Ask The Experts: Retirement

By Reg Jones

Disability retirement

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Q. I am a 56-year-old retired military man. I have 10 years in with civil service. I have filed for military disability due to health problems associated with my military career. Can I draw 100 percent disability from the VA and file for disability from my civil service job and Social Security? If so, how does one calculate the resulting monthly payment?

A. If you are approved for disability retirement, your annuity for the first 12 months would be 60 percent of your high-3, minus 100 percent of any Social Security disability benefit to which you are entitled. After that, your annuity would be 40 percent of your high-3, minus 60 percent of any Social Security disability benefit. Assuming that you continued to be disabled, at age 60 your annuity would be recomputed to include all of your service and the years you were on disability retirement. Any VA disability benefit you might be entitled to wouldn’t affect your FERS annuity. However, since this is a site for federal employees and retirees, I don’t know if there would be any negative interaction between that military service-based VA disability benefit and any Social Security disability benefit.

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Eligible but holding

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Q: I am a 57-year-old CSRS employee with 35 1/2 years creditable service. I am eligible to retire now (since June 21, 2009) but enjoy the challenge of my job, so I have stayed on. I gave serious consideration to retiring Dec. 31, 2011, but I am not 100 percent certain that is what I want to do (my wife wants to work a while longer). Am I running a risk of losing any benefits by staying a while longer? What is the minimum amount of time required after mailing my retirement application, and the effective date I retire?

A: As to your first question, at this point, no one knows what risk you are taking by staying on. Only time will tell. On your second question, you can submit your paperwork up to the day you leave work. However, prudence suggests that you let your employer know what your plans are well in advance and that you take enough time to have your application reviewed by your personnel office. The consequences of putting your application in at the last minute include having it bounce because of errors or omissions and/or delays in processing by your agency that keep you from getting your initial interim annuity payment until months after you leave.

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Health benefits

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Q: My husband and I work for the post office – he will retire soon and I will carry the health insurance and leave with a deferred retirement in a few years – at 45 with 20 years – what happens to the health benefits?

A: Your husband would be able to continue the self and family coverage under Code 1M of the Table of Permissible Changes in Enrollment.

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Retirement and spouse Social Security

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Q: I plan to retire this year. I am under CSRS. I understand the WEP for me but have some doubts about the Social Security benefits of my wife. She has been paying Social Security all her life and never worked for a government with another type of pension. Is her Social Security retirement affected because of me? If I choose a survivor benefit, how is that going to affect her Social Security?

A: The fact that you will receive a benefit from a retirement system where you didn’t pay Social Security taxes will have no affect on her own earned Social Security benefit or on the survivor benefit you elect for her.

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FEHBP and Tricare

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Q: I will become eligible for Tricare in March. Is there a need for me to continue coverage with FEHBP and if not, can I drop my coverage before the end of the fiscal year? I don’t turn 60 until March, which is when I become officially retired from the military reserve.

A: You can apply to suspend your FEHB coverage at any time. To do that, you must submit a completed suspension form and provide necessary documentation to show eligibility for Tricare or CHAMPVA during the period beginning 31 days before and ending 31 days after the date you designate as using Tricare or CHAMPVA instead of FEHB coverage. You can get a copy of the suspension form at www.opm.gov/forms/pdf_fill/sf2809.pdf.

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FERS retirement and spousal Social Security

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Q.  My wife, age 63, is retired from FERS and draws a monthly retirement check. When I turn 67 in three years and begin drawing my Social Security benefit, is she able to draw a spousal Social Security benefit (50 percent of mine) as well as her full FERS retirement check?

A.  You’ll find the answer at www.socialsecurity.gov/OACT/quickcalc/spouse.html.

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Retirement dates

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Q: I am a CSRS employee who plans to retire on my 55th birthday Sept. 22 with 33 years of service. Can I retire at the close of business Sept. 21 or would it be better to retire at the end of the month on Sept. 29 at close of business with a retirement date set at Sept. 30? Does it make a  difference? Can I submit my retirement paperwork a year in advance or should I submit it later?

A: The decision is yours to make. If you retire at the end of a pay period, you will get credit for any annual and sick leave you earned during that pay period. If you retire before the end of a pay period, you won’t get any credit for it. Looked at another way, if you retire Sept. 21, there will be a nine day break in income before you go on the annuity roll. If you retire Sept. 30, there won’t be a break. You’ll seamlessly walk off the payroll and onto the annuity roll. While you should plan for your retirement a year in advance and, as part of that process, go to your personnel office to review your official personnel folder (OPF) to make sure everything is in order, you don’t need to submit your retirement application until a few months before you retire.

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Delaying retirement

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Q: I’m eligible to retire in January but am considering working a little longer. With the current federal employment climate, is there any danger in delaying, or should I get out while I can?

A: If I examined the entrails of a goat, I might be able to predict the future. Since I won’t, I can’t.

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Changing retirement date

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Q.  How can a FERS employee change their retirement date if they’ve already declared one?

A.  You need to inform your supervisor (and your personnel office if you have already submitted your retirement application). Usually, changing your retirement date won’t be a problem. However, if your position is being eliminated as of a certain date or your agency has already committed itself to someone who will fill your position, then it can refuse your request to change the date of your retirement. The reason for its refusal will have to be presented to you in writing.

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Retire at age 60

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Q.  I will be 60 on Nov. 30 and I have 26 years of working at the VA hospital. I also have three years and seven months of military time that I haven’t paid for. When can I retire?

A. Regardless of whether you are covered by CSRS and FERS, because you have at least 20 years of service, you’ll be eligible to retire at age 60.

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Health care plans

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Q: I am retired military and also a DoD civilian under FERS. I use Tricare as my health insurance. When I retire, I would like to also have FEHB as a “backup” to Tricare, just in case something changes with Tricare. Do I have to have FEHB for five years prior to my retirement or can I get FEHB at any time once I retire? Also, can I include my family with FEHB coverage after retirement, even if they are not covered now?

A: To carry FEHB coverage into retirement, you would have to be enrolled in it before you retire, and the combination of Tricare and FEHB would have to add up to at least five continuous years of coverage. If you are enrolled in the FEHB program as a retiree, you can change your coverage from self only to self and family during any open season. If you aren’t enrolled when you retire, you cannot enroll at a later date.

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Annual leave and separation

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Q: I am thinking about leaving federal service after 18 years and will have at least 240 hours of annual leave accrued. I do not want to cash it out and prefer to leave it should I choose to return to federal service.  May I do that?

A: No.

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RIF and retirement

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Q: If I am of retirement-eligible age, and there is a reduction in force, can I ‘bump and retreat’, or can I be forced to take retirement?

A: You cannot be forced to retire. The RIF rules will apply to you just as they do any other employee. FYI: If it turned out that the RIF would result in your separation, you would have the choice of voluntary or involuntary retirement.

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VERA eligibility

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Q: I am contemplating retiring on the 2011 VERA/VSIP offer. If I took a VSIP in 1995 and returned to federal employment in 2002, am I eligible to receive a VERA in 2011?

A: There isn’t any bar to your accepting another offer of early retirement. However, you are barred for life from accepting another Voluntary Separation Incentive Payment.

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Retirement and survivor benefits

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Q: My father has been a federal employee since 1975 under CSRS. He intends to retire at some point in 2012 and has already elected for my mother to receive survivor benefits. If he passes away before he formally retires, does my mother still receive the survivor benefits, and is the amount the same as the amount would be if he had first formally retired and then passed away? Or does his retirement need to vest before she can collect her full survivor benefits?

A: She would be entitled to a survivor annuity in either case. If he were to die before retiring, she’d receive 55 percent of the amount he would have been entitled to if he had retired on the day he died. If he died after retiring, it would be 55 percent of his unreduced annuity, increased by any cost-of-living adjustments made to annuities after he retired.

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Postponing annuity receipt

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Q: I am a 57-year-old FERS employee with 26 years of service in my current position. I made a deposit in FERS some years ago to buy back previous civilian service. Some of this service involved intermittent time and LWOP. I recently met with my agency to determine whether I have 30 years of credit and thus can retire on an unreduced annuity and receive the special supplement. My agency had a great deal of difficulty making the determination. It took seven weeks and it had to consult with specialists at another center. It finally decided I will have 30 years of credit next month. OPM refused to review my case before I separate. If I leave and OPM disagrees with my agency that I have 30 years of credit, my annuity will be substantially reduced, and I won’t be eligible for the special supplement. If OPM disagrees (after I leave) that I have 30 years of credit, am I entitled to tell OPM that I wish to postpone my annuity until I am 60 to eliminate the reduction? I understand that, in that situation, I would not be eligible for the special supplement.

A: Yes, you can postpone receipt of your annuity.

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Retirement in 2011

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Q: I’m reading a Reg Jones column for 2006. I cannot find a similar article discussing retirement at the end of 2011.

A: Read my July 25 column, entitled “By the calendar, 2011 marks a good year to retire.”

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No retirement at 50

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Q: I’m a FERS employee. At 50 years of age I will have 25 years of working for the federal government. If I retire then, what will be the penalty? If I was to leave at 50, but would not apply for my pension until I was 55, would there still be a penalty? Would my pension be 50 percent of my best five years?(25 years X 2 percent = 50 percent)?

A: You can’t retire at age 50. The earliest you could retire would be when you reach your minimum retirement age. MRAs range between 55 an 57, depending on your year of birth. You could, of course, resign from the government and apply for a deferred annuity. Since you’d have at least 20 years of creditable service, you could get that at age 60. Unless the law changes between now and when you applied, the following formula would be used to calculate your annuity: 0.01 x your highest three consecutive years of average salary on the day yiou left government x your years and full months of creditable service.

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Buyout options

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Q: With all of the angst and uncertainty in Civil Service (i.e., pay freeze, pay retention, prospect of having to contribute more into retirement fund, etc.), I decided the heck with it and submitted my retirement papers on July 28. I will be 62 on Nov. 3 and in December will have nine years of federal service. If my DoD agency should offer a buyout in the next two or three months like several other federal departments are starting to do, am I eligible to apply for it, or would I have to pull my papers and then resubmit them?

A: The Voluntary Separation Incentive Payment program is intended to get employees who hadn’t intended to leave to do so. Since you have submitted your retirement papers, you’ve signaled that you don’t need an incentive to do that. If you withdrew your retirement papers, it would be up to your agency to decide if your position is one it wants vacated badly enough to offer you one.

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Retirement date

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Q: Does it make a difference if I retire on Dec. 31? I question it because Dec. 31 starts pay-period 2 and I want to cash in my annual leave without losing the amount over the maximum carryover.

A: You are mistaken. The 2011 leave year for non-Postal Service employees ends on Dec. 31. The new leave year begins Jan. 1.

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