Lots of people put a neatly tied ending to their federal careers by retiring on December 31. Next year New Year’s Day is a Monday, so you could wake up and have a mimosa. But in the next several weeks, you’ve got some serious final planning to do. The Federal Drive with Tom Temin talked with a happy federal retiree, Abe Grungold, who is also the owner of AG Financial Services.

Interview Transcript: 

Tom Temin And Abe, I guess let’s start with is Dec. 31 one of those popular dates?

Abe Grungold Yes, Tom. Dec. 31 is a popular date to retire because you can start the new year in a new tax profile as a retiree. It also helps you with the annual leave that you will receive at the end of the year. And Dec. 31 is an important day because it usually is the last day of a pay period in the year in which you can retire. And that’s important to sort of go out in the new pay period so you don’t have to have a lag in receiving that first retirement check that you will not receive until Feb. 1.

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Tom Temin Assuming [Office of Personnel Management (OPM)] can figure it out by Feb. 1, because sometimes it takes a little longer than that, too, doesn’t it?

Abe Grungold The final payment would come sometime later, but your interim payment would start Feb. 1, which is 70% of what you are estimated to get for an annuity.

Tom Temin It’s funny that they don’t start figuring it out three months before you retire and then they’re ready to go when you do retire. Hey I think I just solve their problem.

Abe Grungold Tom there is an excellent reason for that, because your retirement does not begin until you have officially left your agency. You have to officially walk out the door, and that’s when your retirement application is sent to OPM from your agency. Now, as a federal employee, let’s say you have some reservations about retiring. You have until 4:00 on Dec. 31 to change your mind. So there are people that do that.

Tom Temin Got it. Well, when I have reservations on retiring, they’ll be for a very good steak house, I think. Presuming you’ve gone through the course and you’ve made your Medicare since all that, all that jazz, you have to select for yourself. But it’s not done yet, though, is it? You’ve got some work to do.

Abe Grungold Well, Tom you spent 20 to 30 years in a federal career. You should spend two months on preparing your federal retirement application, which is 14 pages long. You should not rush through it. You need to answer every question and you need to gather all the information that’s necessary to fill out that document. And it’s so important to review something called the [Electronic Official Personnel Folder (EOPF)], your official personnel folder that contains every document for your entire federal career. It’s important to review all of it.

Tom Temin And what is the state of those documents these days? Because if you started a long time ago, stuff might have been on paper. And is it a combination of electronic and paper?

Abe Grungold Well, some agencies still have the hard copy folder. And a lot of agencies have transferred that hard copy folder into an electronic PDF that if your agency has some sort of a sophisticated HR system, you can download your EOPF into a PDF. And it should be in chronological form from the first day that you applied with your application with the government to the President. And it should really be in chronological form. Now some agencies may still have the old hard copy and you should be able to get access to it if necessary.

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Tom Temin Just to be clear, the EOPF is not a form, but you need that information for the form.

Abe Grungold The EOPF is all the forms that you have filled out during your federal career. Health insurance, life insurance. The actual form itself, it’s kept in a folder, and that’s what’s called your personnel folder.

Tom Temin And so that’s the information you need for the SF-3107 then.

Abe Grungold Yeah, the SF-3107 is the actual application to retire. And if you need to go back historically the EOPF has that information. But historically, really what you need are all the dates of service for every agency that you have worked for, part time or full time during your federal career.

Tom Temin We’re speaking with Abe Grungold. He is a federal retired manager himself and also owner of AG Financial Services. So if you are starting out in your career and you plan to be around a while, I guess maybe good advice is to make your own copies of everything that’s going into that EOPF, just in case you would have a backup copy of your own.

Abe Grungold Certainly I kept many, many copies of documents that I had filled out during my 36 years in the government. But the best way is to download that EOPF, and I think mine was somewhere around 250 pages of documents that I had filled out in 36 years. And you can go through it. It’s really kind of reminiscing through your federal career to go back to those early records. But it will have everything in there and it will help you to fill out your federal retirement application.

Tom Temin Now, that’s one step. And the most important step is filling out that SF-3107 and that only 14 pages, it’s kind of a piker compared to some of the SF forms. But nevertheless, you got to get the details right. But that’s not the only thing you do. What’s a good policy for timing of notifying your agency, notifying the government that you would like to retire?

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Abe Grungold Well, I have seen people notify their agency one day and retire at the end of the day, and they still were able to fill out their 14 page application. But the really best way to do it is several months ahead of time, because you need to fill out the form. You need to contact your HR department to schedule an appointment. They need to go over it with you. And it’s sort of a back and forth to make sure that you have filled out every question correctly. And every person is different. And a lot of the questions depends on certain choices that you make. And those choices can have an effect on you, which could be hundreds of dollars or thousands of dollars, depending on the decision that you make. So it is important to go over each and every question on that form.

Tom Temin Yes. If you’re calculating, say, your high three years or planning on your high salaries, that could affect your timing, too. Wouldn’t you want a full year of getting that high salary?

Abe Grungold Yes. You definitely want your high three calculated. But what’s more important is to calculate every time period that you are working for the government, because that’s an important part of the formula. So let’s say you have figured out that you have 30 years of federal service, but then let’s say you work one year in the Peace Corps or you work for a judge in law school and you have forgotten those time periods, those time periods, if you document them on your federal retirement application, it will increase the value of your annuity.

Tom Temin And with respect to having OPM calculate your final annuity, are there common or make sure you avoid types of errors that you can make on that form that could get hung up in OPM?

Abe Grungold Yes, certainly if you have any gaps in your federal career. So let’s say you work the seven years, you left for a year, and then you came back. They may follow up with you to verify that actually happened. And another big problem that holds the final payment from OPM is if you have experienced a divorce. And if you have a divorce, you need to have all your paperwork attached to your federal retirement application, because you will be owed something possibly to your ex spouse and OPM. Make sure that those payments are sent to the spouse. So, yes, you have to have those documents in those attachments.

Tom Temin And earlier, you said there is that phenomenon of some people deciding as the date approaches, they get cold feet and so they postpone. And what happens if you change your mind?

Abe Grungold Yes. So let’s take the example of someone who’s interested in retiring Dec. 31. And they, I really am not sure about that. So there are other dates during the year which are beneficial to federal employees. And let’s say they want to work another couple of months and they want to go to the end of February, or they want to go to the end of July, because they’re really not sure about retiring. A lot of people can retire at age 57 when they meet their minimum retirement age and then they realize that they don’t know what they’re going to do with themselves when they do retire. So then they have doubts about retiring. And that’s normal. That’s normal for anyone. So, yes, you can pull back your retirement application on the last day, Dec. 31, and say, look, I want to hold off. Yeah, I mean, that’s a decision people back.

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