Federal employees who retire now get a partial paycheck first. The Office of Personnel Management (OPM) typically starts interim payments at 60 to 80 percent of the estimated net annuity and pays no interest on the wait, according to a Congressional Research Service report dated September 18. The backlog behind those payments has shrunk quickly, from 65,237 pending claims in February to 8,814 in September, but claims still took 66 days to process in September, and the full trip to a final annuity runs three to five months. For a new retiree, that means months of reduced income with nothing added for the delay.
How the interim payment works
The question for anyone retiring from federal service in the coming months is how large the gap will be and how long it will last. An interim payment is a floor, not a final number, so the shortfall equals 20 to 40 percent of the finished monthly annuity for as long as the claim sits at OPM. Federal income tax is withheld from the interim amount, and OPM says the tax taken from the first interim payment can run higher than from later ones, which pushes the first deposit lower still. Interim payments usually arrive on the first business day of each month.
OPM posts new processing numbers every month, and the three-to-five-month clock only starts once an agency sends in a complete retirement package.
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OPM’s own retirement guide describes interim pay as typically 60 to 80 percent of the estimated net annuity, and the Congressional Research Service Insight repeats that range for the roughly 2.83 million retirees and survivors who draw federal annuities, a group the report estimates received $114.8 billion in benefits in fiscal 2026. The Insight adds the detail that matters most for household budgets: the 60 to 80 percent figure is measured against the estimated net annuity and then trimmed again by federal income tax withholding.
The guide places the first interim payment during OPM intake, a stage listed at 10 to 15 days that begins only after the retiree’s agency and payroll provider finish their own 30 to 45 days of work. When OPM completes the calculation, it pays an adjustment covering the difference. The research service states that no interest is payable for any period of interim payments or for delayed payments of finalized annuities, so the withheld portion arrives late but never grows.
Where the backlog stands now
Through August of fiscal 2026, the number of claims waiting at OPM ranged from a high of 65,237 in February to a low of 15,427 in August, the research service reports. A year earlier the range was 13,844 in November to 26,328 in June. OPM’s stated steady-state goal is 13,000 pending claims. Its monthly retirement processing status report for September shows 8,814 claims in inventory, 5,903 of them digital, which is below that goal, a level the research service’s monthly figures never reached in fiscal 2025 or in fiscal 2026 through August.
Speed has lagged the backlog. Monthly average processing time ran from 60 days to 109 days in fiscal 2026, with the peak in July, and August averaged 79 days overall and 70 days for digital claims. September improved to 66 days overall and 56 days for digital claims. OPM finished 13,227 claims in September while receiving 8,080, which explains how the pile shrank by roughly 6,600 claims in one month and why average waits are now falling after a summer in which they rose.
Digital filing now drives the numbers. Since March 2026, more than half of the claims OPM receives each month have arrived electronically. The digital backlog peaked at 27,582 in February and was down to 11,707 in August. Paper claims still trail badly: OPM received 1,334 of them in September, and they averaged 149 days to process, against 56 days for digital ones. Digital processing averaged 34 days in February, then climbed to 98 days in July before falling back.
What slowed OPM down
The Government Accountability Office, cited in the research service report, found three root causes of delay: paper-based processing, too few staff and mistakes by the federal agencies that prepare retirement packages. GAO reports that OPM Retirement Services staffing fell 16 percent, or 165 full-time employees, between fiscal 2024 and fiscal 2026. OPM’s inspector general separately raised concerns in November 2025 about the loss of 100 retirement staff through workforce downsizing.
Agency errors add their own delay. An earlier GAO review found that about 10 percent of applications were missing information, such as a required form or signature, and each one has to be sent back. The research service also notes that the 43-day funding lapse from October 1 to November 12, 2025 may have furloughed human resources staff and slowed the transmission of applications to OPM, though it treats that as a possible factor rather than a confirmed cause.
OPM’s answer was to remove paper from the process. The agency introduced its Online Retirement Application on October 3, 2025, and on July 1, 2026 it marked what it called the Last Day of Paper, ending paper processing for more than 95 percent of applications. OPM Director Scott Kupor said at the time, “Today we’re closing the book on one of the federal government’s oldest paper processes.” OPM also committed to issuing the first pension payment within seven days for complete packages submitted by the separation date.
Tracking a pending claim at OPM
A retiree with a claim at OPM can see its status for free through Retirement Services Online, which shows when a case has been assigned to a specialist and when it is complete. OPM’s Retirement Information Office takes calls at 888-767-6738, and callers need their claim number ready. The three-to-five-month total in OPM’s guide splits into 30 to 45 days at the agency and payroll office, 10 to 15 days of OPM intake and 10 to 90 days of OPM processing, so the stage a claim is in explains most of the wait.
Kupor told the House Appropriations Committee in March 2026 that OPM was already seeing more than 50 percent reductions in adjudication times compared with mail-based retirements. The research service noted that public OPM data did not yet show improvement of that size. The full-year figures OPM has since posted give a partial answer: digital claims averaged 62 days in fiscal 2026 against 79 days for all claims, a difference of about 21 percent, while September alone put digital at 56 days and paper at 149.
The wait still costs money in one direction only. A retiree on an interim payment of 60 to 80 percent is short 20 to 40 percent of the final monthly amount for every month the claim is open, and the adjustment that arrives afterward carries no interest. At the 66-day September average that is about two months of reduced pay, while a claim on the 149-day paper track runs nearly five. OPM’s published averages are the only measure of how long the gap lasts, and its October update will show whether September’s pace holds.
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This article was produced with AI assistance and reviewed by The Money Overview’s editorial team.
