How to end the rat race: Federal Retiree Common Questions Answered

Are you ready to end the rat race? Wondering how long the retirement process takes from paperwork to payments?

The retirement process can often feel complex or overwhelming, with much uncertainty around paperwork, benefits, timelines, and financial planning. To help you transition smoothly, we’ve compiled answers to some of federal employees’ most common questions approaching retirement. With proper preparation and the right resources, like the tools and expertise available at Benchmark Financial Group, you can feel confident as you retire.

1. How Long Does it Take to Process Retirement Paperwork with HR and OPM?

The processing time for your federal retirement paperwork involves multiple steps and can vary depending on agency workloads and errors in applications. Here’s an approximate timeline:

• Human Resources (HR) processing: After submitting your retirement application to your agency’s HR department, it typically takes 3 to 4 weeks for them to review your forms and ensure everything is accurate. Incomplete applications or errors will delay this process, so it’s essential to double-check all documents before submitting them.
• Office of Personnel Management (OPM) processing: Once HR finalizes your application, they send it to OPM. On average, OPM takes about 6 to 8 weeks to process your standard application. However, during peak retirement seasons (January and June), this could extend to 10–12 weeks. Extenuating circumstances (divorce, breaks in service, buy-back time) can delay processing times even further, so it’s essential to clarify your identifying information when starting the process.

To speed up your retirement processing:

• Submit your paperwork well in advance (ideally 60–90 days before your planned retirement date).
• Verify that all documents, including beneficiary forms, financial information, and service records, are complete and accurate.
• Follow up with your HR department and OPM periodically to ensure everything is moving forward.

2. When Can a New Federal Retiree Expect Their First Annuity Payment?

One of the most pressing concerns for retiring federal employees is when they’ll receive their first annuity payment after retiring. Here’s what to expect:

• Interim payments: After OPM processes your application, you’ll begin receiving partial, estimated payments called “interim payments,” which are usually about 70–80% of your actual annuity amount. These interim payments can take 30–60 days from your retirement date to begin.
• Finalized payments: Once OPM finishes calculating your full benefits (which includes accounting for your years of service, unused sick leave, and former contributions), they’ll adjust your payments to reflect the full amount. Final payments may take 6–12 months to finalize.

To ensure you don’t experience financial gaps during this period, have a financial buffer or short-term savings that can cover your expenses until payments stabilize.

3. What Should Retirees Know About the Thrift Savings Plan (TSP)?

For many federal retirees, the Thrift Savings Plan (TSP) plays a fundamental role in their post-retirement income. However, choosing how to manage or withdraw your TSP funds can be daunting. Here are some key considerations:

1. Investment Allocation:

• If you’re nearing retirement, you may want to move your savings into more conservative options to reduce risk. The G Fund (Government Securities Investment Fund) is one of the safest TSP options as it protects your principal and earned interest from market volatility.
• For those looking to balance low risk with moderate growth, the L Income Fund could be a good option. It’s tailored for retirees and designed to preserve capital while still providing some growth.

1. Withdrawal Options:

• You can withdraw from your TSP through lump sums, monthly payments, or lifetime annuities.
• Be mindful of tax consequences. While TSP withdrawals are subject to federal income tax, you may also owe state taxes depending on where you live.

1. Rollover Advice:

• Some retirees transfer their TSP funds into IRAs for more investment flexibility. However, it’s essential to weigh the pros and cons carefully. Rolling over your TSP could mean higher fees, but also more investment options and growth potential.

For personalized guidance, consult with a financial professional. At Benchmark Financial Group, we specialize in helping federal retirees develop custom strategies for managing their TSP and ensuring their investments align with their retirement goals.

4. Are There Additional Tips for Preparing Financially for Retirement?

Proper planning can alleviate many of the uncertainties surrounding retirement. Here are a few additional tips to help you prepare:

• Create a Budget: Understand your anticipated retirement expenses—housing, healthcare, travel, and leisure—and compare them with your expected income streams. A clear budget reduces the risk of overspending in retirement.
• Review Your Insurance Needs: This includes evaluating Federal Employees Health Benefits (FEHB) and Medicare coverage. Additionally, long-term care insurance might be an option if you’re concerned about future healthcare expenses.
• Check Survivor Benefits: Ensure your spouse or dependents are covered. Verify the details of your survivor annuity election and make updates if necessary.
• Minimize Debt: Pay off high-interest debt before retiring. This creates more financial flexibility as you transition into a fixed income.

Taking the Next Step

Navigating the retirement process and making informed financial decisions can be challenging, but you don’t have to do it alone. Benchmark Financial Group specializes in helping federal employees turn uncertainty into confidence. Through personalized strategies, educational tools, and one-on-one consultations, we empower you to navigate these changes and thrive because of them. It all starts with gathering your information, discussing your goals, and preparing a plan so that we may help you maximize your income in retirement. With the right strategy, you may get your income equal to or exceeding your pre-retirement net income. To get started, schedule an appointment today with Benchmark Financial Group by filling out the form online or calling David Raetz at 913-534-8256 to discuss your financial needs. Benchmark Financial Group will help you navigate your options and determine the best path toward your financial goals. 

*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.

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