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What to Expect When You Retire

Dec 07, 2011 -- Traditionally, Dec. 31 is one of the most popular dates for federal workers to retire. This year it's even more popular because it is the end of the pay period, leave year and month. Additionally, with government-wide budget cuts, some agencies are offering early retirement opportunities to their employees with a Dec. 31 effective date. Due to these combined circumstances, we anticipate that the Office of Personnel Management (OPM) will experience a significant, and perhaps unprecedented, rise in retirement claims, adding to their already overwhelming retirement workload.

As cited in many news articles and federal employee trade publications, OPM is experiencing a backlog in processing federal retirement claims. In July 2011, OPM announced they were averaging 18 weeks (4 months) to fully process a retirement claim. While OPM has not recently announced any increase in claim processing time, given the above factors it is reasonable to anticipate that processing time will increase to possibly 6 to 12 months to fully adjudicate a retirement.

With the delay in providing retirees their full annuity payments, OPM has made remarkable improvements by providing retirees interim pay (typically about 60-80 percent of expected full annuity). It now takes OPM only 7-10 days from when it receives a retirement package (usually 4-6 weeks after the retirement date) to provide an annuitant interim pay. With OPM's current backlog and the expected significant rise in retirement processing workload, the time frame for OPM to place an annuitant in interim pay may increase to 6-8 weeks after their retirement date.

Because of these anticipated delays, federal employees retiring in December 2011 or January 2012, are encouraged to carefully evaluate their financial status to ensure they have sufficient financial resources and are prepared for a 6-8 week period before receiving interim (estimated) payment and as much as a 6-12 month delay in receiving their final, approved annuity.

Sources of income beyond retirement annuities include, but are not limited or applicable to everyone: Thrift Saving Plan (TSP) funds, Social Security benefits, Annual Leave Lump Sum payout, VSIP pay-out, Individual Retirement Accounts (IRA) and other personal savings accounts.

Employees with questions on their individual retirement application packages are encouraged to contact their servicing retirement counselor.

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