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Advice on how to prepare for life after government.
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What Makes the FERS Supplement Special

The Federal Employees Retirement System annuity supplement is important for those covered under FERS who plan to retire before turning 62, but it is especially significant to those who must retire early under special provisions that apply to certain groups of employees: law enforcement officers, firefighters, air traffic controllers, National Guard technicians, Customs and Border Protection officers, nuclear materials couriers and special agents of the Diplomatic Security Service—as well as a few other positions.

Although the special provisions apply to a large number of employees at agencies such as the FBI and the Secret Service, they cover a smaller portion of employees at agencies like the Food and Drug Administration. It can be difficult for some special group employees to get information about specific retirement rules for them that are slightly different due to their retirement coverage. These differences include an earlier retirement age with eligibility to retire with less service than other employees, immediate cost-of-living adjustments, a more generous retirement computation, and an immediate FERS retirement supplement.

To help with this week’s column, I called on Dan Jamison, who is a certified public accountant and retired FBI agent. For more than 20 years, he has produced a...

How Ready Are You For Retirement? A Quick Quiz

Whether you’re concerned about proposed congressional changes that could impact your future retirement benefits or you’re simply at or near eligibility for retirement, you may have been thinking lately about your future plans.

If you’re considering leaving sometime soon, it’s a good idea to think about how prepared you are. Here’s a quick way to assess where you stand.

For each of the 10 questions below, choose the answer that best describes your situation.

Which of the following best describes your contributions to the Thrift Savings Plan?

  1. I’ve increased them within the last two years
  2. I plan to increase them with my next salary increase
  3. a and b
  4. I’m already contributing the maximum
  5. I can’t contribute due to a six-month ban on contributions after taking a financial hardship in-service withdrawal (there’s an exception to this for recent hurricane victims)
  6. I can’t afford to contribute more than I currently am contributing
  7. I do not participate in the TSP

When was the last time you reallocated your TSP funds or rebalanced your overall retirement investments?

  1. Not recently, because I am invested 100 percent in one or more of the lifecycle L Funds...

Potential Benefits Cuts: Where Things Stand

Earlier this year, I wrote about the proposed cuts to federal retirement benefits included in President Trump’s budget. Here, to recap, is what the budget proposal included:

  • Cost-of-living allowances for current and future FERS retirees would be eliminated altogether.
  • COLAs for CSRS retirees would be reduced by 0.5 percent each year from what they would have been otherwise.
  • FERS employees would see employee contributions to their annuities increased by 1 percent each year for the next six years, without any corresponding benefit increase.
  • The FERS annuity supplement would be eliminated for new retirees starting in 2018. That change alone would save the federal government $5 billion by 2026.
  • Federal pensions would be based on the average of the highest five years of salary instead of the highest three. According to Congressional Budget Office estimates, that change would save the federal government $2 billion from 2018 to 2026.

These would clearly be dramatic changes to the federal retirement system, and they have caused alarm among some federal employees. But they have to be approved by Congress, and many lawmakers share employees’ concerns about their impact.

So where do things stand now? To give you an idea, here are some...

Best Dates to Retire 2018

Download the Best Dates to Retire 2018 Calendar

Once you’ve made the decision that you’re ready to retire, it’s time to select a specific date within your desired timeframe. Last week’s column provided a general guide to deciding when to go. Now let’s look at some specifics related to picking a date next year.

Your retirement coverage under the Civil Service Retirement System (including CSRS Offset) or the Federal Employees Retirement System (including transfers to FERS) will be an important factor in choosing the best date.

CSRS

You can choose a retirement date on the first, second or third day of any month and your retirement will commence the following day. So, for example, if you retire on Oct. 1, your salary will end close of business that day and your first retirement benefit will be paid on Nov. 1, covering the remainder of October. If you retire on any day after Oct. 3, then your first retirement benefit will be paid on Dec. 1, covering the month of November. You would forfeit the October CSRS retirement benefit.

The best dates for CSRS in 2018 will be Jan. 3, Feb. 2, March 2, March 31...

Picking a Date to Retire

Is there such a thing as a best date to retire? I should probably know by now, because I’m known for coming up with an annual calendar of such dates.

As more and more federal employees are now retiring under the Federal Employees Retirement System, I have been rethinking the idea of a best date for retirement. Although it is important to carefully choose your exact retirement date, it is even more critical to complete the steps leading up to choosing the day on which you’ll go.

Next week, I’ll present the annual best dates calendar, as usual. But this week, I want to talk about assessing your retirement readiness in preparation of selecting the date that’s best for you.

Civil Service Retirement System

CSRS was designed as a single benefit plan providing a complete retirement all in one monthly retirement payment. An employee who works in government for 40 years under CSRS gets a benefit equal to more than 75 percent of his or her high-three average salary—with immediate cost-of-living adjustments and a survivor annuity for those who elect a reduced benefit.

Most federal employees hired before 1984 retire under CSRS, and they’ve...