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Advice on how to prepare for life after government.

Follow These Steps to a Smoother Retirement

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Flickr user hhm8

The process of retiring can be smooth for some people and a nightmare for others. Is it just the luck of the draw? The good news is that according to the Office of Personnel Management, 76 percent of all claims received monthly are processed in 60 days or less. As of the end of February, OPM had a backlog of 24,225 Civil Service Retirement System and Federal Employees Retirement System claims waiting to be processed.

To help facilitate smooth processing of your retirement, you should take the following steps:

  • Update your pre- and post-retirement checklist. This 10-point pre-retirement checklist from USA Today includes some great ideas to prepare for the next chapter of your life.
  • Thirty to 90 days prior to your retirement date, complete the CSRS or FERS retirement application (along with a form to continue Federal Employees Group Life Insurance).
  • If you’re eligible and want to begin collecting Social Security retirement benefits at the same time as your CSRS or FERS retirement, you can file online.
  • Following your retirement, you will receive your final salary payment for the work performed through your retirement date. Remember that your salary is paid after it is earned, so you may get a full paycheck and a partial paycheck following your final date of separation. (For tips on choosing a good retirement date, check out my Best Dates to Retire 2018 column.)
  • Within six to eight weeks, your payroll office will separate you from the payroll of your agency and pay your lump sum payment of accumulated and accrued annual leave.
  • Around the same time, you will also receive a notice of your separation and the date of the transfer of your payroll records to OPM. This will be your indication that you have been removed from your agency payroll. If you wish to request a Thrift Savings Plan distribution, you should now be able to submit your application to the TSP.
  • Be sure to print out your final Standard Form 50 (Personnel Action Statement) showing the date of your separation and retirement from your agency. You will soon no longer be able to access your electronic official personnel folder.
  • Within 30 days of your final day on the job, your human resources office should be finished assembling your retirement package for submission to OPM. OPM provides instructions to HR specialists for successful completion of this process.
  • Within four to six weeks of your separation, you should receive your Civil Service Annuitant number from OPM. This will identify you as a retiree and you will be able to access OPM Services Online to check the status of your claim.
  • Also within four to six weeks after you leave, you should receive your first CSRS or FERS benefit payment. In most cases, this will be an interim payment pending completion of processing of your retirement. The only withholding from this payment will be federal taxes. Check with your state tax office to find out if you need to pay state income tax on your CSRS or FERS benefits. The National Active and Retired Federal Employees Association publishes an annual state tax roundup to help.
  • Your health benefits and life insurance premiums will be paid by OPM until your retirement is finalized and then deducted from your retroactive annuity catch-up payment. You may be billed for FEDVIP and FLTCIP during the time you are in interim retired status. Be sure to pay these premiums to avoid a lapse in coverage.
  • At the six-week point, if you haven’t received any communication from OPM, it’s time to contact your agency’s human resources office to verify that your claim has been sent to OPM. Be sure to keep the name of your agency contacts for both human resources and payroll in case you need help during this transition.

If you need more help, OPM provides additional information for new retirees.

Sometimes, even if you follow all the important steps, things don’t go as planned. I recently received an email that began, “I’m a 76-year-old with some heart problems, who has waited nine months without seeing a nickel from OPM on a recalculated annuity after seven additional years as a reemployed annuitant.” His retirement processing was complicated by the fact he had come back to work in government after retiring in 2006, and then left again suddenly in 2017 at a time when a lot of employees were filing retirement applications.

It took almost a full year until this annuitant’s first retirement deposit arrived at the bank. He advises other would-be retirees to be sure to have some savings to rely on in the event of a delay in your retirement processing. If you don’t have a lot of cash on hand, consider using your lump-sum annual leave payment for this purpose or taking a pre-retirement loan from the TSP.

Photo: Flickr user hhm8

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at www.retirefederal.com and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement and the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on NITPInc.com.

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