Micah and Tammy have been seeing lots of mistakes and missteps happening lately, with more people reaching out to see whether they were wrong or...
Read MoreMicah and Tammy have been seeing lots of mistakes and missteps happening lately, with more people reaching out to see whether they were wrong or...
Read MoreWhen we talk about your FERS Retirement, we’re really talking about several different benefits. FERS (Federal Employees Retirement System) has three main components: Basic FERS...
Read MoreSpecial Benefit for Some FERS Who Retire Before Age 62 Have you heard about the FERS Supplement? It’s an important benefit for FERS planning to...
Read MoreFERS retirement benefits are complex. It’s easy to get overwhelmed by all of the details. But it’s important to remember that federal benefits are just...
Read More“I have about 1,300 hours of sick leave. What is the best advice on what to do with those hours as retirement nears for me? Thanks“ – Steve
First a little background: On October 28, 2009, President Obama signed legislation that allows federal workers who retire under the Federal Employees Retirement System (FERS) to receive credit for sick leave when they retire. Since around 1970, CSRS workers have been able to apply their accumulated unused sick leave toward retirement. That gave them months, in some cases years, of “extra” service. It’s a good deal and Congress did that to cut down on investigations of what appeared to be that many long-time, previously healthy employees were using their sick leave rather than losing it. So the system was changed. During the early part of the 2000’s this was dubbed, “the FERS Flu.” Today, sick leave is credited towards a FERS retirement, in the same way as it is under the CSRS benefit.
Using OPM’s Retirement Facts #8, conversion chart, you can see that 2,087 hours is equivalent to 1 year and in the case of Steve, his 1,300 hours is equivalent to 7 months and 15 days of additional service credit. (When the number of hours is between two numbers on the chart, i.e. 1299 and 1304, use the higher number for the conversion).
Here you can see how the sick leave credit increased Steve’s federal service from 30 years and 5 months to 31 years and 1 month or a total of 8 months of additional credit.
Example: | Years | Months | Days | |
Total Service 30 years, 5 months, 18 days | 30+1 | 5+1 | 18 | |
Sick Leave (1,300 hours) | + | 7 | 15 | |
30 | 13* | 33* | ||
Years and months for Calculation | 31 | 1 | 3 |
8/12 x 1% (or 1.1%) x $100,000
Years / months of service x factor x high-three average salary
Sick leave credit | X | Factor (1.0% or 1.1%) | X | High-three average salary | = | Value of sick leave in retirement |
8/12 | X | 1.0% | X | $100,000 | = | $666.67 / year |
Steve’s salary is $100,000 per year. If you divide your annual salary rate by 2087 hours you get your hourly pay rate, or in Steve’s example, an hourly rate of $47.91.
If Steve were to stay on the payroll to use his 1300 hours of sick leave, he would be paid a total of $62,283 ($47.91 x 1300).
In addition, Steve would earn additional sick leave while using it and at the end of the time, he would also receive credit for this time in the retirement computation.
It would take 93 years of receiving $666.67 / year extra retirement benefit to equal $62,283!
Unfortunately, sick leave is only granted for:
Final thoughts:
“Hello Micah, I am so glad that I happened onto your website. I have read a lot of material and have watched a lot of podcasts. Because of your solid,
”I have gotten conflicting information about my lump sum annual leave. I plan on retiring on 12/31/21. I know that I will get my lump sum A/L payment a few
“How do I know when it’s worth it to withdraw (refund) my FERS contribution when I leave the Fed workforce? if I have less than 10 years but meet the
“First off, great content on your site! A plethora of information for Federal employees that is extremely invaluable for retirement planning. Regarding the FERS Supplement and VERA, does the supplement
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.
If you are a Financial Advisor looking to work with Federal Employees,
we are always looking for Advisors that want to deliver massive value to clients.
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.