Retirement Policy

There are some special consideration for late-career employees who are looking ahead to retirement—and beyond, to possible reemployment with the government—regarding flexible spending accounts, which can be elected in the November-December open season for next year.


FSA accounts allow active employees to set aside pre-tax money to pay certain dependent care costs, as well as certain medical costs not covered by health insurance. However, as with the “premium conversion” arrangement that allows payment of health insurance premiums with pre-tax money, retirees are ineligible.


However, if you are reemployed you may voluntarily establish an FSA account from your salary. Note that money in FSA accounts is “use or lose”—that is, it can’t be rolled over from one year to the next, beyond a grace period that goes 10 weeks into the subsequent year. So for those who expect to be reemployed for a fairly short period, it may be difficult to accurately assess how much to put into such an account and not risk losing unspent money upon a second separation from service. 


On the other hand, the entire amount designated for a year for a health savings account would be available for paying claims from the outset, and there would be no requirement to make good the difference for those who drew out more in claims than they paid in before separating.


Status as an annuitant under the retirement regulations and the right to continue FEHB as an annuitant following a period of reemployment is unaffected.