If your health has taken an unexpected turn and you’re facing a disabling medical condition, the last thing you should be worried about is how to make ends meet.
But that’s the reality for many federal employees struggling with a medical condition. If the fear of financial insecurity is hanging over your head, Federal Disability Retirement can offer a lifeline.
This benefit provides you with a steady stream of income, allowing you to focus on your health and wellbeing. You’ll also be able to continue growing years toward your pension and remain on your federal health and life insurance.
So, how much can you expect to receive from your Federal Disability Retirement payments? The answer depends on a few key factors, including your salary and years of service. Let’s break down what you need to know to get a clearer picture of your potential income.
How much will you get paid?
Interim and Backpay
Once you’re approved for Federal Disability Retirement, the OPM will begin finalizing your payments.
During this finalization stage, you’ll receive “interim” payments. These payments will be around 80% of what the OPM expects your finalized payments to be. These payments will typically begin around three months after approval and help keep you afloat if you can’t continue working.
You’ll also be eligible for backpay for any time that you were out of work before being approved. You’ll be paid at your Federal Disability Retirement rate from your last date of pay with your federal agency.
Once your case is finalized, the OPM will pay you any money you are owed. If they happened to overpay you during your interim period, you’ll have to repay them.
Monthly Payments
Once your case is finalized, you’ll begin receiving monthly payments based on your high 3 average.
Your high 3 average is the average of your highest 36 consecutive months of basic pay. Your HR will calculate this number, but you can also find it on your SF 50.
The first year on Federal Disability Retirement, you’ll receive 60% of your high 3 average. Every year after, you’ll receive 40% of your high 3.
You’ll also be eligible for COLAs after your first year of Federal Disability Retirement.
You can call our office to get a free benefit estimate and learn how much you might receive.
How will you get paid?
You will manage your payments through your Retirement Services Online account – which you’ll have to create one once you’re approved.
Most choose to have their payments directly deposited into their back account. The OPM is currently phasing out of offering physical checks as an option, so your only other option is to receive your monthly payments on a Direct Express debit card.
Regardless, it’s important to make sure your mailing address is up to date in your retirement services account in case the OPM mails any information.
When will you receive payments?
The OPM makes payments on the first day of the month. So, on the 1st of every month, you should see a deposit in your account.
If you don’t receive your scheduled payment, the OPM recommends calling your financial institute first to report your missing payment.
How long will payments last?
You’ll continue receiving Federal Disability Retirement payments until age 62.
Once you turn 62, your Federal Disability Retirement will recalculate into your regular retirement, and your payments will adjust.
We often refer to Federal Disability Retirement as a “bridge to 62” since it allows you to reach your full retirement age without continuing in your federal job. Don’t feel like you have to struggle through your job just to keep getting paid. Federal Disability Retirement can provide you with the peace of mind you deserve.
Our team is here to guide you through this process and secure the benefits (and payments) you need. Give our office a call to get a free benefit estimate today.
