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Retirement – Do You Know the Requirements?

March 20, 2024
Business Man

Retirement – Do You Know the Requirements?

By: Site Owner

Published: March 20, 2024

Business Man

Author: Ray Kirk, Ph.D., Federal Benefits Specialist

“I’m going to retire.”  Congratulations.  You’ve made the big decision.  Now, what do you do?  This article focuses on four important activities to get you started on the path to retirement.  They are:  Confirm your agency’s retirement application procedures and timelines; Get estimates of your retirement income; Review your service; Collect important documents you will need for your application.

Confirm your agency’s retirement application procedures and timelines.  Once you are eligible to retire, you can retire on any day you want.  It can be a workday, a weekend, or a holiday.  Generally, it’s best to retire on the last day of the month so there is no gap between the end of being paid by your agency and being paid your annuity.  The effective day of your annuity, i.e. the first day you will be on the annuity payroll, will be the first day of the first month after you retire.  If you pick a date in the middle of the month because it’s your birthday or some other special day, you will have a period of time when you will not be paid by your agency nor will you ever receive annuity payments for that time.  Employees under CSRS do have a little additional flexibility to retire on the 1st, 2nd, or 3rd of the month and avoid the gap between pay and the start of your annuity.  Therefore, unless you have some compelling personal reason, the last day of the month is the best choice. 

Once you have decided on your retirement date, contact your agency benefits office to learn the specific procedures and timelines.  Retirement application procedures vary across agencies.  Those with centralized shared service centers may use online forms to collect information about your plans and provide counseling via phone or Zoom calls.  While agencies which process applications locally might schedule in-person meetings to review requirements and forms.  Your benefits office has a large behind-the-scenes role reviewing and assembling documents for your retirement package.  Knowing the timelines is important to keep the process as efficient and stress free as possible.

Get estimates of your retirement income.  All FERS and CSRS-Offset retirees will have three sources of retirement payments: an OPM annuity, TSP distributions, and Social Security.  CSRS retirees will have an OPM annuity and most will have TSP accounts.  These sources of income are independent and you need to get an estimate of your retirement income from each, as well as apply separately for each benefit.  Your agency benefits office will provide you with a retirement estimate of the OPM annuity as part of the retirement application process.  You have to go directly to Social Security and TSP to get the information about those benefits. The Social Security Administration calls the estimate a Social Security Statement. Your Social Security Statement is available to view online by creating a my Social Security account at www.ssa.gov . Your Social Security Statement provides information on when you will be eligible for Social Security and an estimate of your future Social Security benefits.  All your TSP account balance information is available online in your TSP My Account.  Your options for how to use the money in your TSP account after you retire are detailed at:  Withdrawals in retirement | The Thrift Savings Plan (TSP) .

Review your service.  Your OPM annuity will be based on the total amount of covered service.  Verifying that your agency’s version of your service history matches your version of your career service history is an important step.  Your covered service is shown in your Retirement Service Computation Date (Retirement SCD) and is used to compute your total service.  Your Retirement SCD is subtracted from your retirement date to calculate the total amount of years, months, and days of service to be used in the determination of your annuity.  You also have a Leave SCD which is used to determine what leave category you are in.  They can be the same, but they can also be different.    Review your retirement estimate.  Are your retirement and leave SCDs the same or different?  If they are different, do you understand why?  See the NITP Monthly e-News article Understanding Service Computation Dates – Not So Simple to help you understand why they may be different.  If you don’t understand your Retirement SCD, reach out to your benefits office and ask them to explain the difference.  You may have periods of service, such as Active-Duty military service or civilian service, for which you might get retirement credit if you pay a deposit.  Resolving any service credit issues before you retire will help reduce the time it takes OPM to process your application and help avoid glitches in the process.

Collect important documents you’ll need for your application.  There are documents you must include with your application. If you are currently married, you must include a copy of your marriage certificate.  If you have a living former spouse to whom a court order gives a survivor annuity or a portion of your retirement benefits, you must attach a certified copy of the court order and any amendments. If you had Active-Duty military service, you need to provide proof of the military service such as a DD 214 with your application.  Proof of military service is required even if you have decided not to make a deposit for your military service.  Making certain you have copies of all the required documents to include with your application package is another step to avoid delays in processing your application.

These four important activities will guide your retirement application journey: Confirm your agency’s retirement application procedures and timelines; Get estimates of your retirement income; Review your service; Collect important documents you will need for your application.

Here are links to detailed retirement application checklists listing other things to help you “check all the boxes” during the application process.

NITP Retirement Countdown Checklist

OPM Planning and Applying

The NITP Monthly e-News article What Happens After You Retire will help you understand what happens to your application after you have separated for retirement.

Dr. Ray Kirk is a retired Federal employee with over 40 years of Federal Service, 34 years of which were with the Office of Personnel Management. He was the Manager of the Benefit Officers Training and Development in Retirement Services for the last 12 years of his career. Dr. Kirk is a member of the Certified Retirement Counselor® Board of Standards and Policy Development.  Dr. Kirk was a Federal Benefits instructor for NITP from 2014 through 2022 and continues to be affiliated with NITP providing webinars, newsletters, and special projects.  

This newsletter is designed to provide information on the subjects covered. NITP, Inc. takes great care to insure the accuracy and quality of these materials which are provided without any expressed or implied warranty, including, but not limited to, their fitness for a particular purpose. They are also provided with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, financial planning or other professional service. If additional assistance is required, the services of a competent professional should be sought.

This entry was posted in News, Uncategorized on March 20, 2024 by Site Owner.

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