You’ve confirmed your eligibility, finalized your elections, and signed your retirement paperwork. For many federal employees, that moment brings real relief — followed quickly by a new set of questions. How long does OPM take? When does money actually arrive? What should I be watching for?
The question most new retirees ask is: When will I get paid? The more useful question is: How do I keep my cash flow steady while the system catches up?
The Retirement Process Has Gone Digital
For years, retirement packages moved through the system on paper — and much of the timing advice federal employees heard was built around that. That has changed. OPM launched its Online Retirement Application in October 2025 and marked July 1, 2026, as its “Last Day of Paper,” ending paper processing for most applications.
Processing has also improved. According to OPM data, the retirement backlog fell from more than 65,000 claims in February 2026 to roughly 15,400 by August, with average processing time near 79 days.
A few things haven’t changed:
- You need to meet with your agency benefits office at least 60 days before your separation date → earlier is better
- Your agency and payroll office still certify your records before OPM can begin
- OPM’s work generally starts after your separation date, not before
Digital is faster, but it isn’t instant.
Let’s Break It Down: What Happens After You Leave
Every retiree’s timeline is unique, but here is how the retirement process typically unfolds once you walk out the door.
Agency and payroll (about 30–45 days):
Your payroll office issues your final paycheck and your lump-sum annual leave payout, then reconciles your records and transmits them to OPM.
OPM intake (about 10–15 days):
OPM sets up your account and assigns your CSA number, your retirement claim number. Record it right away. You can use it on every call and letter to OPM, and you need it to create your Retirement Services Online account.
Interim pay:
While your claim is processed, OPM may begin partial monthly payments, typically 60–80% of your estimated net annuity.
Final adjudication (about 10–90 days):
OPM verifies your service history, High-3, and elections, then calculates your final annuity. You receive your first full payment, plus an adjustment payment for the difference between interim and final amounts.
From start to finish, OPM estimates three to five months from separation to a finalized annuity.
Planning for the Interim Gap
Navigating the stretch between your last paycheck and your first full annuity takes planning. Interim pay is helpful, but it is partial. Consider a hypothetical retiree expecting a net annuity of about $2,200 a month. At 60–80%, interim payments may range from roughly $1,300 to $1,750 a month until the claim is finalized.
A few details to know:
- Interim payments generally do not include the FERS Supplement → it is typically paid, if you qualify, once your annuity is finalized
- Annuity payments arrive on the first business day of each month, covering the prior month
- FEHB and FEGLI coverage continue during processing → premiums not withheld from interim pay may come out of your adjustment payment
- Dental, vision, and long-term care premiums are handled through BENEFEDS while you are in interim status
Strategies that can bridge the gap:
- Your leave payout → treat it as a bridge fund, not a windfall
- A cash reserve → several months of expenses set aside before your last day
- Your TSP → once separated, a planned installment or partial withdrawal can help fill the gap; separating in or after the year you turn 55 may allow penalty-free access
A cash cushion can turn a processing delay into an inconvenience rather than a crisis.
Watch Your Tax Picture in Year One
Your first retirement year can stack several income sources into one tax return:
- Final salary
- Lump-sum annual leave payout
- Retroactive adjustment payment from OPM
- TSP withdrawals → the default 20% federal withholding may not match your actual liability
Interim pay typically withholds federal tax only. Once your annuity is finalized, review your federal and state withholding so April doesn’t bring a surprise.
Know What Changes in January
The 2027 cost-of-living adjustments were announced in October: 3.6% for Social Security and CSRS annuities, and 2.6% for FERS annuities. Year FERS retirees do not receive COLAs until age 62, and a first-year COLA is typically prorated. Meanwhile, FEHB enrollee premiums are rising an average of 10.9% in 2027, so Open Season (November 9 – December 14) deserves a careful look even as a new retiree.
Your First-Year Checklist
- Download your electronic Official Personnel Folder (eOPF) and final Leave and Earnings Statement before your last day
- Record your CSA number and set up Retirement Services Online
- Confirm your direct deposit and mailing address with OPM
- Review your final annuity statement → service time, High-3, survivor election, FEHB enrollment
- Record your adjustment payment amount and date for your files
- Review tax withholding on your annuity and TSP
- Watch for your 1099-R forms in January
Bringing It All Together
Signing your retirement application is not the finish line; it is the start of a transition. Knowing what happens behind the scenes, and planning your cash flow around it, can help you move from your final paycheck to your first full annuity with financial stability and fewer surprises.
At Benchmark Financial Group, we specialize in helping federal employees navigate the retirement process with clarity and confidence. If you are within five years of retirement, or have just filed, a strategic review of your interim cash flow, TSP withdrawal plan, and first-year tax picture may help you maximize benefits, make informed financial decisions, and enjoy a smooth transition.
Call David Raetz at 913-534-8256 or visit bfgkc.com to schedule your retirement planning consultation.
Your federal career was built with discipline and service. Your retirement deserves the same level of strategy.
Want to learn more? Attend our free online webinar led by David Raetz on Thursday, November 12.
Signed, Sealed…Now What? From Your Last Day to Your First Full Check
Keep cash flow steady while the system catches up. In this session, learn what happens after you file your retirement paperwork and how to keep your cash flow steady while OPM processes your retirement.
*Securities and Advisory Services Offered Through CreativeOne Securities, LLC Member FINRA/SIPC and an Investment Advisor. Benchmark Financial Group, LLC and CreativeOne Securities, LLC are not affiliated.
“*Annuities contain limitations including withdrawal charges, fees and a market value adjustment which may affect contract values. Annuities are products of the insurance industry; guarantees are backed by the claims-paying ability of the issuing company. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.”
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