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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.


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militarybrat  
#1 Posted : Wednesday, October 14, 2020 9:25:13 AM(UTC)
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I am thinking of retiring yet this year & I know there are better days than others for effective date. I plan to continue FEHB so that is primary importance. I will have 35 years & be over the minimum retirement age so no worries there. Not overly concerned if "catch up" payments take several months. Have over 240 hrs of annual leave to cash in so I know I will need to go before that first full pay period in Jan 2021. Also, am I required to apply for the social security supplemental before filing my retirement paperwork directly w my Agency? Just looking for overall & basic information to avoid any avoidable pitfalls - and thoughts on the best date(s) for effective date. Thanks!
GSBS  
#2 Posted : Wednesday, October 14, 2020 3:39:06 PM(UTC)
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12/31/20 would be a good day? Here is more info on the social security supplemental

https://www.fedsmith.com...ntal%20monthly%20income.
roger.d  
#3 Posted : Wednesday, October 14, 2020 3:41:19 PM(UTC)
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https://www.myfederalret...t.com/best-dates-retire/

Believe it or not, December 31 is considered the next best day to retire.

Then Jan 30 and Feb 27.

Check with your HR, there has been some rule changes on AL carryover due to Covid19.


ETA: the best date to retire is when you can. If waiting another month or 4 to gain a couple of hours of AL/SL is a make it or break it situation, you are not ready to retire.

ETA 2:. The best dates are the end of the month/end of the pay period. Next best date is near the end of the month.

FERS pension payment starts after the next full month. So if you retire on Nov 10th, you 1st check would be Jan 1. Sam as if you retired Nov 30th. So if you are looking for not missing a months payment, the end of the month is when you want to retire

Edited by user Wednesday, October 14, 2020 5:02:51 PM(UTC)  | Reason: Not specified

roger.d  
#4 Posted : Wednesday, October 14, 2020 3:51:45 PM(UTC)
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If you Google "how do I apply for the FERS Special Supplement", there will be a bad link that says it will automatically be calculated/paid when you retire.
TheRealOrange  
#5 Posted : Thursday, October 15, 2020 3:51:17 AM(UTC)
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Originally Posted by: militarybrat Go to Quoted Post
I am thinking of retiring yet this year & I know there are better days than others for effective date. I plan to continue FEHB so that is primary importance. I will have 35 years & be over the minimum retirement age so no worries there. Not overly concerned if "catch up" payments take several months. Have over 240 hrs of annual leave to cash in so I know I will need to go before that first full pay period in Jan 2021. Also, am I required to apply for the social security supplemental before filing my retirement paperwork directly w my Agency? Just looking for overall & basic information to avoid any avoidable pitfalls - and thoughts on the best date(s) for effective date. Thanks!

As far as I know, you do not need to apply for the FERS annuity supplement, sometimes referred to as the Special Retirement Supplement. See the GovExec article linked below: "There is no special application to receive the FERS supplement. If you are entitled to receive this benefit, it is included with the FERS basic retirement benefit, which is administered by OPM." Note that it is totally separate from Social Security, and it administered directly by OPM. You will never be dealing with the Social Security Administration with respect to the supplement. I have known many people under the age of 62 who retired with immediate FERS retirement annuities, and none of them had to apply for the supplement; it was automatically a part of their retirement payments from OPM. I also did not see any requirement to apply for the supplement in the relevant OPM FERS publications (see link below). Best of luck to you in retirement.

https://www.govexec.com/...ers-supplement-q/157077/

https://www.opm.gov/reti...rms/pamphlets/ri90-8.pdf (see, Section III, Annuity Supplement, Page 11)
Tanker1497  
#6 Posted : Thursday, October 15, 2020 4:00:28 AM(UTC)

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You need to loose the term Social Security Speical Supplement! Its special retirement supplement. I know we all know this but have become so lazy we don't say it correctly. I was at the SS office to ask questions and said special retirement supplement fers and the lady looked at me like I had two heads! I told her you have the same retirement system and I'm asking you questions! So using Social Security Speical Supplement will cause even more issues.

For Fers employees the last day of any month is key pay, periods don't mean anything.

For CSRS the first 3 days of any month are the best dates again pay period not a factor.

What is a factor is your birth month if you decide you want out on you birth month of your MRA you must must must leave on the last day! Why? Because you loose your special retirement supplement if you don't work the full month you become eligible. That can include terminal leave or sick leave just be on the books the last day.
There have been OPM cases where the OPM rep. said to retire on the last pay period day 30th and there was a 31st and the retiree loss the special retirement supplement. There are no protections of letting you leave and not be eligible either, these things are up to you!
Many leave service before 30 years and before MRA with knowalge they will receive retierment pay at 62, don't count on OPM knowing what you plan is. Ask question!
militarybrat  
#7 Posted : Thursday, October 15, 2020 5:31:57 AM(UTC)
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Thank you to everyone! I am ready to retire and a month or two really doesn't matter so I guess that confirms it! I just didn't want to make a stupid mistake. I thought it would be easier to make it effective at the end of a pay period. Will consider the end of the month. I did not know about the supplemental being handled by OPM - so thanks, too, for that info. I could have gone a couple of years ago but didn't want to let them think they'd forced me out. (It's called "retaliation" for when you object to females being called "b's" and "c's" in an Army professional office (and I am talking professional office-if you get my drift)and it is brutal -but I have outlasted most of them so I feel I can go now on my own terms. Look for an Op-Ed in Army Times or Military Times.... Sorry, off on a tangent there!) Thanks to everyone for their information and guidance!
TheRealOrange  
#8 Posted : Thursday, October 15, 2020 5:36:42 AM(UTC)
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Originally Posted by: Tanker1497 Go to Quoted Post
What is a factor is your birth month if you decide you want out on you birth month of your MRA you must must must leave on the last day! Why? Because you loose your special retirement supplement if you don't work the full month you become eligible. That can include terminal leave or sick leave just be on the books the last day.

There have been OPM cases where the OPM rep. said to retire on the last pay period day 30th and there was a 31st and the retiree loss the special retirement supplement. There are no protections of letting you leave and not be eligible either, these things are up to you!
Many leave service before 30 years and before MRA with knowalge they will receive retierment pay at 62, don't count on OPM knowing what you plan is. Ask question!

I hadn't read or heard of that requirement before and I would be interested in learning more. Can you provide any resources or OPM cases I can read to learn more about that? Thanks.

Edit: The information in the FedWeek article at the link below seems to indicate that one need not work the full birth month (e.g., MRA on February 15 and retirement on February 16) to receive the annuity supplement, but it is not an official source -- response by Elaine Lumsden. https://ask.fedweek.com/contributor/elaine/

Q. Are federal employees required to work the entire month in which they reach their MRA dates in order to begin receiving the special retirement supplement in the following month? For example, if Mary has 32 yrs and she turns 56 (MRA) Feb.15., and retires the next day, when would she be eligible to begin receiving the FERS supplement?

A. FERS annuities commence the first day of the month following separation, so in your example, Mary would become eligible for her FERS and FERS Retiree Supplement March 1. As always there are exceptions such as disability retirements commence the day after separation and they are not eligible for the supplement.

https://ask.fedweek.com/...h-to-get-the-supplement/
roger.d  
#9 Posted : Thursday, October 15, 2020 10:00:54 AM(UTC)
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Originally Posted by: Tanker1497 Go to Quoted Post
You need to loose the term Social Security Speical Supplement! Its special retirement supplement. I know we all know this but have become so lazy we don't say it correctly. I was at the SS office to ask questions and said special retirement supplement fers and the lady looked at me like I had two heads! I told her you have the same retirement system and I'm asking you questions! So using Social Security Speical Supplement will cause even more issues.

For Fers employees the last day of any month is key pay, periods don't mean anything.

For CSRS the first 3 days of any month are the best dates again pay period not a factor.

What is a factor is your birth month if you decide you want out on you birth month of your MRA you must must must leave on the last day! Why? Because you loose your special retirement supplement if you don't work the full month you become eligible. That can include terminal leave or sick leave just be on the books the last day.
There have been OPM cases where the OPM rep. said to retire on the last pay period day 30th and there was a 31st and the retiree loss the special retirement supplement. There are no protections of letting you leave and not be eligible either, these things are up to you!
Many leave service before 30 years and before MRA with knowalge they will receive retierment pay at 62, don't count on OPM knowing what you plan is. Ask question!



For FERS employees, if you retire at the end of the month but not the end of the PP you do not receive credit for that PP's AL/SL.

In that respect, you could have retired at the end of the previous PP.
Tanker1497  
#10 Posted : Friday, October 16, 2020 8:03:25 AM(UTC)

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"I hadn't read or heard of that requirement before and I would be interested in learning more. Can you provide any resources or OPM cases I can read to learn more about that? Thanks."

I read a OPM hand out that refered to that statement, and I attended a retirermnet siminar that also said this. But by simple deductions this is easily figure... if your MRA is 57 and 6 months and you retire at 57 and 15 days you haven't met the MRA of 57 and 6 months as your short by 15 or 16 days!
TheRealOrange  
#11 Posted : Friday, October 16, 2020 9:13:26 AM(UTC)
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Originally Posted by: Tanker1497 Go to Quoted Post
I read a OPM hand out that refered to that statement, and I attended a retirermnet siminar that also said this. But by simple deductions this is easily figure... if your MRA is 57 and 6 months and you retire at 57 and 15 days you haven't met the MRA of 57 and 6 months as your short by 15 or 16 days!

But that is a separate issue. In that scenario, the person never reached the MRA. That has nothing to do with the original statement that "if you decide you want out on you birth month of your MRA you must must must leave on the last day!" If the MRA is 56 years and 6 months (there is no MRA beyond age 57), and someone reaches that age on November 8, 2020, I see nothing in the statute or implementing regulations that would require them to stay until November 30, 2020 ("the last day" of November). Rather, they could retire effective November 9, 2020 (during the "birth month" of their MRA), and would qualify for an immediate annuity and the annuity supplement.

The statute is very clear:

An employee or Member who is separated from the service after attaining the applicable minimum retirement age under subsection (h) and completing 30 years of service is entitled to an annuity. 5 U.S. Code § 8412(a).

Subject to paragraph (3), an individual shall, if and while entitled to an annuity under subsection (a), (b), (d), or (e) of section 8412, or under section 8414(c), also be entitled to an annuity supplement under this section. 5 U.S. Code § 8421(a)(1).

Bold added. There is no requirement to leave on the last day of the birth month, assuming MRA has been reached during the month. I searched for and read several MSPB cases about the annuity supplement and they are all consistent about the requirements. Perhaps your intent did not come through in the original message, but it states that if someone wants to retire on the "birth month of [their] MRA, they "must must must leave on the last day!" It was said that was true because they would lose their "special retirement supplement" if they didn't work the "full month" they become eligible. Nothing in the original post mentioned never reaching MRA. I was also curious about the OPM cases you referenced, as I could not find anything that addressed what was written. Clearly, if someone never reaches MRA, then they never become eligible for an immediate annuity or the annuity supplement.

Thanks for the follow-up. I'll keep checking to see if I can find anything different. I sure don't want to pass along bad information.
Marty  
#12 Posted : Monday, October 19, 2020 10:10:40 AM(UTC)
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Originally Posted by: roger.d Go to Quoted Post
https://www.myfederalretirement.com/best-dates-retire/

Believe it or not, December 31 is considered the next best day to retire.

Then Jan 30 and Feb 27.

Check with your HR, there has been some rule changes on AL carryover due to Covid19.


ETA: the best date to retire is when you can. If waiting another month or 4 to gain a couple of hours of AL/SL is a make it or break it situation, you are not ready to retire.

ETA 2:. The best dates are the end of the month/end of the pay period. Next best date is near the end of the month.

FERS pension payment starts after the next full month. So if you retire on Nov 10th, you 1st check would be Jan 1. Sam as if you retired Nov 30th. So if you are looking for not missing a months payment, the end of the month is when you want to retire


The end of the month isn't always the best payout; you need to do the math. For some FERS folks, just working 1-2 week(s) at the beginning of the month, then retiring, is a bigger payout than one month's delayed pension annuity, plus you don't have to pay a 5-10% penalty on that 1-2 week(s) salary like you do if your carrying a spouse on FEHB.

roger.d  
#13 Posted : Monday, October 19, 2020 5:05:26 PM(UTC)
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Originally Posted by: Marty Go to Quoted Post
Originally Posted by: roger.d Go to Quoted Post
https://www.myfederalretirement.com/best-dates-retire/

Believe it or not, December 31 is considered the next best day to retire.

Then Jan 30 and Feb 27.

Check with your HR, there has been some rule changes on AL carryover due to Covid19.


ETA: the best date to retire is when you can. If waiting another month or 4 to gain a couple of hours of AL/SL is a make it or break it situation, you are not ready to retire.

ETA 2:. The best dates are the end of the month/end of the pay period. Next best date is near the end of the month.

FERS pension payment starts after the next full month. So if you retire on Nov 10th, you 1st check would be Jan 1. Sam as if you retired Nov 30th. So if you are looking for not missing a months payment, the end of the month is when you want to retire


The end of the month isn't always the best payout; you need to do the math. For some FERS folks, just working 1-2 week(s) at the beginning of the month, then retiring, is a bigger payout than one month's delayed pension annuity, plus you don't have to pay a 5-10% penalty on that 1-2 week(s) salary like you do if your carrying a spouse on FEHB.



I am always open to new ideas.

Please expand upon the "penalty" you talk about.
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