How Federal Retirement Income Is Taxed: The Complete 2026 Guide
💰 2026 Tax Guide — Federal Retirees How Federal Retirement Income Is Taxed: The Complete 2026 Guide Your FERS pension, TSP withdrawals, and Social Security each come with their own tax rules — and the wrong strategy can cost you $8,000–$15,000 per year. Here is everything you need to know. 📅 April 11, 2026 ⏱ 15 min read 🛡 Warrior Retirement 100% FERS Pension Taxable at Federal Level 85% Max SS Taxable for Most FERS Retirees 22% Typical Federal Bracket — FERS Retirees $0 State Tax on Pensions — 12+ States Retirement does not mean escaping taxes — for most federal employees, it simply means managing them differently. Your FERS annuity is fully taxable as ordinary income. Up to 85% of your Social Security benefit is taxable. Every dollar you pull from a Traditional TSP adds to your gross income. And if you pull too much in a single year, you could trigger a Medicare IRMAA surcharge that follows you f...