The Polar Bear Club and Federal Retirement

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By on January 8, 2010 in Current Events, Retirement with 1 Comment
It’s that time of year again. When cold-loving folks from Minnesota to Colorado and yes, even to northern Florida, head for the coldest body of water they can find and jump in with little or no clothing on!  
So what do the members of the Polar Bear Club and your federal retirement have to do with each other?
The die-hards in the Polar Bear Club report that you aren’t a “real” member if you inch your way into the water – you’ve got to jump in. That’s right, all the way, over your head into the icy grip of the water. Luckily for federal employees wanting to retire, you don’t have to experience that same “all or nothing” mantra.
More and more studies show that people who ease their way into retirement report greater satisfaction with their transition into retirement.
As a federal employee, you may not have considered this as an option. Especially for CSRS employees, who were penalized for working part-time late in their careers, part-time work didn’t seem to be an alternative.
Due to the provisions of the legislation that was signed by President Obama on October 26 last year, CSRS employees now have the option to work part-time late in their careers without having their annuities penalized. (See The Rehire Geezer Feds Act). Without getting into all of the gory calculations of the pre-legislation High-3, suffice it to say that the only effect part-time service would now have is to reduce the years of service (based on your actual part-time work) that your annuity is calculated on. 
These part-time years would have no effect on your High-3 or the calculation of your annuity for the years you worked prior to April 7, 1986.

This provides a great opportunity for CSRS employees who are thinking of retirement, but aren’t sure they want to “jump in,” to dip their toe in the retirement waters and go to part-time service without any monetary consequences. Your lower part-time salary is also a way to test the waters before you actually dive into retirement and see how you do living on a lower income. 

© 2017 Ann Vanderslice. All rights reserved. This article may not be reproduced without express written consent from Ann Vanderslice.

About the Author

Ann Vanderslice is president and CEO of Retirement Planning Strategies. She holds a Registered Financial Consultant designation from the International Association of Registered Financial Consultants, is an Investment Adviser Representative and a licensed insurance professional.