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

5 Retirement Questions Only You Can Answer

ARCHIVES
Flickr user Animated Heaven

There are some relatively simple things that everyone should know about their basic benefits under either the Federal Employees Retirement System or Civil Service Retirement System. This week, I want to present five straightforward questions covering the key items that allow you to transition from employee to annuitant. The answer to these questions vary according to work experience and other factors, so only you can answer them.

How old you must be and how much service you will need in order to be eligible for an immediate, voluntary CSRS or FERS retirement benefit?

Here’s some basic information to guide you:

If you’ve worked other than a full-time work schedule, it is important to factor in the impact of intermittent or when-actually-employed time, part-time work, and leave without pay periods during your federal career. (Bonus question: Can you explain the difference between an immediate and a deferred retirement?)

Remember, the age at which you are eligible to retire is not necessarily the age at which you can afford to retire. It’s just the date on which you will be able to collect a benefit starting within 30 days of your separation from federal service.

What is your service computation date for retirement? Do you know the difference between your service computation date for leave and your service computation date for retirement?

The service computation date found on your Standard Form 50 (Notification of Personnel Action) was computed to determine the proper annual leave accrual of four, six or eight hours per pay period as well as to determine when your next step increase is due for pay purposes.

When it is time to determine retirement eligibility and calculation of your CSRS or FERS retirement benefit, there are factors that can impact your creditable service, such as service that was not covered by retirement deductions or service that might be creditable for retirement that may not have been previously credited for leave accrual. To learn more about your service computation date, see this column: Computing Your Service.

What is the estimated value of your CSRS or FERS retirement benefit?

The Office of Personnel Management website provides the basics of CSRS and FERS retirement calculations:

OPM, however, doesn’t offer an online calculator to do it yourself. For that, you can try FedCalc, a privately designed retirement estimator program.

The best place to get an accurate retirement estimate is your agency’s human resources office. The problem you may encounter there is they they may not have enough staff to fulfill all of the retirement estimate requests they receive. Some agencies only provide estimates to those who are close to retirement.

What are the potential reductions to your basic benefit?

Once you’ve calculated your “unreduced” retirement benefit, then it’s time to find out if your benefit will be subject to any further reductions. These could include reductions for age, survivor elections and unpaid deposits under CSRS. (Unpaid deposits and redeposits under FERS do not cause a reduction, but can affect the computation of and eligibility for retirement by affecting your service computation date).

I’ve written columns on each of these types of reductions over the years. They can be found in this annual index under the appropriate topic sub-headings.

What are the most common withholdings from your benefit?

These could include federal and state income tax and premiums for Federal Employees Health Benefits, Federal Employees Dental and Vision Insurance, Federal Employees Group Life Insurance and Federal Employees Long-Term Care Insurance.

It’s a good idea to complete a “dummy” tax return using your estimated retirement income to understand the impact of taxes. Your retirement income will also affect your Medicare Part B premiums and how much of your Social Security benefit will be taxed. Here are some tax planning resources:

Here are some federal resources on insurance benefits and retirement:

Some of you may already have started keeping a retirement folder or files of relevant information. This can be a great way to help visualize your retirement goals. Be sure to keep your records current as you get closer to your retirement date.

Finally, you have have noticed that this column didn’t address the Thrift Savings Plan or Social Security retirement benefits. For many federal retirees, they’re important pieces of the total income picture, but the first building block of federal retirement is the CSRS or FERS basic benefit.

IIlustration: Flickr user Animated Heaven

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at www.tammyflanagan.com and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on NITPInc.com.

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:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

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