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Waiting For That First Retirement Check

A primer on processing, payments and patience for those looking forward to getting their benefits. 

If you’re among the thousands of federal employees who retired on Dec. 31, 2022, congratulations! Right about now, you might be wondering how long it’s going to take to process your retirement benefit and when you’ll start receiving the payments you are due.

By now, some of you have received your last salary payment from your agency and maybe even the lump sum payment for the balance of annual leave in your account on the date of your retirement. Others may still be waiting. The retirement process involves many moving parts and does not follow an exact timeline. But knowing what to expect can help make the wait easier and provide some assurance that your retirement claim has not been forgotten, lost or misplaced.

Initial Processing 

Federal retirement benefits are paid monthly by direct deposit on the first business day of the month, covering the previous month. But if your retirement claim has not been finalized, the first payments may be delayed and may not be your regular payments. While your retirement is being processed, you will receive an interim benefit.

There may be delays in processing for a variety of reasons. For starters, some important information or documentation may have been missing from your retirement application when you submitted it to  your agency’s human resources office for initial processing. 

Your HR office also may have received many other applications at the same time you filed yours, so it may take time to process them all. And your application can’t leave your agency until after your retirement date. This is due to the fact that most retirements are considered voluntary, and employees can change their mind prior to their retirement date and withdraw their application. 

An HR specialist at your agency must review your application and other related information related to health and life insurance to prepare your retirement package for submission to the Office of Personnel Management. The HR office also must file a separation action for retirement and a time and attendance report flagged as final before the payroll cycle in which an employee separates.

Delays can also occur when your payroll provider prepares your separation from your agency. Staff in the payroll office must review your retirement package for completeness before it goes on to OPM. This generally occurs within 30 days of your separation date. Your payroll office is also responsible for your lump sum annual leave payment.

Your First Check

Delays also can occur once your retirement application gets to OPM, due to workload backlogs, missing information and processing issues that require additional steps or agency input. It’s wise to prepare for a wait that could be anywhere from three months to more than six months.

Once you’re assigned a Civil Service Active number, OPM personnel will determine if you’re eligible to receive interim retirement payments while your claim is in process. If that happens, you’ll be given instructions for signing into OPM Services Online, where you should find information about the status of your retirement claim.

The first interim payment generally will arrive in your bank by direct deposit about six weeks after your retirement date, but this is not guaranteed. Also, the first check could be significantly less than you are expecting. Interim payments, for example, do not include the Federal Employees Retirement System supplement, paid to those who retire under age 62 with immediate benefits, unreduced for age.

OPM only withholds federal income tax from the interim payments. You may find that the taxes withheld from your first interim payment will be higher than the federal tax withholdings from your subsequent interim payments and regular annuity. This is because OPM sometimes makes necessary tax withholding adjustments when they finish processing your retirement application.

When OPM finishes processing your retirement application, They’ll begin withholding health benefits and life insurance premiums retroactive to the start date of your annuity. You may be able to arrange for state tax withholding as well; check with OPM Services Online or your state tax office for more information. 

Prepare to Wait

Once your retirement has been finalized, you will receive a small personalized booklet with a blue and white cover that will summarize your monthly benefits and provide other essential information about your retirement benefits. If you have questions, you may need to contact your agency’s human resources office if your claim hasn’t been sent to OPM.

You may also need to get in touch with your payroll provider if you haven’t received a notice from them that your retirement has been transferred to OPM, or if you haven’t received your final payment for your unused annual leave. It’s a good idea to have contact information for your retirement specialist in your HR office and a payroll contact prior to your separation. 

For all of these reasons, you should be prepared for it to take more than 30 days to process your retirement claim. In addition to being patient with the whole process, it’s a good idea to have some cash on hand during the transition while you wait for the dust to settle.