Your Retirement Responsibility

Federal employees must make some very important decisions at the time they retire. Some of these choices can have lifelong consequences and should be carefully evaluated.

Unfortunately, the rules surrounding retirement can be confusing and complicated. That’s why the government and its various agencies have a responsibility to counsel federal employees as they go through the process.

It starts with the Office of Personnel Management, which offers an online support center to guide employees. It provides information on a wide array of topics, including applying for retirement; cost-of-living adjustments; health, disability, life insurance, and court-ordered benefits; and interim pay during retirement processing.

At the agency level, benefits officers are supposed to help guide employees through the process, including helping them identify opportunities for pre-retirement counseling. OPM also provides an online guide to benefits officers. 

Uncle Sam has a responsibility to help you through the retirement planning maze, but it’s important to remember that you have the ultimate responsibility for making good decisions about your future after your federal career ends. 

Here’s what OPM says in its handbook on federal retirement issues:

Employees should begin planning for retirement several years before the date they set for retirement so that they will be aware of what is required to continue certain benefits as an annuitant. In preparing for retirement, employees need to know that health and life insurance coverage normally must be in effect continuously for at least 5 years before the retirement date or they will be ineligible to carry these important benefits into retirement. Employees also need to know how other programs, such as Social Security, will affect their retirement. Knowing about the choices that are available and how those choices will affect their retirement benefits will help them make informed decisions. When retirement planning is part of career planning, employees will know how to build a solid retirement base to which they can contribute throughout their years in government service. The Thrift Savings Plan will be a major part of most retirement plans for future retirees and careful planning throughout their careers will assure them of a sound retirement base. Participating in the retirement seminars given by the agency will help the employee understand his or her role in the retirement process and the retirement application process, which is the culmination of all the plans made for retirement throughout their careers. When employees plan and begin the application process early, problems are less likely to occur. The employees will understand what their benefits are and what documentation is required for the retirement package. 

Your agency’s human resources office can be very helpful in answering questions like this:

• When will I become eligible to retire?
• If I retire on a specific date, when will my retirement benefit begin?
• If I pay a military service credit deposit, how will that affect my eligibility for and calculation of my benefit?
• Is my service properly documented and creditable for my retirement?
• What forms do I need to complete to begin the process?
• What is an estimate of my retirement benefit if I retire as of a specific date?
• Does the estimate show the reductions and withholdings that will affect my net monthly benefit amount?
• How much will my retirement be reduced to provide a spousal survivor annuity?
• If I die before my spouse, how is the survivor benefit computed and how long will they receive it?

On the other hand, there are other questions the employees in your HR office are simply not prepared to answer. It’s not in the position description of a benefits specialist to provide financial management advice. So questions like these are yours to ponder and answer carefully:

• What is the best date for me to retire?
• Should I pay my military service deposit?
• Will I be able to afford to retire?
• Should I provide a survivor benefit for my spouse?

Notice that the second set of questions require an opinion rather than a factual response. The first set of questions are important questions that you should have the answers to in order to determine the answers to the second set of questions. You will be able to answer the second set of questions for yourself (with the help of a trusted and qualified financial adviser, if necessary) if you have the facts before you make your decision.