The 3 Most Important Retirement Counseling Tips

Over the years, when I have counseled federal employees who are completing their retirement applications and getting ready to transition from employee to annuitant, there are some important reminders I make sure to tell them. Here are the top three pro tips that every retiring federal employee should know:

Keep copies of everything. The Office of Personnel Management provides agencies with guidance for submitting “healthy” retirement application packages. You should use it as a guide, too. Once you have completed and signed your retirement forms, make a copy for your records. These could include your retirement application, continuation of life insurance and voluntary contributions forms.

You should also maintain copies of the records of your federal employment and the benefits you will be continuing in retirement. Once you are off the rolls at your agency, you will lose access to your electronic Official Personnel Folder. If possible, make a copy of the entire folder, but if that isn’t an option, be sure to keep personnel action statements, (showing jobs, retirement coverage and salary changes), designation of beneficiary forms and records of health and life insurance coverage—especially documenting the five years of coverage necessary to carry health insurance into retirement. 

Make it easy for OPM. We’ve all heard stories of retirements that take many months to process. All of the retirement forms should be completed online and then printed out and signed. If that’s not possible, you can fill out the forms by hand, but make sure you print legibly with a black ink pen. OPM will not accept corrections (such as scratch-outs, white-outs or lineouts) in most sections of the retirement applications.

It may sound simple, but be sure to include the documentation that OPM is asking for on the retirement application, including military service records, a copy of your marriage certificate (if applicable), any court orders that might affect the distribution of your annuity and form W-4P indicating your federal income tax withholding.

Prepare for the worst and hope for the best. Be sure to have enough cash reserves on hand that you can manage your finances when there are delays in processing your annual leave lump sum payout, your first retirement check and initial distributions from your Thrift Savings Plan account. It’s possible you’ll make mistakes in a process that is probably unfamiliar to you. Many federal employees are no longer provided one-on-one retirement counseling, which leaves them on their own. 

Agencies can make mistakes that cause delays, too. Since June, the percentage of monthly federal retirement claims with agency errors has varied from 14% to 21%.

Given all of these considerations, it would be a good idea to be prepared to cover your living expenses with cash on hand for a few months. By then, everything should be squared away and you should be ready to enjoy retirement.