Tammy Flanagan advises: Now’s the time to start.
If you are planning your retirement for Dec. 31, first of all, congratulations! Second, be aware that it's only 128 days away. Now is the time to complete your applications and turn them in to your human resources office. If you’re in a large organization, it’s not too early. Although the application won’t be sent to the Office of Personnel Management until after you’ve retired, it is a good idea to allow plenty of time for your agency to complete their part of the processing of your transition from employee to annuitant.
Remember that the high-three average salary that is used to compute your annuity will be the average of your basic pay adjusted for locality from Jan. 1, 2020 through Dec. 31, 2022. Unless, of course, your salary over three consecutive years was higher at an earlier time in your career.
Also, keep in mind you won’t receive any of the 2022 cost of living adjustment that is due to current retirees on Jan. 1, 2023. In fact, those under the Federal Employees Retirement System who are retiring under age 62 will not see a COLA until the year they turn 62 before Dec. 1. The exception is special groups, such as law enforcement officers, who are subject to mandatory retirement before they turn 62.
So where do you begin with the process of retiring at the end of this year? It starts with gathering the right forms and publications:
- Application for Retirement, SF 2801 (Civil Service Retirement System) or SF 3107 (FERS). Read through the application to find out about documents you might need to attach, such as your marriage certificate or military records.
- If you want to pay a deposit for civilian federal service that was not subject to retirement contributions or service where you retirement contributions were refunded, you’ll need to fill out the Application to Make Service Credit Payment, SF 2803 (CSRS), SF 3108 (FERS).
- Voluntary Contributions Election Form, RI 38-124 (CSRS), SF 2804 (FERS)
- Continuation of Federal Employees Group Life Insurance, SF 2818
- Withholding Certificate for Pension or Annuity Payments (federal taxes), W-4P
- Designation of Beneficiary (if you need to update), SF 2808 (CSRS), SF 3102 (FERS), SF 2823 (Federal Employees Group Life Insurance), Thrift Savings Plan
If all of this seems a bit daunting to you, here are some other resources that provide important information about the retirement process:
- Chapter 40 of the CSRS and FERS Handbook, Planning and Applying for Retirement
- Distributions, a TSP booklet with information on withdrawals
- Remember that if you’re no longer a federal employee or uniformed services member, you must log in to My Account at the TSP to change your mailing address
- The IRS provides a Tax Guide to U.S. Civil Service Retirement Benefits, Publication 721
Next week, we’ll look at a specific checklist of to-do items before and after your retirement date.
NEXT STORY: Higher inflation at least means higher COLAs