Ask The Experts: Retirement

By Reg Jones

Best time to retire

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Q. I am a CSRS employee who will be 55 years old in September 2015 and will have 38 years of federal service. Some are telling me to stay until I have 41 years because of the added benefit. What’s the big difference? I’d like to go as soon as I’m eligible.

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Military buyback

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Q. I will have 39 years of total service as of May 12, of which four years are military service and 35 years civilian service. I have my 40 quarters paid in. Will I have to buy back my military time to achieve my 80 percent at retirement (41 years, 11 months)?

A. Yes, you will. Otherwise, when you retire, those years of active-duty service for which you haven’t made a deposit will be eliminated and your annuity recomputed without them. That will happen at age 62, if you are retired, or when you retire if it’s after that.

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CSRS annuity

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Q. I am planning to retire Aug. 15 with 37 years, two months and 12 days under CSRS. I will be 60 years old. I know if I stay more than 40 years, I will get 80 percent of my salary. What I don’t understand, according to my retirement estimates, is that after age 62, I will be getting less of an annuity each year. How can this be?

A. It can’t be. Something is wrong with either the estimator you are using or the data you are putting into it. Part of the problem may be that you misunderstand how long you have to work to receive an annuity that equals 80 percent of your high-3. It isn’t 40 years; it’s 41 years and 11 months.

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Annuity eligibility

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Q: I will be eligible for retirement in 2011 with 35 years of service under the Civil Service Retirement System.  I have just heard that I will need to work 40 years to get 80 percent of my salary.  What percentage will I receive if I retire with 35 years of service.

A: To receive an annuity that equals 80 percent of your highest three years of average salary, you would have to have 41 years and 11 months of service and owe no deposits or redeposits. To figure out how much your annuity would be, use the following formula, 0.015 x your high-3 x five years of service + 0.0175 x your high-3 x five years of service + 0.02 times all remaining years of service. Note: Any unused sick leave you might have would increase the amount of your annuity and wouldn’t be subject to the 80 percent limit.

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Sick leave accrual

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Q: I plan to retire in December 2011. I will have 42 years in the Civil Service Retirement System with the U.S. Postal Service max annuity is 80 percent, but I will have 18 months of sick leave on the books. How will I be compensated for the sick time?

A: At 41 years and 11 months of actual service, you will have reached the maximum annuity of 80 percent. The Office of Personnel Management will offer you the choice of receiving a refund of the additional month’s retirement contributions or using them to buy a little additional annuity. Like your unused sick leave, it won’t be subject to the 80 percent limit but will be added to your earned annuity.

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