It is something you should plan ahead. Everything is handled by Human Resources (HRSS) by phone (1-877-477-3273 menu option 5). Questions to ask when completing HRSS process:
Have I been credited with all my service?
How much money will I net (take home)?
Can I carry FEHB into my retirement?
What benefit can I provide for my spouse?
Can I carry FELGI into my retirement?
When to retire, what day of the month?
There are two retirement systems: CSRS and FERS.*MRA stands for Minimum Retirement Age.
FERS – (Hired after January 1, 1984)This plan has 3 components:
1. Basic Annuity (defined benefit),
2. Social Security (Supplement) and
3. Thrift Savings (TSP).
Eligibility to Retire with FERS-MRA with 30 years of service. Age 60 with at least 20 years of service. Age 62 with at least 5 years of service. MRA with 10 years of service however there is a 5% penalty for each year under the age of 62.
Benefit Calculation-Earn 1% for each year of service if retiring BEFORE the age of 62. Plus FERS supplement. 1.1% for each year of service if at least 20 years of service and over age 62. Plus Social Security. This percentage is then multiplied times your High 3 calculation.
TSP Allowance-USPS matches up to 5%. Same Annual Maximums apply.
Spousal Benefits- A 25% benefit- reduces annuity by 5%. A 50% benefit – reduces annuity by 10%.
Best day to Retire- Last day of the month.
CSRS Eligibility to Retire with CSRS-Age 55 with at least 30 years of service. Age 60 with at least 20 years of service. Age 62 with at least 5 years of service.
Benefit Calculation – Earn 1.5% for each of the first 5 years of service. Earn 1.75% for each of the next 5 years of service. Earn 2% for each year after the first 10. This percentage is then multiplied times your High 3 calculation.
TSP Allowance – no matching from USPS. $18, 000 Max for 2015. “Catch up” for over 50 is $6,000 more for a total of $24,000.
Spousal Benefits – Any amount may be selected as a “base”, reduction in annuity is a 2.5% of 1st 3,600 of base, plus 10% of the remainder of the base amount. Provides a benefit of 55% of the base to the surviving spouse.
Best Day to Retire – End of the month, or no later than the 3rd of the month.
How can I tell what system I’m in? What’s on your check stub?There’s a little number next to “retire” that indicates the following:
A “1” indicates CSRS, A “5” indicates CSRS Offset and an “8” indicates FERS.
Also an “A” indicates the switch to FERS.
Another element in Retiring is: Can I Afford to Retire?How does my current health impact my ability to continue working?How much money do I owe? (House, car, credit cards, etc.)
How much will I need?
How much money will I get?
How much difference will ANY incentive (VER) really make to my finances?
After Retiring I plan to do:Traveling? How often? Hobbies? What will they cost me?Part time job? How much can I make a year?
Figure out some of the things you plan to do.
When trying to figure out when to retire people often feel frightened, scared, stress, anxiety, etc. You are not alone. It is a big life altering decision. Make sure you do your homework.