Explore recent OPM federal retirement backlog issues: processing delays, application surges impacting feds, and retirement application timelines for those retiring from federal agencies in 2026.
Federal Workers Face Delays with Increased OPM Backlog of Federal Retirement Applications
Recent delays in the OPM retirement process have created significant challenges for many federal employees. The growing backlog of cases pending at the Office of Personnel Management (OPM) has led to extended processing times, leaving federal retirees waiting longer than expected to receive their full annuity payments.
This article will review the application package process, ways to try and shorten your application process, and finally, how to financially prepare for a gap in income – potentially for 90 days or, in extreme cases, up to 8 months.
Learn about your FERS pension, the TSP, and Social Security at an online federal retirement seminar.
Understanding the OPM Federal Retirement Process
OPM oversees retirement services for the vast federal workforce. This includes processing retirement applications, calculating annuity payments, and providing ongoing support to federal retirees. When workers retire from federal agencies, OPM handles their retirement claim.
The Importance of Timely Processing with Agency HR Department and OPM
Timely processing of retirement applications is essential for ensuring financial stability for retiring federal employees. Processing delays can disrupt financial planning, leading to stress and uncertainty for retirees. When an eligible federal employee faces delays in receiving their full annuity payments, it can impact their ability to cover living expenses and manage their finances effectively. Coordinating with your HR manager and OPM can ensure your claim in staying on track for completion. If you find it difficult to contact OPM directly, reaching out to your agency is the next step.
Need to project your compensation as an annuitant under FERS? Try the Federal Pension calculator.
Common Delays for FERS Retirement Applications
Several factors contribute to delays in the processing of retirement applications. The current backlog at OPM has been exacerbated by a surge in retirement applications, leaving many applicants still waiting for their benefits to start processing. Paper retirement applications, in particular, tend to experience longer delays compared to those sent through the new online retirement application (ORA) system
The Current State of the Retirement Backlog
After both the deferred resignation program (DRP) and an increase of RIFs (Reduction-in-Force) last year, there has been a stark increase in claims received, overwhelming the existing administrative capacity, leading to longer processing times for all types of federal retirement claims. As more federal employees retire from federal agencies, the retirement system struggles to keep pace. As the current backlog continues to grow, it will only further strain resources.
Impact of Processing Delays on Federal Employees
Processing delays have a profound impact on federal employees planning their retirement. Many retirees depend on their annuity payments to cover essential expenses. The elongated timeline for federal retirement claims can cause significant financial stress, forcing retirees to defer major life decisions. This is where a fed-expert financial planner can really be valuable resource.
Comparing Application Methods: Online vs. Paper
Retiring from federal service now happens through two very different paths. For decades, employees submitted a paper retirement package that moved slowly through agency HR and OPM’s iron mountain, often leading to delays and backlogs. In the summer of 2025, OPM launched the Online Retirement Application (ORA), a fully digital system that lets employees complete, upload, and track their retirement forms electronically. ORA reduces errors, shortens processing times, and gives retirees more visibility into where their application stands, while paper submissions continue to face longer, manual processing.
Advantages of the New Online Application System
The new ORA online application system presents several advantages over traditional paper retirement applications. Key benefits include:
- Reduced processing time: digital retirement applications are processed much faster.
- Federal employees can submit their documents and track the progress of their retirement application online.
Using this system has assisted OPM with dealing with the current bloated backlog.
Challenges with Paper Applications
Paper retirement applications present numerous challenges that contribute to processing delays, but depending on your agency’s payroll provider, you might not have a choice but apply with the paper packet that OPM receives physically. Specifically, these challenges include:
- They are prone to errors, requiring manual data entry.
- They are more difficult to track compared to online retirement applications.
The administrative burden associated with paper submissions slows down the entire retirement process, increasing the average processing time significantly, delaying the final annuity.
How Errors Affect Processing Times
Errors in retirement applications can significantly affect processing times. Even minor mistakes can cause substantial delays as OPM staff must return the application to the applicant for correction. According to OPM retirement, a single error can add weeks to the overall processing time, exacerbating the retirement backlog. Ensuring accuracy and completeness when submitting a retirement application, whether online or on paper, is crucial for minimizing delays and receiving annuity payments promptly.
Financial Planning Post-Retirement
Whether you’re planning to retire immediately, or with a deferred or postponed retirement, errors can be costly. If there is a delay and you are expecting the FERS annuity immediately, you will need to plan for several months of reduced income during the process.
Addressing Income Gaps in Early Retirement Months
Retiring federal employees need careful financial planning to address potential income gaps during the initial months post retirement. Understanding when to expect interim payments and how to manage finances during the waiting period can prevent financial stress and maintain financial stability for federal retirees who are still waiting for their full pension payments.
Utilizing Unused Annual Leave Payout
Federal employees retiring from federal agencies often have accrued unused annual leave, which can be paid out as a lump sum. This payout can serve as a valuable source of funds to bridge any gaps caused by delays in the retirement process. Understanding how this payout is taxed and using these funds wisely can help new retirees transition smoothly into retirement without immediate financial strain.
Schedule a free consultation with a Financial Planner here.
Exploring TSP and Other Savings Options
Retirees can tap into their Thrift Savings Plan (TSP) and other savings accounts to supplement income while waiting for their annuity payments. Considering the tax implications and having withdrawal strategies for the TSP and other retirement accounts can provide a financial cushion while applications are still in process.
Learn more by attending the next Thrift Savings Plan Webinar.
Immediate Retirement Income for Feds Facing Pension Delays: Interim Pay & Short-Term Solutions
Interim payments are definitely a lifeline when experiencing extended delays in the processing of annuity claims. These payments can provide temporary financial relief while the full annuity claim is being processed and are typically 60 to 70% of the full pension. If more income is needed outside of the federal benefits package, here are some other options:
Evaluating Short-Term Loans and Borrowing Options
In some cases, retirees may need to consider short-term loans or other borrowing options to cover expenses while waiting for their annuity payments. Exploring options like personal loans or lines of credit can provide temporary financial assistance. Retirees should carefully evaluate the terms and interest rates associated with these borrowing options to avoid accumulating unnecessary debt. Exercise caution when considering loans and prioritize other resources first.
Managing Finances During Annuity Claims Processing Delay
Effective financial management is essential for retirees experiencing delays in the retirement process. Creating a detailed budget, prioritizing essential expenses, and exploring alternative sources of income can help retirees navigate this challenging period. Staying informed about the status of your retirement claim and communicating with OPM can also provide valuable insights and support.
About to Submit Your Application to OPM? Use the Federal Retirement Application Checklist
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). We also hold the AIF® designation. At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars using our FERS webinar registration page. Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC℠ today. You can schedule a one-on-one meeting by visiting our contact page.
