How To Pick Your FERS Retirement Date + 4 Mistakes To Avoid

Learn how you can Pick Your FERS Retirement Date Like A Pro! There are 4 big mistakes that pre-retirees make when they decide to retire. Watch this video to learn how you can avoid these retirement blunders.

***Here’s the link for the Pick Your Retirement Date Like A Pro Checklist. You can download the checklist for free. Go to: https://www.fersblueprint.com/p/checklist

This video is brought to you by the FERS Blueprint Online Retirement Training. We believe that it shouldn’t be so hard to get into retirement training, and that you should be able to learn when you want to and at your own pace. Now you can at the FERS Blueprint. Take a class today! https://www.fersblueprint.com
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Before you pick your retirement date, you need to know the answer to this question: When does your FERS pension actually start?

This is an often-overlooked question because there’s lots of misinformation swirling around—not to mention some confusion from the CSRS rules.

The FERS pension begins the first day of the following month after you retire. But there’s more to picking your FERS retirement date!

Here are four mistakes that you’ll probably want to avoid.

Mistake No 1: Giving Up Annual Leave

When you retire, any Annual Leave that you “have on the books,” or haven’t used as vacation, is paid out to you in a one-time lump sum payment.

But if you’re in a “use or lose” scenario with Annual Leave and want leave paid out at retirement, then you’ll NEED to retire on or before that year’s leave ending date. Otherwise, you’ll miss out on getting paid for that “use or lose” leave. OPM publishes a Leave Ending Date calendar here https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/leave-year-beginning-and-ending-dates/

Mistake No 2: Paying More Income Taxes Unexpectedly

If you’ve saved a lot of Annual Leave, you’re likely to get a pretty big check. That income is taxable, and it’s added to all your other earnings that year. This might cause you an unexpected and expensive tax bill. Consult with your tax professional.

Mistake No 3: Losing TSP Monies to Penalties

A lot people plan to use money from their TSP when they retire. But they aren’t too clear about age restrictions before they pick their retirement date. Normally, you must be at least 59 ½ year old to take monies out of your retirement savings account (like TSP or IRA). If you’re younger than that, you could have to pay an early age withdrawal penalty. There’s an exception for your TSP. If you separate from service in the year in which you turn 55 years or older, you can take withdrawals from TSP without any early age penalty. Here’s the TSP link to learn more: https://www.tsp.gov/PDF/formspubs/tsp-536.pdf

Mistake No 4: Thinking that FERS starts Right Away

Be prepared to wait because OPM’s retirement application processing time can vary quite a bit. The backlog can cause you to wait for an extended period. It can be a big mistake to retire without enough savings to take care of expenses. Keep in mind that TSP can take 4-6 weeks after you retire before you can request payments. It makes good financial sense to start retirement with at least four to six months of expenses in a saving account.

Remember these tips when you’re picking your retirement date! If you’ll have “use or lose” leave, check the leave date calendar so that you don’t risk losing that extra leave! Talk with your tax professional about your tax planning. Decide how and when you’ll access your TSP funds. And, finally have enough saved up to wait while OPM processes your retirement application!

To get a Pick Your Retirement Date Like A Pro Checklist, visit: https://www.fersblueprint.com/p/checklist

This tutorial was brought to you by the FERS Blueprint—Online FERS Retirement Training. Learn more https://fersblueprint.com for more information.

FERS Blueprint is an educational division of The Monroe Team, Inc. DUNS Number: 032 057260. CAGE Code: 735L3. NAICS Code: 611710 Educational Support Services. Woman-owned, small business.

FERS Blueprint is not affiliated with, endorsed or sponsored by the Federal Government or any US Government agency. FERS Blueprint is educational only. No specific financial, retirement nor tax advice is being offered. The material presented is as current as possible, but is necessarily generalized. Facts and opinions are based on research and experience, but are not endorsed by the Federal Government. It is recommended to consult with your personnel office and/or the Office of Personnel Management (OPM) Retirement Office, Thrift Savings Plan, Social Security, Medicare, Internal Revenue Service, your legal, tax and/or other advisor(s).

© 2017. The Monroe Team, Inc.

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