When it comes to picking the time to retire, many federal and postal workers leave in late December or early January. By picking the best date to retire at the end-of-year (this year it is December 31 for both CSRS and FERS employees) people can carry over the maximum amount of unused annual leave. And if there is a pay raise in 2011 most of that leave will be paid them at the new higher rate.
(President Obama has proposed a 1.4 percent civilian federal pay raise but Congress may have other ideas. For the latest on the lame duck Congress, click here.)
But if you are planning on pulling the plug then, or anytime in the near future, here’s a tip:
Have a stash of cash. Some experts say you should have enough to pay your mortgage, rent, buy groceries and pay bills for 6 to 12 months. Because…
Compared to the private sector, federal retirement benefits are generous and are indexed to inflation. But…
As good as that annuity may be, it could be some time before you start getting a full retirement check. Think about living on half, or less, os your current income for an extended period!
When you retire the government will give you a portion of your estimated annuity until they figure out exactly how much you should receive. The problem is that could be a while – months in some cases, many months in a few – before you start getting your full annuity check. In September we issued an early warning about delays in retirement processing.
Since then the Office of Personnel Management has promised to speed up the process.
There are a number of reasons for the backlog in processing retirement claims: Lots of early retirements from the U.S. Postal Service, slow or sloppy handling of paperwork from your agency, then delays getting the papers and documents to OPM.
But until things get better, consider this heads up alert that a Commerce Department agency got from its Benefits & Retirement Team:
“…OPM has updated their annuity payment schedule.
You should receive your FIRST annuity payment from OPM about 6 to 8 weeks AFTER your retirement date. This payment will be an interim payment and should equal about 40 percent to 50 percent of the estimate this agency prepared for you.
Interim payments will continue for approximately 9 to 12 months while OPM completes an audit of your records. Once OPM has finalized your case, they will determine the exact amount of your annuity and will make any retroactive payments that are due to you.
The time-frame can vary greatly. Most of the records (your records) are on paper. And they must be eyeballed by a human being. If you’ve spent your entire career in one agency, your paperwork should be less and less complicated than if you changed agencies, had a break in service or anything that would generate extra paperwork.
Mike, a retired IRS agent in Las Vegas, said that when he retired his wife presented him with a pleasant surprise: A bank account with more than $60,000. He said she paid the bills, and did their taxes, for which he is eternally grateful. She also set aside a nest egg which, he said, came in very handy while he was getting interim annuity payments.
After news broke about the FBI arresting the wife of a local politician with $79,600 stuffed into her bra, intrepid reporters at the Washington Post have confirmed that is, indeed, possible. “At a gram each, 796 ($100) bills would weigh around 1.75 pounds and, if stacked horizontally, stand about 3 1/2 inches in height, according to a rep from the Bureau of Engraving and Printing.”