Kick off 2024 with New Year’s resolutions that can help you lay the foundation of a financially-secure retirement.
Resolution #1: Test Drive Your Retirement Budget
From your FERS annuity (pension) and Social Security benefits, to your Thrift Savings Plan (TSP), you can count on multiple sources of retirement income. However, when you consider your nest egg has to last forever, you can understand the importance of developing a retirement budget.
First, total up your monthly retirement income to see if it’s enough to cover the expenses you expect to have when you separate from service. If you find you’re coming up short, take a long hard look at the cost of non-essentials you can easily cut. Once you develop a detailed retirement budget, take it for a test drive while you’re still working to see if you’re on track. If not, you have time to start lowering expenses and making other financial adjustments before you retire.
Resolution #2: Pay Off High-Interest Consumer Debt
Carrying high-interest credit card debt into retirement can take a sizeable bite out of your income once you’re no longer working. Begin the New Year with a resolution to stop using your high-interest credit cards and start paying them down.
If you find yourself with unexpected cash — a gift, an inheritance, or even a healthy tax return — use some of your windfall to pay down your high-interest debts. You may want to consider taking out a low-interest home equity loan to pay off your highest-interest debt then set a schedule to pay off the loan before you retire.
“Remember– if you’re not contributing at least 5% of your wages to earn your agency match, you’re losing out on free money.”
Resolution #3: Maximize Your TSP Contributions
Think about it – your Thrift Savings Plan (TSP) is the only retirement income completely in your control. That’s why it’s important to start contributing as much as you can in the years leading up to your retirement.
Remember– if you’re not contributing at least 5% of your wages to earn your agency match, you’re losing out on free money. For 2024, the TSP contribution limit has been increased to $23,000 while the Catch-Up Contribution limit for workers age 50 and older is $7,500.
Resolution #4: Meet With anFRC® Trained Advisor
One of the biggest challenges for federal workers planning their retirement is finding an advisor who understands the ins and outs of their FERS benefits. FRC® trained advisors have successfully completed a comprehensive course in federal retirement benefits and can provide a level of knowledge and expertise you can trust. To find an FRC® advisor in your area, click here.
