Navigating Retirement with DRP: A Guide on Retirement Preparation
Federal employees planning to retire have a crucial task ahead: filing for retirement with the Office of Personnel Management (OPM). Here's a step-by-step guide to help you navigate the process.
The Retirement Application Process
The days of paper applications are gone. Since July 15, 2025, OPM has moved to an electronic system for retirement applications, known as the Online Retirement Application (ORA) system. To get started, you need to submit a Retirement Intake Form so OPM can create your ORA account. Once you receive an email with login instructions, you can sign in through Login.gov using two-step authentication to enter and submit your retirement details and upload required documents. The ORA system also allows you to track your application status and sends notifications for any required actions, such as completing forms or uploading missing paperwork.
Potential Delays and Common Causes
Delays in processing retirement applications are often due to paperwork errors or complexities. These may include missing or incorrect documents, unreported address changes, divorce decrees or court-ordered settlements, service in special categories (like law enforcement or firefighters), workers' compensation histories, part-time or intermittent service, and multiple agency employment histories. Agency and payroll processing can take 30–45 days, with OPM intake adding another 10–15 days; complex cases may take 90 days or longer.
Retirement Benefits: CSRS versus FERS
Federal employees under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) experience differences in retirement benefits. CSRS, the older system, offers a defined benefit pension based solely on years of service and salary history, with no Social Security coverage for most employees. FERS, which covers most federal employees hired after 1983, provides a three-tiered benefit: a smaller defined benefit pension, Social Security benefits, and the Thrift Savings Plan (TSP), a defined contribution plan similar to a 401(k).
For CSRS employees, the pension amounts to a percentage of the average of the three highest-earning years of employment. The FERS pension formula is 1% of your high-three average salary, multiplied by your years and months of service, and becomes 1.1% if you retire at age 62 or older with 20+ years of service. FERS employees are vested in their pension after five years.
Preparing for Retirement
It's important for retirees to save up a lump sum ahead of retirement to cover the first few months between the last paycheck and the first full annuity payment. Federal employees can save up annual leave time, which is paid out in one lump sum at the end of employment, to help cover these months. OPM refers to this as "interim" pay, and it's usually about 60-70% of the actual annuity.
More is held back than is actually required for projected taxes and benefits payments during the calculation period. There will be a blackout period of two to four weeks before TSP recognizes retirement, during which withdrawals cannot be made. The total amount underpaid will be paid back once the calculations are finished.
The Role of Federal Retirement Consultants
To ensure that the forms are filled out correctly and completely, federal employees may find it helpful to seek the assistance of Federal Retirement Consultants like FEBA's.
The Retirement Packet and Processing
Retirees' retirement packets are sent to OPM by their agency on the date of retirement. OPM begins processing the retirement packet after the date of retirement. Retirees can expect their first, estimated annuity payment within two to three months.
In conclusion, filing for federal retirement requires the use of the ORA system with electronic submission and Login.gov authentication. Delays commonly arise from paperwork errors or complicated service histories. Retirement benefits differ between CSRS and FERS mainly in the structure: CSRS has a traditional pension without Social Security, while FERS combines a pension, Social Security, and the TSP savings plan.
[1] Office of Personnel Management
[2] USA.gov
[4] Federal Times
- To manage personal-finance matters, such as understanding the differences in retirement benefits between the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS), federal employees might find it beneficial to seek advice from Federal Retirement Consultants like FEBA's.
- As retirees file for their retirement benefits through the Office of Personality Management (OPM) using the Online Retirement Application (ORA) system, delays may occur due to paperwork errors or complexities in their service history, such as missing documents, service in special categories, or multiple agency employment histories, and thus, it's advisable for employees to plan for interim personal-finance needs, such as saving up a lump sum ahead of retirement to cover the first few months between the last paycheck and the first full annuity payment.
