligible to stay on your FEHB plan beyond age 26. Your child is also eligible to enroll in Temporary Continuation of Coverage (TCC) or may obtain assistance from your health plan for enrollment in a guaranteed issue nongroup contract available in the health plan’s service area. If your child is interested in TCC, you must contact your Human Resources Office (for annuitants, contact the Office of Personnel Management, or OPM) and inform them that your child is turning 26. You have 60 days from the 26th birthday to notify OPM or your Human Resources Office that your child has turned 26. Your child has 60 days from the later of (1) the 26th birthday, or (2) the date of the TCC notice from the Office of Personnel Management (OPM) or the Human Resources Office to request enrollment for TCC. For more information about TCC, please review the TCC pamphlet. If the premium for the self and family plan is less expensive than switching to the self-only option, it’s best to keep the self and family option, even though the 26-year-old child will no longer be covered. Please review your plan brochure available at https://www.opm.gov/healthcare14

NARFE MAGAZINE JANUARY/FEBRUARY 2026

insurance/healthcare/plan-information/plans/ for FEHB plans or https://www.opm.gov/ healthcare-insurance/pshb/brochures/ for PSHB plans. If necessary, contact the FEHB or Postal Service Health Benefits (PSHB) carrier for further explanation. Most of the time, self-plus-one has the lower premium, but there are plans where self and family enrollment is the less expensive option. According to Consumer’s Checkbook Guide to Federal Health Plans, in 2025, there were 46 FEHB plan options where self and family enrollment was less expensive than self-plusone enrollment. In addition to the annual Open Season, during which you can switch plans, enrollment category, or both, OPM allows retirees to switch down from a family plan to a self plus one plan at any time during the year. This can only be used for the plan you are already enrolled in, not to switch plans, unless there is a qualifying life event such as the death of a family member or divorce. For a complete list of Qualifying Life Events, retirees should refer to OPM Form 2809 (https:// www.opm.gov/forms/pdf_fill/opm2809.pdf), and employees will use SF 2809 (https://www. opm.gov/forms/pdf_fill/sf2809.pdf). To change a PSHB plan, you must use the Postal Service Health Benefits System (PSHBS) through https:// health-benefits.opm.gov/HBEWeb/ehbs/Annon/

Landing. The PSHBS system processes all PSHB enrollment changes electronically.

And TSP Annuities Fact Sheet https://www. tsp.gov/publications/tspfs24.pdf?TSP-FS-24

TSP ANNUITY OPTIONS

FEGLI: OPTION C

I plan to separate from federal service at age 57 with 24 years of creditable service, but I will be postponing my Federal Employee Retirement System (FERS) retirement until age 60. After I separate from federal service, I would like to buy an annuity using my Thrift Savings Plan (TSP) account. I want to wait for the annuity interest rates to go up before I purchase a large annuity. For example, could I initially purchase a small annuity and later buy a larger one?

Once your agency payroll office has notified the TSP that you have separated from federal service, which usually takes approximately 30 days from the date of your separation, you can exercise any of your TSP withdrawal options at any time, including the purchase of an annuity. The minimum amount of your TSP that can be used to purchase an annuity is $3,500. After buying an annuity with your TSP, you will have the option to purchase separate annuities later, provided you have at least $3,500 or more in your TSP account to make the purchase. Alternatively, suppose you choose to leave your money in the TSP and initiate periodic payments directly from your TSP account, rather than purchasing a life annuity. In that case, you can change the periodic payments (monthly, quarterly, or annually) by logging into your account and adjusting the amount of the periodic payment. You can start and stop these periodic payments at your discretion. You can also take as many partial withdrawals as you need (limited to one every 30 days) while simultaneously taking periodic distributions. The primary benefit of the annuity option is to provide a lifetime stream of payments, eliminating the worry of running out of money one day. You may choose annuity features that provide for a survivor benefit, a cash refund, or a 10-year particular feature in the event you die early. You may also add a 2% annual cost-ofliving adjustment. The added features will affect the monthly payment amount. Once an annuity has been purchased, you cannot actively change the annuity payment or have access to the funds that were used to buy the annuity. For more details, refer to the following booklets: TSP Distributions https://www.tsp.gov/ publications/tspbk25.pdf?TSP-BK-25

I recently got married seven months ago and missed the 60-day window to elect family coverage (Option C) under the Federal Employees Group Life Insurance (FEGLI) program. I currently have basic coverage under FEGLI, but can I use the Standard Form 2822 to make this election if my spouse is healthy, or do I have to wait for a FEGLI open season to make this election?

Unfortunately, Standard Form 2822 only provides employees with the option of enrolling in Basic FEGLI or adding Options A and/or B in 2016, or experiencing a Qualifying Life Event (QLE). Also, while federally employed, if you experience a qualified life event (QLE) such as adoption or birth. These QLEs are listed in the instructions that accompany the Life Insurance Election Form, SF

COUNTDOWN TO COLA

The final determination of 2026 cost-of-living adjustments (COLA) to federal retirement annuities and Social Security benefits was announced on Oct. 24, 2025. It will be 2.8% for Civil Service Retirement System (CSRS) annuities and Social Security benefits and 2% for Federal Employee Retirement System (FERS) annuities. To calculate the 2026 cost-of-living adjustment (COLA), the 2026 third-quarter indices will be averaged and compared with the 2025 third-quarter average of 317.265, which is 2.8% greater than the average CPI-W for the third quarter of 2024 of 308.729. Due to the government shutdown, the U.S. Bureau of Labor Statistics was unable to provide the October 2025 CPI on Nov. 13, 2025 by NARFE Magazine’s printer deadline. Until the government resumes normal operation, the U.S. Bureau of Labor Statistics will NOT reschedule or produce any additional CPI releases. You can read the rescheduling notice at https://www.bls.gov/bls/092025-cpireschedule-notice.htm. The CPI represents purchases of food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services.

MONTH

SEPTEMBER 2025

CPI-W

318.139

Monthly % Change

0.28

% Change from 308.729

3.05

OCTOBER NOVEMBER DECEMBER For FECA COLA updates, visit narfe.org and search for FECA.

NARFE MAGAZINE www.NARFE.org

Questions & Answers

2817. For more information, visit https://www.opm. gov/forms/pdf_fill/sf2817.pdf. Meanwhile, suppose your spouse is healthy & insurable. In that case, an alternative option is to explore securing reasonable life insurance for your spouse in the private sector or open market.

RETIREMENT MAILING ADDRESS FOR 1099-R FORM

Q A

May I ask OPM to mail my 1099-R forms to my secondary residence?

1099-R forms are typically mailed out to annuitants by the end of January each year according to the mailing address that OPM has on file. However, if you want a duplicate Form 1099-R for the current year (or a previous year) mailed to a different address, there are three ways to request this: 1. Call OPM toll-free at 1 (888) 767-6738. OPM’s Customer Service Specialists are available during their regular business hours from 7:40 a.m. until 5:00 p.m. (Eastern Time). 2. Send an email to retire@opm.gov. Please include the title “Requesting duplicate 1099R” in the subject line and provide the details regarding your request, along with your CSA or CSF number, in the body of the email. 3. For annuitants who have previously set up their Services Online account with OPM, they can typically access their 1099-R forms online before others receive theirs in the mail each year. https://www.servicesonline.opm.gov/

CHANGE IN MONTHLY ANNUITY PAYMENT

Q A

Where can I find the current withholdings from my annuity payment?

Log on to servicesonline.opm.gov to see the most recent annuity statement and several archived statements. The statement shows gross annuity payment and up to 35 possible deductions or additions. The statement reflects changes made through the previous business day, except those made after the date for updating the monthly payment. Any changes made after that date will be reflected in the next month’s statement, when the change will be effective. Your statement will also show required payment adjustments, such as cost-of-living adjustments, 16

NARFE MAGAZINE JANUARY/FEBRUARY 2026

changes to insurance premiums, changes to the federal income tax withholding table, and changes to life insurance premiums.

EARNINGS TEST FOR FERS RETIREMENT ANNUITY SUPPLEMENT

I’m retired and receiving the FERS retirement annuity supplement (RAS) with my monthly annuity. I’m concerned because I went back to work part-time in the private sector in 2025 and was paid $6,000 more than the annual earnings limit. When will my RAS be reduced? What earnings are considered, and when should they be reported?

OPM will send you an “earnings survey” in the spring of 2026, usually in May, for you to report earnings from 2025 that exceeded the annual earnings limit of $23,400. You should report any earned income in the prior year after retirement. “Earned Income” means: • Any salary or pay you receive working for someone else (including overtime, vacation pay, bonuses, and severance pay, etc.). • If you are self-employed, any self-employment net earnings are made from working or managing your own business. • If you are re-employed in Federal service, the gross income before your employing agency offsets your salary. • Deferred income, which is compensation earned now but paid out later, is used for the earnings test in the year it was earned, not when it was received. For example, wages earned in one year but paid in a future year are counted toward your earnings limit in the year the work was done. Note: Certain deferred compensation received after stopping work, like bonuses or accumulated vacation pay, are considered “special payments” and do not count against the annual earnings limit. Generally, all income subject to the Federal Insurance Contributions Act (FICA, also known as Social Security) taxes or self-employment net profit is considered earned income. Work wages are on any W-2 statement issued by an employer. Be sure not to include any income earned before retirement. Income reported on IRS Form 1099 are not considered earned income and should not be

reported, such as: Civil Service Retirement System (CSRS) benefits, annuities, pensions, Social Security benefits, veteran’s benefits, and military retired pay, withdrawals from 401k plans, unemployment compensation, workers’ compensation, interest and dividends from savings accounts, stocks, personal loans, or home mortgages held, insurance proceeds, gifts, inheritances, estates, trusts, endowments, prizes, awards, gambling or lottery winnings, alimony/ child support, scholarships or fellowships, pay for jury duty, capital gains from the sale of personal property, amounts received in court actions, and rents or royalties unless received in the course of your trade or business. If you reach age 62 during the first six months of 2026, then OPM would most likely not send you the 2025 Annuity Supplement Earnings Survey in the spring of 2026. The FERS RAS ceases upon

becoming eligible for Social Security at age 62. If you are between your FERS minimum retirement age and age 62 during the first 6 months of 2026, you will receive the 2025 Annuity Supplement Earnings Report from OPM in the Spring of 2026. OPM reduces the RAS Your July FERS payment (payable in August) will be $1 for every $2 your 2025 reported income exceeded $23,400. Although the current Earnings Survey Form is not currently updated on OPM’s website, the following is an example of what it looks like, which can be found at https://www.opm.gov/ forms/pdf_fill/ri92-022_2021.pdf. To obtain an answer to a federal benefits question, NARFE members should call 800-456-8410 and select option 2 for the Federal Benefits Institute; send the question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits@narfe.org.

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Benefits Brief

Medicare’s General Enrollment Period for Part B: What about Medicare Parts A, C, and D?

or individuals age 65 or older, it may be time to consider enrolling in Medicare.

MEDICARE PART B

From Jan. 1 through March 31 each year, you can join Medicare Part B. Be aware that if it has been more than 12 months since the end of your Initial Enrollment Period (IEP), or the end of your employer sponsored group health plan based on current employment (the later of the two dates), you will incur a 10% late enrollment penalty for each 12 months. This is a permanent penalty based on the standard Part B premium. For 2026, $20.65 equals 10% of the standard premium of $206.50/month. If you didn’t think you needed Part B but have now realized that the benefits are worth the cost, the general enrollment period (GEP) is the time to enroll or reenroll if you previously dropped your Part B coverage. Part B covers outpatient care, and when combined with many Federal Employee Health Benefit (FEHB) and Postal Service Health Benefit (PSHB) plans, your out-ofpocket cost-sharing is eliminated because these plans waive your deductible, copayments, and coinsurance when Medicare is the primary payer.

PART A

If you are age 65 or older and receive Social Security benefits, you are automatically enrolled in Part A, hospital insurance. When FEHB/PSHB coverage is the secondary payer, many plans 18

will waive your inpatient costsharing. If your premiums are being deducted from a retirement payment, Medicare is most likely the primary payer. Most people should enroll in Part A when they turn 65, even if they have health insurance from an employer. However, some should consider delaying Part A until a later date, including those contributing to a Health Savings Account (HSA). Those eligible for premium-free Part A who are not automatically enrolled, can enroll at any time after first available eligibility.

PART C

If you enroll in Part A and Part B, sometimes referred to as “Original Medicare,” you can enroll in a Medicare Advantage (Part C) plan available through some FEHB/PSHB plans or during the annual open enrollment period from Oct. 15 to Dec. 7 for Medicare Advantage (MA) plans. These plans pair a Part B premium reimbursement with significantly reduced or no cost-sharing for healthcare expenses, as well as prescription drug costs. Part C plans must cover all medically necessary services that original Medicare covers and may also offer extra benefits that original Medicare doesn’t. You may need to get approval from your plan before it covers certain services or supplies that do not require approval under original Medicare. Also, MA plans include a cap on out-of-pocket expenses. In 2026, this cap may not exceed $9,250 for in-network services and an estimated $14,750 for all

NARFE MAGAZINE JANUARY/FEBRUARY 2026

covered services. Out-of-pocket limits only apply to services covered under Parts A and B.

PART D

If you have Part A, Part B or both, you may be auto-enrolled in a Medicare Part D drug plan through most FEHB/PSHB plans. Here are some things to know about the Part D Prescription Drug Plan (PDP) or Employer Group Waiver Plan (EGWP) offered through your FEHB/PSHB carriers: • Medicare drug benefits accessed through FEHB/PSHB plans offer expanded access to drugs at a lower cost. • You may only be covered by one Part D plan at a time. • There is no additional cost for the Part D EGWP unless you have a higher income and are subject to an Income Related Monthly Adjustment Amount (IRMAA) of $14.50 up to $91/ month per spouse. • Part D plans offer a $35/month cap on insulin products and an annual $2,100 (2026) cap on out-of-pocket Part D drug costs. • PSHB members (including eligible family members) who choose to opt out of a plan’s Part D EGWP prescription drug coverage will not receive any prescription drug coverage through PSHB. • If a family member of a USPS annuitant is not eligible for Part D, they will receive prescription drug coverage through the PSHB plan. • FEHB members (including eligible family members) may

BENEFITS RESOURCES NARFE OFFERS MEMBERS a wide range of information on federal benefits. Visit www.narfe.org/federal-benefits-institute.

opt out of the PDP or EGWP and return to the plan’s original drug benefit.

OTHER CONSIDERATIONS

• If you enroll in Parts A and B, sometimes referred to as “Original Medicare,” you can enroll in a (MA)/Part C plan. You will receive all of your benefits through the Part C provider. These plans are provided through many FEHB/PSHB plans as an enhanced benefit. Enrolling in a MA/Part C plan through the FEHBP plans that offer this benefit requires a “second” enrollment step to provide evidence of your enrollment in Parts A and B. Another way to obtain MA/Part C coverage is to enroll in a “commercial” MA/Part C plan through Medicare.gov during the annual open enrollment from Oct. 15 through Dec. 7. You can suspend your FEHB/PSHB coverage if you choose to enroll in a “commercial” MA/Part C plan. These plans provide greatly reduced or no cost-sharing for healthcare expenses, besides prescription drug costs, and generally will offer a reduction in the cost of Part B

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and some extra benefits such as gym membership, meal delivery, and non-emergency transportation to medical appointments. • All plans provide coverage overseas. Medicare is available only in the U.S., including the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. • Two benefits help people with limited income to afford Medicare: ◊ Medicare Savings Programs are a type of Medicaid that helps people pay the Medicare Part B premium (and sometimes other costs). You may hear these referred to by their acronyms: QMB, SLMB, or QI. ◊ Extra Help (also called the Part D Low-Income Subsidy or LIS) helps lower the cost of prescriptions and Part D plans. —MERCEDES JOHNSON IS A RETIREMENT AND BENEFITS SPECIALIST WITH RETIRE FEDERAL.

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Other fees such as late fees, returned check fees, and an over-the-limit fee may apply. For the full list of fees SFCU charges, please visit SignatureFCU.org/FeeSchedule. Annual Percentage Rate (APR) ranges from 12.99% - 18.00%. Rates, terms, and conditions may vary based on credit worthiness and qualifications. Your actual APR will be determined at the time of application and will be based on your application and credit information. Not all applicants will qualify for the lowest rate. Rates are set by the Board of Directors and may change without notice.

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NARFE MAGAZINE JANUARY/FEBRUARY 2026

Your Next Chapter

KEY BENEFITS DECISIONS FOR

BY TAMMY FLANAGAN

I’ve always thought that there should be another term for the word, “retirement.” After all, retiring from federal employment is not always the end of an individual’s working career. Sometimes it is a time to start something new.

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conomic research published by the Indeed Hiring Lab, https://www.hiringlab. org/2025/03/25/federal-employeeslooking-for-work/ reported that nearly 70% of federal employees who are actively searching for a new career have a bachelor’s degree or above. Understanding the education and skills of those impacted workers currently seeking new roles — and matching that with a view of the kinds of jobs available to fill nationwide — can provide insight into the ultimate likelihood of these workers finding new jobs soon. Reports on the attrition for the federal workforce in 2025 indicate that hundreds of thousands of workers have left their government careers. The total number was projected to exceed 300,000 by the end of 2025, driven by a combination of voluntary separations, retirements, and layoffs. By the end of September 2025, OPM had already received 94,157 applications for retirement with indications that approximately 60,000 more were “in the pipeline” and would soon be on their way. The January “Fork in the Road” memo required an initial deadline for separations to occur at the end of the fiscal year, and employees were expected to voluntarily leave their careers under the novel Deferred Resignation Program (DRP). There are two types of early retirement that allow employees to retire younger with less service; one called Voluntary Early Retirement Authority (VERA) and one that is an involuntary early retirement benefit or Discontinued Service Retirement (DSR) option. Many of the employees who left in 2025 were able to receive immediate retirement benefits if they were as young as age 50 with a minimum of 20 years of creditable service

By the end of September 2025, the Office of Personnel Management (OPM) had already received 94,157 applications for retirement, with indications that approximately 60,000 more were “in the pipeline” and would be submitted soon.

NARFE MAGAZINE JANUARY/FEBRUARY 2026

and at any age if the employees had 25 or more years of creditable service. Retiring at a much younger age means that, although the federal career may have ended in 2025, a new career is needed. It is difficult for an employee to be able to replace enough of their income with early retirement benefits. Here are some of the financial reasons forcing recent retirees to return to the workforce: • A FERS retirement, based on 25 years of service, replaces only 25% of an employee’s high-three average salary. After potential reductions to provide survivor benefits, prorations applied to reflect employees who had part-time work schedules, and apportionments that may be required for a former spouse added to the withholdings for taxes and insurance premiums leaves little left as the “net” FERS monthly benefit. • Rising prices due to inflation can erode the purchasing power of a FERS basic retirement benefit that does not receive inflation adjustments until age 62. • Fluctuating stock market markets and the housing market can reduce a nest egg and force younger retirement to find additional income. • Individuals who are in their 50’s may be supporting a family with children in college or getting married. Some will need to assist adult children and other family members financially. • Although most federal employees participate in the Thrift Savings Plan to provide additional retirement income, these accounts require many decades of savings and compound growth to reach the often-recommended goal of having 10 times of an employee’s salary set aside by retirement. As a rule of thumb, employees should strive to have the equivalent of their annual salary saved by age 30, and only 10 years later, at age 40, around three times their salary. This continues so that by age 50, there should be six times their salary set aside. Because of compounding, this goal is achievable for employees who diligently save for retirement. This is often referred to as “the magic of compounding.” Think of the fact that 10% growth on a $50,000 balance is $5,000 but 10% growth on $500,000 is $50,000 – ten times more! Compound interest is like a snowball being rolled down a hill that grows larger because of the larger base allowing larger amounts of snow to accumulate. Retirees at any age will often return to work for non-financial reasons such as:

Many of the employees who left in 2025 were able to receive immediate retirement benefits if they were age 50 or younger with at least 20 years of creditable service, or at any age with 25 or more years of creditable service. Retiring at a much younger age means that, although the federal career may have ended in 2025, a new job is needed. • Having too much unstructured time can lead to boredom and social isolation. • Leaving a career sometimes feels like leaving your identity behind along with a feeling of contributing and providing meaningful activities. • Meaningful work helps retirees maintain good health and ward off cognitive decline. • Being able to use the newfound freedom of retirement to pursue a lifelong interest such as starting a new career or business that aligns with rewarding and enjoyable hobbies.

Becoming a “Reemployed Annuitant” For federal retirees who return to government service, the implications for retirement and benefits depend on the retiree's specific situation, including their retirement system (FERS or CSRS), whether their separation was voluntary or involuntary, and the terms of the new position.

Rules for CSRS:

A retiree's annuity is terminated upon reemployment in the Federal service when the annuity is based on an involuntary separation such as a Reduction in Force (RIF). This is not the case if the separation was required by law based on age and length of service (i.e., such as mandatory retirement for the special provisions for federal law enforcement officers), or a separation for cause based on charges of misconduct or delinquency. The annuity is also terminated if it was based on disability and OPM has found the annuitant has recovered or restored to earning capacity prior to reemployment or the annuitant is under age 60 and is reemployed in a position equivalent in tenure and pay to the position from which he or she retired. If the annuitant receives a Presidential appointment subject to retirement deductions their CSRS annuity would also be terminated. When an annuity stops for either the first or second reason, the retiree NARFE MAGAZINE www.NARFE.org

has the same status as any other Federal employee employed in an equivalent position with a similar service history. However, the CSRS annuity will be reinstated after the retiree again leaves Federal employment, unless his or her right to receive that annuity has been terminated by another provision of law, or he or she is entitled to either an immediate or deferred CSRS or FERS annuity based on this new separation. A Presidential appointee is entitled to a redetermined annuity, or restoration of the original annuity with COLAs, whichever results in a higher or CSRS annuity. This amount is subtracted from annuity amount. the amount of your salary paid by the employing A CSRS retiree's annuity is suspended when Agency. Rehired annuitants may also elect to the annuitant is a former Member of Congress have retirement deductions withheld from their and the annuity is based on five or more years of new salary. The new agency is responsible for congressional and/or congressional employee service, paying the salary and remitting the offset amount unless the position in which he or she is reemployed to OPM for credit to the appropriate retirement is without pay or is on an intermittent basis; the fund. The salary offset rules do not apply when a annuitant is appointed as a justice or judge of the reemployed annuitant is approved for waiver of United States, or the annuitant is awarded interim offset of pay/annuity under exceptional or unusual relief and receives an interim appointment under the circumstances outlined in OPM’s CSRS and FERS order of an administrative or judicial forum under the retirement guides. provisions of Public Law 101.12, The Whistleblower Reemployed annuitants receive annual cost Protection Act. of living adjustments to their annuities (for most FERS annuitants these adjustments begin after Rules for FERS reaching age 62). This is in addition to the general Under FERS, a retiree's annuity is only terminated pay adjustment that is added to federal salaries upon reemployment in the Federal service when the annually. Agencies should have a process in place annuity is based on disability and OPM has found the that reminds reemployed annuitants to provide annuitant recovered or restored to earning capacity. updated copies of the COLA to increase notifications There is no provision in FERS to terminate annuities to their annuities from OPM to the servicing based on involuntary separations or upon receiving a Personnel Office to ensure their salaries are Presidential appointment. accurately offset. A FERS retiree's annuity is suspended when the Although, as a reemployed annuitant, you may annuitant is appointed as a justice or judge of the be working for the difference between your new United States, as defined by section 451 of title 28 salary and the amount of your retirement, there of the United States Code; or the annuitant receives are many benefits to becoming rehired into federal an interim appointment under the order of an employment. Here is a summary of those benefits: administrative or judicial forum under the provisions Federal Employees' Group Life of the Public Law 101-12, The Whistleblower Insurance (FEGLI) Protection Act. If retired voluntarily under CSRS or voluntarily When the annuitant is reemployed and their - or involuntarily - under FERS, the employee’s pay retirement benefit continues - and the position is FEGLI eligible - they will find that their basic as a reemployed annuitant is subject to an offset FEGLI insurance, Option A and Option C carried (reduction) equal to the amount paid in your FERS 24

NARFE MAGAZINE JANUARY/FEBRUARY 2026

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Dues Withholding is for retired members and is only $42 annually ($3.50/monthly annuity withholding). To apply, see NARFE’s Dues Witholding application on pg. 27 of this issue of NARFE Magazine or on the back of your next renewal notice. It takes about 4-5 months to get members onto dues withholding.

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as an annuitant, are suspended. The reemployed annuitant automatically receives basic life insurance as any other employee who is being hired into a career position. Also, if enrolled as an annuitant, Option A and Option C insurance are transferred to the employee with premiums withheld from the salary. If the reemployed annuitant waived FEGLI as an annuitant and is reemployed after a break in service of 180 days or more, the reemployed annuitant automatically is provided Basic insurance (even if previously waived) and can elect any type of optional coverage or increase the multiples of optional coverage within 31 days of returning to service. When the annuitant is reemployed under conditions that terminate the annuity, the life insurance carried as an annuitant is also terminated. There is no right to convert their coverage to an individual policy. The reemployed annuitant can get life insurance as an employee when the position is FEGLI eligible. When it comes to FEGLI Option B coverage (multiples of your salary up to five times your basic pay rate, if the annuitant is reemployed in a position that does not exclude coverage, they are given the opportunity within 60 days of reemployment to choose whether to keep Option B as an annuitant or elect it as an employee.

Federal Employees Health Benefits (FEHB) When the reemployed annuitant is enrolled in FEHB as an annuitant and reemployed in Federal service in a position that conveys FEHB eligibility, the reemployed annuitant may participate in 26

NARFE MAGAZINE JANUARY/FEBRUARY 2026

premium conversion, the program that allows Federal employees to use pre-tax dollars to pay insurance premiums for the FEHB Program and FEDVIP. Based on Federal tax rules, employees can deduct their share of health insurance, dental insurance and vision insurance premiums from their taxable income, which reduces their taxes. The enrollment can be transferred from the retirement system to the employing Agency. The FEHB premiums are deducted from the reemployed annuitant’s pay on a pre-tax basis as an employee. When the annuitant separates from reemployment, the payroll office for the employing Agency transfers enrollment back to the retirement system. When the reemployed annuitant is not enrolled in FEHB as an annuitant but is reemployed in a position that conveys FEHB eligibility, the reemployed annuitant may enroll the same as any other new employee. The annuitant continues enrollment after separation from reemployment when the annuitant receives a supplemental annuity or a redetermined annuity and meets all the requirements that any other retiring employee must meet.

Federal Employees Dental/Vision Program (FEDVIP) When the reemployed annuitant is enrolled in FEDVIP as an annuitant and is reemployed in a position eligible for FEDVIP, the annuitant must contact BENEFEDS (www.benefeds.gov) to elect to have premiums deducted as an employee. FEDVIP premiums paid by annuitants are post-tax dollars, whereas reemployed annuitants pay FEDVIP

NARFE’s Dues Withholding Program What is dues withholding? It is a dues-payment method available to retired NARFE members, their spouses and annuitant survivors giving them the option to have their annual NARFE membership dues deducted from their annuities each month. Advantages • Save more than 10% off your annual NARFE dues • Sign up your spouse and double your savings • You’ll never get another dues reminder from us • Your monthly payment is affordable and convenient • You may cancel your dues withholding at any time

How does it work? One-twelfth of your total dues is automatically deducted from your monthly annuity. Your monthly deduction is determined by the following formula: ($42 NARFE dues ÷ 12) + (Chapter dues - if applicable ÷ 12) = total monthly deduction How do I sign up? Complete the Dues Withholding Application below. Send no payment. It may take 60 to 90 days before auto-deduction starts. Your membership starts as soon as your application is received. To learn more about dues withholding, call 800-456-8410.

NARFE Dues Withholding Application for NARFE Members who are Retirees, Spouses of Retirees or Annuitant Survivors STOP! Complete this section ONLY if you are signing up for Dues Withholding. If so, DO NOT send payment

o YES. I want to enroll in NARFE’s Dues Withholding Program. NARFE dues of $42* and chapter dues, if applicable, to be withheld annually. (*Dues-withholding members save more than 10% off the regular NARFE dues rate.) Civil Service Annuity Number

Social Security Number (9-digit number)

–

C S

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(Include prefix, CSA or CSF) (Include any applicable suffix)

o Mr. o Mrs. o Miss o Ms.

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be withheld from my annuity. (Additional annual dues of $42 and chapter dues, if applicable, to be withheld annually. If YES, enter spouse’s information below.)

State ___________ ZIP _________________________ Phone (__________) ___________________________ Email _______________________________________ Date of Birth _________ /_________ /__________________ mm

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AUTHORIZATION (Withholding will begin in 60-90 days). Send NO PAYMENT with Dues Withholding Application! I authorize the United States Office of Personnel Management to make appropriate deductions from my annuity payments, not to exceed the amount certified by the National Active and Retired Federal Employees Association as the amount of dues for which I am annually obligated, in accordance with elections I made above, and to pay the deducted sum to the National Active and Retired Federal Employees Association (NARFE). This authorization shall also apply to any and all dues changes certified by NARFE membership in accordance with elections I made. Please allow 60-90 days for processing. I understand that this authorization shall be valid until NARFE receives and processes my written notice of cancellation in accordance with its agreement with the Office of Personnel Management and that any disputes regarding this authorization shall be a matter between NARFE and myself. I hold the Office of Personnel Management harmless for any erroneous allotment deduction made pursuant to this authorization. ___________________________________________________________________________

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Dues payments and gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes.

MAIL THIS FORM TO: NARFE, ATTN: Member Services, 606 N. Washington St., Alexandria, VA 22314-1914 800-456-8410

memberrecords@narfe.org

Do not send money with this form

(DW-2 01/21)

premiums with pre-tax dollars the same as other federal workers. When the reemployed annuitant is not enrolled in FEDVIP, and the position is eligible for enrollment, the employee may enroll as a newly hired/newly eligible employee within 60 days of reemployment.

to fill mission-critical needs or in other unusual circumstances.

Flexible Spending Accounts

An employee who has a break in service and returns to work for the Federal Government is entitled to the recredit of his or her sick leave, regardless of the length of the break in service. For a reemployed annuitant, any sick leave that is used in the computation of the employee's annuity is charged against the employee's sick leave account and cannot be used, transferred, or recredited in the future. For a FERS employee who retired between October 28, 2009, and December 31, 2013, 50 percent of his or her sick leave was credited toward the employee's FERS annuity computation. If the employee returns to Federal service as a reemployed annuitant, he or she is entitled to the recredit of the remaining 50 percent of his or her sick leave. For a CSRS employee, or a FERS employee who retires on or after January 1, 2014, 100 percent of the employee's sick leave will be used in the annuity computation, consequently, no sick leave will remain for recredit should the retiree later return to Federal service. Supplemental annuity: A supplemental annuity is payable only if the period of reemployment consists of at least one year of actual continuous full-time and/or part-time (equivalent to

As a reemployed annuitant, the annuitant is eligible to enroll as an employee in the Flexible Spending Account Program (FSAFEDS) for health care and/or a dependent care account 60 days after employment. For the FSAFEDS account, the reemployed annuitant’s position must be eligible to enroll in FEHB (although the employee is not required to enroll).

Long Term Care

A reemployed annuitant may continue the Federal Long Term Care Insurance Program (FLTCIP) coverage based on payment of premium. Deductions can be paid through the individual’s annuity or employee salary.

Dual compensation waivers

A waiver to the annuity offset is possible but rare. If an agency receives a waiver from the Office of Personnel Management (OPM), a reemployed annuitant can receive both their full salary and their full annuity without a salary offset. Waivers are typically granted for temporary appointments

Financial reasons forcing recent retirees to return to the workforce: • A Federal Employee Retirement System (FERS) retirement. • Rising prices due to inflation. • Fluctuating stock markets and the housing market. • Individuals who are in their 50s may be supporting a family with children in college or getting married. • Not enough TSP savings. 28

NARFE MAGAZINE JANUARY/FEBRUARY 2026

Potential for a higher annuity

Reemployment can offer the opportunity to increase a federal retiree's annuity in the future.

Recredit of Sick Leave

Your donation to NARFE works 365 days a year. GIVE TODAY and we’ll send you this calendar to remind you of the great things that NARFE does for you every day. Go to www.narfe.org/your-calendar to reserve your calendar. or more will go a long nt ou am is th in ft gi r You d pay and benefits! Hurry! Quantities are limited. rne ea r you g in ct ote pr to y wa

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at least one year of full-time employment) service. Retirees who meet this requirement can apply for a supplemental annuity, which adds an additional benefit to the original annuity based on the reemployment service. Redetermined annuity: After completing at least five years of reemployment service, a retiree can elect to have their entire annuity recalculated. The new annuity would be based on the combined service time and the highest average salary (“high-3”) from either the original or the reemployment service.

Thrift Savings Plan (TSP) implications For FERS annuitants: If you are reemployed in a position covered by FERS, you will be subject to automatic enrollment and can receive agency matching contributions. Your previous TSP elections may be reinstated if rehired with a break in service of less than 31 days. Retirees hired under a dual compensation waiver (without an annuity offset) are not eligible to make TSP contributions.

Key consideration for private vs. federal reemployment Federal retirees should carefully consider whether to return to federal or private sector work. Federal reemployment: Often results in a salary offset but offers the potential to increase your

NARFE MAGAZINE JANUARY/FEBRUARY 2026

federal retirement benefit through a supplemental or redetermined annuity. Private sector reemployment: Will not affect your federal annuity. You can keep your full federal retirement and receive a full private-sector salary. It is tempting to live a better lifestyle while receiving a retirement benefit and a new salary from reemployment. It is important to remember, however, that reemployment will end at some point. According an article in Business Insider, https://www. businessinsider.com/personal-finance/banking/ lifestyle-creep, lifestyle creep, or lifestyle inflation, is overspending after your income increases. For example, if you get a new job that gives you $20,000 more per year in take-home pay but decide to buy a (non-essential) car for $30,000, you'll have more debt than before your increased income. You can preplan around increases in wages. Be sure to increase your TSP or 401(k) contributions when you become reemployed just as you might each time you receive a raise or a bonus. This approach lets you maintain your current lifestyle while saving for retirement, so you can look forward to a comfortable life after leaving the workforce. Then you can join the many retired federal employees who are waking up without an alarm clock or dreading a long commute to the office. —TAMMY FLANAGAN IS A RETIREMENT EXPERT WITH RETIRE FEDERAL

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NARFE MAGAZINE JANUARY/FEBRUARY 2026

OWNERSHIP BY EVERETT A. CHASEN

Looking to buy a new home? Here are some tips to help in your search.

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early two-thirds of Americans live in a home they or a family member owns and occupies. In addition, according to Gallup, 30% of adults who don’t own a home expect to buy one in the next few years. Why is homeownership so widespread in the United States, and what are the advantages and disadvantages of owning a home?

NARFE MAGAZINE JANUARY/FEBRUARY 2026

“One of the huge advantages most people think of is you are building equity (the portion of your home’s value you own outright), as opposed to renting, where you’re just paying someone else for your housing—and you never see that money again,” said Melissa Ward, a Los Angeles-based real estate agent. “Every time you make a mortgage payment, you’re essentially paying yourself instead of a landlord. And homes generally and historically appreciate over time, meaning that your investment is going to grow over time, just as an investment in the stock market would.” The financial advantages of homeownership tend to derive from the ability to borrow against the value of the property on good terms, and then to deduct the interest payments from your taxable income—tax-advantaged leverage, according to Michael S. Miles, a certified financial planner (CFP) based in Northern Virginia who specializes in financial planning for federal employees and retirees. “In addition, by owning your home, you also get to avoid paying rent.” Homeowners can deduct mortgage interest. They can deduct up to $750,000 of mortgage debt to buy or improve a first or second home. They can also reduce their taxable income by deducting property taxes they pay on their homes. If they sell their home, they can exclude up to $250,000 ($500,000 for joint filers) of capital gains on profits made from the sale, as long as the home has been their principal residence for the past five years, and if they have not claimed a capital gains exclusion for the sale of another home during the previous two years. If they rent any of their property, they can also deduct the costs of improvements they make for that purpose. “For a lot of people, owning a home is not only a financial decision, but a lifestyle one,” said Ward. “You can make a lot of your own decisions about your property, which you can’t if you’re renting. You can’t always change things when you’re renting, so it gives you a bit of freedom to be able to make your own decisions about what you want to do with your home.” Ward also cited the value of building wealth through home ownership. “It’s something you can pass on if you have children, and building that generational value is huge, especially in this day and age,” she added. “And we’re seeing a lot more intergenerational living situations now, which I think is a lovely thing.”

Mortgage Information First-time homebuyers can take advantage of programs that offer lower or no down payment on mortgages. These include Department of Veterans Affairs loans; U.S. Department of Agriculture loans for properties in designated rural and suburban areas; Federal Housing Administration loans; Fannie Mae and Freddie Mac loans; and state and local assistance programs. The standard mortgage is a 20% down payment, but if you’re able to put down more than that, it will bring down your monthly costs, says Ward. Miles tends to favor a 30-year fixed-rate mortgage for 80% of the purchase price, without discount points and with reasonably low transaction costs, if available. “I think this should be the benchmark for comparison,” he said. Ward recommends that the first step someone looking for a mortgage should take is to speak with a lender. A lender can tell you exactly what type of mortgage you can get, the best mortgage for your situation, and what your rates will look like. “There are fixed-rate mortgages that give you nice predictability throughout the life of the loan,” she said. “Adjustable-rate mortgages might start lower, but carry the risk of increasing later. However, that may be exactly what you’re looking for. It depends on your situation, how long you plan

“It’s something you can pass on if you have children, and building that generational value is huge, especially in this day and age. And we’re seeing a lot more intergenerational living situations now, which I think is a lovely thing.” —M elissa Ward, a Los Angeles-based real estate agent. NARFE MAGAZINE www.NARFE.org

He also mentioned “capital illiquidity,” meaning “Renting is a better option if that the home’s equity cannot be quickly converted into cash without a significant loss in value. This you don’t plan to stay in the can pose a challenge for homeowners who may need some money for emergencies or other investments. home for at least five years. Finally, Miles cited transaction costs—the Real estate can be illiquid, and expenses incurred in buying and selling a house beyond the purchase price—and carrying costs— flipping homes can be expensive the ongoing expenses of owning and maintaining a property over time. and risky.” “Before you buy a home,” he said, “make sure

— Michael S. Miles, certified financial planner to stay in the home, and your financial comfort level with the risk different types of mortgages carry.” Ward suggested speaking to a few different lenders or mortgage brokers. “If you have a bank you’ve been with for a long time, that’s going to be the best place to start,” she said. “If you’re with a credit union, that’s always a good option. And a mortgage broker (someone who connects borrowers with lenders) can see what everyone’s offering: offers you wouldn’t necessarily have been able to find on your own.” A strong credit score is very desirable. To get one, pay your bills on time, keep credit balances low, pay off all outstanding debts, and manage your credit history responsibly. “Clean that all up first, so you have your best foot forward before seeing what your loan situation is going to be like,” Ward added. Additionally, she maintains a roster of credit repair resources to refer clients to, “so that when you are ready to start putting in offers, you’re going to shine above the rest.”

Potential Disadvantages to Homeownership There are disadvantages to homeownership that first-time buyers should consider. Miles cites the possibility of low appreciation rates for the property, where a property’s value increases at a slower-thantypical rate or below the rate of inflation. This can happen when a property is poorly maintained; the location is or becomes undesirable; there’s a lack of demand in the local real estate market; or there are adverse economic conditions, either locally or nationally. 36

NARFE MAGAZINE JANUARY/FEBRUARY 2026

you carefully consider all the costs of ownership, including mortgage interest, taxes, insurance, maintenance, repairs and improvements that will or might be needed.”

Hidden Costs of Becoming a Homeowner Homeowners insurance is going through a transition period in California, according to Ward. “The insurance market has changed significantly because of natural disasters like fires and floods,” she said. “In other parts of the country, too, hurricanes and storms have become more regular. We always recommend that buyers look into insurance ahead of time and figure out what those costs will look like. Because if you’re not properly insured, as we saw very dramatically in 2025, you could lose everything, and still have to pay your mortgage on a house that doesn’t exist anymore.” Ward suggested speaking to a local insurance broker before agreeing to purchase a home to get an idea of what insurance costs look like in the area you’re considering. Many purchase agreements now include an insurance contingency, where you have a certain amount of time to find someone to write an insurance policy on the property you’re looking at. If not, you can pull out of the deal without penalty. Closing costs, which are miscellaneous fees and expenses you pay when you buy a home, are another transactional cost buyers need to be prepared for. Besides insurance premiums, these costs can include appraisal fees, title insurance, attorney fees, prepaid interest, and property taxes. Ward estimates that closing costs can range anywhere from 2 to 5% of the purchase price. Real estate agents like Ward can give homebuyers estimates of closing costs and what they should budget for.

One significant cost first-time homebuyers may not think about is maintenance and repairs. “I always bring this up,” said Ward, “because they’re coming from renting, and they’re used to being able to call up their landlord when the sink is overflowing—and the landlord just sends someone out and fixes it. They don’t see the cost of that.” As a rule of thumb, she suggested homeowners budget 1 to 4% of the house's cost each year for repairs. “Have a separate house fund you feed into so you’re not scrambling when things like the need to replace your washer and dryer happen,” Ward said. One way to avoid unexpected repair costs is to purchase a condominium (condo) or shares in a cooperative (co-op). A condo is a building or a complex of buildings that contains individually owned apartments or houses. A co-op is a type of housing in which residents collectively own and manage the building or property, rather than owning individual units. “Sometimes a condo or a co-op can be a nice starter version of homeownership, because you have to take care of your own unit, but you still have a homeowner’s association that will make

some decisions for you, like whether a roof needs replacing,” said Ward. “It’s not quite as fully independent as a single-family home, but it’s a nice transition. It’s also true the other way around, a nice transition down from home ownership. If you feel like it’s too much for you to continue to take care of, say, a large yard, transitioning into a condo can provide a little reprieve from the amount of responsibilities you have.”

Value of a Buyer’s Agent

Another aspect of homebuying is finding an agent to help you through the process. While “doing it yourself” may save you commission fees (and it may not, as the seller pays many such fees), there are plenty of reasons to work with an agent. “Agents know about neighborhoods, commuting time, and market trends—little things that are always super helpful,” said Ward. “Pretty much everyone has access to listings on the Multiple Listing Service (MLS), but if your agent has good relations not only with agents within their brokerage but with other brokerages as well, they can call them and say: hey, my clients aren’t finding what they’re looking for. Do you have

NARFE MAGAZINE www.NARFE.org

“The insurance market has changed significantly because of natural disasters like fires and floods. In other parts of the country, too, hurricanes and storms have become more regular. We always recommend that buyers look into insurance ahead of time and figure out what those costs will look like.” — Ward, on the transitional period happening with homeowners insurance

anything that’s coming up? Do you have anything off-market? Is there anything we’re not seeing on the public sites we might be able to tap into? That’s what an excellent agent can do for you.” During the purchase process, good agents walk you through every paragraph of the purchase agreements and explain what everything means. They make sure you’re not missing anything. An agent’s fiduciary duty to a client is to make sure the client is getting the best deal possible and not being taken advantage of in any way. Ward used the analogy that you can represent yourself in court if you want, but you will definitely come out better if you use an attorney who knows the process. Real estate agents serve the same function. Ward offers NARFE members interested in purchasing a home a free consultation and help in finding a skilled, ethical agent who will work in their best interest. “I’m happy to help and talk to anyone,” she said. “And if you’re in a different area (from Los Angeles), I will always have a good connection and a resource to help you find someone. You should never have to call someone you don’t know and hope they won't mess up. You should always be able to call someone you trust and have them help you find another trustworthy person in the area you’re looking at. The referral network is huge, and it’s definitely something people should take advantage of.” 38

NARFE MAGAZINE JANUARY/FEBRUARY 2026

Ward’s email address is melissaward@compass. com, and you can learn more about her at www. compass.com/agents/melissa-ward-la.

Final Advice Both Miles and Ward have some final thoughts for prospective homebuyers. “Renting is a better option if you don’t plan to stay in the home for at least five years,” Miles said. “Real estate can be illiquid, and flipping homes can be expensive and risky.” “I think a lot of people worry about when the right time is to buy,” added Ward. “Should I buy now? Should I wait? And the same is true for sellers: when am I going to get the price I want?” “I always tell people: if you need to buy a house, now’s the time to buy. If you need to sell your house, now’s the time to sell.” Ward thinks people always end up satisfied with their decisions when they base them on what they need in life, rather than trying to make marketbased decisions. “Housing is something we all need, and your decisions should be made based on what you need,” she said. “If you can include what you want in there, that’s amazing! At the end of the day, I think that’s when people feel the best about their decisions.” —EVERETT A. CHASEN IS A FREELANCE REPORTER BASED IN THE GREATER WASHINGTON, D.C. AREA.

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Managing Money

Tracking IRA Basis to Avoid Double Taxation

elieve it or not, the Internal Revenue Service (IRS)

doesn’t want you paying tax on the same dollar twice, but unfortunately, many retirees do because they fail to

report the basis in their traditional individual retirement accounts (IRAs) properly. Fortunately, the IRS allows taxpayers to correct their mistakes and establish their basis even years later. Think of the basis as the “already taxed” money inside a traditional IRA. While most traditional IRAs contain only pre-tax dollars – money that has never been taxed and is fully taxable when withdrawn – there are times when after-tax dollars end up in a traditional IRA, creating what’s called basis. For federal retirees, there are two common ways that basis ends up in traditional IRAs. The first involves non-deductible IRA contributions made while working. Taxpayers with earned income may contribute to a traditional IRA, even if they are covered by an employer-based retirement plan, such as the Thrift Savings Plan (TSP), or are married to someone who is. There are income phase-out limits that determine whether a contribution is deductible. When income exceeds these limits, the contribution becomes nondeductible, creating basis in the traditional IRA. The second way a federal retiree can establish basis in a traditional IRA is through voluntary contributions. Voluntary contributions are a supplementary Civil Service Retirement System (CSRS) retirement plan funded with after-tax contributions, which may be used to generate an

WHILE IRA CUSTODIANS REPORT CONTRIBUTIONS AND DISTRIBUTIONS TO THE IRS, THEY DO NOT REPORT OR TRACK WHETHER THE MONIES IN A TRADITIONAL IRA ARE PRE-TAX OR AFTER-TAX.

additional annuity at retirement. Alternatively, a CSRS participant may request a refund of their voluntary contributions and elect to roll the funds into an IRA. The optimal strategy is to initiate a tax-free conversion of the after-tax contributions to a Roth IRA. However, many CSRS retirees instead rolled these contributions into a traditional IRA, creating basis. While IRA custodians report contributions and distributions to the IRS, they do not report or track whether the monies in a traditional IRA are pre-tax or after-tax. That responsibility falls entirely on the taxpayer. Using Form 8606, taxpayers report when they make a non-deductible

NARFE MAGAZINE JANUARY/FEBRUARY 2026

contribution or rollover after-tax funds from a retirement plan, such as voluntary contributions to a traditional IRA. Furthermore, when a traditional IRA contains basis, Form 8606 must also be filed when a distribution is taken from any of the taxpayer’s traditional IRA, Simplified Employee Pension (SEP) IRA, or Savings Incentive Match Plan for Employees (SIMPLE) IRA. It’s essential to understand that the IRS doesn’t let you cherry-pick which dollars you withdraw or convert. Using Form 8606, taxpayers must aggregate the total value of all traditional, SEP, and SIMPLE IRAs. Then, they calculate the percentage of the total value that represents pre-tax dollars and the percentage that represents after-tax dollars (basis). This pro rata calculation will determine how much of the distribution will be considered to come from basis (and therefore tax-free) and how much will be considered to come from pre-tax money (and thus taxable). Unfortunately, many taxpayers fail to file Form 8606 to report basis when they should have. As a result, the IRS assumes the entire traditional IRA balance is pre-tax money, which can potentially lead to double taxation. Fortunately, Form 8606 can be filed retroactively for any year it was missed. Importantly, this does not require amending tax returns as Form 8606 can be filed separately for previous years. If you still have documentation such as IRA

BENEFITS RESOURCES NARFE OFFERS MEMBERS a wide range of information on federal benefits. Visit www.narfe.org/federal-benefits-institute.

statements reporting contributions, Form 5498s, which IRA custodians issue to report contributions, or old tax returns showing whether a deduction was claimed for a contribution, those can be used to reconstruct your basis and correct prior-year reporting. All is not lost if you don’t have detailed and complete records. A 2018 tax court case, Shank v. Commissioner (T.C. Memo. 2018-33), offers some relief. In that case, the court applied the “Cohan Rule,” named after a 1930 decision that allows taxpayers to use a “reasonable evidentiary basis” when exact documentation is unavailable. If you’ve made non-deductible IRA contributions or rolled over CSRS Voluntary Contributions, review your tax returns to make

sure you have been filing Form 8606 correctly. If not, take corrective action to avoid double taxation. While the IRS doesn’t want to tax your money twice, they won’t go out of their way to stop it either. MARK A. KEEN, CFP®, PARTNER, KEEN & POCOCK. SECURITIES OFFERED THROUGH THE STRATEGIC FINANCIAL ALLIANCE, INC. (SFA), MEMBER FINRA/SIPC. ADVISORY SERVICES OFFERED THROUGH STRATEGIC BLUEPRINT, LLC AND THE STRATEGIC FINANCIAL ALLIANCE, INC. MARK KEEN IS A REGISTERED PRINCIPAL OF SFA AND AN INVESTMENT ADVISOR REPRESENTATIVE OF SFA AND STRATEGIC BLUEPRINT, LLC. SFA AND STRATEGIC BLUEPRINT ARE AFFILIATED THROUGH COMMON OWNERSHIP BUT OTHERWISE UNAFFILIATED WITH KEEN & POCOCK. NEITHER STRATEGIC BLUEPRINT NOR SFA PROVIDE TAX OR LEGAL ADVICE.

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NARFE News

Enter NARFE’s 2026 Photo Contest

apture the image that conveys your interpretation of the theme “Our American Adventure” and submit it to the 2026 NARFE Photo Contest. Winning photos will

be featured in the 2027 NARFE Calendar. Submissions will be accepted now through March 6, 2026. All NARFE members in good standing, except for those who are professional photographers, are eligible to enter, even if they’ve already had a photo appear in past calendars. By entering the contest, you grant NARFE a nonexclusive license to use your photo in perpetuity in any medium, including editing, publishing, distributing and republishing it in any form. Entrants retain the copyright to their images. NARFE assumes no liability for any misuse of copyright. Photos for the 2027 calendar will be selected and winners notified by the end of June 2026. Send photos to NARFE Photo Contest, Attn: Communications, NARFE, 606 N. Washington St., Alexandria, VA 22314.

CONTEST GUIDELINES • Photos must be horizontal and size 10″ w x 8″ h or 11″ w x 8.5″ h • Each member is limited to five photo entries • No photos of children or pets, please • Photos sent by email will not be accepted • No Polaroids • Photos will not be returned The following information must be written on a piece of paper and taped to the back of each photo: • Title of photo • Description (up to 15 words) • Member name / address / email / phone number • Indicate chapter name and number or national member

SUBMIT YOUR 2026 FEDERATION/REGIONAL EVENT INFORMATION If your federation or region is planning to hold a 2026 event or election, please complete the form att https://www.narfe.org/submit-2026-federation-conferenceselections/ to provide location, dates and contact information. Event details will be published in NARFE Magazine at no charge as space allows throughout 2026. 42

NARFE MAGAZINE JANUARY/FEBRUARY 2026

NARFE Sees Plenty of Growth in 2025

ARFE’s ongoing goal to stabilize membership and chart a path toward growth was jump-started in early 2025. Since my arrival in April 2023, membership has been on a path toward stabilization, with a focus on bringing more lapsed members back into active status and increasing the quantity of mail, while also stabilizing the mail schedule for this group. The reinstatement mailings, while very successful, only get NARFE half of the way there, and the remainder of the members need to be brought in as new. To meet this goal, you may have heard that in 2024, Street Level Studio and BRG Communications were hired to increase visibility for NARFE and enhance brand awareness, ultimately helping NARFE attract new members. The fall of 2024 was spent researching and developing, including multiple member surveys, interviewing FEDcon24 participants, and even conducting focus groups with NARFE’s active federal employee members. There were also test campaigns that ran in November 2024, which contributed to a surge of 900 new members joining that month, indicating that something was starting to take shape. The Association Management Software, or AMS, underwent a complete upgrade in the fall of 2024 and was back up and running normally by the beginning of 2025. This was just in time for the influx of new members arriving due to the disruption to the federal workforce that began with the January 20 Inauguration of President Donald Trump. In January 2025, we experienced a surge of more than 1,000 new members, and in

February, we saw more than 2,000 new members join online. At the same time, BRG Communications secured numerous TV And print interview requests for John Hatton, NARFE’s staff vice president for policy and programs, as well as a letter to the editor in The Washington Post from President Bill Shackelford. Street Level Studio’s new ads began rolling out in March and NARFE contineud to see increased gains through May and June. The strong start to the year meant that NARFE had acquired almost as many new members in the first quarter of 2025 as it had in the entire previous year. NARFE experienced a 300% increase in online memberships, comparing the first six months of 2024 to the same period in 2025. As of the print deadline for this issue, see the chart below for the latest membership counts, still trending in the positive nine months into the year. On October 15, membership began surging again, due to the launch of NARFE’s Open Season webinars and Street Level Studio’s newly designed Open Season ad campaign. See the examples of some successful ads above. Although it is unknown how 2025 will conclude as I write this column, there is no denying that NARFE became more visible to more members in 2025. Comparing the first six months

of 2024 to the first six months of 2025, NARFE saw a 15% difference between active employees and annuitants decrease to a 7% difference. More active employees are learning about and joining NARFE every day. There is still a long way to go to increase the name recognition of NARFE among active employees, but with these ad campaigns and new work still to be developed in 2026, significant headway has been made in beginning to close the awareness gap. —BY NORA MACDONALD, SENIOR DIRECTOR OF MEMBER ENGAGEMENT

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NARFE News

Longtime NARFE Member Rep Promoted to Federal Benefits Team

fter 23 years serving in an exemplary role as the friendliest voice you’ll talk to on the phone as a NARFE member services representative, Terri Badie decided in 2025 that, in her heart, it was time for a change. Just in time for the Open Season influx of calls and emails, she immediately joined and bolstered the needs of the Federal Benefits Institute as a representative. “It’s quite complex,” she says about the needs of federal retirees and their benefits. “There are

many layers to it. It’s going to come in stages.” Terri has a BA in Psychology and started in August 2002 in Dues Withholding within the Membership Department, and her job evolved from there. When she asked to try new things, NARFE leadership gladly obliged. In 2003, she took on working the 1-800 phone line for NARFE. She always handles her growth and development at NARFE with the utmost care, and in 2004, she transitioned from the 800-

Line to Dues Receiving within Membership. Fast forward to 2020, when the pandemic struck, and every representative in the Membership

NARFE Magazine Statement of Ownership, Management and Circulation 1. Publication Title: NARFE 2. Publication Number: 4632-60 3. Filing Date: October 20, 2025 4. Issue Frequency: Monthly except February and July 5. Issues Published Annually: 10 6. Annual Subscription Price: $48 7. Address of Known Office of Publication: 606 N. Washington Street, Alexandria, VA 22314-1914 8. General Business Office of the Publisher: 606 N. Washington Street, Alexandria, VA 22314-1914 9. Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: Publisher: National Active and Retired Federal Employees Association, 606 N. Washington Street, Alexandria, VA 22314-1914 Editor: Jennifer Rafael, Senior Director of Communications and Technology, 606 N. Washington Street, Alexandria, VA 22314-1914 Managing Editor: Matthew Sanderson, Sr. Content Manager, 606 N. Washington Street, Alexandria, VA 22314-1914 10. Owner: National Active and Retired Federal Employees Association, 606 N. Washington Street, Alexandria, VA 22314-1914 11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages or Other Securities: None 12. Tax Status: Has Not Changed During Preceding 12 Months

13. Publication Title: NARFE 14. Issue Date for Circulation Data Below: October 2025 15. Extent and Nature of Circulation: Average No. Copies Each Issue During Preceding 12 Months Date A. Total Number of Copies (Net Press Run) 132,544 B. Paid Circulation 1. Mailed Outside-County Paid Subscriptions Stated on PS Form 3541 126,288 2. Mailed In-County Paid Subscriptions Stated on PS Form 3541 N/A 3. Paid Distribution Outside the Mails including Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid Distribution Outside USPS 181 4. Paid Distribution by Other Classes of Mail Through the USPS 300 C. Total Paid Distribution 126,769 D. Free or Nominal Rate Distribution 1. Free or Nominal Rate Outside-County Copies included on PS Form 35410 523 2. Free or Nominal Rate In-County Copies included on PS Form 3541 N/A 3. Free or Nominal Rate Copies Mailed at Other Classes Through the USPS 142 4. Free or Nominal Rate Distribution Outside the Mail 3,411 E. Total Free or Nominal Rate Distribution 4,076 F. Total Distribution 130,845 G. Copies Not Distributed 1,699 H. TOTAL 132,544 I. Percent Paid and/or Requested Circulation 97% 16. If total circulation includes electronic copies, report that circulation on lines below: A. Paid Electronic Copies 1,211 B. Total Paid Print Copies (Line 15C) + Paid Electronic Copies 127,980 C. Total Print Distribution (Line 15F) + Paid Electronic Copies 132,056 D. Percent Paid (Both Print & Electronic Copies) % 17. Publication of Statement of Ownership: January 2026 18. I certify that all information furnished on this form is true and complete. Jennifer Rafael, NARFE Senior Director of Communications and Technology/October 20, 2025

NARFE MAGAZINE JANUARY/FEBRUARY 2026

No. Copies of Single Issue Published Closest to Filing 129478 123,313 N/A

180 300 123793 515 N/A 141 3,850 4,506 128,299 1,299 129,478 96% 1,736 125,529 130,035 %

Department became 1-800 Operators with split positions; so, Terri went back to the phones; as a Dues Receiving/800-Line Operator. In federal benefits, whether it’s during the busy height of Open Season or in general year-round, when retirees are dealing with questions such as navigating the retirement application process with the Office of Personnel Management, NARFE’s federal benefits team fields very specific, complex questions that are almost singularly centered on one individual’s path in the retirement process. Over time, a federal benefits representative builds a detailed record of handling inbound questions from NARFE members, much like the necessary messaging required in membership services or general customer care, to bring about a resolution. Terri, who’s always keen to learn and delivers the

most consistent, empathetic approach to every NARFE member, brings the experience and skill level to handle the challenge of federal benefits. If a question is too complex to answer right away, NARFE’s Federal Benefits Institute has contracted experts to handle the most challenging situations in consulting with federal retirees. “Our members are quite fortunate,” she says. “Our experts have decades and decades of experience. From a knowledge standpoint, it takes a lifetime to learn federal benefits.” Some of NARFE’s federal benefits experts are retired and can to work part-time for the organization. “We have several federal benefits specialists who handle specific questions, but we can refer members who need comprehensive guidance to a group we partner with,” says Terri. “Basic guidance

is included with the membership. Comprehensive guidance is provided to our members on a fee basis.” Now with Open Season 2025 in her rearview, Terri is already learning beyond the basic questions to help the federal benefits team. “Terri has been a tremendous asset to the Federal Benefits Institute (Institute) team,” said Ellie Dorsey, NARFE federal benefits manager. “She has over 20 years of experience in customer care at NARFE, and her expertise in this area has been evident in her prompt attention to all inquiries to the Institute, including her efficiency with managing calls and emails. She has established a strong rapport with the Institute’s benefits specialists, and her efforts are greatly appreciated.” —BY MATT SANDERSON, SENIOR CONTENT MANAGER

NARFE FEDERAL BENEFITS INSTITUTE

NARFE Webinars

Answers for the Federal Community ON-DEMAND WEBINARS NOW AVAILABLE Open Season Follow-Up Estate Planning for Feds FEHB and Medicare Prescription Drug Plans FEHB/PSHB with Medicard FEHB/PSHB without Medicare (Active Feds) Medicare: To Part B or Not to B And more!

To see On-Demand webinars go to www.NARFE.org/webinar-archive, where you can find links to each webinar and download the slides from each presentation. Questions? Members can call 800-456-8410 x2 or email NARFE’s federal benefits specialists at fedbenefits@narfe.org. Not a member? Join NARFE today at NARFE.org/Join. NARFE MAGAZINE www.NARFE.org

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