As a federal employee, your retirement benefits are arguably the best in the nation. On the other hand, things can get complicated when making decisions that can potentially impact your financial security for the rest of your life. Since the OPM is prohibited from giving you retirement planning advice, you have two options: figure out your complex benefits on your own or work with a professional retirement advisor.
Keep in mind that you need to choose an advisor who fully understands the ins and outs of your benefits because mainstream retirement advice doesn’t usually apply when you work for Uncle Sam. Here are just a few of the complex decisions that a Federal Retirement Consultant (FRC)® can help you navigate when planning for your golden years.
Calculating your creditable service isn’t easy. Don’t assume that your creditable service starts with your Service Computation Date (SCD).
Choosing The Ideal Retirement Date
Unlike the private sector, there is no one-size-fits-all retirement age for federal workers. To retire under FERS with afull (unreduced) immediate annuity (pension) depends on your Minimum Retirement Age (MRA), based on the year you were born, and your total years of creditable service.
Calculating your creditable service isn’t easy. Don’t assume that your creditable service starts with your Service Computation Date (SCD). Your SCD is only used for calculating leave. If you make a calculation error when retiring, it can lower the amount of your annuity (pension).
Choosing Between The FERS Supplement Or The FERS 10% Bonus
There are only two ways to retire on an immediate, unreduced FERS annuity (pension):
- At age 60 with 20 years of service or,
- At your Minimum Retirement Age (MRA), based on your birth year, with 30 years of service.
Depending on which option you choose, you may be eligible for the FERS Special Retirement Supplement (SRS) or the FERS 10% Bonus. Of course, there are pros and cons with each of the two options and your decision needs to be weighed against your personal financial situation and other factors like your health and life expectancy.
Other Decisions That Can Impact Financial Security In Retirement
Your federal retirement requires making other highly-complicated decisions:
- Choosing to continue FEHB and FEDVIP in retirement.
- Timing when to file for Social Security to maximize your benefit.
- The ins and outs of choosing a FERS survivor benefit.
When you work with an FRC® trained advisor who understands your federal benefits, they can help you make informed decisions and begin laying the foundation for a financially-secure retirement.
