You may want to leave on terms where your agency would be willing to take you back. Image: SmartPhotoLab/Shutterstock.com
By: Reg JonesCongratulations to those of you who have decided to retire. Now it’s time to focus on the final steps, including your exit strategy.
If you have submitted your retirement application well in advance and are leaving with a mix of smiles and tears all around, great! On the other hand, if you are leaving in a huff because you are fed up, angry or frustrated, jumping ship without saying goodbye or, worse still, just leaving your retirement application in your boss’s inbox, that can have repercussions that last.
Why do I say that? Because even if your application is in perfect order – which is rare for one that hasn’t first cleared your personnel office – it will take a long time until you are receiving your full annuity.
Your paperwork can’t even leave your agency until you are off the payroll. And then, they have 30 days to get it to OPM. After OPM receives your application and does an initial review, it will notify you of that fact and, usually within a month, begin sending you interim payments. These are a percentage of what a first glance suggests your final annuity will be—supposedly around 80 percent, but often much lower. They do that to avoid overpayments, which they are not allowed to recoup.
Only when your case is finalized will you receive the full amount you are due, plus a catch-up payment to cover the amount you should have received but didn’t. Best case scenario, that would be several months. Worst case scenario—for those with complex work histories—potentially many months, or even a year or more. So, before you leave, ask yourself whether you’ll be financially able to bridge the gap.
Longer-term, will your annuity and the money in your Thrift Savings Plan account be enough to live on? Take it from one who has been there. Retirement living costs more than you think it will.
While you will no longer have the out-of-pocket expenses associated with working, you’ll still have basic expenses to cover, such as house payments or rent, federal and (sometimes) state taxes and, in many cases, health and life insurance, plus, if you sign up for it, Medicare Part B.
Keep in mind that what you’ll get in your annuity will be less than what you were getting in your pay–much less, if you are a FERS employee. And while CSRS retirees will be eligible for full annual cost-of living adjustments (COLAs), FERS retirees won’t – with rare exception – receive any COLA until they reach age 62, and even then it will be reduced if inflation is above 2 percent.
This is why your attitude on retiring is important. You may find that you need to supplement your retirement income. Your best bet to do that likely would be to return to work for the government. You would want to leave on terms where your agency would be willing to take you back.
Maybe you are certain you never would need or want to return, but here’s my advice anyway: Even if you are unhappy in your work, get your paperwork in on a timely basis, put a smile on your face, and leave gracefully. Wouldn’t you rather have your coworkers sing you out the door than slam it behind you?
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
5 Steps to Protect Your Federal Job During the Shutdown
Over 30K TSP Accounts Have Crossed the Million Mark in 2025
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025
Primer: Early out, buyout, reduction in force (RIF)
See also,
OPM Guidance Addresses Pay Issues arising During, After Shutdown
