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What Do You Do If You Come Up Short For Retirement?

You’ve done your homework and discovered that your retirement expenses are going to exceed your retirement income. What can you do now? Quite simply, you are going to have to figure out a way to increase your income and/or reduce your expenses. Here are some ideas to get you started: 1. Postpone your retirement. While you might like to retire at a particular age, this may not be realistic given the high cost of retirement. You may need to postpone retirement and continue working a few additional years to allow yourself...

Reader Question: How Do I Calculate My Federal Retirement Benefits?

A: Your benefits are calculated as follows... Your benefit is based on your “high-3 average pay.” This is figured by averaging your highest basic pay over any 3 consecutive years of creditable service. Generally, your benefit is calculated according to this formula: 1% of your high-3 average pay  X  years of creditable service If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is used rather than 1%. To determine your length of service for computation, add all of your...

Providing for Your Survivors on Retirement

f you are married when you retire, your annuity will be reduced to provide a full survivor annuity for your spouse (unless he or she consents to a lesser benefit). To provide for a survivor annuity, your annuity will be reduced by 2.5 percent of the first $3,600, plus 10 percent of the annuity over $3,600. The survivor annuity will be 55 percent of the amount of your annuity before this reduction. Note: If you were divorced after May 6, 1985, your former spouse may receive by court order, all or part of the survivor...

Coordination of Debt Repayments with Retirement or Workers’ Compensation

When you apply for disability retirement or workers' compensation benefits, your annuity or compensation is generally payable from the day following your last day of pay. If you are eligible to continue health benefits coverage, the employee share is withheld from your annuity or compensation retroactive to the beginning date of the annuity or compensation payments. If you have not made payments to your employing office for coverage during leave without pay status (either directly or through collection of the debt),...

Prep Your Healthcare Coverage Before Retirement

Retirement planning takes a lot of work. It is often advised to have a plan starting 5 years from your expected retirement date. One area of concern is health coverage, but it doesn't need to be one that worries you. It's one of the easiest parts of your plan to prep. If You Want to Continue Your Health Benefits Coverage... If you meet all the requirements, you don’t need to do anything to have your same health benefits enrollment continue after your retirement. If You Want to Cancel or Change Your Health Benefits...

Minimum Retirement Age (MRA) Plus 10 Annuity under FERS

A Minimum Retirement Age (MRA) plus ten annuity under the Federal Employees Retirement System is a provision that allows you to retire with benefits beginning immediately if you have ten years of service and have reached the Minimum Retirement Age (at least 55). However, the annuity is reduced for each month you are under age 62. The reduction equals five percent per year (or 5/12 of one percent per month). To avoid the reduction, you can postpone payment. You can later apply for the benefit by writing to OPM or filing...

Retirement Contributions Overpaid and Require Repayment

Federal employees hired in 2014 are subject to paying higher contributions into the FERS system, but many have not been paying at the higher rate because payroll processing systems could not account for the change. This means these new employees have been overpaid and will owe the excess as a debt to the government. The Defense Finance and Accounting Service, which handles payroll of some 1.2 million non-postal federal employees in agencies like the DoD, VA, HHS, Energy, EPA and several smaller agencies, has said it will...

What do you do if you come up short for retirement?

You’ve done your homework and discovered that your retirement expenses are going to exceed your retirement income. What can you do now? Quite simply, you are going to have to figure out a way to increase your income and/or reduce your expenses. Here are some ideas to get you started: 1. Postpone your retirement. While you might like to retire at a particular age, this may not be realistic given the high cost of retirement. You may need to postpone retirement and continue working a few additional years to allow...

Federal Employment Retirement Benefit Formula

Benefit Formula How your benefit is calculated as follows. Your benefit is based on your “high-3 average pay.” This is figured by averaging your highest basic pay over any 3 consecutive years of creditable service. Generally, your benefit is calculated according to this formula: 1% of your high-3 average pay  X  years of creditable service If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is used rather than 1%. To determine your length of service for computation,...

Newly Hired Federal Employees Must Contribute More to Retirement

Congress finally came together on a budget deal without resorting to shutdown threats again. Federal retirement benefits have increased by 1.5 percent for those retired under CSRS and those under FERS who are eligible for COLAS. The increase also applies to Social Security, military retirement and survivor benefits. However, the budget deal also imposed a different kind of increase. Starting January 1, new federal employees' mandatory retirement contributions have risen an additional 1.3 percent of salary—bringing the total...

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