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

5 Things You Can Change After You Retire

There are many things about retiring from federal service that are considered irrevocable, permanent and “one-time only.” This kind of language can make people nervous about the transition from employee to annuitant.

But there are several things you can -- and often need to -- change after you retire. Here’s a list of the top five:

1. Your Address

Retirees need to remember to notify the Thrift Savings Plan, the Office of Personnel Management and the Social Security Administration of any change in address. It’s important to make sure you’re notified of any change in your benefits as well as any upcoming deadlines, such as required minimum distributions from your TSP.

2. Your Insurance

Health: Retirees are eligible to participate in the annual Federal Employees Health Benefits Program open season, just like active employees. The difference is that retirees make changes to their insurance directly with OPM. Retirees also can make other changes outside of the open enrollment period. For example, when you turn 65, you have a personal open season allowing you to change your health plan to something that might work better with Medicare. Here’s more information about FEHBP and Medicare. You can find a list ...

Ready, Set, Go

In my recent pre-retirement seminars, I have met many employees who have their sights set on retiring near the end of the 2014 leave year (1/10/2015). As usual, the end of the year is a popular time to retire for employees who wish to cash in a big lump sum of accumulated annual leave to provide a “cushion of cash” to ease into life after retirement.  

In addition, federal employees may be waiting a while for guidance on implementing the new phased retirement program because agencies are still pondering which employees will be permitted to participate, what the time limit will be and what will be the definition of “mentoring,” which is required by the program.

You may want to read some of the past columns I’ve written on how to get ready to retire. Here are some of my favorites:

How to Pick a Financial Adviser

One of the questions I get asked over and over at my seminars is: “How do I find a financial adviser who I can trust and who understands federal retirement benefits?” Sometimes, I get mistaken for such an adviser, since I talk about financial issues in the context of discussing federal retirement benefits. It’s true that the topics of benefits and financial planning are intertwined. But there’s a difference between the two.

Think of it this way: If you ask a retirement specialist at your agency, “When should I retire?” they would be able to tell you when you would be eligible for retirement and might even help you pick a date that maximizes your retirement benefits. But the question, “When can I afford to retire?” requires a different kind of expertise -- that of a financial planner.

Who has been your financial planner so far? The answer may be yourself -- and you may have done a great job. But you may also be reaching the point where you need some outside help to ensure your decision-making is sound when it comes to planning for life after government.

The Old and the New

Under the older Civil Service Retirement ...

Retired and Rehired

The new phased retirement option has been getting lots of attention lately, but there are other options for continuing to work for government after retirement that have been around a lot longer. In fact, there are three of them.

Personal Services Contractor

The first involves an agreement between a retiree and his or her agency to be rehired under a personal services contract. This involves providing a predetermined amount of compensation for a prescribed amount of work to be completed. In these cases, the individual is reemployed, but without any benefits of federal employment.

Those under a personal services contract receive a 1099 form from the IRS at the end of the year rather than W-2 that employees receive, since they are being paid a fee for a service. For tax purposes, contract workers are self-employed and responsible for both the employer and employee share of taxes due.

Contractor Employee

Another way for an employee to be rehired into the same or similar work would be to work for a private sector company that does business with the federal government. In this situation, the employee retires and then is rehired by a company that holds a contract with a particular ...

Phased Retirement: Case Studies

With all the news lately about the upcoming phased retirement option for federal employees, many people are considering whether it makes sense for them. To help clarify the issues at stake, let’s look at a couple of case studies, one for an employee under the Federal Employees Retirement System and another for someone covered by the Civil Service Retirement System.


Let’s say Jim is 66 and still loving his federal job. He has 30 years of service and a high-three average salary of $100,000. His retirement would be computed as 1.1 percent x 30 years of service x $100,000, or $33,000 per year (before any reductions for survivor benefits). He would love an extra day or two a week to play golf. Under phased retirement, he can collect half of his salary ($50,000) and half of his FERS retirement ($16,500).

Here are some factors Jim should consider as he weighs phased retirement:

Social Security: Because Jim is over the full retirement age for Social Security and is no longer subject to the earnings limit, he could begin to draw benefits (let’s say $20,000 a year). That brings his total ...