You may be surprised to learn that you won’t get your first full FERS annuity (pension) check for several months after you separate from service. Don’t confuse this with a delayed or postponed retirement. All FERS participants who apply for an immediate retirement experience this processing delay.
Why Your First Full FERS Pension Check Is Delayed
The Office of Personnel Management (OPM) usually takes several months to process your application for immediate retirement. Add to this, OPM tends to have a backlog of retirement applications during the end of the year when many federal workers file. If your retirement application is incomplete, or if you failed to check your work record for accuracy, the delay of your monthly checks may be even longer. An application is considered incomplete when required documents are missing or lacking a signature.
How Your Retirement Application Is Processed
When your agency’s personnel office receives your retirement application, they’ll confirm that you meet the age and service requirements to retire on the date you’ve selected. Other things they’ll check include eligibility for FEHB in retirement and your creditable service. Then your retirement application is forwarded to your agency’s payroll office.
Your payroll office authorizes your final salary payment and any lump-sum payment you’ve accrued for unused annual leave. They’ll also certify and close out your Individual Retirement Record (IRR). It takes about 30 days or more for your application to make its way through your personnel office and payroll office before it’s sent to the OPM for processing. Once the OPM receives your application, they’ll send you a notice plus a retirement claim number.
Plan To Cover Your Expenses For The First Two Months Of Retirement
To play it safe, plan to cover all of your living expenses for at least two months after you retire. Around the third month, you’ll start receiving interim payments of about 80% of your full net annuity. Interim payments will continue until the OPM has completed the processing of your application for immediate retirement.
Keep in mind, it can take another three months or more until you receive the full amount of your net annuity (pension) check plus the retroactive pension owed to you with interest. Without emergency savings or other income to pay your expenses during this delay, you may have to withdraw more funds from your TSP than you had originally planned.
Consider working with an FRC® trained advisor who can help you develop a strategy for covering your needs while you wait for your first full FERS annuity (pension) check.
