Generally, an estimate from your Human Resources (HR) Department on your Federal Employee Retirement System (FERS) benefits is a good source of information for you to begin to plan your retirement.
However, it is your responsibility to ensure that the estimate that you receive from your HR is accurate. Your HR will not know your service better than you. You are the best and most reliable source for knowing when, where and, what you did while employed with the Federal Government. I do not like relying on the words, “always correct” because it leads to a false sense of accuracy.
From working with a lot of Federal Employees, I have seen HR retirement estimates that have been spot on — down to the penny. I have also seen retirement benefit estimates that are wrong — really wrong.
There are a few common inconsistencies that I see when it comes to a Federal Employee Benefits Estimate, regardless of which agency employs you. That is why I run down a checklist with my clients on what I look for when reviewing their FERS Benefits Estimate.
This is the date in which your HR will certify as to your “start” date for benefits when you go to apply for retirement with the Office of Personnel Management (OPM). Your HR does not have malicious intent on trying to get your dates incorrect. They are, however, relying on information that is in your Official Personnel File (OPF). If you have made changes in your careers, like changed jobs or agencies, your OPF had to change with you.
Did you buy back military time that wasn’t applied?
This widens the opportunity for errors, such as mixing up dates. You know your Federal Service history better than anyone.
Your pension income is based on your creditable years of service and your high three salaries. Your High Three is the mean of the three highest salary years that you have as a FERS. These years generally occur towards the end of your career.
Review your Hi-Three salary and make sure that your numbers are accurate.
One of the most common mistakes FERS employees make when calculating their pension income is they base their retirement income off of the gross numbers and not the net.
Your FERS Pension income is subject to Federal Income Taxes but there are other deductions as well that have to be accounted for.
The tax estimate provided on the benefits estimate from HR makes an assumption that this singular pension source serves as your only income source. It does not account for other income sources that you may have as a single or married person. These include retirement accounts, social security, other pensions, etc.
HR retirement estimates for Federal Employees are wonderful resources, but they have to be scrutinized. You alone are the best source of knowing your Federal Service history, your salary, and your taxable income sources. Do not base your retirement decisions off of the wrong figures: your gross v. your net income.
“What happens to your sick leave if you are 63 years and have 28 years of federal service. Thanks for taking this question.” FERS Sick Leave Rules As a Federal
“As a FERS retiree, am I required to sign up for Medicare at age 65; or can I opt out of Medicare Part B? Also, regarding my spouse, who has
“I have two questions about social security. I am 61 and my wife is 58. Let’s say my wife files for social security at age 62 and I wait until
My understanding is that if I take immediate retirement at MRA before 62, then I will: 1) get the FERS Supplement to my FERS annuity; and 2) but I will
Get the most out of your federal retirement benefits by taking advantage of the FERS resources created by Micah Shilanski, CFP®, and the team of independent financial advisors at Shilanski & Associates, Inc. Join the thousands of federal employees who trust us to guide them in their retirement planning journey because of our unique perspective of how your FERS benefits contribute to your comprehensive financial plan.
Year after year I see Federal Employees missing the same critical concepts in their federal retirement planning. That’s why I’ve created an online workshop to help educate Federal Employees on these critical concepts.
Advisory services offered through Shilanski & Associates, Inc., an Investment Adviser doing business as “Plan Your Federal Retirement”. Plan Your Federal Retirement is not employed by the United States Federal Government and does not represent the United States Federal Government. All content on this site if for information purposes only. This website is not personalized investment advice. Securities investing involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. Please review our Customer Relationship Summary (Form ADV Part 3) for important information about our services and fees.
Opinions expressed herein are solely those of Shilanski & Associates, Incorporated, unless otherwise specifically cited. Material presented is believed to be from reliable sources, and no representations are made by our firm as to other parties, informational accuracy, or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant, or legal counsel prior to implementation.
Content provided herein is for informational purposes only and should not be used or construed as investment advice or recommendation regarding the purchase or sale of any security. There is no guarantee that any forward-looking statements or opinions provided will prove to be correct. Securities investing involves risk, including the potential loss of principle. There is no assurance that any investment plan or strategy will be successful.
7 CLASSIC RETIREMENT MISTAKES Federal Employees Make
Your privacy is our top priority, and we promise to keep your email safe! For more information, please see our privacy policy.
