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Use the Magic Words to Get What You Want

When seeking retirement information, make sure you're precise in how you phrase your question.

According to Emily Post (and moms everywhere), the magic words are “please,” “thank you,” “I’m sorry,” “you’re welcome,” and “excuse me.” These words show you have good manners and convey kindness, appreciation and awareness of others. They can open doors and make things happen.

When it comes to retirement planning, did you know that there are also magic words you need to use when requesting information about your benefits? There are specific terms that get action and convey the correct meaning of your request.

Over the years, I have met many employees who have received inaccurate or misleading information due to using the wrong language when asking questions. The specialist at the agency didn’t give a wrong answer, they just answered a different question than the employee thought they were asking.

Here are a few examples:

Can I continue my health insurance if I defer my retirement?

The correct answer to this question is no. But what if the employee actually is asking about a postponed retirement, not deferred? Then the answer would be yes.

The employee may be eligible for a type of retirement called “MRA+10,” which refers to leaving government at minimum retirement age with at least 10 years of creditable service (at least five of which are civilian federal service). Under an MRA+10 retirement, an employee covered under the Federal Employees Retirement System can continue their health and life insurance benefits into retirement if they have been covered for the last five years of their federal career. Taking an MRA+10 retirement may involve incurring  a significant penalty if the retiree is under 62, unless they choose to postpone (notice I didn’t use the word “defer”) receiving the benefit. By choosing the postponed benefit, the retiree can reinstate their insurance.

On the other hand, if the employee is under the minimum retirement age when they separate from federal service, then this might be a deferred retirement. It would also be a deferred retirement if they are covered under the Civil Service Retirement System, because CSRS doesn’t include the MRA+10 option. A deferred retirement does not provide the option to continue insurance benefits.

Do I have to take a full withdrawal of all the funds in my Thrift Savings Plan account when I retire?

This open-ended question could receive a variety of responses. The correct answer is, it depends — which is never the answer anyone wants to hear. I would answer this question with additional questions such as:

  • How old will you be when you retire?
  • How much money will you need to have on a monthly basis?
  • How much income will you receive from CSRS or FERS, Social Security and any other sources?

It is important for federal employees to be educated about the variety of withdrawal options that are available from the Thrift Savings Plan. A full withdrawal can take the form of a lump sum payment, or it can be a series of monthly payments taken until the account is depleted over many months — or even a lifetime. The best answer to this question might be a referral to The Retirement Income Calculator and the withdrawal strategies page of the TSP website.

If I have 29 years of service and I have saved up a year of sick leave, can I retire, or do I need to work another year to be eligible?

This is a trick question. Without knowing the employee’s age, it can’t be answered accurately. This query highlights the difference in the meaning of service credit used for eligibility for retirement and the calculation of the retirement benefit.

If this employee is under 60, then, the answer might be yes, he or she needs to work another year. For optional, immediate retirement under FERS, the service requirement is 30 years of service at your minimum retirement age. (For CSRS, it’s 30 years of service at age 55). Sick leave cannot be used for retirement eligibility; only computation of your benefit.

On the other hand if you are at least 60, the service requirement for CSRS or FERS is only 20 years, which means you’ll receive credit for 30 years of service in the computation of your retirement (29 years of service plus one year of sick leave credit). But you are eligible to retire since at age 60 you only need to have 20 years of creditable service. (At age 62, you only need five years).

So how do you find the magic words when gathering retirement information? Here are a few tips:

  • Be sure you understand the question you need to ask. If necessary, do some background research.
  • Find someone to ask who has some experience with retirement benefits.
  • If you think the person doesn’t understand your question, try asking it again in a different way.
  • When making a request in person, bring a resource or a reference with you from a  website or printed publication that explains the concept you’re asking about.
  • Get a response in writing to keep for your records.
  • If you’re asking your question of a retirement specialist at your agency, make sure it’s about benefits. If you need help with financial, estate or tax planning, you may need to hire an adviser.

Photo: Flickr user Sarah Buckley