As a FERS participant, you have excellent retirement benefits: two sources of lifetime income from your FERS annuity and Social Security, plus your Thrift Savings Plan (TSP). But this isn’t a reason to let retirement planning slide until the last minute. Waiting too long to ensure you’ll be financially secure in retirement puts you at a greater risk of outliving your savings.
A Majority Of Current Retirees Regret Not Saving More
A recent online survey published by the Transamerica Center for Retirement Studies® (TCRS), indicates that over 70% of retirees regret not maximizing their retirement savings. Since many federal workers hit their peak earning years at age 50, it’s a good time to start getting your ducks in a row. You can start making TSP Catch-Up Contributions at age 50 and it’s also a good time to build up an emergency savings account.
Consumer Debt Is A Major Threat To Your Retirement
More and more Americans are carrying high-interest consumer debt into retirement. In fact, the Federal Reserve Bank of New York reports that the total debt burden for people over 70 has gone up by 543% during the 20-year period between 1999 and 2019. With some credit card interest rates as high as 20% it’s crucial to start paying down your consumer debt in the years before you retire.
“If your estimated retirement income is less than your projected expenses, you’re in danger of dealing with an income gap.”
Roll Up Your Sleeves & Crunch The Numbers
You’ll never know if you’re saving enough for retirement until you figure out how much you’ll need. The first step is developing a rough estimate of your monthly expenses once you’re no longer working. Include all the monthly bills you’ll need to pay and add in the cost of recreation, travel and dining out.
Next, estimate your monthly retirement income including your FERS annuity (pension), Social Security benefits, and any other types of income you’ll receive in retirement. The OPM.gov and SSA.gov websites have free calculators you can use to estimate benefits.
If your estimated retirement income is less than your projected expenses, you’re in danger of dealing with an income gap. Though distributions from your TSP can help cover the difference, you need to make sure your TSP nest egg can last 20 to 30 years. If not, you need to start saving more, right now.
You Simply Can’t Afford To Put Off Planning For Retirement
When you procrastinate, you risk running out of money when you’re the most vulnerable: in your final years of retirement. Connect with an FRC® trained advisor who help you crunch the numbers and start planning a financially-secure retirement.
