Retiring from federal service is an exciting milestone. It often comes with a complex set of steps, timelines, and final decisions. Knowing when to submit OPM retirement paperwork, finalizing which benefit options make the most sense for you, and when to expect your payments can make the difference between a smooth transition and an unexpected gap in income.
This guide walks you through the key retirement milestones federal employees should know to retire with clarity and confidence.
Start Early: The 18–24 Month Countdown
Federal retirement planning isn’t something to leave until the last minute. Multiple agencies are involved—your HR office, OPM, FEHB & FEGLI insurance carriers, and TSP—so giving yourself ample time to prepare ensures you make informed and timely decisions.
Action Steps:
- Run OPM’s online benefit calculators to model different scenarios.
- Meet with a Fed-focused advisor—Benchmark Financial Group—that can help you navigate your benefits and create an income plan.
- Review gross FERS pension amount + Survivor Options and Costs
- Review current FEGLI coverage, decide which options to keep in retirement.
- Review your sick leave credit, unpaid leave balance, and TSP projection.
- Review Federal and State taxes
- Review net monthly income, current vs. net monthly income at retirement
Notify Your Agency: 6–12 Months Out
While the federal requirement is typically 30–90 days, giving 6–12 months’ notice to your HR department is ideal. This allows your agency to process your personnel action, order retirement forms, and begin certifications for your service record.
Key Forms to Request:
- SF 3107 (FERS) or SF 2801 (CSRS): Immediate Retirement Application
- SF 2809: FEHB Election
- SF 2818: Continuation of Life Insurance Coverage as an Annuitant
- IRS W4p: Federal Tax Withholding on CSRS/FERS Pension Payments
- State W4p: State Tax Withholding on CSRS/FERS Pension Payments (if applicable)
- Court Order Acceptable for Processing: Former Spouse Survivor Annuity (if applicable)
Submit & Review Applications: 3–6 Months Out
As your retirement date approaches, accuracy becomes everything.
- Retirement Forms: Double-check service dates, deposit history, and survivor annuity elections.
- FEHB: Must be elected within 31 days post-retirement to avoid losing coverage.
- FEGLI: Coverage elections must also be made within 31 days.
- Agency Certification: HR certifies your leave balances, service history, and insurance elections.
Interim Annuity & Lump-Sum Leave Payments
- Interim Annuity: If OPM hasn’t finalized your full annuity, you’ll receive 60–80% of your estimated payment about 60 days after retirement. Once OPM completes the calculation, they’ll issue any adjustments.
- Annual Leave Lump-Sum: Expect payment for unused leave 30–45 days after separation. This lump sum is taxed automatically with a 20% Federal withholding and 0% State withholding.
Your First Full Annuity Payment
Your official annuity is always paid on the 1st of the month following your retirement date.
- Retire 12/31/2025 → First payment would typically arrive February 1, 2026 (covering the month of January 2026)
- OPM pays FERS annuities at the start of the following month, covering the prior month’s annuity
Payments are deposited directly into your bank account. If the 1st falls on a weekend or holiday, your payment posts the business day before.
Insurance & Other Benefit Continuation
- FEHB Premiums: Deducted from your annuity after your first full pay period in retirement.
- FEGLI Premiums: Continue at active rates for 31 days, then adjust to retiree rates.
- TSP Options: Leave funds in TSP, take partial withdrawals, or set up monthly distributions from TSP, Full or Partial Rollover to outside Traditional IRA or Roth IRA.
Common Pitfalls & Best Practices
- Don’t Miss Deadlines: Late FEHB or FEGLI elections (31 days) may cause you to permanently lose coverage.
- Have All Documentation: Missing marriage certificates or court orders can delay survivor elections.
- Plan for the Gap: Interim annuities are common—budget for potential delays.
Track Leave Conversion: Verify your lump-sum leave payout on your final pay stub.
Ready for the next steps?
A successful federal retirement is all about timing. With the right plan in place, your first annuity check, health benefits, and insurance coverage will flow seamlessly into your next chapter. At Benchmark Financial Group, we’re here to make sure every detail is handled—so you can step into retirement with confidence. We specialize in helping federal employees turn uncertainty into confidence. It all starts with gathering your information, discussing your goals, and preparing a personalized 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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