Retirement…Do You Have Questions?

Apr 10, 2023 | Retirement Planning

Federal employees have access to a retirement system that is different from those of other employees. The Federal Employees Retirement System (FERS) is a three-part retirement system that includes a basic retirement annuity, Social Security, and the Thrift Savings Plan (TSP). This retirement system has many rules and regulations that employees need to be aware of before they retire. Here are some questions that federal employees need to know before they retire.

Am I eligible to retire?

To be eligible for retirement benefits, federal employees must meet certain requirements. For FERS employees, they must have completed at least five years of creditable civilian service, and be at least age 62, or age 60 with 20 years of service, or at their Minimum Retirement Age (MRA) with 30 years of service. The MRA varies depending on your year of birth.

What documents and forms do I need and where do I obtain them? 

The best way to start the process is to make sure you have all the proper documents to review your financial situation. Additionally, you will need to complete some forms. Since every financial situation is different, we encourage you to reach out to Benchmark Financial to get the complete list of items that make sense for you.

Do you have enough money to retire?

To best answer this question, you need to examine how you plan on spending your retirement. Are there going to be significant purchases that need to be made? Do you plan on doing a lot of traveling? Are you hoping to leave a legacy for your children and grandchildren? Retirement looks different for everyone, so understanding how you would like to spend your time in retirement will help you determine if you have enough money to retire.  In addition, some expenses will go away in retirement, so you may have more income than you realize. Talking with a Fed-Focused financial advisor can help you identify your goals and how much money is available to you.

What if I retire before I am eligible for Social Security benefits?

The FERS Supplement is a temporary supplement to the employee’s FERS annuity. The supplement provides additional income to FERS employees who retire before they are eligible for Social Security benefits. The FERS Supplement is based on the employee’s years of service and their retirement date.

What health benefit options will I have?

Federal employees may be eligible to continue their health benefits in retirement through the Federal Employee Health Benefits (FEHB) Program. To be eligible, employees must have been enrolled in FEHB for at least five years immediately preceding their retirement. Your FEHB will be transferred to OPM after retirement. During the interim pay period, no deductions will be taken for health insurance.

How is my life insurance policy affected?

Federal employees can continue their life insurance coverage into retirement. The amount of coverage will depend on the employee’s salary and the type of coverage they have. Employees can elect to continue their life insurance coverage into retirement by completing the necessary paperwork before retirement.

Where do I submit my retirement package?

The original package should be submitted to payroll. They will reconcile your Individual Retirement Record (IRR) and then send it with your retirement application to OPM. We recommend that you retain a copy of this paperwork for your records. This process usually takes 30 days from the date of your retirement.

In conclusion, federal employees need to be aware of the eligibility requirements and the benefits available to them under the FERS retirement system. Employees should review their estimated retirement annuity, Social Security benefits, TSP investments, health benefits, life insurance, and FERS Supplement before retiring. By understanding these retirement benefits, federal employees can make informed decisions and prepare for a comfortable retirement.

Have questions that aren’t on this list? Contact us!

If you have questions and are looking to get the process started, Benchmark Financial Group can help. It all starts with gathering your information, discussing your goals, and preparing a plan so that we can help you maximize your income in retirement. With the right strategy, you may be able to get your income equal to or exceed 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 is happy to help you navigate your options and determine the best path to move 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.

9300 W. 110th Street, Ste 160
Overland Park, KS 66210

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