Ep #32: Retiring In December vs. January

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More and more federal employees are thinking about retiring at the end of the year, and while we’ve already gone over the best times to retire, this episode is going to focus on this common aim for retirement and how to get ready for it right now. You’ll learn what you can do to prepare and ensure that you don’t overspend, as well as what can cause delays in receiving your retirement and how to manage expectations.

Listen in as Tammy and Micah share how important it is to have cash reserves, plan for inflation, deal with OPM backlogs, and more. We’ve noticed that retirement thoughts and conversations often flow right out of summertime, so this is a great time to be discussing this and thinking about that next step.

What We Cover:

  • Where the end-of-year magic date came from.
  • What you’re solving for when planning your retirement.
  • The cash flow problem and how to ensure you have what you need for your retirement.
  • Why you should always plan for inflation.
  • How to decide whether you should retire in December or January.
  • Things that cause an automatic delay in retirement.
  • Key areas that need planning.

Resources for this Episode:

Ideas Worth Sharing:

The better your retirement plan, the less it matters what time you retire. – Micah Shilanski Click To Tweet

This isn’t about maxing out your pension—this is about maxing out your retirement. – Tammy Flanagan Click To Tweet

You have to solve for YOU and how much you want and need coming into retirement to make sure you have a successful retirement. – Tammy Flanagan Click To Tweet

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Full Episode Transcript
With Your Hosts
Micah Shilanski and Tammy Flanagan

 You can spend. You can save. What is the right thing to do? Federal benefits, great savings plans too. You can save your own way, with help from Micah and Tammy. You can save your own way. Save your own way.

Micah Shilanski: Welcome to the Plan Your Federal Retirement podcast. I’m your co-host, Micah Shilanski, and with me, as usual, is the amazing Tammy Flanagan. Hey, Tammy!

Tammy Flanagan: Hey, Micah! It’s been a little while since we’ve gotten together, but looking forward to our topic of today. I think people will find it quite interesting.

Micah Shilanski: I think so too. You know, it’s one of those things that’s really important to talk about. We’re talking about the best month to retire. We went through that before, but really the end of the years when more and more federal employees are thinking about retirement. And maybe, that’s because I’m just speculating here, I’m in Alaska, so summertime is a beautiful time to be in Alaska. A lot of people are out and enjoying and having vacations and fun times. Then they think about going back to work in the fall and like, “You know what, this is kind of coming close to the end of my federal career, should I start making that transition to the next chapter in my life?”

So whatever that thought process is, it’s a conversation that always comes up more in the summertime or in the fall time, about getting ready for retirement.

Tammy Flanagan: Right. And part of this, so-called best state to retire, kind of dates back to the days before the office of personnel management would place new retirees what we call interim retired status. So in the days when FERS was being implemented and everything was kind of getting bogged down, employees, who retired would typically wait a month, sometimes six weeks for their first check. But during that period of time in the mid-80s that was going out to two months, three months, sometimes four or five months.

And OPM didn’t at that time, put anyone in interim pay unless it was a real financial hardship. So we used to tell you, I worked at the FBI back then. We used to tell our employees “Save up your annual leave because you’re going to get that from payroll right away after you leave”. So even if it does take OPM 3 or 4 months to process your claim, you can live on that annual leave check while you’re waiting.

So this is where the end of the year magic date had come from. And I think even to this day, it still remains a very popular time to retire. A lot of people still like to save up their leave and cash out that huge lump sum payment so that helps.

Micah Shilanski: Absolutely. And I think one of the things that come up with this Tammy is, how good is your retirement plan? Now, the better your retirement plan, feel free to push back on me if I’m wrong on this one, but either better your retirement plan, the less it matters what month you retire. Now, sometimes there’s always going to be something out there that people want to maximize their Federal benefits, right? This is what might get, “If I work longer, I’m going to get more” and that is correct. But the problem with that logic under FERS, the Federal Employee Retirement System is, that’s always correct. The more and more and more and more you work, your pension will always be more.

So sometimes you’re solving for the wrong thing, this isn’t about maxing out your pension. It’s about maxing out your retirement. The difference is, retirement is solving for you. How much do you want? How much do you need coming in retirement to make sure you have a successful retirement.

Tammy Flanagan: Right. I always hear the same thing. I hear people say “Well when do I get the maximum benefit?”. It’s like, well, the longer you work, the more generous the benefit becomes. So you could just work forever, and it would just keep going up.|

Micah Shilanski: Exactly. And so, yes, that is an option, right? But maybe not the best option. So if you have a solid retirement plan, it doesn’t really matter. Now, what are we talking about? A solid retirement plan. Well the first thing we always talked about getting into retirement plans is cash flow, right? How much money do you have in checking and savings? And if the world got turned upside down, do you have enough cash to make it the next several months? And as a federal employee, you are not exempt from this. It’s been more than one time that your paychecks have stopped coming in while you were still actively employed, right? And that can probably will happen again.

So you need to have a cash reserve and that’s the same thing in retirement. Tammy. As you know, clients that go into retirement with a cash reserve of having six to 12 months of expenses, ready to go make a successful transition because we’re not worried about how long’s it going to take OPM to process my retirement.

Tammy Flanagan: Well, what would you tell a client, like I’m just curious as to how you would handle this, that doesn’t have that cash reserve and they’re maxing out their TSP putting $1,000 a paycheck, but not setting aside any cash on hand? Would you tell them to continue to max out their TSP or would you say cut back on that and put some money in the bank?

Micah Shilanski: Oh, great question. How young were they? Let’s say they’re ready to retire in the next two years. So, under 59 and a half?

Tammy Flanagan: Well, it wouldn’t matter since if they retire at 55 or later, they’ll still be able to take their TSP out.

Micah Shilanski: Well, I would say, I’d give two different sets of advice. Just in a thought process here. One is over 59 and a half, I’d say it’s slightly different because we could do a partial TSP transfer and we could get their cash reserves set up in advance. If they’re under 59 and a half, we cannot do that until after they separate but we’ve seen it, take a couple of months to get money from OPM. And then, by the way, they end up losing that check. Don’t worry, it was only seven figures that they lost and so we had to get that reissued. So it was like several months in order for someone to get access to their TSP.

So I don’t like waiting to make sure the government process goes through. So Tammy in that case, if they’re under 59 and a half, they’ve done a great job, maxing out their TSP. They’re still putting on thousand a month-end, but they do not have cash reserves. I would be a really big proponent of looking into reducing that TSP contribution. Of course not to 0, right? We always want to make sure we’re getting our match but maybe we massively reducing that to build up our local cash savings for the big what-ifs.

Tammy Flanagan: Yeah. That makes sense. So I get that question a lot from people who are near retirement worried about that transition period, and as you said Micah, even if it wasn’t going to be a delay, there’s always something we need cash on hand for. So it’s always a good idea regardless of your retirement readiness.

Micah Shilanski: Tammy, we talked about it before. I think one of our first episodes we to- oh we totally forgot to mention, by the way, I’m sorry, little off track. I should look at my notes, we meant to thank you guys are listeners number one because we just passed for July. We passed over 13 thousand downloads and that’s a new record for us and that is because of you our listener. So thank you so very much. This is so important.

Tammy Flanagan: That’s incredible. I always think is just you and I listening to this. I never realized we actually have an audience and we have really some good dedicated listeners because I’ve been getting emails from people too, I really appreciate hearing that feedback because it motivates me to say “Yes, this is working and this is helping people”. So we both appreciate hearing that and learning that you guys are listening to us.

Micah Shilanski: Yes, it’s awesome. Thank you for the comments. Thank you for the reviews that you guys post and send out. It is much appreciated. So getting back on the cash flow question, we all have this thing called a financial thermostat, right? When we have X amount of dollars in our bank, we feel comfortable. Now, if all of sudden that x amount dips below a certain value– some people, those values are in the six figures, some people’s five, some people three figures, whatever that is for you.

But if that bank account dips below a certain amount you go “Oh crap. I’m out of money, quit spending right now”. I’m cringing because you don’t have money in that account and then all of a sudden your savings build back up and you get above that X. And now “I’m feeling really good and now I start spending money and I spent it down to X”, right?

It’s that roller coaster, that thermostat we’re moving up and down within our spending all of the time and it’s the same in retirement. So one of the things that a cash reserve really helps with is being comfortable in that transition because retirement is a big change in your life. You don’t want to feel financially strapped, moving into that.

Tammy Flanagan: Right. I guess, with that in mind, I love that idea of just, having that kind of comfort zone with your cash reserve. But when you move into retirement, it may dip below that comfort level but at least you have the cash reserve there to dip into, knowing that you’re going to replace that with your lump sum annual leave or perhaps the retroactive payment that OPM owes you once they finalize the claim. So, as long as you know that money’s coming you can be a little comfortable even though you’re dipping below your normal comfort zone.

Micah Shilanski: That’s one of the things, Tammy, I like to tell our retirees, it says “Look, you’re going to live off savings for a period in time”. Let’s say it’s six months because that’s how long OPM’s going to take. Then OPMs going to do a retroactive payment. Let’s say your net pension is three grand a month, just making my math easy, so all of a sudden you’re going to get an 18 thousand dollar deposit in your bank account, making up for everything OPM was supposed to pay you and didn’t. What happens is, a lot of people is they consider this bonus money and they’ve taken 18,000 out of savings. They spent that for day-to-day living. Now, they got an eighteen thousand dollar bonus, and they want to blow that as well. So if that’s not in your retirement plan, don’t spend it.

So I really like to plant that seed by saying, “Hey, when that 18 comes back, we need to replenish your savings account. When you put the money back in there for the future because you’re just robbing yourself if you overspend. And that’s a really easy way to overspend in retirement.

Tammy Flanagan: Yes, I agree. And I think also, with FERS employees, especially when they retire, in many cases, there’s no cost of living adjustment for a few years. If you retire, let’s say at age 57, which for many people now is the minimum retirement age, 5 years go by and we have a period of high inflation like we’re starting to experience this year, that can be a real problem. So again another reason to have some extra cash on hand, in case things get more expensive next year and your retirement stays the same. You need to prepare for those things.

Micah Shilanski: From a good planning perspective, Tammy, we should always plan on inflation’s going to be with us. Now, I’m not going to say what inflation is going to be this year or next year, most likely because I don’t like to be wrong. Also, because I don’t know, right? This is one of those things, we know it’s going to be more, we’re just not sure where.

So you always need to be planning that in retirement and making sure you’re committed to that long-term retirement plan. You’re investing for the long-term to outpace that inflation because you said, your pension doesn’t keep up with inflation. Social Security doesn’t keep up with inflation. It gets a cost of living adjustment, but it’s not the same as keeping up with inflation. Really, your long-term savings TSPs, IRAs, 401ks Roth’s, etcetera, that’s the thing that needs to be earmarked to keep up with inflation, over the long term.

Tammy Flanagan: Right, and that’s probably another reason why you don’t want to just put that whole TSP account in the bank because then, you are definitely not going to keep up with inflation. If you’re going to be that conservative with it. Because that’s the other question I get from people ready to retire. They say, “When should I be moving everything to the G fund then?” I’m like “Never I don’t think”.

You always want to have a good balance. You want to still have some volatility in there to let that grow for the future. But maybe become a little more conservative as you get closer to when you’re going to start drawing down that balance.

Micah Shilanski: Yes, that’s what I do call three critical concepts for retirement and maybe this is something this fall will do again, but we talked a lot about that. Those step-by-step processes are things that we need to think about and don’t be short-sighted in retirement just because you’re retiring doesn’t mean to make all these dramatic changes, put everything in the G fund. That may not be the best answer for you in the long run.

Tammy Flanagan: Yes, I think going along in that same line of thought, I don’t know about you Micah, but I hear people all the time planning to be retired for only 15 or 20 years. And meanwhile, they’re 55 years old. It’s like, why do they think they won’t be here after they’re 75? I said I’m planning on living to 105, I don’t know about you. How do you prepare for that if your retirement could potentially last 40 or even 50 years? So that’s something else to be realistic about.

Micah Shilanski: Yes, something we can talk about on a future podcast or future classes? Tammy, let’s focus back a little bit on preparing for the end of the year retirement. Now sometimes, we’ll get the comment that comes in that says, “You know what, we know OPM gets backlog, we know OPM gets behind and everyone was retired at the end of the year”. So should I quote “beat the rush” and try to retire before the end of the year just to make sure all of my retirement is good to go?

Tammy Flanagan: I don’t think that’s necessarily something anybody needs to do. OPM knows that they get a good percentage of retirement claims at the end of the year. Right now trying to catch up on some of the backlogs that carry over from 2020 and carrying over from all the telework they’ve been doing. So they’re ready for you. I mean they know it’s coming, doesn’t mean it’s going to get processed any sooner or later whether you go out in September or December.

The most important thing I think for the employee to do is to make sure everything is ready to go. Make sure there are no questions about your service. No discrepancies in the applications, when you fill them out, sign everything, make copies of everything. The more due diligence you do on that application and that preparation, the less you have to worry about how long it’s going to take to process the claim. It will get processed, whether it takes 60 days, 90 days, or 180 days. It will eventually come out in the wash and everything will come out. The way you want it to. This goes back to having that cash on hand. So I wouldn’t worry so much about how long it’s going to take to process. I would be more concerned that everything goes smoothly in the process.

Micah Shilanski: Yes and smoothly in my opinion. Make that based on things you can control not outside processes. And the reason I want to gain it this way, Tammy, is a little bit of head game is sometimes to be super irritated, and frustrating to get tied up and delays and bureaucracy, and these other things. Well, guess what, you can’t control that. But what can you control? Your cash reserves getting into retirement, you can control your spending, you can control your plan and if we plan for a delayed process, well, then okay, great. Now we can do roll with the punches. We can deal with anything that comes up and as long as you have your ducks in a row, retirement will get straightened out. Yes, it may be a couple of back and forth with OPM but your retirement will get straightened out. If you’ve done everything in advance.

Tammy Flanagan: Right. There are a few things that will be an automatic delay and I’ll just list a couple of them that come to mind. For instance, if you go to retire and you have a court order that says, your former spouse is going to get a portion of your retirement or they were awarded survivor benefits. That means your processing has to make a pit stop in the court order section of OPM and that place is notorious for the backlog. So that’s going to be a delay right there in the processing or finalization of your claim. So, that would be one thing. Another thing that can cause an automatic delay is if you’re over 62 and you’re retiring under Civil Service offset because now OPM has to interface with the Social Security Administration to compute the offset, the reduction to your retirement.

So those employees were seeing more and more CSRs, offset, employees, starting to retire. And if you are over 60 to be prepared for that to take some extra time and be prepared to know what that offset should be. So that whenever you get the final numbers from OPM, that it looks right to you. Because some employees who retire under offset aren’t affected by the windfall provision or they are and you want to make sure that OPM is computing that correct amount.

So you may want to get those figures at least estimated to a pretty close estimate before you walk out the door because I’ve seen some errors and you may have to question that it time to time. So it just depends.

Micah Shilanski: Yes. That’s a great thing. Just plan for delays and if they don’t happen, great, everybody’s delighted, so manage those internal expectations for your retirement. I think it’s important.

Tammy, we’ve talked a little bit about getting your plan for retirement ready? So maybe we should dive into that just a little bit and talk about what are those components of things that people should be thinking about? What do you think?

Tammy Flanagan: Yes, I think that’s a great idea.

Micah Shilanski: So I would say, well let’s start off first with “timeline”. Timeline is probably the key thing when you’re thinking about retirement. When do you want to separate from federal service, right? When do you want to retire? Because now we can start backing into things. Question: When should I submit my retirement application? Well, when do you want to retire? We generally like it submitted three months in advance but we need to be thinking about these things.

Tammy Flanagan: Yes. I guess, even before that point, maybe farther down in the timeline, is to get good estimates, to understand exactly what it is that you’re expecting to receive. The estimates are nice, but they may not include everything. You need to ask questions, for instance, you and I both have seen estimates where you’ll have a five thousand dollar retirement, the estimate shows, a hundred and fifty dollar tax withholding and that may not be accurate.

So question things that you don’t understand, try to get a good handle on, what your retirement numbers are. Figure out the tax withholding, the health benefits, the life insurance withholdings. Once you understand that, I think the rest of it falls into place pretty nicely.

Micah Shilanski: Yes, really important. Now if you don’t have a timeline, we have put together a 180-day retirement timeline, kind of three months before retirement, the month of, and three months after, you’re welcome to jump on our website, which is planyourfederalretirement.com/32 I think, this is episode 32 and you will see it right on there, or you can email us at podcastMicahplanyourfederalretirement.com. Inside of there, just ask Victoria. She would be happy to send you that timeline so you can go through it for your reference as a starting place. So yes, get that timeline in place. I love all that stuff that you said.

Then I would say, the next step is cash flow and I still like starting with a date because it gives us a “why”, right? We start with these other things like, “Why do them now?” But if we start with the timeline, we start with a retirement date in mind. “Aha. Now we have a deadline, we can get things done” and 99.9% of us do really well on a deadline. How do I know that? How often do you miss your airplane? If you have a flight, do you miss it often? Probably not. So you can work on a deadline.

So if we have retirement as a deadline, perfect, now we can start backing into things and I like to look at cash flow. Tammy, your point about where is the money going to come from is a great question, how much are you going to get net from your pension? How much are you going to get from Social Security? When is social security going to come in? How and when do you take money from your TSP? But also where is that money going? I don’t want to 72 line-item budget of things because that’s not fun in the conversation at all.

But in general, how much a month, do you spend how much does your spouse spend? How are you going to spend in retirement? If your initial thought is “Micah when I retire my spending will go down”. You’re lying to me about this and other things as well, right? I promise that is probably not the case. Yes, there are rare exceptions. But if you’re justification is “I don’t have to spend that money on gas and I don’t have to buy work clothes”. There are probably other things you’re going to do in retirement and spend more money. For example, what if every day’s a weekend? When are you going to spend more money?

Tammy Flanagan: That’s right and I think if you look at your net paycheck and what I like to do is take that net bi-weekly paycheck multiply it by 26 pay periods, divide that by 12, and that gives you an idea of how much net retirement income you better hope you have. Because like you Micah, I don’t think our spending is going to change that much as far as going down. I think we’ll spend things differently perhaps once we retire. But we’re still going to be spending similar to that same amount of money. And like you said, there are exceptions for instance. If I’ve been setting aside money every month to pay off college for my youngest child, and that’s finally finished. Then that money is money I won’t be spending anymore. Maybe I could take that into account but you know what about the wedding? What about grandchildren?

So I don’t think we necessarily stop spending money on our kids once they graduate college. Most of them– some of them do go into jobs where they’re making more money than we do, but most of them don’t necessarily do that from day one. So sometimes we want to still help out a little bit.

Micah Shilanski: Now, spoiler alert if you do contact me because I do work individually with some clients on Financial Planning and you’re talking about your cash flow. And you mention that your 30-year-old is still on your cell phone plan. I got an expense we’re going to cut, right? So there are some things that we do need to graduate and help but Tammy to your point, you gotta plan on those grandkids’ money, you got to plan those other things because you know you’re going to spend it. A part of a good plan is being very realistic with what we know we’re going to do.

Tammy Flanagan: Yes, you might want to put that same allotment aside for a nice family vacation next year. Now that you’re retired, you can take time. They run a place down in key– I’ve been thinking about this running a place in Key West for a month and have the family come down for a week or so to join you. So there are things you’re going to spend money on that, you haven’t even thought of yet, but just don’t cut yourself short.

I would hate to see someone retire before they were financially ready and can’t enjoy retirement because they can’t spend any money.

Micah Shilanski: I would also say, adding to that is location would be the next thing. I really want to look at Tammy on the retirement plan because it goes hand-in-hand with cash flow. Where do you want to be? And how long do you want to be there? Do you want to move down to Florida? Do you want to move to a warmer State? What do you want to do? Do you want to Snowbird? These are things that fact cash flow. But where do we want to be at this point in time? Now, a lot of federal employees, at least the ones up in Alaska, have a relocation package still and that’s one of the things they want to use. And then first to use your retirement, they want to relocate somewhere or to have the government pay for that. So, look at that and say great, how does that work? How does it fit into the plan?

Tammy Flanagan: If you’re wondering, how do you get that relocation package? It’s not common for the rest of the government. You’ll see the last move home for senior execs and CIA employees coming back from overseas. You can have a final move, but again, that’s not necessarily all federal employees. So most of us aren’t going to be that lucky. But yes, that does happen for some so that would be something to consider and really think about. Maybe do some visiting, use your annual leave to go visit some places where you think you might want to live. You go there offseason, it might be nice in your time but in the wintertime, it might be a different story.

Micah Shilanski: And I like to say too, there’s a difference when we’re in vacation mode versus living mode. So we go to someplace we absolutely love when we’re on vacation there. But what it would it be like to live there? And this is where renting comes in handy Tammy. I know we talked about this before, but on the location side, I’m a huge fan of someone going and renting a place for three to six months and really seeing if it’s where they want to be before they buy especially now with home prices being crazy and just going up dramatically. You know what, maybe it doesn’t make sense to overbid homes and to buy today because maybe it’s not where you want to be. Maybe it makes sense to rent for a little bit and make sure it’s the right place for you.

Tammy Flanagan: Yes. This is a good time to sell your home perhaps and then bank that money until the prices are real estate come down and you know exactly where you want to go.

Micah Shilanski: Could be. Yes ma’am. Then you also have to have a plan changing a little bit Tammy. You got to plan for those unexpected things. Death, Disability, Long-Term Care, moving, sending kids money, that’s going to come up a large lump-sum distribution. You know, when we talk about tax planning or always solving for some tax frame. One of the things I tell clients all the time is “Look, at some point in time, you’re going to need a lump sum of money. A large sum of money and I want to have options on where to take it from versus all taxable to you”, whether it can buy a house, whether it helps a kid or a grandkid out, whether it’s any of these types of things, it almost hands down happens with all of my clients at some point, we need a large lump sum of money. Where’s that going to come from?

Tammy Flanagan: Right. Yes, it’s nice to have some tax-free money set aside for those expenses. It’s also nice to prepare for things that we don’t like to think about. Whether it’s long-term care, whether it’s two of us, down to one of us, we should lose a spouse. How is that going to look? Have we prepared for that so that when one income goes away, can we still live on the income we have left?

So it’s those what-if situations that I think are part of this plan before you walk out the door to make sure you have the tools you need in place to cover those unexpected and oftentimes crisis situations that can come up in life.

Micah Shilanski: Very much so. One last thing that we’ll talk about today is, I always get a question about how do you start the process for retirement? It’s slightly more informal than you would be thinking but Tammy, walk us through that. What is that process of starting the retirement process so to speak on the federal side?

Tammy Flanagan: Yes, it’s probably in some respects easier to retire from federal service than it ever was to get hired into Federal service. In fact, technically, not that I would recommend this, but technically, I remember I used to get retirement applications in a sealed envelope with secret written on it and slid, under the door, on a Friday night because this person didn’t want anyone to know, not even their supervisor that they’re leaving. And I suppose you could do that. I wouldn’t recommend it, of course. Most supervisors would not appreciate that, but you don’t necessarily have to tell anybody, but your HR office to get the ball rolling. That starts by filling out the retirement application, whether it’s FERS, which is a standard form, 3107, or CSRS, which is a standard form 2801.

You can find those forms on the OPMs website. I would recommend also having a conversation with your HR office, there’s someone there who’s a retirement specialist, They’re the person who is going to actually do the personnel side of the processing of your retirement. So give them a call and say, “Hey how soon before I retire? Do you want my application? Do you have a lot of applications for that date? Are you expecting to get a lot of people to retire? Because if that person has any experience, they can tell you what it’s been like they can tell you how long it takes them to get that application from their office to the next stop, which is payroll.

There is a process that has to happen both on your end, which is filling out the forms and making sure their complete, and making a copy. Then turning those into HR which is the first step on the agency side and then you actually leave the government, your retirement date comes around. And now you’re looking at payroll taking you off the payroll of the agency. Sending all of that information regarding your separation to the office of personnel management where the final processing takes place which is all after you retire.

So even though you may have given six months’ notice that you’re leaving, you might have turned that application in 6 months ahead of time, that doesn’t necessarily mean that the OPM part of that is going to happen any sooner because they’re not going to get the application till you’ve left anyway. Regardless of how much notice you’ve given. So I wouldn’t give too much notice because your application could get lost in the shuffle. So there’s that sweet spot which I usually say, talk to your HR specialist if they’re willing to counsel you on that and provide that information. That’s your best bet because they know what they’re looking at as far as workload at that time of the year.

Micah Shilanski: In a general rule of thumb, we have this on the retirement timeline, so we can send that to you if you’d like that. We talked about that earlier. You can jump on our website, planyourfederalretirement.com/32 for this episode, and we’ll have a copy of that and that goes through that.

But Tammy, I like that concept of involving that HR person right in the beginning. In my federal career, I started helping federal employees I should say is I would help clients fill out retirement applications. I’d send it to their HR. The HR would actually get a little fussy with me saying, “You’re not supposed to do this. This is my job.” and so I had to take a step back then “Okay, what’s the process?”, and its really contacting them and even if it’s just adding a little bit of goodwill then that’s okay. Even if they send me a blank retirement application, we still ask them first before we send them a retirement application. Because I want the HR retirement specialist to be happy with us.

So we asked them what it is, and then great, if they only want it 65 days in advance, well then great. Then that’s what we’re going to follow. If they’ll make it four months in advance, then great. That’s what we’re going to follow. And everyone, as you said, it’s going to be slightly different, but we’re going to follow that process because it’s their process. We need to make sure we’re fitting normally in their process because if we don’t if we’re the oddball the 1-1 out as you said, retirement application will get lost will get forgotten, things will get misplaced. So I want that normal process so that retirement goes through successfully.

Tammy Flanagan: Yes, and you’re going to find with a smaller organization, you might work for an agency that has 350 employees and there’s one person that’s going to handle that. They’re going to walk you through it. They’re going to sit by your side and hold your hand, Where if you work for the Department of Army for instance and now you’re dealing with the Army benefit center which is in another state, it’s fairly automated. You may not even talk to your retirement specialist or counselor unless you reach out to them and even then it’s not sure of when you’ll get to talk or if you’ll get to talk to somebody. So there are different processes and different organizations.

The other thing you’ll find is on the employee page of your agency, you have some type of online service where sometimes they’ll post, here’s the process of retiring from this agency. It’s going to give you a link to the forms that you need. It’s going to tell you what documents you might need to attach. Because if you’re married, you’re going to need a copy of your marriage certificate. If you’re divorced, you might need a copy of your divorce decree, if you served in the military going to need those military records, if you’re waiting for workers comp, you might need some documentation of a worker’s comp claim.

So there are things that you may have to attach to that estimate when you mail it in. And this is a paper-based process by the way. So OPM, once any pen’s signature, they call it a wet signature on that form. You may have to get a notarized statement of your spouse if you’re not going to provide them with the maximum survivor benefits. So there are some things you want to look through. So if I were you, I would download the application. Take a look at it. Really try to fill it out and read through it because there’s a lot of decisions you’re going to have to make anywhere from choosing your retirement date to electing what kind of a retirement you want, and then it goes into how much life insurance do you want to continue. So you do have to make some pretty serious decisions at the time you plan your retirement.

Micah Shilanski: Well, Tammy, let’s transition a little bit to action items for our listeners to this podcast. Not only is it about good humor and a lot of fun. It’s also about action items to our listeners can do things. So I think I’ll kick it off because we would appreciate all this a little bit and actually, I remember one. What’s your timeline? Build your timeline for retirement so you know when things need to get done.

Tammy Flanagan: I love that. Set a goal. I think that you should also get those calculations. Set up a My Social Security account, download your most recent TSP statement. Some of you can go online and get your retirement estimate, it’s a do-it-yourself GRB platform. Others may have to request an estimate from their HR specialist, but find a retirement estimate and start really understanding it.

Micah Shilanski: Absolutely, you know what third one, I’m going to add in here, involve your spouse. Now, in most households, you have one spouse which is going to handle the finances for 90% of things. However, this is a team effort. So if you’re married, you need to be involving your spouse about when it’s going to be, how much we’re going to spend, all those details. Well, not all of the details, because one spouse will get overwhelmed and doesn’t want to participate. But at a high level, both spouses need to be involved in this process because it affects both of you.

Tammy Flanagan: At least let them know you’re thinking about retirement.

Micah Shilanski: Might be beneficial.

Tammy Flanagan: That kind of spring it on, “Guess what? I’m retiring at the end of the month” “What? really?”. So along with that also I had mentioned filling out the form. So download those forms go to OPM’s website. You can see all the forms there, read through them, start accumulating all the documents you’re going to need so that when the time comes to turn it in, you’re ready to go.

Micah Shilanski: Perfect. Well guys, thank you always, for all of the listeners, all the growth. Feel free to leave us a nice review. Share this with a friend, would be phenomenal. Send it out to more co-workers. Like I said over thirteen thousand downloads in a month and growing and that’s because of you. So thank you so much and until next time! Happy planning!

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