Welcome everybody to the FedImpact webinar today on “Your 10 Point Retirement Checklist.” Now, if there’s a topic that I know federal employees love to talk about, it’s the day when they no longer have to show up to work. There’s a lot that goes into preparing yourself to retire and the actual act of the retirement process. And so that’s really what we’re going to be talking about today.

You guys know me. I’m Chris Kowalik, the founder of ProFeds. I am always so excited to be able to do webinars like this because I think it gives you a glimpse into the no-nonsense approach that we take to unravel some of the complexity that the government has created.

Retiring from the government shouldn’t be this complicated and it shouldn’t take this many steps, but they didn’t ask me and they didn’t ask you. And so here we are with the process that is at hand and we have to figure out how to make sure to hit all of the salient points to make sure that you step into retirement with everything complete and you feel great about what you’ve done. And so that’s really the premise of today’s session.

Your 10 point retirement checklist, your must-do action items, timelines, and step-by-step instructions to be prepared.

Agenda

For our agenda today. We’re going to talk about those action items. A list of steps that every fed should be taking before they retire. We’ll put some timelines on these action items as well to make sure that you’re doing this at the right time, as you’re leading up to that retirement window. And then some step-by-step instruction. A walkthrough of how to complete each action. If there’s a form, if there’s a resource or a tool that you should be using, we’ll reference that here. And again, we’ll make sure that those links are in the show notes when you access the replay.

I always include this slide in our webinars because as much as I want to give full, robust, complete webinars, y’all don’t have the ability to stick around for six hours for me to tell you everything that I’d love for you to know. This webinar is tailored to specifically covering the action items that you are taking to step out the door into retirement. This is not implying that you’re financially ready to go (that’s a completely different conversation).

Making the decision to want to retire is super easy, but preparing to retire is way more complicated, and I think y’all can appreciate that given the different topics that we cover in webinars like this. It’s rarely just a simple thing to make a decision on a particular benefit. It typically requires you to dig further into your bigger financial life to see how these government benefits fit into what you already have and what you need, frankly. And so that’s not what today’s webinar is going to cover. We’re simply going to cover the steps that you need to take.

Now, of course the goal in all of this is to not only help you to retire, anyone can retire once. Our goal is to make sure that you retire only once. We don’t want you to retire and then realize, oh no, I got to come back. Now, in this particular webinar, we’re going to be talking about the administrative things that you’re doing as you approach that retirement window. So remember we’re not talking about whether you’re financially ready to go, I’ll give you a resource for that as well, but I want to make certain that administratively you’ve got all of your ducks in a row. When we think about the 10-point checklist, let’s go one by one.

#1: Update Your Beneficiary Designations

You guys know that I am a stickler on beneficiaries. There is no reason for the wrong person to get your money when you die. You want to make certain that the person that you want to get your money is actually getting your money, and the way to do that is to complete the beneficiary designation forms.

Here are your action items. You want to update all four forms:

Your SF-3102, which covers any lump sum benefits that may be payable from CSRS or FERS.

The SF-1152, which is unpaid compensation for folks who are still working (so if you’re already retired listening to this webinar, you don’t have to worry about this form), but the unpaid compensation would tell the government where you want your final paycheck and your annual leave payout in the event that you are to die while you’re still working.

The SF-2823 is your FEGLI life insurance. What the death benefit is out of that? Who is supposed to get that money?

Then the TSP-3. Technically the TSP-3 doesn’t exist because you can’t access it and complete it on your own. You actually have to log into tsp.gov to effectuate a beneficiary designation, so that happens on the back end of that system.

As far as the timeline to do these things, please do these right now. Don’t wait until you retire, because God forbid if something should happen to you between now and that point, you want to make sure that all of this money is going to the right person. Why guess when you could know? Just update the forms. They’re not difficult to complete, as long as you know who you want to give your money to, they’re pretty straightforward.

You can find all of the beneficiary designation forms at FedImpact.com/beneficiaries. We’re linking out directly to the OPM or the TSP for this particular action, but we’ve put them all in one place so they’re super easy for you to find. Again, I’m going to make sure that this link is in the replay notes so that you have that easily accessible to you. All right, update those beneficiary designations. Please don’t wait.

#2: Request Your Benefits Estimate from Your Agency

Now, I hope that their estimate is better than counting gumballs and estimating what things are going to look like. I hope that it’s pretty spot on for you. But here’s the deal. You want to get that printout from your agency of what they think your benefits are going to look like if you retire on a given date. You’re going to have to tell them, if I retire on this date, can you give me an estimate? But please don’t stop there. Don’t take that estimate as golden. I want you to scrutinize the daylights out of this document because this is your future.

We want to make sure that your agency is using the right information, they have the right amount of service, they haven’t left off things like your military service that you made a deposit for, or that temporary time that you made a deposit for. Or vice versa, them giving you credit for things you haven’t earned, yet. For instance, if you had military service and their calculations include that service but you know haven’t made a deposit for it, guess what? It’s going to be found out later by OPM, and then you very well may get the call that you need to come back to work if that caused you not to be eligible to retire.

It’s an estimate, they’re calling it an estimate to cover their backsides so that it’s not golden, but you need to scrutinize this data to the very best of your ability and make sure that what they’re using is right and you don’t see any red flags. Your action item is to request an estimate and a counseling from your agency. Now, they’re not going to be able to give advice. They can’t tell you what things to select when you retire, that’s not their role, but they can at least help get clarity on any missing pieces of service or service that was included that shouldn’t have been in your calculation.

The timeline for this, most agencies really ask you to wait until you’re six to 12 months out before you, quote, might retire. Just because you might be eligible doesn’t mean you plan to go, but for good reason they don’t necessarily want everyone continually asking for estimates if they’re outside of that window.

Check with your personnel office. You can either talk directly with them or sometimes those personnel offices actually provide an online system that you can go in and request your own estimate and even fiddle around with some of the dates. Again, all of you have different payroll processors, you have access to different systems. And so that might be, for instance GRB is one of those platforms. You can go in and request your own estimate right there online. You just need to check with your personnel office what is the system that they have made available to you to be able to do that?

#3: Ensure Your Service is Properly Documented & Credited

This goes right along with your benefits estimate because if you’re within that six to 12 month window and you notice that some of your service isn’t documented or being credited properly, this is your time to fix it and get to the bottom of that.

But here’s the deal. We want you to complete a Certified Summary of Federal Service to make sure that all of the service that you’ve ever had is listed and is credited to you for retirement purposes. A Certified Summary, which is the action item that you’re going to complete, is a way for you to prompt your agency to reiterate back to you what they have in your Official Personnel File as far as all of the service that you’ve ever had with the federal government.

Along with that certified summary or as part of that, it will document whether that service is creditable or not. For instance, let’s say that you had a year of temporary service when you first joined federal service. You were not contributing to the retirement system during that time. It will not count for you as you step into retirement unless you are able to make a deposit for that service and then that time will count.

In your Certified Summary, if you have not made a deposit for that period of service, it will say deposit owed right next to it or some version of that statement, so that would be a red flag for you that there’s some service that needs your attention. Now, the timeline for this, give yourself some time to be able to fix anything that you find in this process. Do this no later than one year from your planned retirement date.

But let me give you a little secret, it doesn’t hurt to do this earlier. If you’re 10 years away from retirement, but you know had some wonky service at the very beginning, go ahead and submit this document. It doesn’t have to be done along with retirement planning, but do that now so that if there’s a piece of service that needs your attention, you can get on it today instead of waiting for 10 more years to pass before you address it, which we know will accrue interest and all of that if you happen to owe money to the government. The sooner you know the better, and this document can certainly be submitted at any time, not just along with retirement counseling.

We have put this document, there’s a different version for CSRS and FERS. We’ve put this at FedImpact.com/certify. So on that page we give some instructions. We also are helping you to advocate for yourself because many times HR departments do not wish to do these certified summaries unless it is being accompanied by a retirement application. This is actually embedded inside the retirement application. But these two pages for the Certified Summary can be submitted all by themselves. In fact, it’s in the instructions of the certified summary that an employee can submit this as getting verification of their actual service at any time in their career.

If you try to submit this and your HR department box at that and says, no, no, you have to submit this with your retirement application, you can push back because right there in the instructions it tells you that you can do it. And it stands to reason. You don’t want to wait until the very end of your career to realize there was a huge chunk of service that needed your attention, and you’ll read that as “you owe something.” You want to know that now so that you can do something about it and perhaps spread out some payments over several years versus being surprised as you approach that retirement window, which may delay your ability to retire.

So the Certified Summary is, very, very important. It is an action item we encourage every fed who comes to our workshops to complete just for the warm and fuzzy that all of the service that is supposed to be in your record is in there.

#4: Confirm Your Eligibility for Keeping FEHB & FEGLI

Here we’re talking about your health insurance and your life insurance. You don’t want to be caught holding the bag when you go to retire, that in fact based on when you retired you’re no longer eligible for your health insurance or your life insurance.

The rules for this is you must have coverage under your health insurance and your life insurance for at least 5 years prior to retiring to be able to keep it. If you’ve been enrolled this whole time, no problem, right? You’re probably good to go. But if you hopped out of FEHB for whatever reason, maybe you went on your spouse’s plan for a little while and then you came back or you more recently enrolled in the FEGLI program, you want to make sure that you have this 5-year window in mind as you’re choosing when you plan to retire. You don’t want to cut it too close and risk losing those important benefits.

Your action item is to review your Official Personnel File for copies of your enrollment documents for both the health and the life insurance. Now, eventually when you complete your retirement application, your agency will certify the timeline that you’ve had these coverages on your retirement application itself.

But if you’re quite a bit of ways from retirement, you don’t want to wait until you actually submit for retirement to find out that you have now tripped this 5-year window and you’re no longer eligible to keep that coverage. You want to know way in advance so that you can adjust your retirement timeline to make certain that you met that 5-year requirement, assuming that you wish to keep these benefits in retirement. Do this years before your planned retirement date.

It’s not so much that we want you to go back and get the copies of the enrollment forms years in advance, it’s that we want you to be aware of this so that you don’t leave these programs within your last 5 years of service and then be surprised later when you’re not able to keep them. Again, go to your Official Personnel File. You should have access to your EOPF, your electronic Official Personnel File and be able to see those enrollment forms. That will give you the good, warm and fuzzy that in fact there have been no gaps in your coverage.

#5: Choose Your Retirement Date

Now, boy, is this a loaded question or what? Like I mentioned, it’s super easy to decide that you want to retire. It’s way harder to decide that you’re going to do the work to financially be ready to go. You want to choose the specific date that you plan to retire, and I need you to pay special attention to when you are eligible and when your pension will begin accruing.

Now, I want to be careful that we don’t go down a rabbit hole here because there’s so much that I want to tell you about picking a retirement date, but I’ll give you an idea of how this works. I had an employee contact us just a few days ago and he asked, should I retire October 31st, which is the last day of the month, or should I retire November 4th, which is the last day of that pay period?

Fair question. I think that most people would have this natural question. And so it would stand to reason that the pension itself is likely not going to substantially change stepping into November 4th, so end of the pay period. But what actually happens in this situation is that if this employee were to retire October 31st, the way the rules are written is the pension would be, going to accruing the first day of the following month, which is November 1st, and it would be paid December 1st. But if this person were to wait until November 4th to retire because we’re getting to the end of a pay period, the rule is written, the pension will begin accruing the first day of the following month, which is December 1st, and it will not be paid until January 1st.

By virtue of trying to time this to the end of the pay period, this person would’ve given up almost an entire pension check. And this is a high earner I was speaking with, and so we’re looking at $7,000 – $8,000 a month in the pension. And so that’s a lot of money to give up just to get it nice and clean at the end of a pay period. Think about that, last day of the month is typically what we recommend for that very reason, but we want to make sure of course that you’re eligible to retire, that your pension starts accruing right away, and we don’t have any gaps in there. I share that as an example because when we can put dollar amounts to decisions, as far as consequences I think it helps people to realize like, Oh now I understand what the rule is saying and how I’m going to be personally affected by that.

Action item, your retirement date is going to go onto your retirement application. For both CSRS and FERS, you’re going to go to section B, question number two. That’s where you’re going to put your retirement date. They say the date of separation, same thing. I’m asked this question a lot, can I change my mind after I submit my retirement application? The answer is yes, you can change your mind all the way up until the time that you actually leave service, but you want to be clear on what you’re doing and not submitting your retirement application willy-nilly, because it begins a domino effect of other actions that are happening that you don’t want to jerry-rig that date too much and mess that process up for you, for HR, for your supervisor, for your replacement. That complicates things.

And I also want to make sure that you’re just thinking through your process of being prepared to retire, not just the actual act of leaving service, but financially speaking that you’re ready to do that. The timeline for choosing your retirement date ideally is prior to you submitting your retirement application so you don’t have to go in and change that. We’ve put both of the retirement applications for CSRS and FERS at FedImpact.com/application to make that nice and easy. You don’t have to hunt and peck and hope that you find the most accurate version. And we also did a webinar on The Perfect Day to Retire, and you can find that at FedImpact.com/webinar-perfect. We just made a quick little link to be able to get right to that webinar.

That webinar talks about all of the different decisions that people are making with respect to what year do I go? What month do I go? What day of the month do I go? And all of the pros and cons of each of those. We did that I think back in 2021, but still very valid with all the decisions that you’re going to be making about when you retire. If you need to freshen up on that, please go watch that replay.

#6: Complete Your Retirement Application

If we just chose the date, now we have to complete the actual application to retire, and I want you to pay special attention to the decisions, the elections that you are making for various benefits. You’re going to make decisions about survivor benefits, which is how to protect a portion of your pension for a surviving spouse.

We’re going to be making an election on the life insurance, and you’re going to be indicating that you are eligible to continue your health insurance. And again, your agency’s going to certify that, but you are indicating that you are in fact eligible to do so. You’re going to submit your retirement application. Most agencies ask for about 6 months’ notice. Many of them won’t even accept a retirement application further out than that. Some do, some don’t. Ask your personnel office what their preference is, but you want to make sure that you’re giving them notice as well, because there’s a whole checklist of items that your HR needs to do on your behalf to prepare your retirement application. They’re going to hold onto it until you actually leave service. Because remember, you can change your mind. They don’t want to send it off to OPM too fast.

But we do want to make sure that your HR department has the chance to do all of the work. If you do what some employees do, which is if you have three consecutive bad days at work, you decide to drop retirement papers and walk out the door, can you still retire that way? Sure. Will your pay be messed up for a really long time? Absolutely. Because your agency didn’t have a chance to do their part and get everything right before they have to shuffle off the application to OPM. In order to do the actual application, you’ll go to FedImpact.com/application. Again, we link both to the CSRS or FERS versions right on the OPM site. And that way you always know that you have the most up-to-date version of these documents.

#7: Spend Your HCFSA Funds Before You Retire

If there’s any money left in your FSA, specifically your Health Care FSA, on the day that you retire, it’s going to be forfeited. Very, very important. At the beginning of the year you indicate the level that you wish to fund your Flexible Spending Account. And a fun feature of the Flexible Spending Account for Health Care is that all of it is available immediately, even if you haven’t funded it all yet, because you’re funding it on a per pay period basis. But the entire benefit amount is available right at the beginning of the year. If you retire in July, you can still use the whole dollar amount that was allotted to you, even though you haven’t funded all of it. It’s a weird way that that particular program works. But you have to make sure that you use all of it before you retire. Before you retire.

If there’s anything left in your Health Care Flexible Spending Account, when you retire it will all go away. Now, Dependent Care, Flexible Spending Accounts are a little bit different. This is where if you have young children who are going to daycare or perhaps an elderly parent that you’re caring for and providing financial assistance to, those are reimbursable through December 31st of that benefit year. And so we don’t have as big of a rush to hurry up and spend that money, that can continue to accrue through the end of that year. With respect to the Health Care Flexible Spending Account, you want to make sure to spend all of those monies on qualified medical expenses. As far as the timeline, do this before the day you retire.

You want to make sure all of that money is gone. You can see the details of the rules of the flexible spending account, as well as those qualified medical expenses. You can go to FedImpact.com/HCFSA and see a long list of all of the qualified medical expenses, as well as any of the special rules for particular expenses that you will find on that list. Now, keep in mind, these don’t have to be doctor’s visits or prescription drugs. These can be a wide variety of different medical expenses. If you can’t think of anything to spend your money on, you might be making a trip to Costco or Sam’s Club to buy a whole bunch of rubbing alcohol and band-aids and Neosporin, and anything you can possibly think of that is on that list that you can stock up on.

#8: Use Your Annual and Sick Leave Wisely

Now, this is another topic that opens up a can of worms because the weight in which annual leave and sick leave can be used is wildly different. You want to consider all of the factors that go into the use of your annual leave and your sick leave. I’ll tell you how to do that here in a second. One of the action items that you’re going to need to do, in order to use it wisely we have to know how much of it we have. You want to calculate the anticipated number of hours of each type of leave at the time that you retire and decide what to keep and what to use before you go.

If you’re on pay period 22 right now, and you are planning to retire at pay period 26, maybe we want a little bit more time than that, but we’re going to know how much leave you have right now in both buckets, the annual and the sick leave bucket, and we know how much you’re accruing on a per pay period basis. Count the number of additional pay periods that you have, which are full pay periods. That’s the only time you accrue leave, is a full pay period. So if you retire at the end of a pay period, great. If not, if you’re in the middle of a pay period, then don’t count the leave hours that you would accrue during that particular pay period. But you’re going to come up with this final number, assuming that nothing comes up that causes you to use it, and that will tell you how much annual leave you’re going to be able to be paid out in lump sum, and it will tell you the number of hours of sick leave that you’re able to apply in your pension calculation.

Now, again, we can get way down into the weeds on this, and that’s my natural tendency because I want to share with you all of these things. But instead of doing that here, please go back and watch the webinar that we just did on annual leave and sick leave and leveraging each one of them properly. You can go to that replay at FedImpact.com/webinar-leave. That will get you into the nitty-gritty of all the calculations. We give lots of examples and you can figure out for yourself what this is really going to look like. But using your annual leave and sick leave wisely is an important part. It’s not the most important part of deciding to retire and going through this process, but it is something that I know we get lots of questions about, so I wanted to make sure that it made it on this list so that you can be smart about what it is that you’re doing.

Now, as far as the timeline for this goes, when we have somebody contact us and say, hey, I’m going to retire in two years, what’s the best thing to do with my annual leave and sick leave? My quick answer is, beats me. I don’t know what things are going to look like for you in the next two years, so it’s really, really hard to tell. But once you get three to four months out from retirement, that’s the time that you’re able to really fine tune this, because you have a better sense of vacation that you’re taking, any holidays that are happening, any doctor’s visits that you need to have, if you’re going to do knee surgery before you retire, whatever it might be, you have a better sense of that when the timeframe is shorter.

And that’s when you’re able to look at the amount of lead that you have right now and what you’re going to accrue in those last three to four months of work and start to finagle all of those numbers to your benefit. Again, you can watch that replay of that webinar, again, we just did it last month. Go to FedImpact.com/webinar-leave, and you’ll be able to see that full replay.

#9: Retain Your Access to Important Documents

I’m surprised at how many times when I share this idea with feds that, hey, you have access to lots of things right now because you’re an employee, but when you retire, you no longer have access to those things. I’m surprised at the eyes that widen at me like, oh gosh, I didn’t think about that. Make sure to make copies of any of those important documents and ensure that you can still access them.

Things like your Official Personnel File, your beneficiary designations, that retirement application that you sent over to HR, your TSP account, you want to make sure that you are able to get all of that information once you’re retired. Some of these things you do not have the ability to retain access to electronically once you’ve left federal service. The only reason you have access to them right now is because of those systems that your HR department has made available to you like GRB or MyPay or any of those types of programs. You want to make certain that for things like your Official Personnel File, your beneficiary designations, your retirement application, and maybe even those TSP statements, that you print them, and I’m a big fan, kind of old school, print them in paper and put them in a safe place.

You can also save electronic copies of them, and that’s okay, too. But we want to make sure that if you were to die or are otherwise incapacitated, that your family has access to these documents. And if you have it on a thumb drive or on your computer and nobody knows the password, then they can’t get to those documents and it’s incredibly unhelpful to them. Perhaps consider going ahead and printing those documents as well to have in a nice, safe place. Action items. Keep the copies in a safe place. And here’s something that I need to say very, very clearly so that we don’t get you in a bind here. Please make sure to update your account settings to not include your government email or your government cell phone. If you have a two factor authentication set on your TSP account that kicks over a code to your government cell phone. That doesn’t do you any good if you no longer have that government cell phone. Make sure to get in and update all those account settings so that you’re using a personal email and your personal cell phone so that all that two-factor authentication can work.

Next up, timeline. You want to do this within about a month of your planned retirement date. Of course if any additional documents are added to your OPF or you update any more beneficiary designations, you can always grab an extra copy of those and bring in the updated version if that happens within that last month. But this way, you’ve got a nice complete record of your service history and all those important documents in a safe place. I wish I had a super simple place to tell you to go for this, but there’s all these different systems that you guys have access to. Just think about all of those pieces that you personally have access to right now and get in and update those.

#10: Get Your Retirement Scorecard

This is a quiz that we put together here at ProFeds, and it is a diagnostic assessment for your retirement readiness. It’s going to talk about 20 critical financial topics. Because here’s the deal, you can decide you’re going to retire without being ready to retire, and I want to make certain that you’ve thought about all these pieces and how it interacts with the federal retirement decisions that you are making with respect to protecting your pension and life insurance and health insurance, and all those pieces. This quiz is designed really to give you a framework of various action items within those 20 critical financial topics to make sure that you’ve thought about, that you’ve considered your full financial picture before retiring.

The timeline for this, boy, the earlier the better! The earlier you can know that you have some things that you need to work on, the better off you’re going to be, the less frantic you are going to be as you approach that retirement window. And frankly, I want you to be super confident stepping into retirement. And if going through this quiz, you’re like, wow, look at me. I’m all that. I have figured this out. My score’s great. I have maybe a couple of items, but other than that I’m good to go. Your confidence is going to be through the roof as you fill out that retirement application and you’re going to dance out the door. But if you’ve not thought about any of these things and your score is relatively low, there’s probably some action that needs to happen on your end to get the retirement that you want.

Guys remember it is not the government’s responsibility to give you a great retirement. That’s your responsibility. And we’re here to help you to be able to have some visibility on these items and know what you need to work on. But we want to make sure that you have the awareness to get the retirement that you want. And if you know that these items are out there that need your attention, it allows you to devote the time and care to getting this right. You can go to FedImpact.com/scorecard and be able to take that short quiz.  These are pretty big topics, and we ask a lot of questions within these questions, but read them carefully, slow down, this is not a fast process. We want you to really be honest with yourself in how you’re scoring, because the only one you’re fooling is yourself. Make sure to get this right. Take the time, read carefully and answer honestly. Hopefully this is a little bit of a fun process. At the end you’re going to get a copy of all of the questions. You’re going to be able to use that to highlight or star the types of things that you know need a little bit of work on and get to business.

Wrap-Up

I’d be crazy if I didn’t tell you that we really want you to come to one of these workshops that we have. This is a starting point to open your mind to some of these bigger decisions that you’re going to have. Again, today’s webinar was about the administrative things that happen as you approach that retirement window. But we want to make sure that you’re thinking about the bigger picture and making sure that you are prepared to address the retirement math problem that most people face as they step into retirement.

Not just federal employees, but most people have concerns about, am I going to have enough money and am I ever going to run out? And I think that’s a fair question that we should be asking ourselves. Attend one of these workshops. They are in-person sessions. They are full day. We have a lot to cover with you, and we want to give you our full attention for the day so that you can stay nice and focused. There is no cost to attend these sessions. These are sponsored sessions. These are brought to local communities to be able to raise awareness for federal employees no matter what agency you’re with. And so we’d love to have you attend. These sessions, cover all of the federal benefits topics and these decisions to be made within the federal benefit structure, but you also have some one-on-one help available to help you to know how does all of the federal stuff that I have fit into the rest of my financial life. You’ll have the ability to ask for that help if you want it, so you can see all of the details and the various locations that we have available at FedImpact.com/attend.

Thank you so much for joining us, again, to find a workshop, get some clarity on these benefits, and start to get some help, you can go to FedImpact.com/attend. You will see all of the cities and dates that we have workshops, hopefully in a city near you. Thank you all so much. We will see you next month.