For multiple reasons, early retirement — if eligible; if offered; if … — is an option which must be considered by a Federal or Postal employee. In the coming months, Voluntary Early Retirement will be offered to Postal Employees; each year, Federal employees who become eligible for some form of early retirement must make hard financial decisions. In light of the present state of the economy (not good), an offer of early retirement (some not so bad) may have to be considered by the Federal or Postal employee. In each case of such an offer, the details of any such offer must be carefully reviewed and considered — especially if, concurrently, a Federal or Postal employee is considering filing for disability retirement. A Federal or Postal employee can only collect one or the other: you can either receive an early retirement annuity, or a disability retirement annuity, but not both. You can, however, consider filing for early retirement (in order to continue to have some income), then file for disability retirement within one year of being separated from Federal Service.
If you take this route of filing for early retirement, then filing for disability retirement, you must be careful. For instance, if a lump-sum payment is part of an early retirement package, will it have to be paid back if you file for, and are approved for, disability retirement? Further, remember that the years that you are on disability retirement counts toward your total number of years of Federal Service, when it is recalculated at age 62. This is an important point. The short-term benefit of retiring early may not seem like such a good idea 10 years later when inflation eats into the annuity. A cost-benefits analysis should look to all of the factors involved: the annuity amount and difference between disability retirement and early retirement today; the difference of the annuity when disability retirement is recalculated, and those years while on disability retirement count towards your regular retirement; and the dollar difference calculated out to the life expectancy. These are all considerations which must be looked at carefully — not just upon one’s short-term benefit of an early retirement (which may seem great), but more than that, for the long-term security of the Federal and Postal employee.
Robert R. McGill, Esquire