Retirement is one of the biggest transitions in a federal employee’s career. Whether you’re approaching retirement age or have opted into the Deferred Retirement, Voluntary Separation Incentive Payment (VSIP), or Voluntary Early Retirement Authority (VERA) for an early exit, proper planning is the key to a smooth and successful new chapter.
If You’ve Opted for VERA: What’s Different?
VERA allows eligible employees to retire earlier than the typical age and service requirements. To take early retirement under VERA (also known as an “early out”), you must meet one of these combinations:
- At least age 50 with 20 years of creditable federal service, or
- Any age with 25 years of creditable federal service
If you’ve been offered and accepted VERA, it’s crucial to understand how this impacts your benefits and planning timeline. While many steps will be similar to a standard retirement, there are a few specifics—especially regarding your pension calculation, the FERS supplement, and Social Security eligibility—that you must consider.
What to Do NOW to Get Ready
- Review Your Service Records
- Ensure your Official Personnel Folder (OPF) accurately reflects your service history, military deposits, and any leave without pay periods.
- Mistakes or missing documentation can delay processing.
- Estimate Your Pension
- Use the federal retirement calculators (through your agency’s HR portal) to get an estimate of your monthly annuity.
- FRB (Federal Retirement Benefits Report), Annual FERS EBS Statement (from Employee Express), GRB (Government Retirement & Benefits Platform) Estimates are all helpful tools.
- Consider the FERS Supplement
- If you are under MRA, you generally won’t be eligible for the FERS annuity supplement until you reach your MRA. The supplement stops once you become eligible for Social Security, usually at age 62.
- VERA retirees typically do not receive the supplement until they turn MRA.
- Lining up the timing of these benefits, in an income strategy, is always an important variable.
- Analyze Social Security Eligibility
- Early retirees will not be able to draw Social Security until at least age 62.
- Compare your FERS Supplemental payment to age 62 social security, often times there is a pay increase moving from the FERS Supplement to your social security payment.
- Review Your Thrift Savings Plan (TSP)
- Estimate how much you’ll need to withdraw to supplement your annuity.
- Consider taking larger withdrawals in the early years (until Social Security or the FERS supplement kicks in), then adjusting your strategy.
- Understand withdrawal options: single payment, installments, annuities, or mixed approaches.
- Spousal & Survivor Benefits
- Decide if you want to provide a surviving spouse annuity, as this will reduce your monthly payment, but provide ongoing income for your loved one.
- Review federal health insurance (FEHB) continuation rules for spouses.
- Update Beneficiaries and Personal Information
- Make sure your beneficiary forms for pension, TSP, and life insurance are up to date.
What Happens Once You Retire?
- Retirement Application Processing
- Once your agency submits your retirement package to OPM, processing typically takes 1 to 3 months, but can be longer, especially after VERA waves or during peak periods.
- You may receive interim (partial) payments while your full benefit is calculated.
- Your First Payment
- Expect to wait about 4 to 8 weeks for your first interim retirement payment.
- Once your annuity is finalized, you’ll receive any back pay owed.
- Health & Life Insurance
- If eligible, your FEHB and FEGLI will continue seamlessly if you made proper elections.
- Income Coordination
- If you retire before Social Security or the FERS supplement is available, plan withdrawals from TSP or other savings to bridge the gap.
- Review your tax situation annually to optimize withdrawals.
Next Steps & Resources
- Contact Your Agency HR: For personal counseling and application checklists.
- OPM Retirement Services: For processing updates and questions about payment timelines.
- TSP Website: For withdrawal calculators and forms.
- Social Security Administration: For benefit estimates and filing information.
Need Help Navigating?
If you need help navigating these decisions, 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 all things retirement. 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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