Retiring from the federal government provides employees with valuable benefits, but retirement is more complicated than leaving a private employer. Federal retirement planning should start early, even five years out, so you don’t miss benefits. You’ll need to check personnel records, verify you’re getting credit for all your service, and ensure your health benefits are accurate. All these documents can impact your financial benefits and health insurance in retirement. We break down the records to keep tabs on as you start the retirement countdown from five years to the day of retirement.
What You Need To Know
Retiring from the federal government requires careful planning so you don't miss benefits. You'll want to start planning up to five years before your intended retirement date. To ensure you receive all entitled benefits, start by contacting your employer and consulting with a financial advisor with a federal benefits expert on their team. Review your Official Personnel Folder (OPF) to confirm that all your service records and personal details are accurate, and verify your Social Security benefits. As retirement approaches, address any outstanding paperwork, resolve debts, apply for Medicare if needed, and ensure all your documentation is in order. There are certain tasks to consider each year as you step closer to retiring from a federal job. This structured approach helps you maximize benefits, manage your finances effectively, and transition smoothly into retirement.
Federal retirement planning
Plan as early as possible for retirement from the federal government.
While we’ll break down specific things to do each year as you get closer to retirement, in general, these are actionable steps to take starting five years before retirement:
1. Contact your employer.
When you have a date of separation in mind, you can contact your employer to guide you through the retirement process and the agencies to contact within the federal government to get the documentation you need in order.
2. Talk with your federal benefits expert or financial advisor.
While your employer can guide you through the federal retirement process, they can’t advise you. That’s the role of your federal benefits expert, wealth manager, or financial advisor.
If you don’t have one yet, now is the time to find one.
Ask them to review your investment vehicles, including federal benefits and personal investments. They can look at allocations in your Thrift Savings Plan (TSP) or other retirement accounts to ensure they’re maximized for your projected retirement date.
A retirement expert can also help you evaluate your risk tolerance. That may change as you approach retirement.
If you don’t have a planner, find one specializing in federal retirement benefits or has certifications like a fee-only planner who puts your interests first. These are the questions you should ask a financial advisor to find a good fit and the worst ones to ask.
3. Check your Official Personnel Folder (OPF).
When was the last time you reviewed files in your Official Personnel Folder (OPF)? It’s a folder with your employment history and records with the federal government or military.
The U.S. Office of Personnel Management (OPM) holds the folder, and it’s accessible online for many agencies.
Why is it important? The OPF contains the records that will be used to calculate your retirement eligibility and annuity entitlement.
If there’s inaccurate data or missing documents or information, you may not receive full credit for your service. Therefore, you may not maximize retirement benefits from the federal government.
If you changed jobs within the federal government, verify your start date is accurately recorded.
This folder should be checked at a minimum of five years from retirement from the federal government, but it’s also good practice to check it annually.
If you find something is missing or inaccurate, you’ll have time to request it from another agency or payroll service center.
There are a lot of detailed documents in the OPF, and the earlier you check it, the more time you’ll have to request changes.
4. Verify Social Security Benefits.
As a federal employee, you’re eligible for Social Security benefits when you are between age 62 and 70.
If you wait until 70 to apply, you’ll receive more money.
You can determine your Social Security benefit through the Social Security retirement calculator. It takes into account your earnings history and date of birth to estimate how much money you will receive during retirement from the Social Security Administration.
You can also see the benefit in today’s dollars or inflated (future) dollars.
If you’re getting close to retirement, you can also create an account and login to view your Social Security account information.
5. Maximize savings.
In addition to speaking to a financial advisor, you can ensure you’re saving enough money for retirement with the Federal Ballpark E$timate®. This tool is designed to quickly determine the approximate amount needed for a comfortable retirement. The estimate includes projected annuity and TSP benefits.
If you’re five years out, the tool may not be as handy as it would be for a new federal employee looking to maximize federal retirement benefits.
The tool is intended for federal employees who plan to retire voluntarily.
6. Know "how" you will retire.
Retiring from the federal government is not as easy as saying, "I'm retiring!" You need to consider "how" you will retire. That may be voluntarily, early, deferred, phased, or through disability. Depending on your choice, your FERS benefits will be impacted. Learn "how" to decide to retire from a federal position and maximize benefits.
7. Know "when" you will retire.
Will it be in five years or more like ten years? While you don't need a specific date, it's helpful to have an estimate of "when" to retire from your federal job. We walk you through the things to consider to determine "when" to retire for your personal financial situation, age, and years of federal service. When may depend on your expected FERS benefit, and we guide you on calculating that.
You can also always talk to our federal benefits expert at Open Road Wealth Management.
What to do five years before federal retirement?
While five years may seem like an eternity before you retire, it’s when you should start taking steps to ensure you receive all your eligible federal retirement benefits when you finally reach the date of separation.
You’ll want to check many of the items above. Once you take the steps necessary five years out, you’ll be on cruise control until about a year from retirement.
It’s the general timeline to start preparation because certain things need to be in place five years out to continue after separation.
For example, you need continuous health and life insurance coverage for at least five years before you retire otherwise, you can’t keep those benefits after retirement. There are exceptions, but the law says those must be exceptional circumstances.
Five years also gives you time to make sure the date you have in mind is the best date for your financial situation.
What to do 1 year before federal retirement?
Congratulations, you’re close to retiring from your job. Now is the time to determine when you want to retire. What’s the magic date? It may depend on when you’re eligible and whether you’ve met the Minimum Retirement Age (MRA).
You’ll want to:
- Think about when you want to retire.
- Attend a pre-retirement counseling seminar.
- Review your Official Personnel Folder (hiring dates, salaries, health and life insurance benefits) with your personnel officer.
- Talk with your financial advisor or federal benefits expert about your retirement accounts.
- Verify beneficiaries.
There are certain things you’ll want to ensure are in your OPF, including information on your employment history and health insurance enrollment for the last five years. You’ll need the health insurance information for retirement.
You’ll also want to check your beneficiaries or designations for retirement benefits. Life changes, so ensure it’s the proper person.
You're almost done with your federal retirement planning. Only a few steps left as the big day approaches.
Six months before retirement
You’re almost to the finish line! You probably have it circled on a calendar by this point!
When you’re six months or several months away from retirement, it’s time to tidy up any outstanding paperwork or internal recordkeeping.
If applicable, you’ll want to:
- Resolve any debts to your employer (outstanding travel advances, overpayment of salary, advanced leave, fees for failure to return government property or damage).
- Waive military retired pay.
- Apply for Medicare benefits three months before your 65th
Two months before federal retirement
It’s getting closer!
- Choose your date, if you haven’t already done so.
- Complete your retirement application.
- Talk with your local personnel office about benefit payments.
- Check on military service deposit, for service after 1956.
- Request direct deposit of your annuity checks.
What do I do when I’m ready to retire?
Certain things must be done to process your retirement application. The responsibility is shared by:
- You
- Personnel office
- Payroll office
You should start this process at least 30 days before retirement or separation to avoid delays. Some personnel offices may want you to start the process even earlier.
Retirement application
First, you need to submit a retirement application if you qualify for payments from CSRS or FERS. This may be:
- Standard Form 2801, Application for Immediate Retirement (CSRS)
- Standard Form 3107 – Application for Immediate Retirement (FERS)
You submit the application to your employer if you’re still working and send it here if you’re no longer working:
U.S. Office of Personnel Management
Retirement Operations Center
Post Office Box 45
Boyers, PA 16017
Stay on top of the paperwork that you’re responsible for as an employee and that your personnel and payroll offices need to complete. They will ask for signatures along the way on documents like the Certified Summary of Federal Service as well as take other actions on your behalf.
You will receive a Civil Service Claim Identification Number that you must use whenever you contact OPM about your annuity.
Withdrawing money from your TSP account
When you retire and want to withdraw money from your Thrift Savings Plan, you can fill out a withdrawal election form. It may take up to 8 weeks to process the form after it’s received along with your Employee Data Record from your payroll office. It indicates that you’ve separated.
Talk with a federal retirement expert
Retiring from the federal government requires documentation and a review of your personnel records.
Tap into the experts – your personnel office and your employer – for guidance through this process.
This list may not be inclusive. For detailed information from the U.S. Office of Personnel Management, consult their guidelines:
Also, talk with a financial advisor who helps federal employees. They can provide retirement advice, considering your full financial retirement picture.
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