Welcome Guest! To enable all features please Login or Register.

Notification

Icon
Error

Retirement Planning


Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.


To read today's top news stories on federal employee related news visit FederalDaily.com.

Options
Go to last post Go to first unread
StewieG  
#1 Posted : Wednesday, June 22, 2022 8:31:43 PM(UTC)
StewieG

Rank: Newbie

Groups: Registered
Joined: 3/20/2022(UTC)
Posts: 4

Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.
TheRealOrange  
#2 Posted : Thursday, June 23, 2022 4:20:39 AM(UTC)
TheRealOrange

Rank: Senior Member

Groups: Registered
Joined: 5/22/2011(UTC)
Posts: 1,001

Thanks: 1 times
Was thanked: 201 time(s) in 174 post(s)
Originally Posted by: StewieG Go to Quoted Post
Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.

Based on everything I've read, I don't think the COLA will be applied until after the retirement, i.e., inflation could have a big impact. As I understand, FERS annuitants are not eligible to receive a COLA until January 1 after the year they become age 62. This means that a former FERS-covered employee with more than 19 years of service who opts for a deferred retirement, and is eligible to start receiving his or her FERS annuity before age 62, will not be eligible to receive a COLA to their FERS annuity until January 1 after the year after they become age 62. I haven't seen anything to indicate that the high-3 will be adjusted at all during the deferral period.
MovinUp  
#3 Posted : Thursday, July 28, 2022 12:05:59 PM(UTC)
MovinUp

Rank: Rookie

Groups: Registered
Joined: 9/6/2016(UTC)
Posts: 39
United States

Thanks: 6 times
Was thanked: 10 time(s) in 8 post(s)
Originally Posted by: TheRealOrange Go to Quoted Post
Originally Posted by: StewieG Go to Quoted Post
Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.

Based on everything I've read, I don't think the COLA will be applied until after the retirement, i.e., inflation could have a big impact. As I understand, FERS annuitants are not eligible to receive a COLA until January 1 after the year they become age 62. This means that a former FERS-covered employee with more than 19 years of service who opts for a deferred retirement, and is eligible to start receiving his or her FERS annuity before age 62, will not be eligible to receive a COLA to their FERS annuity until January 1 after the year after they become age 62. I haven't seen anything to indicate that the high-3 will be adjusted at all during the deferral period.


That's what I understand also. I had 26 years in, considered leaving 8 years short of MRA and 14 years short of 62. Still a fed employee at over 39 years. For fun, I estimated what the pension would have been had I left vs what it will be when I turn 62 in a year. It would have been about 50% of what it will be, had I left those years ago. Many other factors involved, but it's a data point.

roger.d  
#4 Posted : Tuesday, August 16, 2022 8:07:03 PM(UTC)
roger.d

Rank: Senior Member

Groups: Registered
Joined: 8/25/2016(UTC)
Posts: 6,186
United States
Location: Midwest

Thanks: 153 times
Was thanked: 1163 time(s) in 946 post(s)
Originally Posted by: StewieG Go to Quoted Post
Does your High-3 salary get adjusted for COLA while you are waiting for your deferred retirement to kick in?

Example: let’s say I retire at age 40, with 20 YOS. My entitlement is 1.0 x 20 = 20%. Let’s say that my highest 3 years salary was $100k. I can apply for deferred retirement, and in 20 more years it will kick in. Will my pension be 20% x $100k = $20k/yr? Or will it be 20% x $100k x COLA for the years I was 40-60 = more?

If the COLA isn’t computed in it seems like you take a BATH in inflation.


From OPM


Quote:
High-3 Average Salary
Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. (If your total service was less than 3 years, your average salary was figured by averaging your basic pay during all of your periods of creditable Federal service).


Socialist governments traditionally do make a financial mess. They always run out of other people’s money. --Margaret Thatcher
Rss Feed  Atom Feed
Users browsing this topic
Guest
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Powered by YAF 2.1.1 | YAF © 2003-2022, Yet Another Forum.NET
This page was generated in 0.290 seconds.