Delivered on: Friday, June 23, 2023

What to Expect When You’re Expecting (Your First Retirement Check)

Managing the financial transition from “federal employee” to “federal retiree” when you finally take the leap

• APPLICATION: The timeline for your retirement application to be processed – and how to speed it up
• INTERIM PAY: The percentage of your pension you should expect to receive shortly after leaving service – and what the government does with the rest of it
• BENEFITS: The changing of your benefits in retirement – and what happens to those benefits while you are in “interim pay” status
• ACCESS TO CASH: The importance of cash for the transition into retirement – and why accessing your TSP may be challenging during this time

Download Handouts: CLICK HERE

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Transcript of this webinar:

Welcome everybody to today’s FedImpact webinar on What to Expect When You’re Expecting Your First Retirement Check. We wanted to have a little bit of fun with this session because we actually get a fair number of questions from employees like, “What’s this going to look like when I finally retire? I’m worried about my cashflow.” And that is a very valid question that I love that people are asking about. And so, we wanted to just dive into some of the details of how this all works in that transition period.

Of course, for our audience today, we’ve got lots of you on here. We will be handling all of the questions through our Q&A area, so our support team is standing by to be able to answer the questions (so you’ll type those in and you’ll get a response back). Like I do on all of the sessions, all that I ask is that if you do have a question, please make sure it has something to do with today’s material because we just have so many of you on here that it becomes difficult to get to all of the relevant questions if we’ve got a lot of others coming in.

Now, the handouts for today are available for download right in the handout section of the webinar portal, and each of you will receive a copy of the replay in the email here in the next day or so, okay? Now, stay until the end. We have just a whole series of things we want to make sure that you’re aware of and eliminate as many surprises as you can in retirement.

You guys know me, I’m Chris Kowalik of ProFeds. Really delighted to be able to do these sessions that give us an opportunity to have a different perspective or a different level of training than we typically do in our retirement workshops. We go pretty deep on the benefits there, but we have so many to cover that we can’t get to some of the nuanced things that we’re able to do in the webinars. So we’re excited to be able to do that today.

“What to Expect When You’re Expecting Your First Retirement Check.” This is all about managing the financial transition from being an employee to a retiree when you finally take that leap. In today’s session, we’ve got quite a number of things to cover. The first is the application itself. We want to look at the timeline for the retirement application to be processed and how you can speed it up. Talking about interim pay, that is a percentage of your pension that you’re going to be receiving until OPM figures everything out. And what they do with the rest of the money? If you’re not going to get all of your pay, what does the government do with the rest of it?

Next up are the benefits that you have and how those benefits change in retirement. We want to make sure that you know what happens to those benefits while you’re in that interim pay status so that we avoid any freakouts. We definitely want to make sure that you are aware of what is happening during that time. And then last is access to cash. That’s really where this webinar started, which is, “How do I know how much I can expect to get and when am I going to get it?” So if access to cash to be able to pay bills is important, we want to make sure that you know exactly where that money can come from and where you should not rely on it to come from for quite some time.

Now, this webinar is not going to cover all of the different nuanced retirement types. We’re not going to be talking about disability retirements, we’re not going to be talking about deferred retirements. We are talking about regular, fully eligible retirements during this session. If I don’t do that, this just gets too disjointed and gets confusing and away from the actual topic that we’re trying to figure out. So those other types of retirements, for instance, have their own nuances, but a lot of what you’re going to see today carries over to any of the other types of retirements as well, okay?

Let’s start with your retirement application. This process is exciting and overwhelming at the same time. Let’s talk about the actual retirement application and the package that you’re going to be helping your agency to create.

For fully eligible retirements, which again is what we’re talking about on today’s webinar, we have different versions of the forms being used for our older retirement system, CSRS versus the newer one FERS. You just want to make sure that you’re using the correct form to start with. On top of that, part of those forms, those actual applications for retirement, they’re going to ask you to include some additional documentation that OPM is going to need to be able to process everything effectively. Things like if you served in the military, giving us your military discharge papers, that’s your DD214, and there’s some other documents that can be used in its place, but primarily it’s the DD214. Next are any court orders that award benefits to a former spouse. OPM wants to make sure that they honor what the court has put in place. And so they’re going to ask for a copy of that if there are any of those benefits awarded.

The W-4P, this is a tax withholding document specifically for pensions. You want to make sure that you’re not left holding the bag come tax time because not enough taxes have been taken out of your pension. And then next up is a very important one and one that is forgotten way too often, and that is the SF-2818, the FEGLI continuation of coverage. This is your life insurance. And you need to tell OPM what you want to have happen to that coverage so that they know what to do, okay? If you fail to submit this document, there are defaults that happen to your life insurance coverage, which makes the vast majority of it go away. And if that’s not your intention in retirement, you want to make sure that your intentions are identified right there on this document. We’re not going to go through each of these documents, but I want you to be aware of generally what is included in this application process.

Next up, let’s talk about timelines. Most agencies who we work with to help employees get their retirement squared away, they ask for about six months warning that you’re going to be retiring, okay? In part, they’re thinking about who your replacement’s going to be. That’s probably not the part you care about. The part you care about is that they need time to do their part to prepare your retirement package and to close out your employment record. That’s what’s going to allow your annual leave to be paid out and all of those good things, okay? So you have a role in all of this with the retirement application, the documents that you need to submit to HR, but they also have a role of additional things that need to happen kind of behind the scenes that you might not really see. We want to make certain that we’re giving your agency enough time to do their job so that everything is ready on time to go to OPM, okay?

You want to make sure that anything you’re giving to your agency is accurate and complete. I would also add in here, legible. I would highly, highly, highly encourage you not to handwrite your retirement application. It is the best way for errors to happen and for the wrong thing to happen in retirement, okay? There are fillable forms. We encourage you to use those so that everything is nice and clean. But if you fail to initial boxes, if you fail to provide a notary, if you have a former spouse who’s entitled to benefits but you fail to include the court order, those are all things that are going to cause your agency to have to go back and ask and ask and ask for you to provide that. And if they don’t get it in time, eventually they’re going to send your package off to OPM and then OPMs going to stall there because they don’t have the documentation that they need.

So as much as I know employees love to complain about HR departments and it’s so easy just to point to them and say it’s their fault, in reality, they have a process too, and you are best served by helping them to follow the process that they have laid out that hopefully is their best practices and is giving them the best opportunity to have everything right and ready to go to OPM, okay?

Now, as far as OPMs processing times, those can vary. We see a pretty wide spectrum of processing times with OPM. It has a lot to do with the type of retirement that you have and some of the complexities. Court orders always slow things down. If you have service that isn’t creditable to you, that needs to be figured out. Those are all things that just drag out the timeline. But you can’t control how fast OPM decides to pull your file out of the filing cabinet and start working on it. What you can control is making sure that you’ve eliminated any of the errors or the omissions, things you simply forgot to do in the retirement application or in the greater package. Again, if you had military service but you failed to include your DD214, to show your military service, that is going to delay OPMs processing time, okay? There’s plenty of things you don’t have control over, but plenty of things you do.

It is worth noting that even as long as OPMs processing time might be, and they’re working to make that shorter, which I’m grateful for, but no matter how long that process is, I need you to realize that your package does not go to OPM until after you leave federal service and after your agency is done with their part. So what this means is if you have three consecutive bad days at work and decide you’re done and you’re going to drop your retirement papers and walk out the door, your agency is way behind in the processing of doing their part of your retirement application. They haven’t had a chance to sit down with you, counsel you, give you an estimate, walk through that, make sure everything is correct. If you just walk out the door, you’ll eventually get a pension, but it’s going to be a giant mess and it will be a long time before you get it, okay? Do yourself a favor and allow your HR department to do their job and give them the time to be able to do it.

Now, OPM’s been in the news for quite a number of years about how long it takes them to process their retirement claims. We can hem and haw over it all we want, but the reality is there’s a lot of people retiring and it’s no surprise that it takes a long time. Do we wish it could be better? Of course we do. Do we have a lot of control over it? Of course we don’t, okay?

OPM has recently released what they call their retirement quick guide. It is a pretty helpful three page PDF that you can download. We’ve made it really easy to get to it. OPM has a really long ugly link, so we just made a nice, easy, quick link for you to be able to get to. If you go to fedimpact.com/opm-quick-guide, you will be able to get right to the OPM download to be able to have this nice and handy. Sometimes the frustration or the stress that comes with the retirement process is simply not knowing. “Well, what’s happening right now with my package? Why is it taking so long? Where is it getting stuck?” But if you have a better understanding of what the process is, it makes it easier to be patient and allow the process to work.

They also give some really great tips for the things that might delay your retirement processing so that you can avoid those as you’re submitting your retirement package, okay? I think it’s important aside from OPM to understand the role that your agency is playing. You kind of have two different parts. We have HR, like your personnel office, and then we have your payroll office. Those are typically two different places.

Here’s the deal. This little image was created by OPM and I had to break it up into two slides so I can make it large enough for you to see it. So here we’ve got you submitting your retirement application. Your HR department is going to make sure that you’ve got the right paperwork. They’re supposed to do a retirement counseling with you to make certain that you understand what’s going to be happening in the process, and they will be providing you a benefits estimate. Now, many of you are able to get benefits estimates through programs like GRB or Fed Navigator or a slew of other programs that your agency may have you have access to, but either way, either they need to personally provide it to you or simply give you access to be able to do that in one of their systems, okay?

They’re going to be then developing the retirement package and the separation form and review that package and all the final documents to go to the agency’s payroll. Payroll is going to receive the package. They have their set of criteria of analysis that they’re going through, making sure that they’ve crossed all the Ts and dotted all the Is. They’re going to prepare that individual retirement record. And that’s the point that they electronically submit what they call a summary file, and they’ll mail the hard copy over to OPM, okay?

Now, once OPM receives it, they’re going to calculate an interim payment. Based on what the agency told them was the likely pension that you were going to get based on all the details of your case, they’re going to authorize interim payments. Now, this is not a fast process. These arrows are really short on this page, but the timeline is relatively long, especially when you’re waiting for a paycheck, okay? We’ll talk a little bit more about that cashflow problem a bit later. But in the order here, they’re going to approve your interim payment so that you can start to get something. That’s the point that it moves into the longer period of time.

They have to, of course, make sure that everything’s been included in your retirement package. They’re going to be looking at the regular benefit payment that you should receive, not your interim payments, but the real payment that you should be receiving. And once they get all that done based on the elections that you’ve made in your retirement application for what you want to have happen to your benefits, that information is going to be put into a package, so to speak, where those benefits payments are reviewed and verified. And then at that point, you’ll receive a message that says, “Great news, we’ve now finalized your retirement. Here’s what your benefits are going to look like and here’s what your actual pension number is.”

That’s the basic process. I wanted to give you just a little bit behind the scenes of the roles that different offices are playing because it’s so easy to blame OPM, it’s so easy to blame HR, but it’s really a process that just takes time.

Next up, let’s talk about these interim payments. This is a pretty big deal and a source of confusion for a lot of people, and so we want to get some of those details ironed out. Interim payments. OPM is going to finalize your retirement claim eventually, but in the meantime, you’ll receive these interim payments. Most agencies have a set figure between 60 and 70% of the expected pension. I’ve seen some as low as 50%. I’ve never seen an 80%. Although OPM says that that’s a possibility, I’ve never seen that actually happen. So we like to say 60 to 70% is what you should be expecting to receive of your pension until OPM gets everything finalized and you have more of a normal retirement check.

But what happens to the other 30 to 40%? If they’re not paying you the full amount, what are they doing with the other money? Well, this money is what we call held in reserve. It’s not a withholding like a tax withholding that’s going off into La La Land. It is 30 to 40% of your expected pension check will be held in just a special account for you that is designed to pay for benefits that you have elected on your retirement application. Okay, we’ll talk more about what those are in a second. But that money is there so that OPM doesn’t pay you too much and then have to chase after you to get repaid. That’s what they used to do, and it was a nightmare.

OPM became the collections department for retirees instead of the department that’s supposed to be providing benefits and making payments, they were spending so much time in collections. And so in this interim payment process… Although it’s frustrating to not get all of your money, they’re actually withholding some of that so that they’re able to pay for benefits. By the time they figure out what benefits you’ve elected when they pull your file out of the filing cabinet and figure out what you’ve chosen to keep in retirement, that will come out of that 30 to 40%.

If there’s money left over, for instance, you didn’t utilize all of the 30 or 40% that they held in reserve, that money will be refunded to you in lump sum. If not enough money is withheld like you’ve elected benefits that are way more expensive than 30 to 40% of your pension, then you’re going to owe that remaining balance and OPM will work with you on how that needs to happen with respect to getting them paid back. We’re not going to go into great detail on that today, but I think it’s worth you seeing visually how this all is happening.

We pulled a slide from our workshop because I think that although there’s a lot going on on this page, it does help to get things clearer on what is really happening. Follow along with me. On the far left-hand side of this table, you’ll see a list of obligations. We have federal and state income tax, we have survivor benefits. That’s protecting a portion of your pension for a surviving spouse. And then we have the insurance programs, the federal employees group life insurance, health benefits, dental and vision, and long-term care, okay? Those are the obligations that you are going to potentially have in retirement based on what you’ve selected.

If we go to that second column, the only type of obligation that is paid from those initial interim payments are your federal income taxes, okay? Convenient I know, but it’s worth noting that there are three benefits listed on here that while you are receiving interim payments, you must pay for out of pocket. That is your state income tax, your dental and vision insurance, and any long-term care insurance that you have through the federal government, okay? Those are three really important benefits. We want to make sure that you know that you have an obligation to do that out of pocket until OPM finalizes your retirement.

Now, the next column talks about the obligations that are paid for from the amount that was held in reserve, that 30 to 40% that was withheld. Specifically, we have survivor benefits, the federal employees group life insurance, and the health benefits program. That 30 to 40% is intentionally withheld from your pension so that when OPM finally gets to processing your retirement claim, your real one, they’re able to look to say, “Was a survivor benefit elected? How much life insurance does this employee intend to keep in retirement? What did they elect? And then what is the continuing cost of health insurance?” Presumably, you’re keeping the same coverage stepping into retirement, although open seasons are available for retirees as well, okay? That 30 to 40% isn’t withheld as a penalty. It is simply withheld to have a pool of money for OPM to pull from to pay for benefits that you’ve elected, but that they don’t know about yet because your file is in a filing cabinet not being processed yet, okay?

Now on the far right-hand side, you will see that once your final retirement check is identified and OPM has all of that straight, they’re able to pay all of the obligations that you see on the left-hand side of the screen. All of those obligations can be paid right from your check. But this is a mess during the time that OPM is trying to get all of this right and to finalize your pension. And this isn’t a knock on OPM. I mean, we have plenty of frustrations there, right? But it makes sense that they’re helping to withhold money to not overpay and then have to collect money back. That will feel worse than you simply getting a little bit lower of a check only to find out that the benefits that you’ve selected may very well be right around that 30 to 40% mark. Yours might be higher or lower, and we’ll see an example here in a bit. But it’s important to know that it is withheld for a reason and eventually everything will get squared up once your retirement is finalized, okay?

I do want to point out the asterisk at the very bottom of the page. Survivor benefits, life insurance and health insurance, all that coverage remains in force during this interim period. Even though technically money has not been withheld or paid to the carriers, it is in the group policy that they have with these carriers. It’s all still in force. There is no question about whether you still have life insurance or you still have health insurance. Or if you were to pass during interim payments, would a survivor benefit be paid out to your spouse? All of that is encapsulated right there in the retirement application. Whatever you selected in there will happen regardless if you’re an interim status or not.

Next up, let’s talk about changes to benefits. Sometimes we want to make modifications to benefits. Sometimes we’re allowed to do that and sometimes we’re not. But I want to talk just briefly about how these things are going to work when you’re stepping into retirement.

First up, let’s talk about annual leave. This is a benefit that is paid out in cash by your agency, and therefore it happens pretty quickly. Normally, within about two to three weeks of you separating from service, you will receive your annual leave check. Some agencies are even sophisticated enough to get it into your final paycheck. Along with your last pay period of pay, they’re able to process it that way. Some just don’t do that and they pay it separately. But either way, you’re going to get that pretty quickly.

With respect to your health insurance, there is no change to coverage allowed as a condition of retirement. Retirement is not a qualifying life event, so you’re not allowed to change carriers at that time. But of course, the next open season, you could always go in and change the carrier or the type of coverage that you have. Dental and vision, the same thing. Open seasons every Fall, you’re able to do that. And then the Federal Long Term Care Insurance Program, there are no open seasons anymore, and in fact, the long-term care program is temporarily shut down for two years by OPM, but there’ll be no changes allowed to coverage at the time of retirement.

With respect to life insurance, this is a big one. Like I mentioned, you’re going to make your election of what you want to have happen to your life insurance on the SF-2818, that continuation of coverage document. This is where you get to identify all the pieces of FEGLI that you have, basic A, B, and C. Are you going to keep all of it? Are you going to keep some of it? Are you going to keep none of it? And I’m way oversimplifying this document. It’s not terribly difficult to fill out. You just have to know kind of what you’re looking at, but you’re telling OPM what coverage you want to carry into retirement.

Now, next up, we have the Special Retirement Supplement. The Special Retirement Supplement is a program that provides a bit of a bridge between the time a first employee retires from federal service up until the time they’re 62. I’m not going to go into great detail on how that is structured. We have other webinars for that. We’ll link to those in the show notes. But the Special Retirement Supplement can be somewhere between 1,000, $2,000 we typically see for the supplement each month. But you need to understand that while you are in that interim pay status by OPM, you will not receive payments of the Special Retirement Supplement.

Once your retirement is finalized, OPM will look back and say, “How many months did we miss?” And they’re going to pay you those retroactive payments. You will eventually get the money, but do not rely on that money from a cashflow standpoint until OPM finalizes everything. And even then, it takes a little bit of time to get that supplement money squared away, okay?

Last step is the TSP. Although this is not a benefit that is specifically triggered in retirement as far as on the retirement application, you do need to understand that part of the process that your agency is following and your payroll department is they send a code over to the TSP to let them know that you are now either retired or separated. And that changes what you’re able to do with your money in the TSP. We’ll talk a little bit more about that here in the next section, but a very, very important process to understand that we need your agency to do their part and not miss that so that everything can get to TSP and you have access to that money.

Let’s talk about that access to cash. Cash is a very important thing. And what I mean by that is not actual bills. I simply mean access to liquid money that you can utilize to pay the bills that you have and the other financial obligations that you’ve committed to in retirement, okay? That might be things like a mortgage, your electric bill, automobile insurance, whatever that might be.

With respect to access to cash, your agency will notify the TSP when you leave service. As far as the TSP is concerned, they do not care if you are separated or retired. The same options become available to you on the backside of TSP, meaning once you’ve retired or separated, you have the same access to your account regardless of which status you are under.

You are going to need to wait at least 30 days before you’re going to be permitted to request the TSP to process any access to funds. Any withdrawal requests either directly from the TSP to your checking account or your savings account, or if you plan to roll out that money into a private IRA for instance, you’re still going to need to wait 30 days for either of those actions to take place.

The TSP is not cash. The TSP is not easy to access early in your retirement. I would argue it’s even frustrating to access it later in retirement, but that’s for another webinar, okay? For this reason, we highly, highly recommend having six months of operating funds available outside of the TSP. When you retire, you want to be able to look to your checking or your savings account and say, “If OPM messes this up royally, I’m still good for six months.” Chances are you’re going to get your interim payments. You’ll eventually get access to your TSP. You’ll eventually have a finalized retirement check by OPM, but in the meantime, you do not want to turn to things like high interest credit card. Those debts are very difficult to dig yourself out of in retirement, okay?

We want to make sure that you don’t end up doing otherwise unsavory financial things that put you in a bad spot simply because you didn’t have access to cash. Six months in the bank of what it takes to operate your household. We hope that it doesn’t take those six months of funds. Eventually, all of it will be replenished because OPMs going to eventually pay you the money that they owe you. But in the meantime, we want retirement to be an amazing experience for you. And there are things that you could do like having cash in the bank to make certain that it’s a smooth transition into retirement and not a complete mess, okay?

Next up, let’s take a look at a case study. We’re going to talk about John Smith and his wife Mary. John’s about ready to retire from federal service. He’s going to retire at the end of this year. He’s a regular FERS employee. He has 30 years of service and he’s 60 years old. He’s fully eligible, ready to go. Could he have stayed a little longer and got a better pension? Sure. But that’s not what today’s webinar is about. It’s simply about understanding the math behind what is happening with the benefits and the pay that John’s going to be receiving, okay? When we look at his High-3, it’s 100,000, and his final pay is about almost $102,000.

The benefit expectations that he has in retirement, I want to walk through each of these benefits and look at what they are while he’s employed and then what the expectation is in retirement. As far as a FERS pension, we know he doesn’t receive a pension while he’s working. He’s getting his salary while he’s still employed, right? But when he retires based on the FERS’ retirement calculation, he’s going to expect about $2,500 a month gross. The survivor benefit, the most coverage that can be elected for Mary is to protect 50% of the pension while he’s employed. I’ll say this is not applicable. In fact, there is a survivor benefit, it’s just not one he’s paying for. We’re going to put NA here. But in retirement, the expectation is that he’s going to owe 10% of his pension to pay for the benefit for Mary. That’s going to be $250 per month.

For health insurance and the dental and vision programs, he’s under the Blue Cross Blue Shield Self Plus One plan. He’s looking $472 a month. And while he’s employed, that’s what he’s going to pay, the expectation in retirement is that’s what he’s going to pay. But of course, remember retirees are going to expect those same types of rate increases just like they do as an employee. Each year those premiums change. They’re the exact same premium for employees and retirees, but he’s not planning to change coverages or drop his wife from coverage or anything like that. We’re going to expect a pretty similar premium amount at that time.

Dental and vision, same concept. Looking at about $59 per month. He does have the federal long-term care program. Again, 250 a month that he’s got under that program, and he’s going to expect that that’s going to continue in retirement as well.

Now, life insurance, this gets a little trickier. We’re going to say that John has just the basic coverage, just to make our example here a little bit simpler. While he’s working, while he’s still employed, it’s about $36 a month. But he’s decided based on his family’s needs that he needs to keep all that coverage in full force. He heard it gets expensive, but he needs that. Maybe he’s got some health issues, maybe he can’t qualify for private life insurance, and he’s decided that he needs to keep all that basic coverage in force. If he does that, it’s going to run him $270 a month when he steps into retirement, okay?

Now the answer isn’t, “Wow, that’s expensive. Let’s drop the coverage” because he’s already identified he needs it based on what he’s trying to protect. And so, either he needs to go get it somewhere else in the private sector and be able to perhaps make a different decision for his basic coverage, or he’s going to need to pony up 270 bucks a month to keep that, okay? Now, the Special Retirement Supplement, of course, this is not a benefit that’s paid while someone’s employed, but based on his numbers, he’s going to expect about $1,800 a month in the Special Retirement Supplement. And this would go into his Social Security expected amount and all of that. So I’ve used some numbers that are very reasonable given his salary and what he would naturally expect in Social Security given that pay history. He’s going to expect $1,800 a month.

Well, guess what? He’s not going to get all of the pay that he is expecting in retirement just yet, okay? We have to be very, very careful about expectations and reality. I want to reflect back on the money that’s held in reserve to show you how the numbers are going to work out, at least for John and his situation. If the pension should be $2,500 a month, we’re going to expect or at least show here that the agency’s only going to pay out 60% of the pension, and so 40% is held in reserve. If the pension’s supposed to be $2,500 per month, OPM is going to hold a reserve $1,000, okay? That is 40% of $2,500. And that $1,000 is designed specifically to pay for these three benefits, survivor benefits, health insurance, and life insurance.

Now, for him, when we add these things up of what he’s supposed to pay as a retiree, it comes up to $992, okay? Now, it works out pretty perfectly for this gent. I’ll say it’s not so pretty for a lot of people. For instance, if he was receiving a larger percentage of his pension, that means that less is held in reserve, and so that $1,000 might only be 750. And so now we’re in a situation where now John owes money to OPM. And for the life insurance, if John had a lot more coverage under FEGLI instead of just the basic coverage, if he had specifically option B, which is the one where you can have multiples of your salary and want to keep that in full force in retirement, that is going to get very, very expensive. And so, that $270 a month might be several hundred dollars per month. And now the numbers don’t work out so pretty.

In this case, based on the general numbers that we have for John Smith, he would owe $992. So he’s going to get a credit of about eight bucks each month that he is in an interim status. But keep in mind the Special Retirement Supplement of that $1,800 that he was expecting, that hasn’t been paid in however long he’s been in an interim status. Maybe it’s two months, maybe it’s eight months. Who knows? So we have to be prepared from a cashflow standpoint to stomach that and make sure that we can keep functioning as a household and that we don’t end up making some other choices that are otherwise not cost-effective or financially prudent.

I wanted to specifically talk about this money held in reserve because it’s a point of confusion for a lot of people and they feel like they’re getting duped by the government. But in reality, the benefits that are being selected here I think are reasonable benefits, and it seems way better for OPM to hold some money in reserve so that that bucket of money can be used to pay for these things when they eventually figure them out at OPM versus you spending the money and then not having it to give back.

Here’s the deal. When someone steps into retirement and we have a cashflow problem, this is a big giant mess stepping into retirement. Your ability to manage this mess is largely dependent on your access to cash. If you have all of your money going into the TSP, you have no other non-qualified accounts like regular brokerage accounts or checking and savings money, you have no other access to money, you are going to be in a world of hurt come time to retire because you’re already taking a giant pay cut to stop getting your regular paycheck and start getting your retirement check.

But in the meantime, you’re not even going to get all of that. We have to manage the mess, and we do that by being prepared eyes wide open, stepping into retirement of the complexity that’s going to happen with the… It kind of feels like a shell game of things moving around. Eventually, it will all work out and you’ll get what you’re supposed to get, but that timeline may be longer for some of you, and we’d really love to help you not be putting yourself in a bad situation at the hands of OPM, but in something that you could have had a little bit more control over, okay? I hope today’s session has been helpful to be able to get kind of mentally prepared for what this process is going to look like.

Now, we have lots of you on here who have never ever been to one of our retirement workshops, and even some of you who have been to our workshops that could use a refresher. I would encourage you highly to attend one of these sessions. These are in-person sessions. There is no cost to attend. We cover all of the federal benefits topics, the pension, survivor benefits, Social Security, the supplement, all the insurance programs, and of course, the thrift savings plan in our one-day session, okay? Following that session, you will have some one-on-one help that’s available. I hope that you’ll take advantage of that. You can see all of the cities and the dates that we have available for workshops by going to fedimpact.com/attend. Again, fedimpact.com/attend. You’ll see every city and every date that we currently have open for registration.

Now, some admin things, handouts and replays. We do have, of course, the handouts right here in the portal. You can download those now. They’ll also be emailed to you. And the link to the replay will be available here in the next day or so when we get that email out.

Now, our next webinar will be Taxes in Retirement: Understanding the tax Implications of Retiring and What Steps to Take Today to be Ready When it Happens. There is a lot of misconception about what taxes are going to look like in retirement. Everyone believes they’re going to be in a lower tax bracket, but there’s a big catch that we’re going to be talking about on this webinar. So I hope that you will join us for Taxes in Retirement on July 28th at one o’clock Central. You can register for that session the exact same way that you registered for this one at fedimpact.com/webinar.

Wonderful. Well, thank you all very much for joining us. I hope that this has helped to put some structure around what you can expect when you’re stepping out into that retirement realm, and a few tips on what you can do to be better prepared. Again, to find a workshop in your local area, go to fedimpact.com/attend. To register for the next webinar on Taxes in Retirement, go to fedimpact.com/webinar. Thank you all so much. We’ll see you next month.