The Federal Retirement Process

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By on July 22, 2019 in Retirement with 0 Comments
Words 'retirement plan' written on a notebook sitting on a desk next to a pen, notepad and decorative plant

It’s never too early to start planning for retirement to achieve the lifestyle that fits your dream.

I like to start by determining your estimated “fixed” expenses in retirement and your “wants” expenses. What do you want to do in retirement? You can travel, take tennis, golf, cooking lessons, garden, exercise, dine out, spend time with family and friends, remodel home, garden, wine tasting, fishing – the world is your oyster! Where are you planning to live? So many things to think about!

Then look at your sources of income from your Social Security, FERS or CSRS annuity and TSP and other assets that you are accumulating for retirement, along with your contributions to TSP and other accounts to determine if you are on track to meet your goals. You will also need to include inflation and estimated rate of return to run this calculation.

While there are a lot of considerations involved with retirement, the scope of this article is to focus on the retirement process and to retire from your agency. 

What to do if you owe a deposit or a redeposit

If you have periods of service where you were not contributing to CSRS or FERS for which you received a refund of your retirement contributions, you should take action immediately so you can find out what it would cost you, including principal and interest, to make these payments back before retirement. It may take a year to get this information, so make the request well ahead of your planned retirement date to maximize your benefits.

Civil Service Retirement System (CSRS) retirees complete SF 2803 or Federal Employees Retirement System (FERS) retirees complete SF 3108 to get the periods of service during which you either did not contribute to the Civil Service Retirement and Disability Fund, or for which you received a refund of your retirement contributions. You will submit this to your Human Resource Office (HRO) or your Agency Benefit Office.

What to do if you want to make a deposit for military service

In most cases, if you are eligible for military pay you cannot use your military service to add credit to your annuity. You must make a deposit prior to the date of retirement. Processing time requires approximately 120 days so plan accordingly.

  1. You must complete RI 20-97, Estimated Earnings During Military Service, and mail it to the appropriate military finance center (see the mailing addresses), with a copy of all DD Forms 214.
  1. Once you receive your estimated military earnings, complete the Application to Make Service Credit Payment SF 3108 (FERS) or SF 2803 (CSRS). Mail the application along with your completed estimated military earnings and DD Form 214 to the appropriate Military Finance Center.

Processing Your Retirement Paperwork

We recommend you start working with your Human Research Office (HRO) or Agency Benefit Office within a year of your planned retirement date. Do not get alarmed if you do not have a Human Resource Office or Benefit Office on site at your agency. In fact, most agency benefit offices are offsite. For a list of agency benefit offices go to https://apps.opm.gov/abo/.

Here is a step by step guide to processing your retirement paperwork

  1. Complete an application for retirement: FERS SF 3107, CSRS SF 2801 and compete SF 2818 FERS and CSRS, continuation of life insurance in retirement, and mail to your Agency Benefit Office or your onsite HRO office if they do retirement processing. It is suggested that you FEDEX, DHS or UPS, although this is not a requirement.
  2. If you are married and electing less than a full survivor benefit, your spouse must consent by signing SF 3107-2 for FERS, and SF 2801-2 for CSRS, in the presence of a notary before submitting your application.
  3. If you are married, submit a copy of your marriage certificate.
  4. Complete beneficiary designations for the lump sum payment of retirement contributions when no one is eligible for benefits. FERS form is SF 3102 and CSRS form is SF 2808. If you are not sure if you previously completed this form, complete the beneficiary form anyway, which will supersede any previous designation.
  5. Get completed forms to your benefit office 60 days prior to your planned retirement date or as your agency dictates.
  6. Your retirement application is then forwarded to your servicing payroll office, which will close out your payroll record, verify for OPM to complete your contributions to the retirement fund, calculate your lump sum leave payment, and complete other payroll actions.
  7. Your payroll office then forwards the application package to OPM.
  8. OPM makes a final determination on your retirement eligibility. Upon confirmation of your eligibility, they will send you interim payments until your annuity calculations are finalized. Your interim payments are usually between 60 to 80 percent of your estimated final annuity and do not include the FERS Supplement (if applicable).
  9. You can expect to receive your interim payment 4 – 6 weeks after you retire. You will receive a Civil Service Annuity (CSA) number from OPM that identifies your application and you should refer to your CSA number when contacting OPM regarding your annuity.
  10. Your interim payments are subject to federal income tax withholdings. Premiums will not be withheld for health or life insurance, although these benefits will continue and will be brought whole once your annuity is finalized. You should make arrangements with www.benefeds.com and www.ltcfeds.com to make premium payments during the interim period.
  11. When OPM receives your retirement application from your agency, they will mail you a welcome letter, along with a retirement card, which contains your CSA number. It’s a seven-digit number and will be included on all correspondence from OPM. You will also receive a password which will give you access to your annuity at OPM Services Online.
  12. You can use Services Online once you have received your claim number and temporary password to:
  • View the Status of Case while in Interim Pay
  • View/Print 1099-R Tax Forms
  • Change Federal and State Income Tax Withholding
  • View/Print Annuity Statement/Verification of Income
  • View/Print a Year-to-Date 

Register to attend Carol's free webinar: Steps to Take Now to Solve Your Math Problem in Retirement on Tuesday, September 24, 2019 from 12:00 - 1:00 pm EST.

© 2019 Carol Schmidlin. All rights reserved. This article may not be reproduced without express written consent from Carol Schmidlin.

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About the Author

Carol Schmidlin is the President of Franklin Planning and has been advising clients on how to grow and preserve their wealth for 20 years. In addition to her financial planning practice, she is the founder of FedSavvy® Educational Solutions, which provides Financial and Retirement Literacy Programs for Federal Employees. Follow FedSavvy® Educational Solutions on Facebook for the most up to date information. Contact Carol at (856) 401-1101 or visit FranklinPlanning.com.

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