Choosing the right day to retire can be a science

Published Jan. 22, 2009
By Brandice J. Armstrong
Tinker Public Affairs

TINKER AIR FORCE BASE, Okla., -- Choosing to retire and determining the last official day of work from the federal service sector is a personal decision. Oftentimes, it can be difficult with several factors -- loyalty to the organization, an unstable economy and floating rumors -- to consider. But, the Office of Personnel Management has pre-selected "best" dates to use based on an employee's retirement type. Plus, Tinker offers a class and has experts to assist in the decision-making process.

The OPM suggests employees hired under the Civil Service Retirement System retire the last day of the month or within the first three days of a new month. The OPM advises personnel hired under the Federal Employees Retirement System to retire the last day of the month. In 2008, 600 employees retired from Tinker and the majority, officials said, left on suggested days.

"The majority of folks retire either at the end of the month or the first three days of a [new] month," said Jim Mannon, 72nd Force Support Squadron chief of Staff and Associates Employee Relations Element. "Probably 98 to 99 percent retire at the end of the month."

Approximately 20 percent of Tinker's federal employees are in the CSRS system. Applicable from 1920 to 1987, CSRS provided benefits such as retirement, disability and survivor for most civilian employees. FERS, the CSRS replacement, was introduced in 1987.

By retiring on a suggested day, Mr. Mannon said an employee can maximize their annuity, which goes into effect the day after retirement. Annuity is based on completed years and months of service. If an employee opts to retire in the middle of the month, that individual could lose potential compensation.

CSRS annuity amounts to up to 80 percent of the highest 36 months of salary, based on years and months of service. FERS also allows for the highest 36 months of salary, but an individual can only accumulate up to 1 percent per year. In addition to annuity, the government allows FERS employees two other components for retirement pay. If a FERS individual retires at an option point with the minimum amount of service and age requirements, that person is eligible for a social security supplement, which pays until the individual turns 62 and social security benefits start.

A FERS employee is also eligible for the Thrift Savings Plan. Comparable to a 401(k) account, TSP allows civil service employees the opportunity to put a portion of their earnings into up to five lettered funds to accrue money for retirement. CSRS employees can also contribute to TSP, but do not receiving matching contributions.

If a FERS employee opts to retire at the minimum retirement age - between 55 and 57 years old - and 10 years, but not at an option point, the employee forfeits the social security supplement.

"Pick what works best for [you]," Mr. Mannon said. "Do your homework and make informed decisions when you're ready to process because they are decisions you have to make, no one can make them for you."

Chaniece Harkey, 72nd Air Base Wing commander's secretary, retired Jan. 16. Eligible at the end of September, Ms. Harkey said she initially wanted to retire before the end of 2008, but when things got busy, she opted to stay until mid-January, and through the end of a pay period.

"I decided to retire in mid-January because it would be a date I could remember and the 31st is my sister's birthday, and I didn't want them to be on the same date," Ms. Harkey said. Ms. Harkey's civil service career spans 18-and-a-half years. "I think the best time to retire is when you are still healthy, know you have enough income coming in and are ready to start the next chapter of your life."

To help with the decision, Tinker also offers a retirement seminar for employees within five years of retirement and those new to Tinker. Sponsored by Tinker Federal Credit Union and held at Rose State College, the seminar is held twice a month and lecturers discuss retirement and plausible options. For employees within five years of retirement, the seminar lasts a full day. For the new employees, the seminar is a half day. Officials are working to expand the seminar to include all federal employees.

"It is really a lot of very good information that the people need," Mr. Mannon said. The next seminars are held Feb. 3 and Feb. 10 for tenured employees, and Feb. 19. for newcomers. For more information, call your organization's training monitors.