Retiring someday? A word to the wise

Monday - 7/1/2013, 2:00am EDT

Correction:An earlier version of this column contained inaccurate information about TSP withdrawals and FERS retirement.

Senior Correspondent Mike Causey is on vacation. Today's guest column was written by a recently retired federal employee.

There are some things many, if not most of us, only do only one time. They include:

  • Scarfing down a plate (bowl, bucket?) of haggis

  • Dying

  • Retiring.
The last one is very, very important because it becomes the basis for the rest of your life — and you want to get as good a start as possible. Today's guest column is from a recently retired fed. She has a military background and is obviously ship-shape. So now, hear her advice for about-to-retire feds:
  • Have a full copy in your personal files of your personnel record. You can request a copy from your personnel office. If you are a military veteran, be sure you have copies of any Forms DD-214 and also a copy of any statement issued to you by your agency documenting your payment of your military deposit. When you submit your retirement application through your agency, ensure copies are included so OPM will have ready access to them when processing your retirement application. And of course, be sure you keep a copy of everything submitted.

  • Be sure you have run the numbers and are financially prepared to take the plunge. Check with whomever your agency has chosen to assist you with the process. You should be able to request an estimate of what your retirement would be worth once you are within a year of your projected retirement date.

    "Be aware that you will not immediately receive the correct amount of your annuity on retirement. OPM wants to check and double-check to ensure they have accurately determined the correct amount to pay you. Until they do so, many new retirees receive between 50 percent and 65 percent of their estimated annuity.

  • Be prepared to survive on half or less than half of your projected annuity for at least 12-18 months. Although a large number of people will receive their correct annuities within 6 months, a sizable minority will not. (And yes, OPM does eventually pay you a check for the difference between your estimated annuity payments and the finally determined correct annuity amount.) If you don't have the money in the bank to tide you over until your full annuity is being paid, you may still be able to move forward with your retirement plans if you are willing to tap into your TSP account.

  • If you are aged at least 55, you may make a one time partial or a full withdrawal upon your separation from active service without being liable for the 10 percent age-related penalty most others would incur for making a withdrawal before the age of 59 1/2. But remember, if you are relying on your TSP to provide the second leg of your three-legged FERS retirement stool, you should consider long and hard before you withdraw any part of it. Also, you are allowed only one partial withdrawal, so be sure you draw out enough. You may withdraw some as an immediate distribution and roll over a portion if desire to an IRA. That allows you ready access later if the amount you took as a distribution is insufficient for your needs.

  • Finally, only you can make the decision as to whether retirement is the right choice for you. The bottom line should be, if you are no longer enjoying your job, it may be time for you to consider other options, be that a different position or retirement. I wish you the very best in whatever you do. — Recently Retired Fed

  • NEARLY USELESS FACTOID

    Compiled by Jack Moore

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