Tall Oaks Podcast — Episode 125 with Branden DuCharme & Trevor Trebbien
Federal employees have one of the strongest retirement setups in the country — a pension, Social Security, and a low-cost 401(k)-style plan stacked on top of each other. So why do so many of them arrive at retirement scrambling? Because the whole thing is do-it-yourself, and the only “advisor” most people ever consult is the coworker at the next desk or a search bar. On Episode 125 of the Tall Oaks Podcast, Branden DuCharme sat down with Trevor Trebbien of Encompass More, who spends his days untangling exactly this, to walk through how federal retirement actually works — and the handful of levers that decide whether you coast into retirement or claw your way there.
Here’s the short version, then the details.
Quick answer: How does federal employee retirement work?
Federal retirement under FERS (the Federal Employees Retirement System) rests on three parts: a pension based on your salary and years of service, Social Security, and the Thrift Savings Plan (TSP) — the government’s version of a 401(k). The pension gives the plan its stability, the TSP does the heavy lifting for growth, and a few specific moves — capturing the full 5% TSP match, buying back military time, timing Social Security, and running Roth conversions in low-tax years — separate a good outcome from a mediocre one. Miss those, and you leave real money on the table.
Now the parts that matter.
Table of contents
Why federal retirement is a “do it yourself” system
The FERS pension: the predictable leg of the stool
The TSP: simple on purpose, and easy to under-use
The 5% match: the closest thing to free money you’ll ever get
The five TSP funds, in plain English
Chasing performance: the quiet account-killer
The landmines (and the bag of gold)
FAQ
Listen to the full episode
Why federal retirement is a “do it yourself” system
Trevor’s core observation is almost uncomfortable in how true it is: the federal retirement program hands you powerful tools and virtually no guidance on how to use them. HR can hand out generalities but is legally boxed out of giving actual advice. So people fill the vacuum with hallway wisdom and Google — and then base their entire financial future on it.
The upside of a pension-backed plan is that most people stay long enough to see it through. The downside is that “I’ll figure it out later” quietly becomes the plan. As Branden put it, planning almost always needs to start sooner than people think. The employees who thrive understand the plan in simple terms early; the ones who reach out to Trevor already close to retirement are often trying to pull levers that work best when pulled years in advance.
The FERS pension: the predictable leg of the stool
The pension is the piece that makes federal retirement feel safe, because it’s built on math you can see coming.
It’s calculated on time and salary. Specifically, your “high-3” — the average of your three highest consecutive years of pay — run through a formula tied to your years of service. Two numbers anchor eligibility: the minimum retirement age of 57, and the 20-year service mark that puts you in what Trevor calls the “golden area.” Locality matters too — the same role in Orem versus the San Francisco Bay Area carries a different salary, and the formula follows.
As a rough rule of thumb, the pension works out to a little over 1% of your high-3 per year of service. Trevor’s example: someone with a $100,000 high-3 and 20 years of service lands around $2,000 a month — about $24,000 a year.
Because it’s so predictable, the pension is also where planning quietly stalls. The common trap sounds reasonable: “Social Security plus my pension covers most of my paycheck, so I just need to pay off the mortgage and the car and I’m fine.” That’s a fine starting point. It’s a terrible finish line.
The TSP: simple on purpose, and easy to under-use
The Thrift Savings Plan is the growth-and-liquidity leg of the three-legged stool. It’s designed to be simple, and simple isn’t a flaw — but “simple and ignored” is where people lose ground.
A quick note that trips people up: the TSP is managed by BlackRock, but you own the fund units. When people grumble that “BlackRock owns the world,” it’s worth remembering the mechanics — you own the fund, the fund holds the shares, and the fund shows up on the filings. You’re the owner; the fund is just the vehicle.
The 5% match: the closest thing to free money you’ll ever get
If you take one thing from the episode, take this. The TSP match is tiered:
The government matches dollar-for-dollar on your first 3%.
It matches 50 cents on the dollar from 3% to 5%.
Contribute the full 5%, and you capture the entire match available to you.
Put in 5%, get the full match — an immediate, guaranteed return on the money you contribute, before a single dollar is ever invested. Trevor’s advice was refreshingly blunt: people skip it because they don’t love the withholding early in their careers, but just do the 5%. Leaving it on the table is the single most common, most expensive mistake federal employees make with their TSP.
The five TSP funds, in plain English
TSP investing is deliberately streamlined into five core funds:
G Fund — Government securities. The conservative, stable-value option.
F Fund — Fixed income, tracking the Bloomberg U.S. Aggregate Bond Index (Treasuries, investment-grade corporate bonds, and mortgage-backed securities). It can out-yield a plain Treasury but carries some credit and reinvestment risk.
C Fund — Common stock, tracking the S&P 500: about 500 of the largest U.S. companies, market-cap weighted.
S Fund — U.S. small- and mid-cap stocks — the “completion” index of American companies outside the S&P 500.
I Fund — International stocks.
The best part: the five core funds are nearly free, running expense ratios under three basis points. As Branden noted, “simple” doesn’t mean “bad” — a low-cost index fund that matches your goals is a perfectly good tool.
One thing worth understanding is how an index is weighted, because it changes behavior. The S&P 500 is market-cap weighted — bigger companies carry more of the index. The Dow Jones, by contrast, is price-weighted: a stock’s share price, not the company’s size, drives its weight. That’s a quirk left over from an era before frequent stock splits, and it’s why two “large-cap” indexes can move quite differently, with the more value-tilted Dow sometimes leading when value is in favor.
Investing internationally (the I Fund) adds a second layer of risk beyond “will these companies do well?” — currency. Because your returns are measured in U.S. dollars, a strong foreign business can still deliver weak dollar returns if the dollar strengthens against the local currency. That dynamic drove years of international underperformance when the dollar was strong, and it flipped when the dollar had its worst year in recent memory and international snapped back. Branden’s gut check: to know whether international is genuinely outperforming or just riding a weak-dollar wave, compare it against gold, another dollar-sensitive asset.
Chasing performance: the quiet account-killer
Here’s the behavior that undoes good savers. Someone hears a colleague brag, “I went all-in on the C Fund, and now I’m a TSP millionaire,” and they chase it. Or the market drops, they panic, and they move everything to the G Fund and leave years of growth on the table.
Both are the same mistake in different clothes: reacting emotionally to recent performance. Branden didn’t soften it — logging into your TSP to buy whatever went up lately isn’t kind of a bad idea; it’s a really bad idea. For people who don’t want to manage it themselves, the Lifecycle (L) funds — target-date funds that automatically shift more conservative as your date approaches — are a clean, hands-off default. There’s also a limited mutual fund window for outside funds, though it carries fees the core funds don’t and comes with no advice attached (you can review what’s available at TSP.gov as a participant).
The landmines (and the bag of gold)
Beyond the mechanics, a few situations quietly make or break federal retirements.
Buying back military time — the “bag of gold.” If you served in the military and then took a federal civilian job, you can often “buy back” your military years and credit them toward your FERS pension through a payroll allotment. Trevor’s example lands hard: if you’re aiming for 20 years of service and have 10 years of military time, you can buy those years back and only have 10 more to work. For veterans in the federal workforce, this is one of the most valuable and least-known moves available.
The Social Security supplement. Certain early federal retirees qualify for a supplement that bridges the gap before Social Security begins — Trevor described a client who started at Indian Health Service straight out of high school, hit 30 years of service in her mid-50s with $1 million already in her TSP, and qualified for a supplement paying a portion of her projected age-62 benefit to carry her through the in-between years. Timing Social Security, coordinating it with TSP withdrawals, and deciding whether to lean on the supplement is where real income planning lives.
Roth conversion windows. Long-tenured employees often sit on a large, fully traditional (pre-tax) TSP balance. There’s frequently a window — retired early, not yet claiming Social Security, low or no earned income — where you can convert traditional dollars to Roth while filling up your standard deduction and the 10% and 12% brackets. Done deliberately over a few years, this can meaningfully shrink your taxes and required distributions later in life. One critical detail Branden flagged: pay the tax from outside the account, not by withholding it from the converted funds. The TSP now offers Roth conversions and Roth TSP contributions directly, though many people skip the Roth contributions simply to avoid paying tax now.
FAQ
What is FERS? FERS stands for the Federal Employees Retirement System. It’s the retirement plan for most federal workers, made up of a pension, Social Security, and the Thrift Savings Plan.
What is the TSP match, and how much should I contribute? The TSP matches dollar-for-dollar on your first 3% and 50 cents on the dollar from 3% to 5%. Contribute at least 5% to capture the full match — anything less leaves guaranteed money behind.
What’s the difference between the C Fund and the S Fund? The C Fund tracks the S&P 500 (large U.S. companies). The S Fund tracks the U.S. small- and mid-cap market — the companies outside the S&P 500. Together they cover most of the U.S. stock market.
Can you buy back military time toward a federal pension? Yes. Veterans in federal civilian jobs can often buy back their military service years via a payroll allotment and credit that time toward their FERS pension, reaching their service milestone years sooner.
When should I start federal retirement planning? Sooner than you think. Many of the most valuable moves — the match, military buyback, Roth conversion timing — work best when planned years ahead, not in the final scramble before retirement.
Listen to the full episode
There’s a lot more nuance in the conversation than any summary can carry. Listen to Episode 125 of the Tall Oaks Podcast wherever you get your podcasts, or watch on YouTube.
Have questions about your own federal retirement? Connect with Trevor Trebbien on LinkedIn (search “Trevor Trebbien”).
Information presented on this program is believed to be factual and up-to-date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Encompass More Asset Management LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.