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Be prepared! Your Federal Pension check is usually delayed. Even if you have turned in all of your paperwork on time – in does not guarantee that you will immediately receive your Federal retirement check.
In my experience, most Federal Employees will not receive their first retirement check until 3 months after they retire. And that is if all goes well. I have seen it take much longer for the first pension check to arrive.
On top of the delay, it’s important to know that the first checks, interim payments, will not the be full amount of your federal pension. I tell my clients to expect their interim payments to be about 60% – 80% of their final pension amount.
You will not receive 100% of your monthly pension until OPM has reviewed your file and officially calculated your benefits. It may take approximately 3 *more* months for that to happen.
In most cases, when you finally do receive your first 100% check, you will also get a check with the difference between your interim payments and the full amount you should have been paid plus interest.
So you will eventually get all of your pension money – it takes time. But most federal employees are not prepared for the delay.
As another example, to put that in different terms – if you retire on January 1st, your 80% check will probably start arriving around April 1st. But your 100% check will probably not arrive until July 1st!
Remember, these are just estimates. It all depends on how backlogged OPM is.
Let’s put some numbers in an example. For easy numbers let’s say you were expecting a Gross FERS pension check of $2,000/month. Don’t make the mistake of counting on receiving all of the $2,000. Too many federal employees make the big mistake of planning their retirement based on “gross” numbers, when they really need to plan on the “net” – the actual amount they will receive.
So in our example your Gross FERS Pension is $2,000/month. But we’ll need to take 10% ($200) out for a survivor annuity. We’ll also need to take approximately $580 out for FEHB family plan (of course this varies by state and by plan). And finally we’ll take $200 out for taxes (your taxes vary based on your personal circumstances). That leaves us with at *net* FERS Pension of $1,020.
When you retire, you won’t be receiving $1,020/month for quite a while. Let’s say your interim payments are 80% of your expected amount, so they come to $816/month. If all goes well, your interim checks may start arriving around Month 3 of retirement. But remember – that is just a guess. Interim payments can take longer.
In this example, here’s what a timeline of your federal pension and interim payments might look like…
If you are eligible for the FERS Supplement, that is also subject to the delay and interim payment. Let’s look at another example where you were going to receive a gross FERS pension of $2,000 and a FERS Supplement of $1,000/month. For the FERS pension – we’re going to go with the same numbers of our previous example where we took out the cost of the FERS survivor annuity, FEHB premiums, and an estimate for taxes that leaves you with $1,020/month of *net* FERS pension.
In this example, we’ll say for easy numbers that your Gross FERS Supplement was going to be $1,000/month. And that after taking out approximately $100 for taxes that your *NET* FERS Supplement will be $900/month. So in this example you have $1,020/month of net federal pension and $900/month of net FERS Supplement, for a combined total of $1,920/month.
If your interim payments are 80% of your total (remember – they might be less!) – that would mean your interim payments would be $1,536/month. And you might begin receiving those interim payments around the 3rd month of your retirement. Ideally by month 6 of retirement your federal pension has been finalized and you will begin receiving $1,920/month along with back pay plus interest.
So again – eventually you will get all of the federal pension you are owed. But you must be prepared financially to get through this gap.
We seen the mistakes that people (and even some professionals!) can make, and we want to help you avoid them. Click the button below to learn more.
✗ Forgetting to check your beneficiary designations
✗ Expecting pension check to arrive in 30 days after retiring
✗ Not knowing the difference between SCD vs. RSCD
✗ Completing retirement paperwork incorrectly
✗ Failing to prepare financially for retirement
✗ Failing to understand tax consequences
✗ Getting bad advice
Click the button below and learn how to avoid these mistakes while planning YOUR retirement
Unfortunately there is no way to accurately predict when your interim payments will start – or how much they’ll actually be.
I have seen it take 8 months for a Federal Employee to receive their *first* retirement check! That means if they retired on January 1st – their first check didn’t arrive until September 1st!
What if your first check takes that long to arrive? Do you have enough money in savings?
During your career, I encourage you to have at least three to six months living expenses in cash reserves.
But when you are getting ready to retire – you want to have 2 years of living expenses in a savings account. Not in stocks, or bonds – in a plain old savings account or money market account.
This way, if you do not receive your Federal retirement check for several months, you will still have enough money to pay the bills.
Your ‘Cash Bucket’ is the most important of your three ‘Buckets of Money’ when it comes to your federal retirement. It’s what will help you get through the long wait for your first federal pension check and more.
But the Cash Bucket is also one aspect most federal employees overlook when getting ready for retirement. Learn more about your ‘Cash Bucket’ and how much money you should have in it before retirement.
If you’re getting ready for retirement – you want to be sure you’re not missing anything. Above all, be sure you understand all of your options *before* you separate for service.
“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,
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“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.