Life After Government: When to Retire

After more than 20 years of working in the government, there's one date inevitably circled with thick red pen on any federal employee's calendar: the day you become eligible to retire.

Eligibility is determined by your age and how long you've worked in the government. If you're in the Civil Service Retirement System, you must be either 62 years old with at least five years of service, 60 years old with at least 20 years of service, or 55 years old with at least 30 years of service.

Under the newer Federal Employees Retirement System, you must be either 62 years old with five years of service, or 60 years old with at least 20 years of service. For FERS employees with at least 30 years of experience, anyone born before 1948 can retire at age 55; the age gradually increases to 57 for those born later.

Feasibility

Eligibility to retire and the feasibility of actually leaving the federal workforce are hardly the same thing, however. According to Tammy Flanagan, senior benefits director at the National Institute of Transition Planning Inc., which contracts with a number of agencies to conduct retirement seminars, for CSRS employees, "once you get your 30 years in, you've got a pretty nice retirement." If you work another five or 10 years, you're replacing your full salary or more if you have invested in the Thrift Savings Plan along the way--even without Social Security, which CSRS employees are ineligible to receive.

For FERS employees, there is "a break point," Flanagan said. If you're eligible for retirement but younger than 62, you will be too young to collect Social Security, which the FERS system relies on heavily. To make up for that, the government provides a supplement. However, the supplement only reflects the years you worked in the government, not years you may have spent working in the private sector. So if you're considering retirement at age 61, it might pay to wait an extra year and take in a Social Security income that reflects a full lifetime of work.

The Date

Choosing the right date to retire takes careful planning in order to maximize retirement benefits. Flanagan lists a number of considerations to weigh in selecting your date. Consider:

  • Leaving at the end of a month. Retirement benefits start on the first day of the month following your retirement. This way, you won't have a gap between receiving your last paycheck and your first annuity.
  • Leaving at the end of the year. Employees can carry over 240 hours of annual leave into the new year. So accumulate as many leave days as you can this year and add it to the 240 hours you carried over. By the end of the year, you could have more than 400 accrued hours, which could cash out into a lump sum of $25,000. You would receive that payment in about a month's time, serving as a transition allowance until the government begins paying your full annuity, since your initial checks might not be the entire amount you have earned. Many times, it takes the Office of Personnel Management a number of months to compute your annuity payment; until then employees receive an estimated annuity, which often amounts to around 80 percent of the full benefit.
  • Waiting until January. Working into the new year gives you one more pay raise to boost your life insurance total, which is computed based on your highest salary. It gives you one last time to put money into a Flexible Spending Account, which keeps money tax-free for health and child-care purposes. You can stock up on contact lenses or get that root canal you need. It also gives you another shot to invest in the Thrift Savings Plan, if you maxed out your possible contributions from the year before. Some employees may choose to put their entire first months' paychecks into the TSP, because once you retire, you can no longer contribute.
  • Waiting until you can carry over your health insurance. You must be enrolled in the government's health insurance program for at least five years before you're allowed to bring it with you-for you and your spouse-into retirement. The government's health benefits can potentially save you thousands of dollars in your retirement.
Taking all of those factors into consideration, Flanagan said the best dates to retire this year are:
  • CSRS: Jan. 3, 2006
  • FERS: Dec. 31, 2005
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.