De-Stressing the Retirement Process
Take a deep breath and understand the key steps.
For many federal employees, retirement means a time of reward for a long and dedicated career. Many people prepare for retirement with a sense of anticipation and excitement.
The actual process of retiring, however, can be more stressful. It begins with formally filing your retirement application and ends when all of the dust has settled and your retirement income produces what you need for a comfortable life. The timeline for this process is not set in stone, and can be different for each person. For some, retirement will occur in stages, with Social Security benefits and Thrift Savings Plan withdrawals delayed until a second career has ended. Others will get up from their desk on a Friday and leave their daily commute and annoying alarm clock behind forever.
To reduce the stress of preparing to retire, it helps to understand the key steps in the process. Let’s take a look at them.
Application for Retirement
You should file your formal application under the Civil Service Retirement System or Federal Employees Retirement System 30 to 90 days before your retirement date. Here are some key documents and tips:
- CSRS Application for Immediate Retirement Submit to your agency human resources office.
- CSRS Application for a Deferred Retirement Submit directly to the Office of Personnel Management.
- FERS Application for an Immediate Retirement Submit to your agency human resources office.
- FERS Application for a Deferred or Postponed Retirement Submit directly to OPM.
- Continuation of Federal Employees Group Life Insurance This form is used to tell OPM how much life insurance you want to keep past your retirement when you are over age 65.
Your last paycheck should come on schedule the next pay date after you retire. You may get two paychecks following your separation--a full and a partial--depending on whether you retired at the end of a pay period.
Thrift Savings Plan
You must wait to apply for TSP withdrawals until at least 30 days after your retirement. Allow time for your agency payroll office to notify TSP that you’ve left the agency rolls. The TSP will mail information to you regarding withdrawal options once they receive a notice of your separation from your agency payroll office.
Apply for Social Security retirement up to three months before when you would like your benefit to begin. The easiest way is by using the online application.
Your lump sum payment for annual leave will be your final separation payment from your agency. The payment will come from your agency’s payroll provider and is generally paid between six to eight weeks following your retirement date.
If you retire at the end of leave period 25 or 26, you could potentially have a balance of 240 hours (or more carried over from the previous year) plus a possible 25 or 26 additional accruals of annual leave (depending when the leave year ends, which is the “use or lose” deadline). That means a possible total payout for 440 to 448 hours of unused annual leave.
Interim Retirement Benefit Payments
Your first benefit payment should be deposited into your bank account within the first two weeks of the first month following your retirement. For example, if you retire on Sept. 30, 2019, your first interim payment should arrive within the first two weeks of November. The November payment is for your October month of retirement.
The second Interim payment should come on the first of the following month after your first interim payment. It may be a little more money than the first interim payment, if some work has been done on your claim. Your full retirement benefit should start by the third to six month after your retirement.
This schedule could vary depending on OPM’s workload and the complexity of your case. Here are some potential causes of delays:
- Missing documentation or the submission of a court order awarding benefits to a former spouse.
- If you owe money to the retirement fund for federal employment that was not previously covered by retirement deductions, or if you have outstanding refunded CSRS or FERS contributions.
- Discrepancies in your records, in which your Social Security number, date of birth or other factors do not match other documents in the file. Your individual retirement record that shows your career history of CSRS or FERS retirement contributions must be reconciled and match the career history that is documented in your official personnel records.
- Issues related to whether you’re eligible for FEGLI benefits or continuation of coverage under the Federal Employees Health Benefits Program.
- Simple errors such as a missing signature or notarized spousal consent, or whited-out or crossed-out dates.
OPM tracks the percentage of claims that come in with errors across all agencies. The average has been as high as 15% and as low as 9% over the past six months. But some agencies submitted as many as 41% of claims with errors that must be corrected.