Retirement FAQs

You should carefully read the information that is part of your retirement application, and complete and submit the forms.  You do not need to submit a separate letter of resignation.  A completed and signed retirement application is equivalent to a letter of resignation. If you are eligible for a retirement benefit, you should not resign, intending to submit a retirement application later. This is because if you die after separating but before filing the application no life insurance, no survivor benefit, and no survivor health insurance coverage would be available to your survivor(s). You should, however, complete all the other required "exit procedures." Read more about applying for retirement.

You can help reduce delays in processing by submitting your application in advance and by making sure your Official Personnel Folder (OPF) is complete. If you submit your paperwork early, your personnel and payroll offices will be able to complete their action before your retirement date.

You can ask that your retirement contributions be returned to you in a lump sum payment. Or, you can wait until you are retirement age to apply for monthly retirement benefit payments. If you get a refund of your retirement contributions now, you will no longer be eligible to receive monthly payments when you reach retirement age. Refer to information about retirement eligibility.

If you are not receiving social security benefits, you can have Medicare premiums withheld from your annuity payments. We must receive a request for the withholding from the Centers for Medicare and Medicaid Services. We cannot withhold premiums based on your direct request or even one from the Social Security Administration. However, the social security district office may be able to give you additional information.

You should begin planning several years before the date you have set for retirement so that you will know what is required to continue certain benefits into retirement. There are many factors related to retirement planning, and it is literally never too early to begin. The federal annuity is only one element to consider in today's complex financial scene. You may need to start a Thrift Savings Plan or IRA schedule many years before considering actual retirement. Other considerations, such as Social Security may affect your benefits. However, the best place to begin is with your local personnel service center. They can provide personalized assistance and they have your employment records. Your health and life insurance coverages are of immediate concern now because you must carry coverage continuously for at least five years before your retirement or you may be ineligible to continue them.

Generally, if you are receiving a regular retirement, it will continue and your salary will be equivalently reduced. But, if you retired for disability or because your job was eliminated, your eligibility for the retirement benefit might end. You can discuss this with your prospective employer or provide us with detailed information about the position so that we can let you know if your benefit would stop. We need to know the title, grade, salary, tour of duty, and retirement coverage provided by the position you are considering. If your retirement benefit ends, your health benefits coverage as a retiree stops as well. You can enroll for health benefits where you are employed. Your life insurance as a retiree stops without a right to convert to an individual policy. Your eligibility for life insurance coverage will be the same as any other new employee.

When you get within one year of retirement eligibility, you should:

• Confirm when you will be eligible to get a retirement benefit;
• Decide when you want to retire;
• Get information about other benefits to which you may also be eligible, such as Thrift Savings Plan payment options and any other entitlements based on employment, for example: Foreign Service, Social Security, pensions from private industry, and Individual Retirement Accounts (IRA). You should have a fairly comprehensive picture of all sources of your retirement income and when each is payable.
• Tell your supervisor about your proposed retirement date. You should give sufficient notice to allow for planning for someone to take your place.
• Attend a pre-retirement counseling seminar.
• Make an appointment with your personnel officer to review your Official Personnel Folder (OPF) or its equivalent to make sure all your records are complete and accurate, all service is verified, and your insurance coverage is documented.

• The beginning and ending dates for each period of employment which will be used for your benefit computation;
• The effective dates for each promotion or within-grade increase during the period that will be used to compute your high-3 average salary;
• The dates of pay changes or earnings and the pay rate, during employment periods when retirement deductions were not withheld from your salary;
• The tour-of-duty during any part-time employment (if you worked more hours than the official tour-of-duty, document the hours actually worked.);
• A record of time actually worked during intermittent or "when-actually-employed" service; and,
• Documentation of the dates of military service.

If any service is not verified or any of the required documentation is missing, you should obtain assistance from your personnel officer.

You can roll over lump sum payments representing the deceased's retirement contributions and applicable interest and the FERS Basic Employee Death Benefit. An eligible payment can be paid either to you or directly to an individual retirement account or other employer sponsored plan. Your choice will affect the amount of taxes you owe. We are required to withhold Federal income tax from taxable payments over $200 at the rate of 20 percent. However, you may choose to take all or part of these payments in a direct rollover to an individual retirement account or an employer-sponsored retirement plan that accepts rollovers. The taxable portion can be rolled over into the Thrift Saving Plan. If you make this election, we will not withhold the Federal income tax from the taxable payments. You can open an individual retirement account to receive a direct rollover. You must contact the individual retirement account sponsor to find out how to have your payment made to your account. If you are unsure of how to invest your money, you may wish to temporarily establish an account to receive the payment. However, you may wish to consider whether or not you may move any or all of the monies to another account at a later date without penalties or limitations. If you choose to have the payment made to you and it is over $200, it is subject to the 20 percent Federal income tax withholding. The payment is taxed in the year in which it is received unless within 60 days after receiving it, you roll it over to an individual retirement account or retirement plan that accepts rollovers. You can rollover up to 100 percent of the eligible distribution, including the 20 percent withholding. To do so, you must replace the 20 percent withholding within the 60 day period. You will be taxed on any amount that you do not roll over. For example, if you roll over only the 80 percent of the distribution, you will be taxed on the remaining 20 percent. You can find more information about the taxation of payments from qualified retirement plans from the following Internal Revenue Service publications:

• IRS Publication 575, "Pension and Annuity Income",
• IRS Publication 590, "Individual Retirement Arrangements",
• IRS Publication 721, "Tax Guide to U.S. Civil Service Retirement System Payments", and
• Form 4972, "Tax on Lump Sum Distributions".

We will withhold Federal income tax of ten percent if your total taxable lump sum is less than $200. We will request a rollover election when you are eligible for a payment of $200 or more.

If at age 62 you are eligible for Social Security, we will recompute your retirement benefit to "offset" any part of your Social Security benefit that is based on your years of Federal service under the offset plan.

Your benefit will be computed in the same manner as if it were not subject to offset. However, it will be reduced when you become eligible for Social Security benefits. The offset applies when the basic requirements for Social Security are met, generally at age 62, even if you do not apply for those benefits. If you are not eligible for Social Security benefits at age 62, there is no offset unless you become eligible later.

After your personnel agency takes action, your agency payroll office:

• Authorizes your final pay check and lump sum payment for unused annual leave;
• Prepares your "Individual Retirement Record," Standard Form 2806 (CSRS) or 3100 (FERS) which reflects service, salary history, and annual retirement contributions; and
• Forwards all retirement documents to OPM.

A court order related to your divorce or legal separation agreement can:

• Divide your annuity;
• Divide a refund of your retirement contributions made when you leave federal service before retirement;
• Permit your ex-spouse to continue health insurance coverage;
• Require you to assign your life insurance;
• Garnish your annuity to pay alimony, child support, in cases involving child abuse, or for Chapter 13 bankruptcy;
• Award life insurance; or
• Award a survivor benefit.

Refer to information about payments and about address and withholding changes.