Federal Employee Pre-Retirement Checklist: 5 Years to Day One

Federal retirement has more moving parts than any private-sector exit: FERS annuity timing, high-3 salary optimization, survivor annuity election, FEHB continuation, FERS supplement, TSP withdrawal strategy, sick-leave conversion, and a paper-heavy OPM application process. This checklist organizes the decisions chronologically so nothing slips through the cracks.

5+ Years Out: Foundational Decisions

These items require years to execute. Starting early gives you the most leverage.

• Verify your retirement system. Confirm whether you're FERS, CSRS Offset, or CSRS. Check your SF-50 (Notification of Personnel Action) — the retirement plan code should show FERS (code K, L, M, or N) or CSRS. If you have a break in service, confirm how it was bridged.
• Check your Official Personnel Folder (OPF) for service credit gaps. Any periods of non-deduction service (before 1984 for FERS, temporary appointments, or LWOP over 6 months) may require a deposit to count toward your annuity. The longer you wait, the more interest accrues on deposits. Request your OPF through your HR office.
• Decide whether to buy back military service. If you have active-duty military service and aren't receiving military retired pay, a FERS military buyback costs 3% of military base pay (plus 4.25% annual interest in 2026¹) and adds those years directly to your FERS service total. A 6-year military buyback at the median military pay typically pays back in under a year of additional annuity. See our military buyback guide for the break-even analysis.
• Confirm FEHB 5-year continuous enrollment. To carry FEHB into retirement, you must be continuously enrolled in FEHB for the 5 years immediately before your retirement date — or since your first opportunity to enroll if less than 5 years of service.² Check your enrollment history with HR now. If you opted out to go on a spouse's plan, a gap could permanently disqualify you from FEHB in retirement.
• Confirm FEGLI 5-year enrollment. The same 5-year rule applies to Federal Employees' Group Life Insurance. Basic coverage continuation in retirement and the Option B/C/A no-reduction elections all require 5 years of continuous coverage immediately before retirement. See our FEGLI guide for the full cost framework.
• Start maximizing TSP contributions. The 2026 elective deferral limit is $24,500. At ages 60–63, the SECURE 2.0 super catch-up allows an additional $11,250 on top of the base catch-up ($8,000 at ages 50–59).³ Every additional dollar in TSP compounds tax-deferred until withdrawal. See our TSP strategy guide for the Roth vs. traditional decision.
• Verify your Social Security earnings record. Log in to ssa.gov/myaccount/ and review your earnings history. Missing or incorrect years affect both your Social Security benefit estimate and your FERS supplement formula. Errors are easier to correct when the employer records still exist. See our Social Security guide for federal employees.

3–4 Years Out: The Optimization Window

Many of the highest-leverage decisions take effect 1–3 years before retirement. This is when the numbers start to matter concretely.

• Run a high-3 salary projection. Your FERS basic annuity is 1% × high-3 × years of creditable service (1.1% if retiring at age 62+ with 20+ years). The high-3 is OPM's weighted 360-day average of your three consecutive highest-paid years, counting only basic pay (base + locality — no overtime, awards, or bonuses).⁴ A promotion, step increase, or locality pay change that hits in your last 3 years can meaningfully shift the number. Model the scenarios: retire before a step increase vs. after; take a promotion or decline one. See our FERS high-3 guide for the math.
  Example. A GS-14 Step 7 in DC earning $168,000 who promotes to GS-15 Step 5 ($185,000) 18 months before retirement adds roughly $5,650/year to their lifetime annuity — worth $140,000+ in lifetime payments at a 25-year expectancy. Timing matters.
• Model your retirement income from all three legs. Use our FERS retirement calculator to estimate FERS basic annuity + FERS supplement + TSP at 4% SWR + eventual Social Security. Know what your total gross monthly income looks like at the date you're considering — then subtract FEHB premiums, income tax, and any survivor annuity cost to get net income. If it doesn't meet your living expenses, you have time to adjust.
• Understand the FERS supplement and the earnings test. The FERS supplement bridges the gap between your MRA and age 62. But it's subject to a Social Security earnings test: in 2026, earning more than $24,480 from post-retirement wages reduces the supplement by $1 for every $2 earned above the threshold.⁵ If you plan to work part-time in retirement, this affects which retirement date is optimal. See our FERS supplement guide.
• Decide on your survivor annuity election — early. The survivor annuity election must be made at retirement and is generally irrevocable (without spousal consent to reduce it). A 50% survivor annuity costs 10% of your gross annuity; a 25% survivor costs 5%. The alternative is to decline the survivor election and self-insure with life insurance — but FEGLI or private term must be sized and locked in before you're uninsurable. Use our survivor annuity vs. life insurance calculator to model both options.
• Review your FEHB plan for retirement suitability. Not all FEHB plans are equally good in retirement. Plans with strong nationwide networks (BCBS Service Benefit Plan, GEHA, Aetna) matter more after retirement when you may relocate. Also check whether the plan is coordinating correctly with Medicare Part A if you're approaching 65. See our FEHB + Medicare coordination guide.
• Inventory your sick leave balance. Sick leave converts to additional service credit at retirement. Every 174 hours = 1 month of additional service. Partial months beyond a full month are dropped — so retiring with 87 hours of sick leave credits you with 0 months, while 180 hours credits you with 1 month. At the GS-14 level, 1 extra month of service credit adds roughly $150/year to your annuity for life. See our sick leave and annual leave guide.

1–2 Years Out: Application Prep

Within two years of your target date, planning becomes execution. Begin assembling documents and finalizing the big decisions.

• Select your retirement date strategically. Six factors interact: (1) leave year end date (January 9, 2027 for leave year 2026⁶) — retire just before to capture your full annual-leave lump-sum including that year's accrual; (2) end-of-month rule — FERS annuity starts the first day of the month after your separation date, so a month-end retirement gives you a full first month of annuity; (3) high-3 finalization — wait until after a step increase or promotion takes effect; (4) sick leave timing — retire when sick leave aligns to a full month; (5) MRA+10 implications; (6) FEHB 5-year eligibility. These factors can't all be optimized simultaneously. See our when to retire guide for the full analysis.
• Maximize annual leave before retirement. Most employees can carry over a maximum of 240 hours to a new leave year.⁷ A full year's accrual (104 hours at 8+ years of service) can bring your total lump-sum at retirement to up to 448 hours if you retire in the final pay period before leave year rollover — at a GS-14 step 10 DC rate (~$90/hr in 2026), that's a $40,000+ lump-sum payment. Do not donate or use leave unnecessarily in your final year.
• Begin gathering required documents. The OPM retirement application (SF-3107 for FERS) requires: SF-3107 main form, SF-3107-2 (notarized spousal consent if applicable), birth certificate, marriage certificate (current + prior if applicable), DD-214 for military service, divorce decree/QDRO if applicable, and SF-1199A for direct deposit. Originals or certified copies — not photocopies. Missing documents are the #1 cause of OPM processing delays. See our OPM retirement application guide for the full checklist.
• Open or confirm a non-government bank account for direct deposit. Interim pay and final annuity payments go to the account on file with OPM — make sure it matches your SF-1199A. If you've only ever used a credit union linked to your agency, confirm OPM can reach it.
• Decide your TSP withdrawal strategy. Will you take monthly payments, partial withdrawals, roll to an IRA, or some combination? The rollover vs. stay-in-TSP decision involves G Fund access, expense ratios (TSP at ~0.035%⁸ vs. IRA funds), and IRMAA cliff management. See our TSP strategy guide — particularly the rollover and IRMAA sections.
• Check TSP beneficiary designations. TSP does not automatically follow your will. If your beneficiary designation on file is outdated (former spouse, deceased parent), that's who receives the balance at death — regardless of a current will or spouse. Log in to tsp.gov and update your beneficiary designation form (TSP-3).
• Consider a FERS disability retirement contingency plan. If health issues may affect your ability to complete your planned service, know your options. FERS disability retirement requires 18 months of service, a disabling medical condition, and an OPM finding that accommodation isn't feasible. See our FERS disability retirement guide for eligibility and the OWCP vs. FERS tradeoff.

6–12 Months Out: Benefits Locking and Application Filing

• File your retirement application with your agency 60–90 days before your retirement date. Your agency HR forwards the package to OPM after processing. As of 2026, OPM averages 71 days to process a paper application and 34 days for digital submissions via the Online Retirement Center.⁹ Late submission doesn't delay your retirement date but does delay your interim pay, which is typically 60–80% of your estimated annuity.
• Elect or confirm your FEGLI retirement option. At retirement, Basic coverage continues at 75% reduction (to 25% of pre-retirement face value by age 65), 50% reduction, or No Reduction — each option carries a different monthly premium deducted from your annuity. Options B and C require separate elections and have sharply increasing age-band premiums. These elections are irrevocable once chosen. See our FEGLI guide for the premium tables and break-even math.
• Decide on Medicare Part A enrollment (if you're approaching 65). Medicare Part A is premium-free if you have 40+ quarters of Social Security-covered work. You're automatically enrolled if already receiving Social Security benefits; otherwise, sign up 3 months before your 65th birthday at ssa.gov. No penalty for Part A — there's no reason to delay.
• Decide on Medicare Part B (if approaching 65 and still working). FEHB retirees can delay Part B indefinitely without the usual late enrollment penalty, because FEHB qualifies as employer-based coverage. However, once you lose FEHB (e.g., if you drop it), you have an 8-month Special Enrollment Period for Part B. For most FERS retirees, keeping FEHB and skipping Part B is defensible — but the math depends on your specific plan's cost-sharing, the $185.00/month 2026 Part B standard premium,¹⁰ and your IRMAA tier. See our FEHB + Medicare coordination guide.
• Notify Social Security if you're within 3 months of claiming benefits. If you plan to start Social Security at retirement or shortly after (e.g., at 62 or FRA), apply 3–4 months early at ssa.gov. If you're under 62 and eligible for the FERS supplement instead, do not apply for Social Security early — the two aren't additive, and the supplement stops when you reach 62 regardless of when Social Security starts. See our Social Security guide for federal employees.
• Review your federal retirement tax picture. Your FERS annuity is taxable as ordinary income (with a small exclusion ratio for your employee contributions via the Simplified Method). TSP traditional withdrawals are also fully taxable. Social Security may be up to 85% taxable depending on combined income. Plan for federal withholding from your annuity by submitting W-4P to OPM. See our federal retirement tax guide for the worked example and state exemption map.

60–90 Days Out: Final Confirmation

• Confirm your application is in OPM's queue. Your agency HR should provide you with a receipt or case number once they forward the package. If you haven't heard within 2 weeks of your agency's receipt, follow up.
• Verify SF-3107-2 is notarized correctly. The spousal consent form for survivor annuity reduction is one of the most common causes of OPM rejection. The notary must sign after witnessing your spouse's signature — not before. A rejected form delays processing.
• Take stock of TSP balance and timing. TSP withdrawals in your first year of retirement count as income — and may interact with IRMAA two years later. If you're within 2 years of age 65, coordinate large TSP distributions (including rollovers) with a tax advisor. See our TSP RMD calculator to project future mandatory distributions.
• Confirm your MRA if retiring under MRA+10. If you're taking an immediate but reduced annuity under MRA+10 rather than waiting for a full-service retirement, confirm your MRA matches OPM records — MRA is a function of your birth year, not your years of service. A one-year discrepancy changes your annuity reduction significantly. See our MRA+10 guide for the penalty calculation.
• Talk to an HR specialist about your last day. Your official separation date (not your last physical day) determines your annuity start date. Many employees use annual leave at the end of service — your "retirement date" may be earlier than your last day with pay. Confirm this distinction with HR so your OPM application reflects the correct date.

The Final Month: Last Preparations

• Submit SF-1199A for direct deposit confirmation. Confirm your banking information is current at both your payroll office and OPM. Interim pay and then final annuity payments will both route to this account.
• Liquidate your FSA balance (if enrolled). Flexible Spending Accounts end on your separation date — unused balances are generally forfeited. Use remaining FSA funds before your last day. FEHB continues, but FSA does not.
• Settle any TSP loan outstanding balance. An outstanding TSP loan at separation becomes a taxable distribution 90 days after separation if not repaid. This will count as income in the tax year the 1099-R is issued. If you have a loan balance, either repay it before separating or prepare for the tax impact.
• Print or export your TSP beneficiary designation (TSP-3). After separation, your tsp.gov login behavior changes — download your beneficiary record and any account statements you need before your last day.

Day One and the First 90 Days in Retirement

• Expect interim pay, not full annuity. OPM will pay interim annuity (typically 60–80% of your estimated monthly annuity) while processing your case. FEHB premiums are NOT deducted from interim pay — but you'll owe them retroactively when your full annuity begins. Budget accordingly.
• Wait for your Civil Service Annuity (CSA) number. OPM assigns a CSA number when your case is finalized. Keep it — you'll use it for future OPM correspondence, W-4P withholding changes, and FEHB premium coordination.
• Revisit your TSP allocation for the distribution phase. The allocation that made sense during accumulation (heavy C/S fund) may need rebalancing in retirement — especially if TSP is supplying monthly income. The G Fund's stability is more valuable as a decumulation buffer. Revisit with a fee-only advisor who can model the sequence-of-returns risk specific to your FERS annuity size and Social Security timeline.
• Start tracking FERS supplement earnings if you go back to work. If you take part-time or consulting work after retirement, keep records of earned income (wages, self-employment net income). Exceeding $24,480 in 2026⁵ triggers a supplement reduction applied the following July. Passive income (rent, dividends, interest) does not count.

Sources

1. OPM — Military Service Deposit (RI 20-97): 3% deposit rate; interest accrues at 4.25% for 2026 per OPM annual rate table.
2. OPM FAQ — FEHB 5-year continuous enrollment rule for retirement continuation.
3. IRS — 2026 TSP/401(k) elective deferral $24,500; catch-up (50–59) $8,000; super catch-up (60–63) $11,250 per SECURE 2.0 § 109.
4. OPM — FERS annuity computation: 1% × high-3 × years (1.1% at 62+ with 20+ years); high-3 = 360-day weighted average of highest basic pay years.
5. SSA — 2026 Annual Earnings Test exempt amount: $24,480 (applies to FERS supplement reduction).
6. OPM — Leave year 2026 ending date: January 9, 2027.
7. OPM — Lump-sum payment for annual leave at retirement: carryover cap 240 hours; maximum payout up to 448 hours for strategic retirement timing.
8. TSP — Expense ratios: C Fund total ~0.035% (2025 figures; 2026 not yet published); among lowest of any retirement plan option available in the US.
9. OPM — Retirement application processing: 71-day average (paper), 34-day average (digital via Online Retirement Center); interim pay at 60–80% of estimated annuity during processing.
10. CMS — 2026 Medicare Part B standard premium: $185.00/month (standard, non-IRMAA); IRMAA first tier begins at $106,000 MAGI (single filers).

Federal retirement benefit values (FERS supplement earnings test, TSP limits, Medicare premiums) verified against OPM, SSA, IRS, and CMS publications. Current as of May 2026.