How to Put Your Retirement on Hold During a Pandemic Sponsored by: Flavio, Joe Carreno

One of the biggest things to put on hold during the ongoing Coronavirus pandemic is your retirement. Just think of this situation as you are retiring during the furlough of last fiscal year that extended for 35 days. During that spare time, the government allowed only essential workers to work. The process of retirement slowed temporarily. People who were unfortunate in choosing the same retirement time during that furlough had to retire with uncertainty about the benefits of their retirement. Some retired employees waited longer than expected because their applications were still at the agencies. During the Coronavirus slowdown, most employees are working (some working from home), but there are still many questions that remain unanswered to those employees who were supposed to retire. In this article, we will answer their questions and try to make their life easier. 

Tammy received an email from a client who was planning to retire this year. 

She gave 40 years of service to the federal government and had already started the retirement process on March 28, 2020. She is under the CSRS retirement program. She is worried and confused if she should put her retirement on hold due to the Coronavirus pandemic. She has a few dollars saved for her TSP. She is pretty sure about her retirement, but due to the pandemic, she has questions like if her timing is right, if she can retire this month, or should she wait and put her retirement on hold. Her goal was to reach 40 years of service and take retirement. She did work for 40 years and completed her tenure this month. Should she be concerned, and what should she consider before retiring?

Tammy said that her primary source of income in retirement would be from her CSRS retirement benefit so that she would be least impacted by the ongoing stock market roller coaster ride. Hopefully, she would do well and would not withdraw money from her retirement savings. 

Tammy called the Office of Personnel Management’s call center and checked if their office is still open for business and processes all work-related documents within retirement services. But she believes that some retirement processing will take time because most OPM employees and other agencies are working from home. We know that the federal retirement process is still paper-based, so most of the paperwork is done at the underground facility in Pennsylvania. Though the operation is still open, employees are working, but the time to respond may change. 

The Thrift Saving Plan operations continue to operate normally during the pandemic. The TSP workers are still working and continuing to process retirement forms and requests. TSP representatives are answering calls and giving you access to operate your account online. The situation there is changing too, so their operation style may eventually change. 

The stock market is the worst one to be impacted by the ongoing pandemic, but we must mention that this is not the first time that federal employee investors have seen this type of hit. 

Lastly, Tammy said that if the client wants to continue with her retirement date, she might have to delay her retirement to April 3 instead of March 28. The reason is, shifting the date would give her client additional pay for an extra week of work, and her CSRS retirement benefits should start on April 4.

For employees working under CSRS and FERS retirement system benefits, the date of voluntary retirement annuities is the first day of the month after the employee leaves the service and is eligible for age and service requirements. But under CSRS benefits, the employee who serves in pay status for three days or fewer in the month of retirement, the benefits start on the same day after separation. This includes non-work days as well. 

If the client worked under FERS, Tammy would have suggested that March 31 be the best date to retire. In this case, she would get a salary for the last two days of March. Her retirement benefits would start from April 1, irrespective of her retirement date on the 28th or the 31st. In both cases, her last paycheck would have a salary for the days she worked in the previous pay period, even though her full-pay period was not over.

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