Get an Estimate

By Tammy Flanagan

July 17, 2009

One of the most important tools available to federal employees in preparing for retirement is the official retirement estimate. These estimates are available to employees in a variety of situations, such as those thinking about retiring after a full career, contemplating an offer of an early retirement, involved in a divorce, facing separation due to a disabling condition, or planning to resign and eligible for a deferred retirement benefit.

You need to contact your human resources office to request an estimate. Here are some pieces of information you might be asked to provide:

Here are the top 10 reasons to request an estimate at least a year before your retirement date:

  1. To document your service. This is the most important benefit of an annuity estimate. Remember that the service computation date you might be familiar with was calculated to determine how much annual leave you should get. It's not necessarily the same date that will be used to figure your retirement benefit. If the date on your estimate is different from the one on your personnel action statement form (SF 50) or your leave and earnings statement, then you should find out why there is a discrepancy. It could affect your retirement eligibility and the amount of your benefit, not to mention the speed and accuracy of the processing of your retirement application.

  2. To identify deposits due. Sometimes employees have periods of service when they did not contribute to their retirement. This could be due to working in a type of service not covered by retirement contributions (such as military service, a temporary appointment, or seasonal work). Also, sometimes employees' contributions were refunded if they left government and then came back. A retirement estimate can inform you of how much you owe in deposits to fill such gaps and what happens if you don't pay them.

  3. To find out how much money you will get. You may want to request estimates for two different dates, between six months and a year apart, to show the benefits of working a little longer. Your length of service and the average of your highest three years of salary are used to compute your retirement benefit. Both factors are affected by the date you choose to retire.

  4. To show survivor benefits. Your estimate can be computed to include potential benefits for a surviving spouse or insurable interest.

  5. To see what will reduce your benefits. Choosing survivor benefits causes a reduction in your retirement benefits. There also might be a reduction applied for age, unpaid deposits and other factors. These reductions generally are permanent and affect the amount of retirement income subject to income taxes.

  6. To show what will be withheld from your monthly benefit. A retirement estimate can reflect the monthly withholding for health benefits, life insurance and sometimes even taxes. The details on your estimate will depend on the software your agency uses. Remember that retirement contributions, Thrift Savings Plan contributions and Social Security taxes are not withheld from your retirement benefit.

  7. To find out how much life insurance you will have. Most estimates show the current value of your coverage under the Federal Employees Group Life Insurance plan and the options you can continue into retirement.

  8. To see how much unused sick leave is worth. If you are entitled to credit for unused sick leave under the Civil Service Retirement System, then your estimate will show how many hours were used to compute the credit.

  9. To see your FERS supplement. If you are taking an unreduced, immediate retirement under the Federal Employees Retirement System, you will be entitled to a supplement designed to bridge the time between your retirement and the age at which you qualify for Social Security. Keep in mind that the supplement might be subject to an earnings limit.

  10. For peace of mind. Requesting a retirement estimate will let you know whether your agency's estimate of your future benefits is about what you thought you'd receive. If you attend a pre-retirement seminar, you'll learn the math involved in computing your retirement (don't worry, it's only second-grade level). If there are discrepancies between your agency's estimate and what you think you are entitled to, you can try to work them out before your retirement date.

Keep in mind that your agency cannot provide a final retirement computation, since that task falls to the Office of Personnel Management. Since OPM will not finalize your computation until after you have retired, you must rely on your agency's estimate for planning purposes. Be sure to ask plenty of questions if something doesn't look right, or if there are things you just don't understand.

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.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on or on WFED AM 1500 in the Washington metro area.

By Tammy Flanagan

July 17, 2009