Tips for recent retirees
There may be a few bumps along the way, but don’t panic.
Updated at 8:44 a.m. ET on Feb. 5
As a recent retiree, you may have some questions about your transition to retirement. Sometimes there can be a few bumps along the way that are typical and normal, but since you probably have never retired before, you may be worried that something has gone wrong. Before you panic, here are some common issues you may face that might only require a little more patience and understanding:
- Thrift Savings Plan Withdrawals. Once you are ready to request a distribution from your TSP account, log in to My Account on tsp.gov to begin the request, or contact the TSP by using one of the ThriftLine options found in the TSP Distributions booklet. Note that your mailing address or bank information (for direct deposit) must be on file with the TSP for at least seven days before the TSP can send your distribution there. If you’re trying to take a distribution as a separated participant, your former agency or service must have given the TSP your separation date before you’ll be allowed to proceed with your request. It can sometimes take up to 30 days for an agency or service to notify them. You can log in to My Account or contact the Thrift Line to find out the status of your withdrawal. Once your withdrawal has been disbursed, you cannot return it. The TSP will disburse partial and total withdrawal and distribution payments each business day. For participants who are separated from service and requesting installments, after the start date of an installment, subsequent installments are issued on the 15th (or next business day) of the month they’re due. Allow a few days for payment processing and be careful when completing the request so that it is not rejected for missing information. If in doubt, call the Thriftline for assistance at 1-877-968-3778 (toll-free). You’ll need your 6-digit ThriftLine PIN to access your account.
- Social Security Benefits: If you are planning to become employed again after you retire, you may want to consider delaying your claim for Social Security benefits until you decide for sure about your plans. When you apply at your full retirement age or later, you may request benefits to be paid for up to six months retroactively. You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, your benefits will be reduced. Starting with the month you reach full retirement age Social Security will not reduce your benefits no matter how much you earn. The following earnings limits are used to determine if Social Security will reduce your benefits: If you are under full retirement age for the entire year, $1 is deducted from your benefit payments for every $2 you earn above the annual limit. For 2024 that limit is $22,320. In the year you reach full retirement age, $1 is deducted for every $3 you earn above a different limit, but only earnings before the month you reach your full retirement age are counted. If you reach the full retirement age in 2024, the limit on your earnings for the months before full retirement age is $59,520.
- Special Enrollment Period for Medicare Part B. If you are retiring when you (or your spouse) are older than 65, you may need to consider enrolling in Medicare Part B during the eight-month SEP that follows your date of retirement. According to this Social Security fact sheet,, you can use a SEP to enroll in Medicare Part B while you’re still in a group health plan based on current employment. Also, if your employment ends or the employer-provided medical coverage ends, you have eight months from that month (whichever comes first) to sign up for Medicare Part B. This will prevent a delay in coverage and possible penalty. You will need to provide proof that you had “current employment” health benefits coverage. You may complete CMS-40B and CMS-L564. Then, upload your evidence of Group Health Plan or Large Group Health Plan coverage based on current employment. You can complete and upload Form CMS-L564, or provide written notification (a letter, fax, or email) from your employer, GHP, or LGHP.
- What happens if I don’t enroll in Medicare Part B? Although you are not required to enroll in Medicare Part B to maintain FEHB coverage after age 65, keep in mind that having your FEHB coverage as a secondary payer to Medicare Parts A and B may leave you with almost no out-of-pocket medical expenses when you receive care from your medical provider or facility. Many FEHB plans will waive their cost-sharing (deductible, copayments, and coinsurance) when Medicare pays first. Check Section 9 of the FEHB plan brochures to learn how your plan coordinates coverage with Medicare. Some plans will also provide a reimbursement of some of your (and your spouse’s) Part B premium. Many FEHB plans are also offering an enhanced Medicare Advantage option that provides additional benefits such as free gym membership, non-emergency transportation for medical care and meal delivery following an inpatient hospital stay. This is an optional benefit and if your providers won’t accept the Medicare Advantage plan, you are permitted to leave the Medicare Advantage benefit and return to your traditional FEHB coverage. Learn more about FEHB and Medicare coordination at the FEHB plan website. There is generally a drop-down menu that provides detailed information about these benefits.
- Health benefit changes at or after retirement: Retirees may change FEHB coverage after retirement during a future open season or when they experience a qualifying life event. Retirement itself is not a qualifying life event, however. If you are married to a federal employee who will continue to work in federal service longer than you, it might make sense to have the spouse who continues employment pay the premiums for your health coverage. Remember that employees have “premium conversion” benefits – they pay for health insurance with dollars that aren’t taxed – however, the same benefit was never extended to retirees. Let’s say your insurance premiums are $5,000/year. If your highest income falls into the 22% marginal tax bracket, this can reduce your tax burden by $1,100. Additionally, in most states, you also avoid paying state income tax on the premiums under premium conversion rules. Having the federally employed spouse carry the FEHB coverage for both of you may also allow a retiree who is older than 65 to delay enrollment in Medicare Part B without incurring a late enrollment penalty.
- OPM Services Online: OPM Retirement Services Online can be a time saver when you need to make changes to your retirement benefits after retirement. You'll need your claim number OPM sends after you retireme that starts with CSA and your password to sign in to start managing your account online. This service will allow you to:
- change your mailing address and email address;
- change your password;
- establish, change, or stop a checking or savings allotment;
- establish, change, or stop an allotment to an organization;
- print ID cards from the Services Online screen;
- request duplicate annuity booklets via US Mail;
- request a duplicate Form 1099-R;
- start, change, or stop federal and state income tax withholdings;
- start direct deposit of your payment or change the account or financial institution to which your payment is sent;
- view a statement describing your annuity payment
- Lump sum annual leave payment. If you have a balance of hours in your annual leave account on the last day of federal employment, then you are entitled to a lump sum payment at the time of your separation (whether you are resigning or retiring). I received an email from a retiree about my recent column, “End of the year retirement: Now what?,” where I wrote about the lump sum payment projected to the salary rate you would have received if you remained on the payroll until the leave had been used up.
“I retired from the Department of Veterans Affairs on December 30th with 448 unused AL hours. Since the 2023 leave year ended on January 13, 2024, I expected to be paid at the 2023 hourly rate for my current pay rate for the 80 hours that would have been projected from January 1st through the 13th, and then at the 2024 rate for the remaining 368 hours. However, the payment I received was equal to 448 times the 2023 hourly rate. I talked to an employee at VA Payroll Field Operations who after checking with her supervisor told me their policy is to apply the rate in use on the retirement date to all hours.” According to the OPM fact sheet, Lump-Sum Payments For Annual Leave, "Generally, a lump-sum payment will equal the pay the employee would have received had he or she remained employed until the expiration of the period covered by the annual leave." Thank you for any thoughts on this topic.”
Initially, the payout may be paid entirely at your rate of pay that was in effect on the date of your retirement, but you are due additional pay if there is a general pay adjustment that takes place during the period that your annual leave would have covered if you had been able to take the leave before retirement. After you have been paid for the balance of your annual leave, it can take time, sometimes months, for your payroll provider to adjust the lump sum payment to reflect the new pay rate that took effect at the beginning of the year. The payroll provider must wait for the pay raise to go into effect and then they must run a report to see whose lump sum would be affected, calculate the difference then pay that out. You will receive a supplemental payment for the difference in the number of hours you should have been paid at the 2024 rate. It may not show up in your bank account until February or March and in some cases, I’ve seen it take longer. Hopefully, you will see the balance of your lump sum payment arrive although it may take longer than you expect. Just in case, here is an additional resource to confirm this rule.
Remember that, like any other major life event, retirement is a process both in receiving your earned benefits and in your adjustment to life after retirement. Be prepared for the following stages of retirement:
The honeymoon phase: The day has finally arrived, and you may have feelings of excitement, liberation, and relief from the stresses brought to you by the working world! You no longer must wake up to your alarm clock or be bothered by the tasks assigned by someone else. During the first year or two of retirement spend time reconnecting with friends, family and your partner, learn new hobbies and pursue interests that you have not had time for during your busy career.
Be prepared that you may later find yourself in a disenchantment phase: After the joy of freedom wears off, don’t be surprised if you start to miss the routine of work and the friends who became like family after many years of working side by side. Fight the loneliness, boredom and sense of loss by finding a new routine and activities to take the place of your work life. The book, Transitions, by William Bridges, takes readers step-by-step through the stages of any transition, explaining how each stage can be understood and embraced. The book offers a roadmap to navigate change and move into a hopeful future:
Adapting to your life after retirement: This can be the hardest part of your transition, as the process of finding your purpose will take time and effort. Even though it can be tricky, this is one of the most rewarding and enjoyable stages. This is the time to try new things and new hobbies. You may also have recently launched your children into adulthood and without needing to care for your children and report to your job, it can be hard to find a purpose. It is crucial to find something that gives you energy to enjoy this special chapter of your life. This could be pursuing a passion, volunteering, looking after your grandchildren or just adding fun, interesting activities to your daily routine.
The final stage where you find peace: The final stage of retirement brings feelings of contentment. You will find yourself feeling positive and happy in retirement and your new life. Once you find your new routine and lifestyle, you will be doing things you love and that make you feel fulfilled so that you may enjoy your new sense of purpose and identity.
Correction: An earlier version of this story incorrectly stated that Social Security benefits can be claimed retroactively for six months if you apply before full retirement age. You can only claim those retroactive benefits if you apply at your full retirement age or later.