Life (and your career) after coronavirus

The idea of an out-of-the-blue pandemic shutting down America and the rest of the world would be an April Fools Day prank of the worst kind. Unfortunately, this is not a drill. Unlike past major events, 9/11, the Great Recession, which hit all of us but in many different ways, we are all pretty much in the same boat here. It may be better to be young in Idaho than to be 75 in Brooklyn. But maybe not all that much better.

Hopefully you’ve got food. Toilet paper. You are taking every precaution. Now you wait. We all do.

Federal employees, unlike many other working Americans, will have an annuity, a pension, if they work long enough. Either from the Civil Service Retirement System or Federal Employee Retirement System. CSRS costs employees more but produces a more generous monthly benefit that is fully-indexed to inflation. FERS has a less generous annuity formula and its partial catchup-with-inflation feature doesn’t kick in until age 62, except for a limited group of workers. FERS workers are entitled to a generous matching contribution from the government toward their Thrift Savings Plan. Over time its impact is tremendous. Unfortunately the TSP is in the tank, temporarily we assume and hope, until we get out of the current mess. But for now most balances are down for most people to the point where many are rethinking their retirement date. And if not, should be. So where to start?

When in doubt, and in all things retirement, start with Tammy Flanagan. She’s been thinking and rethinking your career since the virus hit. And I’ll be talking with her today live, at 10 am EDT, on our Your Turn radio show. You can listen live at or 1500 AM in the Washington metro area. The show will be archived on our home page so you can listen later, listen again or pass it along to a friend or coworker. If you have questions for her, send them to me before showtime at Meantime, here’s a preview she wrote up of what we will be talking about:

“VIRUS or NOT,” Tammy says, “ some people are not prepared for retirement…” For instance she writes:

“Email I received: I am under the FERS retirement system and submitted my retirement paperwork back in December 2019. I’ve worked for 22 years in the Federal Government and am retiring on 3/31/2020. I decided on that date long before all of this happened and I also applied for Social Security and will be receiving my social security starting in May 2020. However, as you know the third leg of our FERS retirement is our TSP, which I pulled out last Sept and placed in the trust of a very reliable financial advisor to manage for me. I also have some remaining funds in TSP that have accrued since Sept 2019. I have been aggressively saving in my TSP since I started with the government 22 years ago and even contributed to the catch up contribution. Now I am watching my life savings for my retirement decline a little more every day, and I don’t have the time to make it up, like I did the last time the market dropped drastically. It is my understanding that all of my paperwork has been reviewed and approved; however, I still haven’t received the estimate of my annuity due to the software that our agency uses for computing our retirement being down, so I don’t even know how much I will be receiving monthly. I am in the middle of the checkout process, which now has to be completed electronically, rather than face to face. Hopefully, that goes as planned. I really think it’s too late for me to stop and delay my retirement at this point, so I’m at a loss here as to what to do. It looks like I am going to have to get a part time job after retirement, which I hadn’t planned to do, if I can find one.

“There are a number of things in this email that would be a red flag to this employee’s retirement readiness with or without the current market volatility and the COVID-19 pandemic occurring at the same time. One sentence that jumped out to me was “I still haven’t received the estimate of my annuity due to the software that our agency uses for computing our retirement being down, so I don’t even know how much I will be receiving monthly.” Why wouldn’t you know how much your retirement benefit will be prior to setting your retirement date? Everyone who works for the government should know how to calculate a basic CSRS or FERS estimate. The formula can be found on OPM’s website and it only requires a few pieces of data that most federal employees could estimate with some level of accuracy. You need to know these two things:

  1. High-three average salary
  2. Length of creditable service

Once you estimate your average salary over the highest three years of basic pay of your career (generally the last three years) and your total length of service through your date of retirement, the formula is nothing more than a second grade math problem. That is not to say that there are not things that need to be understood beyond this and that do add a level of complexity to the calculation. There are many reasons why federal employees need access to retirement counseling well before they set their retirement date.

Here are some examples where you may need help from an experienced federal retirement benefits specialist prior to setting your retirement date:

  • If you have had a work schedule other than full time during your career, this may impact your retirement eligibility and calculation. If you have had part-time, intermittent, “when actually employed” (WAE) or extended periods of leave without pay, then you may need additional retirement counseling.
  • If you have experienced any changes in retirement coverage such as a change in coverage from “FICA only” to “CSRS” or “FERS” Or if you transferred from CSRS to FERS. Or if you left federal service and returned after a break in service – then you may need retirement counseling.
  • If you have CSRS Offset retirement coverage and you don’t understand the relationship between your CSRS retirement benefit and Social Security retirement, then you may need retirement counseling.
  • If you are married, and you don’t understand how a survivor benefit election will affect your retirement and how it will provide replacement income for a surviving spouse, then you may need retirement counseling.
  • If you served on active duty in the uniformed services or if you volunteered with the Peace Corps or VISTA, then you may need retirement counseling.
  • If you have gone through a divorce and your former spouse has been awarded a portion of your CSRS or FERS retirement benefit or survivor benefits, then you may need retirement counseling.
  • If there are records missing from your eOPF that document a portion of your federal career, then you may need retirement counseling to help you locate any missing records.

The agency retirement estimate should be used to validate your own calculations and to show the effect of the above mentioned items that may impact your retirement benefit. For these reasons, it is important to have an estimate from your agency prior to submitting your retirement application. I understand, however, that the policy of some federal agencies has been to only provide estimates once the application to retire has been submitted. At the very least, an employee should have access to an experienced retirement specialist to help them understand what may affect the value of their CSRS or FERS benefit so that they are able to validate their financial readiness for retirement prior to making the commitment to leave.

When I read this email, the biggest question I have is “Are you sure that you have prepared for retirement before you set your date in December?”

Nearly Useless Factoid

By Alazar Moges

In American English, no number written in its word form from 1 to 999 includes the letter “a.”

Source: Reader’s Digest

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