The longer you wait to figure out if you’re on track for a financially-secure retirement, the less time you’ll have to correct any shortfalls. That’s why it’s important to accurately estimate your retirement income – sooner rather than later.
Have You Calculated Your Living Expenses In Retirement?
Before you can figure out if you’re on the right track, you need to think about your retirement lifestyle. Do you want to sell your home, downsize and live modestly on the proceeds of the sale? Or, use the money to travel the world and experience adventures on your bucket list?
Then again, according to a recent AARP Home and Community Preferences Survey, 77% of adults age 50 and older want to remain in their homes when they retire. If this describes you, your living expenses in retirement may only be slightly different than they are now.
“If you find you’ve fallen behind, the first thing to do is increase your TSP contributions to 5% then look into making Catch-Up contributions.”
Have You Saved Enough In Your TSP By Age 50?
You’ll find a wide range of advice on how much you should have saved by age 50 — from three-times your salary to as much as seven-times your salary. Of course, this is intended for private sector workers and doesn’t translate well for federal employees retiring with a FERS annuity (pension).
However, if you haven’t been contributing at least 5% of your pay to your Thrift Savings Plan (TSP) to get your agency match, you’ve been losing out on free money. If you find you’ve fallen behind, the first thing to do is increase your TSP contributions to 5% then look into making Catch-Up contributions.
Start Making TSP Catch-Up Contributions At Age 50
If you’re 50 or older, or turning 50 during the calendar year, you can make TSP Catch-Up Contributions in addition to your regular contributions. The 2024 IRS annual limit for Catch-up contributions is $7,500. This is in addition to the regular TSP limit of $23,000 for a total contribution limit of $30,500 for 2024.
How Much Income Will Your Pension & Social Security Provide?
Without a good estimate of the benefits you’ll receive every month, you won’t be able to determine if your retirement income can provide financial security. For an estimate of your FERS annuity (pension), you can use the OPM’s online Federal Ballpark E$timate® . For Social Security, use the Quick Calculator at SSA.gov or create your online Social Security account to view estimates of your benefits at different retirement ages.
If you need help crunching the numbers, connect with an FRC® trained advisor who fully understands your benefits.
