Retire?! Are you nuts?

Thinking of retiring within the next 12 to 18 months? Tired of traffic, being beaten up by politicians and facing a furlough? And who knows when the current thr...

In year three of the federal pay freeze, under attack from all sides of the political spectrum and now facing furloughs, many feds are suffering the civilian equivalent of battle fatigue. Lots of people say they are thinking of pulling the plug. The joys of sleeping late, not having to fight traffic, and the time to travel and visit are a powerful draw. If you have the money…

So, if you are thinking of retiring within the next 18 months to two years, here’s a tip: Stop thinking like that!

What’s wrong with you?

Are you aware that the long-touted retirement tidal wave (first forecast in 1999) is apparently here. That means lots more people are retiring than at almost any time in the past, and the number of retirement-eligible feds grows daily.

Do you know that despite what TV spy and crime-show computer geeks can do in a split second with computers, it doesn’t work that way in real life. Especially when you are dealing with folders and folders of paperwork — some going back to the 1960s — detailing employment, promotions, breaks in service, military time out, etc. All that takes time to eyeball.

With the Postal Service buyouts and early retirement offers from other federal agencies, there are lots of people ahead of you in the line leading to getting your first full annuity check. In many cases, OPM will authorize payment of 80 percent of your projected annuity, pending clearance of all paperwork. But some people say they were given as little as 40 percent, and they were kept on the diet for months at a time.

In January 2012, there was an inventory of 61,108 retirement claims. By April of this year — thanks to more bodies, more overtime money and more emphasis — OPM had trimmed it to 30,080. That’s great, unless you are one of the 30,080 people waiting for your first full annuity payment.

We’ve heard from many people who went from a partial annuity payment to full payment in a matter of a few months. We’ve also heard from people who say it took a year or more to get their first full payment.

So one key issue is how long could you go on eating, paying rent/mortagage and making car payments if you were on half pay — or less — for an extended time? Virtually all financial planners say all of us should have a rainy day fund, easily accessible cash, for an emergency. It should be enough to cover all your expenses for three, six or 12 months (depending on the financial planner, and how long your financial dry spell is likely to last). Bottom line, retire because you want to and have the financial resources to get through the interim period without tapping your TSP account before you otherwise planned.

That said, when is the best time to retire? Tammy Flanagan, benefits experts with the National Institute of Transition Planning, has the best date(s) down to a science. Looking for a tax break, the maximum payment for unused annual leave or hoping to get paid for an extra couple of days? Tammy’s got the formula. You can too by clicking here.


Compiled by Jack Moore

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