December 14, 2007If you are among that group of people who will be retiring in the next few weeks, let me be among the first to offer congratulation on your career of dedicated federal service. As a final send-off, here are some tips for your last days on the job.
Review your final retirement estimate. You did get a retirement estimate, didn't you? If not, now's the time to ask human resources for one. Check the dates and reported salaries, analyze your survivor options, if applicable, and look for any comments that were added. Make sure you understand what it says. Much of what goes on this final estimate will be the same information that is transferred to the Office of Personnel Management and used to determine your retirement benefit.
Stay connected. Ask for the best way to contact your retirement specialist and payroll office after you retire (phone, e-mail or U.S. mail). A specialist can be helpful if you have a question about your retirement computation, insurance coverage or service history. And if you have a question about your final leave payment, your final Thrift Savings Plan contributions, taxes on your leave payment or your final pay check, you will want to be able to contact your payroll office.
Stay in touch. Be sure to remember to keep your address and contact information current with your agency during the transition period (after you retire and prior to your communications from OPM). Let them know if you are moving, going on a trip across the country, or spending the winter in Florida. The same goes for OPM and TSP officials. You will probably be placed in an "interim" retired status while OPM is finalizing your claim. That means OPM might need to contact you in the first few months following your retirement while they review all of your application materials. Throughout your retirement, it is important to update your address if it changes.
Sign everything. Your retirement application needs a signature. You need to sign a form called Certified Summary of Federal Service before retirement. It provides a list of your federal service attached to the documentation of your service that is going to be used to compute your retirement. Look this over carefully, to be sure all of your federal service is accounted for. If your spouse is waiving full survivor benefits, a notarized consent must be provided. Ask your retirement specialist to review your application to be sure you've completed all of the forms and filled in all of the blanks. This should be part of the retirement process. Copy everything. You should maintain a copy of your retirement application as well as all the supporting documentation. If you have questions, you may wish to refer to the application or to your service history documents. Of course, you should have maintained copies of your service history throughout your career, but if you don't have copies of your Notification of Personnel Actions (SF 50's) and your military records, be sure to obtain a copy before these documents leave your agency.
Designate beneficiaries. You also should have copies of your beneficiary designations for your retirement, life insurance and TSP account. To be valid, they must be certified by OPM, your agency or the TSP. If you don't have copies, it might be a good time to file new beneficiary designations. The forms are available here.
Make IRA contributions. My friend Bob Leins, an accountant, offers this tip: If you retire on Dec. 31 or Jan. 3, your last pay check and your payment for unused annual leave will arrive in 2008, and thus will be counted as earned income for 2008. You will be able to make an IRA contribution of $5,000 and if you are 50 or older, you can make an additional $1,000 catch-up contribution. Some people may qualify for Roth IRA contributions, depending on your 2008 income. You cannot contribute to the TSP from your lump sum annual leave payment, however. If you are retiring later in 2008 but before the end of the year, you can plan to contribute the maximum to your TSP account prior to your retirement by adjusting your payroll allotment. Here's some additional information on traditional vs. RothIRA's.
If you're in NSPS… If you are retiring under the National Security Personnel System, to be eligible for a performance payout you must be in NSPS on the day of the payout. This means you will miss out on the payout by leaving on Dec. 31 or Jan. 3. You may have to decide if getting the lump sum leave payment for more than 240 hours is more important than the performance payout you are due to receive. In this case, you may want to postpone your retirement until Jan. 31 (if you're under the Federal Employees Retirement System) or Feb. 1 (if you're under the Civil Service Retirement System). For more information, see my columns When to Retire (July 20) and Best Dates to Retire 2008 (July 27).
Empty out your FSA. Be sure to incur expenses in your health care flexible spending account prior to your date of separation. If you have a 2007 balance, you will not be able to submit claims for expenses incurred after your date of separation.
And Finally… If you are reading this and thinking you would like to retire, but you don't know where to start, here's a checklist for employees who are thinking about retirement.
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.
December 14, 2007