Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Where Retirement Benefits Came From

Martin Luther King once said, “We are not makers of history, we are made by history.”

When I was in school, I had a hard time coming up with a good reason to study history. My history teacher was very theatrical and tried to bring the subject to life by changing the tone of his voice from a whisper to a shout, but his extraordinary effort was lost on me. I just thought he was a little kooky. But if we are indeed shaped by history, then studying it may help us understand how we got to where we are today and where we might be headed in the future.

The topic of retirement was what actually made me passionate about learning more about the past. To me, it’s a fascinating story.

The inability to work due to illness, disability and the frailty of old age is nothing new. Saving for retirement dates back to the ancient Greeks, who stockpiled precious oils that kept well over time. Gradually, our ancestors developed the idea of charity and responsibility of family members to take care of each other.

One of America’s founding fathers, Thomas Paine, backed one of the earliest...

When Life Takes an Unexpected Turn

One of the “what-if’s” of any career is that an unanticipated health problem could derail your future retirement plans. This has happened to many federal employees who, due to an illness or injury, are no longer able to perform their federal job, but they’re also not yet eligible to retire.

For some, recovery is possible and the time spent away from work can be covered by sick leave or some other benefit. The government does not offer short term disability protection specifically, but offers a wide range of leave options and workplace flexibilities to assist employees who need to be away from the workplace. These include annual leave, sick leave, advanced annual or sick leave, leave under the Family and Medical Leave Act, leave without pay, alternative work schedules, credit hours under flexible work schedules, compensatory time off and telework. Agencies may also have a voluntary leave bank program. It is important for the employee to remain on the payroll for as long as possible so that, upon recovery, they can return to normal duties and continue to plan for retirement when they are financially and mentally ready. If an employee dies prior to retirement, certain family members...

Benefits Cuts Are (Probably Not) Coming!

In 1986, not long before the implementation of the Federal Employees Retirement System, CQ Researcher reported on the Reagan administration’s plans to replace the existing Civil Service Retirement System.

“The president's 1987 budget once again proposes to make the new federal retirement system akin to private pension plans, but with one big difference,” the report stated. “Unlike most private sector workers, federal employees contribute directly to their pensions—currently 7 percent of salary under CSRS, after taxes, which Reagan wants to increase to 9 percent. He objects to federal retirement without penalty as early as age 55, after 30 years of service. The president would raise the retirement age to 62. He also has asked Congress to limit cost-of-living increases in pension benefits, a provision most private-sector plans do not offer.”

Does any of this sound familiar?

Fast-forward to 2018, and President Trump’s new management agenda reiterates a proposal to alter retirement benefits. Office of Personnel Management Director Jeff Pon says requiring feds to wait five years to vest in their pensions “just doesn’t make sense” for the modern workforce. The administration recommends moving away from pensions altogether and toward a defined contribution-only system. This, officials...

Follow These Steps to a Smoother Retirement

The process of retiring can be smooth for some people and a nightmare for others. Is it just the luck of the draw? The good news is that according to the Office of Personnel Management, 76 percent of all claims received monthly are processed in 60 days or less. As of the end of February, OPM had a backlog of 24,225 Civil Service Retirement System and Federal Employees Retirement System claims waiting to be processed.

To help facilitate smooth processing of your retirement, you should take the following steps:

  • Update your pre- and post-retirement checklist. This 10-point pre-retirement checklist from USA Today includes some great ideas to prepare for the next chapter of your life.
  • Thirty to 90 days prior to your retirement date, complete the CSRS or FERS retirement application (along with a form to continue Federal Employees Group Life Insurance).
  • If you’re eligible and want to begin collecting Social Security retirement benefits at the same time as your CSRS or FERS retirement, you can file online.
  • Following your retirement, you will receive your final salary payment for the work performed through your retirement date. Remember that your salary is paid after it is earned, so you...

Resigning Instead of Retiring

What happens when a federal employee who is eligible to retire decides to resign instead of filing for retirement? Well…they quit. Their paycheck stops and their retirement doesn’t commence until they decide to file for retirement benefits. It’s not a very common occurrence, but I’ve been discussing it lately with a couple of my associates: Ray Kirk, a former Office of Personnel Management official and federal benefits expert; and James Marshall, deputy director of the National Active and Retired Federal Employees Association’s Federal Benefits Institute.

Here are some situations in which an employee who is eligible to retire may decide to resign instead:

  • They want to work for a different federal agency, but not continue with current employment while seeking a new position. (This could be due to any number of reasons, such as a conflict with management, job dissatisfaction or the end of a term appointment.)
  • They are interested in moving to a new state or different country, and seeking reemployment afterward.
  • They want to prevent an ex-spouse from receiving a court-ordered share of their retirement benefit—even though that keeps the employee from receiving their own share of the benefit.

Why not just...