Getting retirement annuity information


Q. Why isn’t OPM publishing how much (percentage wise) of federal retirement annuities are to be withheld BEFORE an individual puts in for their retirement? I have found several other people who plan on retiring who had no idea how much may be withheld from their retirement annuities. It’s like everyone is keeping it a secret. We are all told to plan ahead of time for our retirements, but neither OPM nor personnel offices are telling people how much is going to be withheld from our annuities when we start asking for our retirement estimates.

Considering the tidal wave of upcoming baby boomer retirees, individuals need to know this information when they start planning their federal retirements and take that into consideration when estimating how much they are going to have to live on because it is not the estimated amounts they are getting from their personnel offices, which is based on years of services, high-three, etc.

How many people are not aware of this information? I know I feel like I am beating a dead horse, but I really feel potential retirees have a right to know this information upfront, not AFTER they have made the decision to retire or AFTER they get their first check.

A. OPM can’t do that because there are too many variables. Let me explain.

Just as was true when you were first hired, when you retire you’ll be asked to designate the amount you want to have deducted from your annuity for federal and (if applicable) state taxes. If you don’t say what you want done with federal taxes, OPM will sign you up for yourself and three dependents. OPM won’t do anything if you are required to pay state taxes as an annuitant and haven’t elected to have deductions taken out.

You’ll have to do a little research to decide how much money you want deducted from your annuity for taxes. There are two reasons for that.

First, your annuity will be less than what you were receiving before you retired, so you may end up in a lower tax bracket. Second, a portion of your annuity will be tax-free because it will represent a return of the money you contributed to the retirement system while working. You can find out more about that by going to and downloading a copy of publication 721.

Things that won’t be deducted from your annuity include Social Security taxes, Medicare taxes and union dues, if any. Things that will be deducted include FEHB premiums and, in most cases, FEGLI premiums.


About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

Leave A Reply