‘It’s Time For Me To Go Fishing’

I recently received the following message from a reader covered under the Federal Employees Retirement System:

I’m 70 years old and have 21 years with the federal government. It’s time for me to go fishing, so what’s best and how do I start the process? I don’t have a fixed date in mind so whatever seems to be best will work.

The process of retiring begins with determining when you are ready to move on, both financially and emotionally. It sounds like you’re there.

The next step is to choose a specific date. Notify your human resources office at least 30 days before your planned date. It’s even better if you let them know 60 to 90 days in advance. Review the FERS retirement application form. If you’re covered by Federal Employees Group Life Insurance, you’ll also need to complete a form to continue it into retirement.

You might also need to locate documents that are required to accompany your retirement application. These include marriage certificates, divorce decrees and military records. 

You’ll have to make important decisions about survivor elections, tax withholding and how much life insurance you would like to retain. Once you have reviewed your application, you can make a list of information you need for your submission. 

Since you will be retiring under FERS, it’s generally best to choose the last day of the month for your retirement date. July 30 is a Saturday and the end of a leave period. That might work if you can do all of your homework in time and your agency doesn’t already have a big pile of retirement applications being processed. If not, then the end of August, September or October would also allow you to retire in 2022 and give your agency’s human resources office more time to work on your application.

Because you’re already past age 62, retiring on July 30 would provide you a prorated cost of living adjustment on Dec. 1 equal to 4/12 of the 2022 increase. It would be payable in your Jan. 1, 2023 FERS benefit.

If you’re saving up your annual leave hours this year to maximize your lump sum payout, then you could delay retiring until the end of the year. Working longer also increases your length of service and high-three average salary, not to mention boosting your Thrift Savings Plan contributions (and the agency match). Retiring later might even boost your Social Security benefit. Speaking of Social Security, if you haven’t already applied to receive your benefit, be sure to do so at the Social Security website.

Once you’ve submitted your application, it is time to notify your supervisor and tie up the loose ends on the job. Helen Dennis of the organization Helping the Elderly Live Productively has written that if you’re worried about the inevitable retirement party, remember that avoiding such a social occasion deprives your co-workers of the chance to say nice things about you, and thank you for your accomplishment. Above all, it deprives them of the opportunity to say goodbye. 

Also, remember that once your application moves from your agency to the Office of Personnel Management, it joins another line of applications waiting to be processed. This can take months, and in rare and complex cases, a year or more. In May, OPM received almost 10,000 new claims for processing, on top of a backlog of more than 32,000. 

Aside from volume delays, processing can be complicated by missing information, requirements under court orders, additional input required by outside entities such as the Social Security Administration, and delays in receiving an application or necessary documentation from agencies or would-be retirees. 

For all these reasons, be sure you have enough cash on hand to pay your monthly expenses while your claim is being processed. And get ready to catch some fish!