Planning for retirement should begin as early as possible. It’s never too early, this post will look at what to do when planning for retirement whether you’re five years out, or ready to apply for retirement now. Knowing the deadlines and requirements will greatly reduce stress as you move into this phase of your life. Contributing to a Thrift Savings Plan as early as possible is especially important; however, there are also other things to consider such as life insurance, health coverage, service history, and more.
Five Years Before Retirement
While retirement planning should begin before this point, the five-year mark is an important one. You must have insurance coverage for the five years immediately before you retire to keep it after you retire.
Health Insurance Coverage
You may continue your health insurance coverage only if you meet the following:
- Your annuity must begin within 30 days or if you are retiring under the Minimum Retirement Age + 10 provision of FERS, your health and life insurance are suspended until your annuity begins, even if it’s postponed.
- You are covered under health insurance when you retire.
- The Federal Employee Benefits program must have continuously covered you:
- For the five years immediately before retiring, or
- During all federal employment since your first opportunity to enroll, or
- Continuously for full periods of service beginning with an enrollment that started before January 1, 1965, and ending with the date when you became an annuitant, whichever is shortest.
If you are an annuitant and enrolled in the FEHB program but decide to cancel your enrollment, keep the following in mind:
- You CAN’T re-enroll in the FEHB program.
- You and enrolled family members won’t be eligible to enroll in continuation of temporary coverage or convert to a non-group contract.
- If you die, you won’t have FEHB enrollment for your survivor, even if they are eligible for a survivor annuity.
Life Insurance Coverage in Retirement
You can keep basic life insurance coverage if ALL the following are met:
- You have coverage when you retire.
- Haven’t converted coverage to an individual policy.
- Your annuity begins within 30 days. An exception is if you are retiring under MRA+10 and you have postponed the starting date of your annuity. Your health and life insurance coverage are suspended until your annuity begins.
- You were insured for life insurance coverage for the five years immediately preceding retirement or the full periods of service when coverage was available.
You can keep optional life insurance coverage in retirement if all the following are met:
- Eligible to continue basic coverage.
- Covered by optional life insurance for the five years immediately preceding retirement of the full periods of service when coverage was available.
Military Service
Another important thing you need to review is your military and civilian service history. If you owe a payment to receive credit for military service performed after 1956, you must make that payment before you retire. If you are receiving military retired pay, you should discuss, with your personnel officer, whether you must waive your retired pay.
One Year Before Retirement
By one year before your retirement, you should have a firm idea of what your eligibility requirements are for retiring. Being just one year away from retirement is a great time to verify information and documentation.
- Confirm your eligibility for a retirement benefit.
- Pick a retirement date.
- Get information about other benefits you may be eligible for such as a Thrift Savings Plan.
- Tell your supervisor about your proposed date.
- Attend a pre-retirement counseling seminar.
- Make an appointment with your personnel officer to review your Official Personnel Folder so that you can ensure all records are complete and accurate, all service is verified and insurance coverage is documented.
When you check your Personnel Folder, be sure to look for the following:
- Beginning and end dates for each period of employment. This is used to compute your annuity benefit.
- Effective dates for each promotion or within-grade increases. This is used to compute your High-3 salary.
- Dates of pay changes or earnings in pay rate during employment periods when retirement deductions weren’t withheld from your salary.
- Tour of duty during any part-time employment.
- Record of time actually worked during intermittent or “when actually employed” service.
- Documentation of military service dates.
Other important things to review are:
- Review your designation of beneficiary.
- Ensure your records show a complete history of health insurance enrollment for at least five years.
- You personnel officer should review your election opportunities for survivor benefits. If you don’t provide a monthly benefit, your survivor will not be able to continue coverage under the FEHB program.
- You can get paid for any unused leave you have left at retirement.
Six Months Before
The main thing to do during this time is to resolve any employer debts such as outstanding travel advances, overpayments of salary, and/or advanced leave.
Two Months Before
During this time, you should choose your exact retirement date, complete your retirement application, and verify any deposit has been paid for any military service performed after 1956.
It may take up to 8 weeks to process a TSP withdrawal. Plus, they can’t process the withdrawal until they receive notice of your separation.
Process of Applying
Once you’ve picked a date for retirement, ensured all your service dates are correct, and elected survivor benefits, it’s time to start the process of applying for retirement.
If you are still working, you will submit your application to your employer. If you have been separated for more than 30 days, your application will go directly to OPM.
Both your personnel and payroll office in your agency are responsible for processing your application.
Personnel Office Process
- They will complete the “Agency Checklist for Immediate Retirement Procedures” (Standard Form 2801, Schedule D for CSRS and Standard Form 3107, Schedule D for FERS).
- Prepare and obtain your signature on the “Certified Summary of Federal Service” (SF 2801-1 for CSRS or SF 3107-1 for FERS).
- Verify any service not fully documented in your Official Personnel Folder. If your personnel office is unable to verify, OPM will do so, but this could create delays in processing.
- Certify and transfer your coverage under Federal Employees’ Group Life Insurance to OPM.
- Transfer enrollment under Federal Employees’ Health Benefits program to OPM.
- Prepare SF 50, “Notification of Personnel Action”.
- Send all retirement materials to your payroll office.
Payroll Office Process
- Authorize final paycheck and lump sum payment for unused annual leave.
- Prepares your “Individual Retirement Record”, SF 2806 for CSRS or 3100 for FERS, which reflects service, salary history, and annual retirement contributions.
- Forwards all retirement documents to OPM.
OPM Process
When OPM receives your application, they will notify you and provide you with a 7-digit civil service claim number.
- They obtain any missing information from your retirement documents.
- Determine your eligibility for annuity and continued health and life insurance coverage.
- Computes the amount of your annuity.
- Sends you materials concerning survivor benefit election, an alternative form of annuity, rollover to an IRA, and if you are a FERS MRA+10 retiree, your annuity start date.
- Authorizes your annuity payment which is paid by the Department of Treasury.
- Sends you an annuity statement.
OPM could take months to process your retirement application so be sure it’s correct before sending. If they must contact you regarding elections or missing information, this will cause delays in an already lengthy process.
In the event that an injury or illness affects your job duties and you can no longer work, you may be eligible for a federal disability retirement. Of course, there is no way to plan for this happening, however knowing your options should this arise can help you plan for your next steps. Our team at Harris Federal Law Firm can help you if you find yourself in a situation like this. Please give us a call at 877-226-2723 or fill out this inquiry form for a FREE consultation.
