It happened in 2013. It happened in 2018-2019 for a record 35 days. It happened again in 2025 for 43 days. And if history is any guide, it will happen again. When the federal government shuts down, roughly 900,000 employees get furloughed, another two million work without pay, and panic spreads through every federal breakroom, group chat, and kitchen table in America.

But here is the truth most people miss: a government shutdown does NOT eliminate your pay, your benefits, or your retirement. It delays them. And the federal employees who come through a shutdown in the strongest financial position are the ones who prepared before it started — not the ones who scrambled after it began.

This guide from Warrior Retirement gives you a complete tactical breakdown of what happens to your FERS pension, TSP, FEHB, FEGLI, pay, and retirement timeline during a government shutdown — plus the exact do's and don'ts that separate the prepared from the panicked.

During a government shutdown, federal employees' FERS pension continues to accrue, FEHB health insurance stays active, FEGLI life insurance remains in effect, and back pay is guaranteed by the Government Employee Fair Treatment Act of 2019. TSP operations continue normally since the Federal Retirement Thrift Investment Board is a non-appropriated agency. However, TSP contributions from your paycheck are paused until pay resumes.

What Actually Happens During a Government Shutdown

When Congress fails to pass appropriations or a continuing resolution by the start of a new fiscal year (October 1) or by the expiration of existing funding, agencies that rely on congressional appropriations must cease non-essential operations.

Federal employees fall into three categories:

Excepted (Essential): You continue working WITHOUT pay until the shutdown ends. This includes law enforcement, national security, healthcare, and disaster response personnel.
Non-Excepted (Furloughed): You are placed in a non-duty, non-pay status. You cannot work, volunteer, or check your work email.
Exempt: Your position is funded by sources other than annual appropriations (certain trust funds, fees, etc.). You continue working and getting paid normally.

The critical point: Regardless of your category, the Government Employee Fair Treatment Act of 2019 guarantees that all federal employees — excepted and non-excepted — will receive back pay once the shutdown ends. You WILL get paid. The question is when.

Your FERS Pension During a Shutdown

Your FERS pension is one of the most protected benefits during a government shutdown. Here is exactly what happens:

Pension accrual continues. Your service time keeps counting toward your retirement. A furlough period is treated as leave without pay (LWOP), and LWOP of up to 6 months in a calendar year does NOT affect your creditable service for retirement purposes.
Your high-3 salary is NOT affected. Since you receive back pay for the shutdown period, your salary record remains intact. Your high-3 average will not be reduced by a temporary shutdown.
Retirement deductions resume once you return to pay status. The FERS contribution (0.8%, 3.1%, or 4.4% depending on your hire date) is deducted from your back pay.
If you were planning to retire during the shutdown: You can still submit your retirement application. OPM Retirement Services continues operating during shutdowns because it is funded by the retirement trust fund, not congressional appropriations.

Current retirees are NOT affected at all. Monthly annuity payments continue on schedule throughout the shutdown. Learn more about protecting your FERS pension at WarriorRetirement.com.

Warrior Pro Tip: If you are within 6 months of retirement and a government shutdown hits, submit your retirement paperwork to your agency BEFORE the shutdown begins if possible. OPM can process your application even during a shutdown, but your agency's HR staff may be furloughed — which means they cannot forward your paperwork to OPM until the shutdown ends, delaying your first annuity payment.

Your TSP During a Government Shutdown

Good news: the Thrift Savings Plan is managed by the Federal Retirement Thrift Investment Board (FRTIB), which is a non-appropriated agency. This means:

TSP operations continue normally. You can still log into your TSP account, change your fund allocation, request withdrawals, and manage your investments.
Your TSP balance is NOT frozen. Your investments continue to grow (or decline) based on market performance — exactly as they would any other day.
Interfund transfers still work. You can move money between the G, F, C, S, I, and L Funds during a shutdown.

However:

Your payroll contributions pause. Since you are not receiving a paycheck, no new money flows into your TSP during the shutdown. Once back pay is processed, your contributions resume — but they are NOT retroactively made up for the missed pay periods unless your agency specifically processes them.
Agency matching also pauses. Since matching is calculated per pay period, you may lose matching contributions for pay periods during the shutdown. This is one of the hidden costs of a shutdown that most employees miss.
Loan payments pause. If you have a TSP loan, payments stop during the shutdown. This does NOT trigger a taxable distribution, but missed payments are reamortized when you return to pay status.

Read our complete guide to 2026 TSP contribution limits to understand exactly how much you can contribute once pay resumes.

Your FEHB Health Insurance During a Shutdown

This is where most federal employees worry the most — and where the news is actually reassuring:

Your FEHB coverage continues. You remain enrolled and covered throughout the entire shutdown, regardless of whether you are excepted or furloughed.
Your premiums still accrue. Even though no payroll deductions are being taken, you still owe the premiums. When pay resumes, your agency will collect the missed premiums from your back pay — sometimes all at once, which can result in a surprisingly small first paycheck after the shutdown.
The 5-year rule is NOT interrupted. A shutdown furlough does NOT create a gap in your FEHB 5-year continuous enrollment. Your coverage is considered continuous throughout.
You can still use your insurance. Visit doctors, fill prescriptions, go to the ER — your FEHB coverage works normally during a shutdown.
Open Season changes still take effect. If you made FEHB changes during Open Season, they still go into effect on January 1 regardless of a shutdown.

Your FEGLI Life Insurance During a Shutdown

FEGLI coverage continues. Your life insurance remains active throughout the shutdown.
Premiums accrue. Like FEHB, missed premium deductions are collected from your back pay when you return to pay status.
No action needed. Your coverage does not lapse, and no re-enrollment is required after the shutdown ends.

The Do's: What Every Federal Employee SHOULD Do

Action Item — Your Pre-Shutdown Checklist:

Build a 3-month emergency fund NOW — before the next shutdown threat. If you do not have one, start today. Even $200/month adds up. During the 2025 shutdown, employees without emergency funds took on credit card debt at 20%+ interest rates.
Know your shutdown status. Ask your supervisor whether you are excepted, non-excepted, or exempt. This determines whether you report to work or stay home.
Verify your FEHB enrollment. Confirm your health insurance is active and your ID cards are current. You will need them for medical visits during the shutdown.
Print or save your most recent pay stub, leave statement, and SF-50. If government systems go offline, you need documentation of your pay and employment status.
Review your TSP allocation. If a shutdown is looming and you are nervous about market volatility, now is the time to review — NOT during the shutdown when emotions run high.
File your retirement application early if you were planning to retire during the shutdown window. Get it to your agency HR before furloughs begin.
Set up direct deposit for back pay. Ensure your banking information in Employee Express or myPay is current so back pay arrives without delay.
Contact creditors proactively. If a prolonged shutdown threatens your ability to make mortgage, car, or loan payments, call your creditors BEFORE you miss a payment. Many banks offer shutdown-specific forbearance programs for federal employees.

The Don'ts: Mistakes That Can Cost You Thousands

1. DON'T Panic-Sell Your TSP Investments

This is the #1 financial mistake during every shutdown. Federal employees panic, move everything to the G Fund, and then miss the market recovery. During the 2018-2019 shutdown, the S&P 500 dropped initially then rallied over 10% in the months following. Employees who sold at the bottom locked in losses permanently.

Your TSP is a long-term investment. A 2-6 week shutdown does not change your 20-30 year retirement horizon. Read our guardrails withdrawal strategy for a rational approach to market volatility.

2. DON'T Take a TSP Loan or Hardship Withdrawal

A TSP loan during a shutdown creates a dangerous cycle. You borrow against your retirement to cover temporary expenses, then pay interest back to yourself — but you lose the investment growth on those funds while the loan is outstanding. A hardship withdrawal is even worse: you pay taxes plus a 10% penalty if you are under 59½.

Back pay is guaranteed. You WILL get paid. Use your emergency fund, a low-interest personal loan, or credit card (in that order) before touching your TSP.

3. DON'T Ignore Your Bills

Skipping mortgage, car, or credit card payments without communicating with your creditors destroys your credit score. Most major banks offer shutdown-specific programs for federal employees — deferred payments, waived late fees, and temporary forbearance. But you must call them BEFORE you miss a payment.

4. DON'T Work for Free If You Are Furloughed

If you are a non-excepted employee, you are legally prohibited from working during a furlough — even voluntarily. Do not check email, attend meetings, or perform any work-related tasks. Doing so violates the Antideficiency Act and can result in disciplinary action.

5. DON'T Cancel Your FEHB or FEGLI

Your coverage continues automatically. There is no reason to cancel, and doing so could create a gap that affects your 5-year FEHB rule for retirement eligibility. Leave everything as is.

6. DON'T Make Major Financial Decisions

A shutdown is NOT the time to buy a house, take out a new loan, refinance your mortgage, or make large purchases. Lenders verify employment and income — a furlough can delay or derail these transactions. Wait until you are back to full pay status.

7. DON'T Forget to File for Unemployment

Furloughed federal employees ARE eligible for state unemployment benefits in most states. The amount varies by state, but it provides cash flow during the shutdown. You must repay unemployment benefits once you receive back pay, but it bridges the gap. Apply immediately — there is often a one-week waiting period before benefits begin.

What About Employees Close to Retirement?

If you are within 1-2 years of retirement, a government shutdown raises specific concerns:

Your retirement date is NOT affected. If you planned to retire on December 31 and a shutdown starts October 1, you can still retire on December 31. Submit your SF-3107 retirement application to your agency as early as possible.
OPM Retirement Services stays open. OPM processes retirement applications during shutdowns because Retirement Services is funded by the trust fund, not appropriations.
BUT your agency HR may be furloughed. This means your retirement paperwork could sit in limbo at your agency until the shutdown ends. The delay is at the agency level, not OPM.
Interim annuity payments will start. Even if processing is delayed, OPM will begin interim payments (approximately 80% of your estimated annuity) within 30-60 days of receiving your application.
Annual leave lump-sum payment may be delayed. Your agency cannot process your annual leave lump-sum payout until appropriations are restored.

If you are near retirement, read our complete FIRE guide for federal employees and our FERS pension breakdown to ensure your numbers are solid before you submit.

Warrior Pro Tip: During the 2025 government shutdown, OPM reported that retirement application processing times stretched from the typical 60-90 days to over 120 days due to agency HR backlogs. If you are planning to retire in the next 6-12 months, get your SF-3107 and supporting documents to HR well before any potential shutdown deadline. Waiting until the last minute is a gamble you cannot afford.

What About the 2025 Shutdown: Lessons Learned

The 2025 government shutdown lasted 43 days — the longest in U.S. history. Here is what federal employees learned the hard way:

Over 40% of furloughed employees considered leaving federal service as a result of the financial stress
Employees without emergency funds reported taking on an average of $5,000-$8,000 in new debt during the shutdown
TSP hardship withdrawals spiked, costing employees thousands in taxes and penalties
FEHB premium collections from back pay resulted in double or triple deductions from the first few paychecks after the shutdown, catching many employees off guard
Retirement application processing was delayed by 30-60 additional days due to agency HR backlogs

The employees who fared best were those with 3-6 months of emergency savings, no consumer debt, and a written plan for handling the shutdown. They treated it as an inconvenience, not a crisis.

Your Government Shutdown Financial Survival Kit

Emergency fund: 3-6 months of essential expenses in a high-yield savings account (currently earning 4-5% APY)
Documentation folder: Most recent SF-50, pay stubs, leave statements, FEHB enrollment confirmation, TSP statements, and creditor contact numbers
Creditor communication plan: List of mortgage, auto loan, credit card, and utility companies with customer service numbers. Call them BEFORE you miss any payment.
Unemployment insurance information: Know your state's unemployment office website and application process. Apply on Day 1 of a furlough.
Budget plan: A written list of essential vs. discretionary expenses so you know exactly what to cut first if the shutdown extends beyond 2-3 weeks
Side income options: If you are furloughed (non-excepted), you CAN take temporary outside employment — but check your agency ethics rules first. Excepted employees who are still working generally cannot take outside employment.

Use the free calculators at WarriorRetirement.com to run your numbers and stress-test your retirement plan against a prolonged shutdown scenario.

Frequently Asked Questions

Will I get paid during a government shutdown?

Not during the shutdown. But the Government Employee Fair Treatment Act of 2019 guarantees back pay for all federal employees — both excepted and furloughed — once the shutdown ends. You will receive full pay for the entire shutdown period.

Does a government shutdown affect my FERS pension?

No. Your FERS pension continues to accrue during a shutdown. Furlough time is treated as LWOP, and up to 6 months of LWOP per calendar year does not affect your creditable service. Your high-3 salary is also unaffected since you receive back pay.

What happens to my TSP contributions during a shutdown?

Payroll contributions to your TSP pause because no paychecks are being issued. Once back pay is processed, contributions resume. However, you may lose agency matching for shutdown pay periods — one of the hidden costs most employees overlook.

Does my FEHB health insurance continue during a shutdown?

Yes. Your FEHB coverage continues uninterrupted. You can visit doctors, fill prescriptions, and use your insurance normally. Missed premium deductions are collected from your back pay when you return to pay status.

Can I file for unemployment during a government shutdown?

Yes. Furloughed federal employees are eligible for state unemployment benefits in most states. Apply immediately — there is typically a one-week waiting period. You must repay unemployment benefits once you receive back pay.

Resources from Warrior Retirement

Use the free Retirement Calculators to stress-test your plan against a shutdown scenario
Read Understanding Your FERS Pension to know exactly what is protected
Review 2026 TSP Contribution Limits to maximize savings once pay resumes
Learn the Guardrails Withdrawal Strategy for managing market volatility
Avoid the 15 Critical Federal Retirement Mistakes
Explore FIRE strategies for federal employees to build financial independence
Read the latest federal retirement guides at warriorretirement.blogspot.com
Review OPM's official shutdown furlough guidance

A government shutdown is temporary. Your retirement is permanent. Do not let a short-term disruption cause long-term financial damage. Prepare now, stay tactical, and protect what you have earned.

OFFICIAL TOOLS: TSP Fund Comparison | SSA Calculators | OPM Pension Estimator | OPM Shutdown Guidance | WARRIORRETIREMENT.COM

Educational Use Only. Content provided by a Federal Employee for the federal community. Not affiliated with OPM or any government agency. Not financial or legal advice.

Warrior Retirement | warriorretirement.com
Strategic Readiness for Your Post-Service Future.

Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Government shutdown rules and policies are subject to change. Consult your agency's HR office, OPM's official furlough guidance, and a qualified financial advisor for guidance specific to your situation.

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Government Shutdown Survival Guide for Federal Employees in 2026: The Do’s and Don’ts for Your Pay, Benefits, and Retirement