Postal Retirement Information

Postal Retirement Information

Information on this page is provided by Roseanne Jefferson. Roseanne is a retired USPS employee with an extensive background in USPS retirement, disability retirement, OWCP, EEO, Labor Relations and HR. She conducts individual and group counseling and is able to comprehensively discuss the pros and cons of employees who are on OWCP, disability retirement and regular retirement. Roseanne will be happy to answer your postal retirement questions. Contact Roseanne at roseanne.jefferson@yahoo.com.

Postal Retirement Q&A November 2010 Part 1

Good Day Postal Employees:

INFORMATION: Payment Date for VERA EARLY OUT 2ND PAYMENT of $5000.00 - October 29, 2010: Payment scheduled to be sent to YOUR LAST OFFICE OF EMPLOYMENT (Plant; Station; Assoc Office)

Annual Leave that is paid to you after you retire, needs to be thought about. Annual Leave is, what you carried over from the prior year; and your earned annual leave (less what you used during the year).

One of the things that you should think about when you retire is the actual date and month that you plan to retire. CSRS can retire any time, FERS can retire anytime, any day... This should cause you to read... Just because you can do something, doesn't mean it's the best financial decision for you. The reason for the confusion is that CSRS can retire on the first, second or third of any month and still be eligible for an annuity in that month. Not so with FERS. FERS cannot retire on first, second or third of any month and still be eligible for an annuity in that month, they will be eligible on the first of the next month. Let me share some examples.

FERS - retire on Jan 31st... Annuity begins Feb 1 CSRS - retire on Jan31st... Annuity begins Feb 1

FERS - retire on Feb 1... Annuity begins on Mar 1 CSRS - retire on Feb 3,... Annuity begins Feb 1

FERS - retire on July 12... Annuity begins on Aug 1 CSRS - retire on July 12... Annuity begins Aug 1

What you try to do is - retire timely enough, so that your money has a smooth nearly uninterrupted process. You need to be strategic in your planning, mailing. You should have your retirement paperwork in to HRSSC at least 90 days, which is what is recommended. I should say it like this, when your retirement package is received by HRSSC, and processed in, that day an email will be generated to your district office, and forwarded to your PM, Plant Mgr. POOM etc. The email informs them of your retirement.

The retirement Form 50 that was initiated by HRSSC, triggered the process of your last paycheck, and your annual leave either on the same check as your last work hours, or a separate check that is mailed to your work location. The reason for the timely retirement mailing is so that by the time you get your last paycheck and/or annual leave, about 2-3 weeks after that you will be receiving information from OPM regarding your retirement.

If you are thinking about retirement, and you have a high annual leave balance, I would recommend that you retire at the end of the year. The reason is that you want your annual leave paid to you in the next year, so that your taxes for the year you were working (your gross annual income). If you retired like I did in the middle of the year (July), my annual leave was paid to me in August. First it was taxed as if I made that every two weeks. I was taxed over 40% on just the check alone. So I got 60% of the value of the annual leave, looking at it from a financial perspective. But the real problem was that when I filed taxes, I had income from the Post Office; my annual leave, and my annuity for the second half of the year. Had I retired in December (would have, but my early out was by July 31, 2009), my annual leave would have been paid to me in the year 2010, and not 2009, and my tax liability would have been far less. So, retire at the end of the year. It's so much better for you.

ROSEANNE QUOTE: IT IS FAR MORE ADVANTAGEOUS TO USE YOUR LEAVE RATHER THAN TO GET IT IN A CHUNK. IT HAS MORE FINANCIAL VALUE WHEN IT'S USED, THAN PAID.....REALLY

NEXT TIME: OPM AND YOUR RETIREMENT **************Till we talk again, Roseanne

Postal Retirement Q&A November 2010 Part 2

Good Day Postal Employees

Q. I tried to see if I was correct for MRA. I am 55 years of age, my high three salary is $81,315, and I have 24 years in. So would my MRA be $19,515.60 (19,516). If this is correct, how would this figure be distributed to me, (weekly, bi-weekly, monthly)?

I will not be 56 until next year. Would it be better for me to wait until 56 years of age, which I do believe my Personal Statement says age 56 or MRA.

A. MRA means minimum retirement age. Based on your age, (born 1953-1964) your minimum retirement age is 56. Unless you were offered an early out for your specific craft, you cannot retire until you turn at least 56.

As far as your monthly annuity, of 81,315, it will be calculated at 1% of your high 3, (813.00 X 24 = %19, 512). However by retiring with MRA and 24 years, your annuity will be reduced by 5% for each year under 62. In your case that would be 6 years X 5%=30%. So your 19,512 would be reduced by 30%, (5854). That would mean 19,512.- 5854, leaves you with an annual annuity of $13,658 or $1,138 per month, and that would be with NO spousal annuity. With a full survivor benefits (another wording for spousal annuity), you would be at $ 12,293 per year or 1024 per month. The survivor annuity would be $6829 per year or $569 per month. This is why hardly anyone can afford to retire MRA and 10 because unless you are offered an early out, you are not eligible for the special retirement supplement, paid by OPM.

I use this question as a platform for those employees in the FERS retirement system. Many employees are puzzled as to why they have such a lower monthly annuity than their CSRS counterparts. The FERS is a 3 tiered program. The large amount of monthly annuity comes from the employee and employer contributions in TSP. The Agency (Postal Service) pays into CSRS pays a little over 7% bi-weekly of their gross salary, and the same is deducted from the CSRS employee's paycheck. Whereas, FERS the Postal Service pays 1% to the retirement fund, pays into social security (as does the employee) and 1% if the employee does nothing to match the employer funds. When similarly situated employees retire with FERS or CSRS, and they have the same years and age, the HUGE difference in their monthly annuity is found in the TSP area. The only way for a FERS employee to have a fulfilling retirement, is to ensure you MAKE the post office match the TSP contributing funds. Quite frankly, you are letting them off the hook by not putting the max in TSP and forcing them to contribute to your retirement. I guess they feel...if you don't care about your retirement to put in your full amount...why should they. This is the basis for the FERS system. CSRS was and is too expensive for employers to put that 7% in for each employee. If you have put the max in TSP, retire with 30 years at your required age, with the postal annuity, social security and TSP, you will have a NICE combined monthly retirement, maybe even better than CSRS.

I am sure the comment section will blow up about this. Many of you who have written in the comment section have a very narrow base of knowledge, have quoted outdated pub's, or have just generally been negative about the information. Of all the comments I have received, none of the negative comments have been from the people who asked questions, and I have answered a lot of emails assisting employees. FERS folks, take charge of your retirement, you the employee have the ability to grow a great retirement fund. Till the next time we talk...Roseanne