Yes, good morning. Jeff here, wondering about having a postponed retirement. When the paperwork needs to be filled out, if I want to start that postponed retirement 2 years from now and I am actively working for the government now, when I walk out the door, if I do not have all that paperwork already in place, how difficult will it be for me to get those things completed after leaving service? Thank you. – Jeff
Retirement planning is an essential step for federal employees, and one option to consider is postponed retirement. This retirement choice can be particularly helpful for those who plan to leave federal service early. Below, we’ll break down what postponed retirement is, how it works, and the steps you need to take to protect your benefits.
What Is Postponed Retirement?
Postponed retirement allows eligible federal employees to delay receiving their retirement benefits until a later time. This differs from deferred retirement, which applies when an employee leaves federal service without qualifying for immediate retirement benefits. With postponed retirement, you can begin collecting your pension later without penalties and really in our opinion, the greatest benefit is to retain access to your Federal Employee Health Benefits (FEHB) coverage.
Understanding the specifics of postponed retirement is crucial to ensure a smooth process and avoiding the potential of losing valuable benefits.
Key Benefits of Postponed Retirement
One of the most significant advantages of postponed retirement is maintaining health insurance coverage under FEHB. Health insurance is one of the most valuable benefits federal employees can retain after retiring, but it requires careful planning to keep this coverage intact.
If you retire early without following the proper procedures, you risk permanently losing your health insurance. Proper timing and attention to paperwork are critical to avoid this outcome.
Necessary Forms for Postponed Retirement
To apply for postponed retirement, you must complete Form RI 92-19, which is the official application for deferred or postponed retirement. This form is available online and should be submitted to OPM after leaving federal service, however, completing the form is just one part of the process; thorough preparation is also necessary.
Preparing for Postponed Retirement
Before leaving federal service, gather and organize all essential documents that prove your employment history and service record. These include:
- SF-50 Forms: These Notifications of Personnel Action document changes in your job status throughout your federal career. This step is often overlooked or not considered important. Please, understand, it is more difficult to get these documents after your are retired than before.
- Pay Stubs: Retain records of your pay stubs as additional proof of employment and earnings.
Having these documents readily available ensures that OPM can process your retirement application without delays. Readily available does not mean your government computer!
The Importance of Timing
Timing plays a critical role in a successful postponed retirement. You need to know the specific deadlines for submitting your application and ensure that all forms are completed accurately. Missing deadlines or submitting incorrect paperwork could result in losing health insurance benefits.
Postponed vs. Deferred Retirement
It’s essential to understand the distinction between postponed and deferred retirement:
|
Postponed Retirement |
Deferred Retirement |
|
You delay receiving your pension but retain access to FEHB and other benefits. |
You leave federal service without meeting requirements for immediate pension; health insurance is lost. Pension ONLY! |
If you fail to correctly apply for postponed retirement, you may unintentionally end up with deferred retirement, which could result in losing FEHB coverage.
Steps to Take Now
If you’re considering postponed retirement, follow these steps:
- Gather Your Documents: Save copies of SF-50 forms and pay stubs on a personal device like a thumb drive before leaving federal service.
- Know Your Deadlines: Understand when you need to submit your application to avoid losing benefits.
- Submit the Correct Forms: Complete Form RI 92-19 and send it to OPM at the appropriate time.
By preparing in advance and staying organized, you can ensure a smooth transition into retirement while protecting your benefits.
Where to Find More Information
For more details about postponed or deferred retirement options, visit the OPM website at www.opm.gov. The site provides official resources and guidance for federal employees planning their retirements.
Conclusion
Postponed retirement offers a way to safeguard health insurance and other benefits you have earned while allowing flexibility in when you begin receiving your pension. To make the most of this option, keep accurate records, adhere to deadlines, and complete all necessary forms correctly. With careful planning and attention to detail, you can enjoy a smooth transition into retirement.
ABOUT THE AUTHOR
Micah Shilanski, CFP®, is a distinguished financial planner known for his deep commitment to providing exceptional advisory services to his clients. As the founder of Plan Your Federal Retirement, Micah has dedicated his career to helping federal employees understand and optimize their benefits to ensure a secure and prosperous retirement. His expertise is widely recognized in the industry, making him a sought-after speaker and educator on financial planning and retirement strategies.
Micah’s approach is client-centered, focusing on creating personalized strategies that address each individual’s unique needs. His work emphasizes the importance of comprehensive planning, incorporating aspects of tax strategy, investment management, and risk assessment to guide clients toward achieving their financial goals.Micah Shilanski 00:00
The best benefit you have is critical to keeping a retirement, but more important, if you go out early, there’s only a certain way that you can keep that, you want to know what that is, or how to do it, and stay tuned for this FERS Federal Fact Check. Hi, I’m Micah Shilanski with Plan Your Federal Retirement. Welcome today FERS Federal Fact Check, we have a really good question that came in from Jeff, and it talks about your best benefit. Now, if you’ve watched me at all on this channel, then you really know that your best benefit, in my opinion, is going to be your health insurance at FEHB, Federal Employee Health Insurance is absolutely amazing. I look at it from the outside in, but we have a really good question to say that’s not exactly about health insurance, but it’s about leaving the government early, and what benefits are you going to get, this question is from Jeff. It says, Good morning, Jeff here, wondering about having a postponed retirement. When does the paperwork need to be filled out if I want to get the postpone retirement two years from now, and I’m actively working for the government now, when will I walk out the door? I do not have all the paperwork already in place. How difficult will me for me to get this but completed after leaving service, thank you! All right, Jeff, a couple of things you’re probably on top of this, so forgive me. Make sure you understand the difference in a postponed versus a deferred retirement. We do a whole video set on that we give out to you guys. It’s really important to know it. The devil is in the details, in this one, in getting the right benefits, keeping your health insurance, and if you mess it up, it’s going to be permanent, and so it’s also what that’s talking about, right there’s your question, when do I fill this out? Boy, that’s what we go through in the series. Now, I don’t want to answer that question so lightly right here, because there’s a lot of details about when that’s going to apply, so go and visit that series, hopefully we’ll put a link to it in the description for you, and go visit that series that we have and really kind of talk one by one about a postponed versus deferred retirement. What I’m going to tell you is your retirement form is 92-19 that you need to fill out, RI 92-19 and that’s going to be retirement form, and great news, Jeff is, you can get that online and you can submit it to OPM at the appropriate time after you’ve left federal service. And now the question is, in my opinion, it’s not just what form do you need to submit, what do you need to do you need to do right now? Right now you need to make sure you’re getting a copy of all of your SF-50s, your notifications of personal action, you want all of those in your own personal record so that, God forbid, when you do separate from service, then later you do apply, if OPM doesn’t have all of your records, you have a copy of those records. This is what I like to say when you’re in your guest and when you’re out, you’re a pest, right? So right now is when you want to get a copy of that, copy of your pay stubs, copy of anything that ever got sent to OPM, make sure you have those in your personal possession. Now, what do I mean by personal possession, not your government computer, right? I want them either printed down or ideally on a flash drive or on a thumb drive, and a personal device that you have that you’re gonna have access to after you leave federal service, OPM generally, does a great job in processing retirement paperwork, but there’s a little bit of an error rate right there, and it could be as simple as they just don’t have all the records, so making sure you have them is really important, that’s step number one. Step number two, know your dates on when you need to submit this application. If you miss the date, if you fill the application out wrong, you could lose your health insurance, and that’s the whole benefit of a postpone retirement versus a deferred retirement, postponed means you’re eligible for an immediate retirement right now, but probably with a penalty, so you’re going to postpone that to a future time when there’s no penalty, but you have to be really clear and apply it the first applicable time in order to get your benefits turned on without a penalty, in order to keep health insurance. If you don’t do it correctly, you lose a postponed retirement, you get kicked to a deferred retirement, what’s a deferred retirement? A pension only, you lost your health insurance for a life, so be really, really careful as you’re filling out this application. If you need more answers to questions like this, then make sure you jump on our website, planyourfederalretirement.com till next time, Happy Planning!