Let’s share some advice for federal workers who intend to leave their jobs in the next five years.
These latter years will be filled with anticipation and excitement, much like how a runner speeds up whenever the final race is in sight! However, you must exercise caution! You’ve come a long way and are almost there with your retirement plans. To prevent any last-minute surprises, don’t let enthusiasm and anticipation keep you from doing the last few tasks.
You should be in excellent shape to get the pension you have always wanted if you follow the early, mid, and late employment advice during your federal career.
Now complete these last steps to secure it!
1. Know Your Numbers (KYN)
- Also Read: New TSP Withdrawal Rules and What They Mean for Your Federal Retirement Plans
- Also Read: TSP Investment Moves That Could Help Federal Employees Retire on Their Own Terms
- Also Read: Early Retirement Myths Federal Employees Need to Stop Believing
2. Ascertain that you have ample cash available for the transition.
The Office of Personnel Management (OPM) will process your retirement application in 2 to 9 months. It has also been shown to take longer.
You will get half your retirement cheques during this transitional period. You must make sure you have sufficient funds to handle your anticipated costs throughout this time. The vital thing to remember is that you don’t want to have to take money out of investments to cover anticipated expenses. Remember that you could sell during a market slump, if there is one, but it might have disastrous effects on your retirement!
3. Recognize the dates and options you have with Medicare.
When you retire, you have up to eight months to sign up for Medicare Part B without paying the penalty if you are 65 or older. Do your research over your final year before retiring! Investigate your alternatives to determine whether utilizing one of these plans makes sense. Some health insurance providers will pay Medicare Part B premiums. Additionally, you ought to be able to calculate your possible Medicare B premium, at the very least, roughly. Since it is income-based, you may have to pay several hundred dollars in monthly premiums if you fall into a higher band. Make a plan! (See the chart showing Medicare B premiums).
4. Tax preparation
Taxes are reportedly the biggest retirement shock for federal employees. When it pertains to taxes, being an employee and then a retiree requires an entirely new way of thinking. You may have never sought the advice of a tax professional before. However, it’s worthwhile to pay to have your position assessed to ensure that you won’t receive any unpleasant surprises in April of the year after your initial full year of retirement.
5. Determine the retirement date and be familiar with your sick leave policy!
There are various ways to choose the optimum retirement date, but remember that your pension begins to accrue the first month after your retirement date. This supports choosing a retirement date as close to the month’s end.
It would be best if you also considered any sick days you have racked up throughout your work. While your sick leave is transformed into months and years of service and contributed to your service time, your yearly leave is paid out in a lump payment. Ensure you are not taking too much sick time off by using the 2087 chart!
6. Remember the COLA regulations?
If you’re retiring under FERS, there are no COLAs until age 62.
7. Prepare your documents in advance!
The retirement application is SF 2801 for CSRS and CSRS Offset personnel, while for FERS employees, it is SF-3107. Confirm your Pension Service Comp date (RSCD) as soon as you can if you haven’t already. Your HR contact can vouch for this. Make sure you have the proper supporting documentation when putting together your retirement application for any service time, such as brief service or service in the military that was bought back. Additionally, ensure that almost all paperwork is ready for submission to OPM if you are separated and your former is eligible for any of your benefits.
8. Securing FEHB coverage
Verify that your records are accurate and that you were registered for five calendar years before retiring to keep your coverage after retiring. Make sure you retain at least a portion of the survivor benefit on your annuity if you have a spouse who might prefer to keep your federal health insurance if you pass away before them. Most couples will choose the highest survivor benefit, including health insurance for the surviving spouse.
Contact Information:
Email: [email protected]
Phone: 3604642979
Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.
