Delayed Gratification

If you had retired at the end of 2007, by now you probably would be thinking that you should've received your third full retirement check, for the month of March. (January and February, presumably, would have come in earlier checks.) But if you had anything but a straightforward career -- say, 30 years of uninterrupted service with the same agency -- you still might be waiting for your first check reflecting the officially approved amount of your monthly retirement benefit.

That's because a host of issues can lengthen the amount of time it takes the Office of Personnel Management to finalize your retirement. Here are some of them:

• You retired under the Civil Service Retirement System-Offset system (especially if you are 62 or older).
• During an open season or upon being rehired into government, you transferred to the Federal Employees Retirement System from CSRS or CSRS Offset.
• Your divorce decree provides retirement benefits, a survivor annuity, or both to your former spouse.
• Before your retirement, you paid a military deposit or a civilian service credit deposit and the record of that payment was not submitted with your retirement.
• During part of your career, you worked on a less than full time schedule.
• Your retirement was processed as disability rather than "optional voluntary."
• You worked as a law enforcement officer, firefighter or air traffic controller.
• A period of your career has not been properly documented.
• There is a question as to whether or not you are in the proper retirement system.

During the time your retirement is being finalized, OPM places you on "interim" status. "We try to provide you with income until we finish processing your application," the agency says on its Web site. Generally, those payments average more than 85 percent of the final benefit you'll receive. But beware of that word "generally."

Small Checks

Here's a case in point.

Robert retired on Jan. 3, 2008, under CSRS Offset. He had more than 22 years of service, which should entitle him to a retirement benefit equal to about 40 percent of his high-three average salary -- which is around $90,000. That means his retirement should be about $36,000 per year, or $3,000 a month. With reductions because he is older than 62 and the fact that he's provided a survivor annuity, his adjusted benefit would be between $2,000 and $2,200 per month. Also, Robert has paid a deposit to receive credit for military service, and worked on and off for the U.S. Postal Service back in the 1960s.

In finalizing Robert's retirement, OPM needed to make sure that he was in the correct retirement system and that his deposit for his military service actually was paid. The agency also had to find out how much he was entitled to in the way of Social Security benefits.

Considering Robert's situation, by now he should have received at least $5,000 in payments for January, February and March. But as of last week, he had received only two checks -- one for $267 and one for $297. It seems unlikely that's anywhere near 85 percent of his earned retirement benefit.

Robert has inquired numerous times about the size of his benefit and the status of his retirement application, but without much success. "There is no longer an actual relationship between your estimate and the amount of interim payments," one response said. "Adjudication of your case will be completed in about four to six weeks. At that time any underpayments will be reconciled. If you feel the current amount of payment is inadequate for your needs please call the current office to which your case is assigned."

Be Prepared

I'm sure that Robert isn't the only person who left government earlier this year who has yet to have their retirement finalized. One reason OPM is trying to modernize the retirement processing system is to avoid these types of situation in the future.

In the meantime, the best thing to do if you're planning to retire soon is to expect the best and prepare for the worst. Make sure you have some money to live on for the first few months of your transition to retirement. Here are some types of income you might be able to rely on:

• A lump-sum payment for annual leave. (That's what Robert has been living on.)
• Another paycheck, if you have switched to a nonfederal job.
• Savings or investments. You can choose to take a partial withdrawal from your Thrift Savings Plan once you are off your agency's payroll. (It's best to wait until you've been gone for 30 days.)
• If you are 62 or older, you can apply for Social Security benefits.

Finally, as I noted earlier this year, it's always a good idea to educate yourself about the retirement process to make the transition as smooth as possible.

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.