The OPM Gap:
Funding the Months Between Your Last Paycheck and Your First Full Annuity

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Two Retirements, One System

Picture two people retiring from federal service in the same season. One gets her first deposit, leave payout and all, about a month after her last day. The other has a court order in his file, so his case runs far past the averages, and he takes a temporary job to cover the mortgage while he waits for his first full annuity payment. Same forms. Same agency in Washington. Neither did anything wrong.

In the federal retiree groups online, this is the single hottest question there is: how do you pay the bills between your last paycheck and OPM's first full check? People report months of silence, no specialist assigned, no email, no letter. Others sail through in weeks and feel almost guilty saying so.

The randomness is the hard part. You cannot control which pile your package lands in. What you can control is the math, and the math is knowable a year in advance.

How Interim Pay Actually Works

While your case sits in the queue, OPM pays you a placeholder. The agency describes it two ways: "approximately 60 to 80 percent of your finalized net payment for most people," and elsewhere "generally 80 percent of your estimated final annuity." About 75 percent of retirees enter interim pay within 30 days of OPM receiving the completed application. The rest typically start within 60 days. Interim pay itself was authorized in about 7 days in June 2026 once OPM had the complete package.

But OPM does not have your package on your retirement date. Your agency and its payroll office process you out first, and that stage runs 30 to 45 days. So the first interim deposit usually lands roughly 4 to 8 weeks after you walk out the door. Payments then usually arrive on the first business day of each month.

Here is the part that surprises people. Only federal income tax comes out of interim pay. No FEHB. No FEGLI. No dental, vision, or long-term care. No state tax. Your health and life coverage continues anyway, which sounds like a gift until you read the fine print.

One more thing interim pay leaves out: the FERS annuity supplement. OPM's Quick Guide says plainly that your interim payment does not take the supplement into account. It starts with your finalized annuity, and amounts owed since your annuity start date come through in the back-pay adjustment. If your plan leaned on the supplement to cover the early months, the early months are exactly when it will not be there. Also worth knowing: the supplement has an earnings test. In 2026 the exempt amount is $24,480, and the supplement is reduced $1 for every $2 you earn above it.

"The OPM gap is not a smaller pension. It is a cash flow problem with a start date, an end date, and a number you can put on paper. In the example below, that number is about $11,600."

The Worked Example

Everything below is a hypothetical illustration with round numbers, not a projection of anyone's benefits. Picture a FERS retiree who expects a finalized net annuity of $3,000 a month plus a $1,000 monthly FERS supplement, against $4,000 in essential monthly expenses.

Now run the timeline at the slow end of OPM's own 3 to 5 month window. Month one, nothing arrives at all, because the agency payroll stage runs 30 to 45 days: that is the full $4,000. Months two through five, interim pay covers $2,100 and the gap is $1,900 a month, or $7,600 across four months. Total bridge: roughly $11,600. And remember the catch-up bite waiting at the end. If health and life premiums in this illustration ran $500 a month, five months would mean $2,500 deducted from the adjustment check when the case finalizes.

Your numbers will differ. The point is that this is arithmetic. You can compute your own bridge number a year before you file.

The Three Bridge Sources, In Order

1 The annual leave lump sum

Your unused annual leave gets paid out by your former agency's payroll office, not OPM: hours times your hourly rate of pay, plus certain other pay you would have received on leave. Most US-based employees can carry a maximum of 30 days, which is 240 hours. In our illustration, 240 hours at $48 an hour is $11,520 before tax. Employers commonly withhold federal income tax at the IRS 22 percent supplemental wage rate, which would leave about $9,000 before any other withholding. That covers most of the $11,600 bridge, with one caveat: OPM's own fact sheet says the payout usually comes with the final paycheck window but "may take several months." Plan around the amount, not the date.

2 The cash buffer

OPM publishes the 60 to 80 percent figure and the 3 to 5 month timeline. It does not tell you what to do about them. The bridge number is the answer: it tells you how much cash needs to be sitting in a boring account on your last day so that a slow case is an annoyance instead of an emergency. Retirees who took temporary jobs to survive the gap were not bad planners. They just never saw this math before they filed.

3 The TSP, with the age rules attached

The TSP can backstop the bridge, and the rules are friendlier than most people think. Separate from service in or after the year you reach age 55, and the 10 percent early withdrawal penalty does not apply. For public safety employees, that drops to age 50, or 25 years of TSP service. After 59 and a half, the penalty never applies. Withdrawals generally process in 7 to 10 business days once properly submitted, but only after your agency reports your separation date to the TSP. Whether to touch the TSP at all is a planning question: what you would sell, what the tax cost is, and what it does to the rest of the plan. That one is worth working through with someone while you still have a paycheck.

Twelve Months Out: The Delay-Proofing Checklist

This is OPM's own guidance, condensed. Cases involving court orders, special computations like law enforcement or firefighter service, workers' compensation, part-time service, or multiple agencies take longest. The rest of the delays are self-inflicted and preventable.

1. Sign every form. OPM says missing signatures are one of the most common reasons for processing delays.
2. Finish service credit deposits before you retire. Post-1956 military deposits must be paid in full before your retirement date.
3. Gather the supplemental documents: marriage certificate, DD 214s, and any court orders. Illegible or incomplete court orders are a classic stall.
4. Download your eOPF records while you still have access.
5. Set up direct deposit and keep your address current. Address changes mid-case slow things down.
6. Compute your bridge number using the worked example above, and decide where each month of it comes from.
7. Meet your benefits officer and pick your date deliberately, per OPM's application tips, and resolve any debts before you file.

Questions Feds Actually Ask

How long does OPM take to process a retirement in 2026?

OPM says most retirees receive their first full annuity check within 3 to 5 months of retiring. In May 2026 the average claim took 87 days (digital 66, paper 105), with a claims inventory of 38,547, down from the February 2026 peak of 65,237. Immediate retirements processed in June 2026 averaged 108 days. Court orders, special computations, workers' compensation, and missing documents all add time.

How much is OPM interim pay?

Approximately 60 to 80 percent of your finalized net payment for most people, per OPM's Quick Guide; OPM elsewhere says generally 80 percent of your estimated final annuity. About 75 percent of retirees enter interim pay within 30 days of OPM receiving the completed application, the rest typically within 60 days, and the agency payroll stage before that runs 30 to 45 days. Only federal income tax is withheld.

Is the FERS annuity supplement included in interim pay?

No. Your interim payment does not take the supplement into account. It starts with the finalized annuity, and OPM issues any back pay owed at finalization. The 2026 earnings-test exempt amount is $24,480; the supplement is reduced $1 for every $2 earned above it.

Why is the first finalized check smaller than expected?

Because the catch-up happens there. During interim pay no FEHB, FEGLI, dental, vision, long-term care, or state tax was deducted, even though coverage continued. At finalization, OPM deducts every health and life insurance premium due since your annuity start date from the adjustment payment. Months of premiums leaving one check is why the finalization payment often lands smaller than retirees expect.

Should I use my TSP to bridge the OPM gap?

The rules first: no 10 percent early withdrawal penalty if you separate in or after the year you reach age 55 (age 50 or 25 years of TSP service for public safety employees), and never after 59 and a half. Withdrawals process in 7 to 10 business days once your agency has reported your separation. Whether it is the right bridge source depends on your tax bracket, what you would sell, and what else you have. That is a question to work through with a fiduciary who knows the federal system, ideally a year before you need the answer.