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Are you prepared to go months in retirement without full pay?
Processing your annuity cannot begin until after your date of separation from your agency for retirement. Your agency will complete your retirement package and submit it to the payroll office, then issue your final paycheck and lump-sum payment for any unused annual leave. However, at that point, you will be placed in interim pay status, which could last for months.
Interim pay is a portion of your estimated annuity payment (approximately 60–80% of your finalized net payment for most people). (OPM estimates 3-5 months, but it could be much longer if a large number of employees are retiring simultaneously.)
- Your interim payment does not include any annuity supplement you may be eligible to receive.
- Interim payments do not include deductions for health benefits, life insurance, dental, vision, or long-term care.
- The only deduction taken from interim payments is for federal tax. State tax is not deducted from interim payments.
- You must manage your dental, vision, and long-term care insurance through BENEFEDS while in interim pay.
Health & Life Insurance
Any health or life insurance coverage you have elected to take into retirement will be active while your case is processed. The premiums for this coverage will be withheld from your adjustment payment once your case is complete.
Prepare Before Retirement
Many federal employees are shocked when they receive their first pension check, and it is much lower than estimated. Those counting on using the FERS Supplement for income are also greatly disappointed not to see this amount in their deposit. While you will ultimately be paid the difference, preparing to go months without receiving the full amount is essential. Try to build up your savings early in the process so you do not have to go into debt, as many people do. You can also access your TSP but be aware of the potential penalties and tax implications of doing so.
Services Online
You can manage many aspects of your annuity account online using Services Online. You will receive more details about logging into Services Online as soon as your case is eligible, which is typically during the Intake phase.
You can access Services Online to see updates on your case when you are assigned to a specialist and when your case is completed. You can also change your mailing and email addresses and direct deposit information.
Retirement Finalized
OPM issues an adjustment payment for the difference between your interim and finalized annuity amount. Any health and life insurance premiums since you retired will also be deducted.
Annuity Payment Date
The payment date for your annuity is always the first business day of the month, and the payment is for the prior month. For example, annuitants will receive their September retirement payment on October 1.