When It’s Time to Retire, Be Ready for Things to Go Wrong

Hope for the best, but prepare for the worst when you file your retirement papers.

Last week, we looked at how errors in your retirement application can cause delays in getting your full benefits.

A retirement claim that is error-free is considered a “healthy case” for processing at the Office of Personnel Management. That’s defined as a complete and accurate package that doesn’t have missing or inaccurate information in it. OPM has provided detailed guidance for agency HR and payroll offices to follow to avoid delays caused by these errors. 

OPM conducts monthly audits on retirement application packages for accuracy and completeness. According to the agency, 21% of new claims submitted in July contained agency errors, along with 20% in June and 16% in May. With about 100,000 applications for retirement every year, that's a lot of mistakes.

Issues with retirement processing eventually are resolved, but it's best to prepare for the worst when you file your retirement papers by taking these precautions:

Have an emergency fund available to cover your living expenses for six months or more. This can be replenished once your retirement claim is finalized and can be kept in place for emergency expenses you may encounter during your life after retirement. 

Make copies of your completed retirement application forms and if possible, review them with a retirement specialist in your agency’s human resources office.

Keep copies of the documents contained in your electronic official personnel folder, or at the very least retain these records: completed beneficiary designation forms, records of beginning and ending dates of your federal service, forms documenting changes in your retirement coverage or work schedule, and records showing that you had health and life insurance coverage at least during the last five years of your career.

Have a plan for taking Thrift Savings Plan distributions, consider a post-retirement period of employment, and research your options for claiming Social Security benefits before you retire from government.

Finally, before leaving federal service, make sure you have a retirement estimate for your planned retirement date. Remember to consider potential reductions for survivor benefits and the possibility that you might need to pay a service credit deposit for work earlier in your career in order to get your full benefits.