Federal employees tend to make the same retirement-planning mistakes in the years leading up to their separation from service.
1. Not Taking Advantage Of TSP Catch-Up Contributions
Surveys show the top regret among federal retirees is not contributing more to their Thrift Savings Plan (TSP) and taking advantage of Catch-Up Contributions at age 50.
2. Forgetting the FEHB 5-Year Rule
To continue your FEHB coverage in retirement, you need to retire on an immediate annuity and be continuously enrolled in a FEHB plan for the five years preceding your retirement.
3. Failing To Get Credit For Your Military Service
If you’re a current employee with prior military service, getting credit for your military service can enable you to retire sooner and increase your annuity benefit.
4. Mismanaging Your Unused Sick Leave
Unused sick leave is added to your years of creditable service and increases the amount of your annuity (pension). Even better – there’s no limit on how much sick leave you can accumulate over the course of your career.
5. Mismanaging Your Unused Annual Leave
It’s important to understand how annual leave is accrued and how much you can carry over each year. With strategic planning, you can accrue a good amount of unused annual leave to get a large lump sum payment when you retire.
“If you fail to check your OPF for accuracy and correct errors before you retire, it can delay processing of your retirement application.”
6. Not Checking Your Official Personnel Folder (OPF)
Your OPF includes your employment history, any military service credit, plus records related to benefits like your annuity (pension), FEHB, FEGLI and designated beneficiaries. If you fail to check your OPF for accuracy and correct errors before you retire, it can delay processing of your retirement application.
7. Confusing Your SCD With Your RSCD
Your Service Computation Date (SCD) is used for leave purposes only. Don’t confuse it with your Retirement Service Computation Date (RSCD) which is used to calculate your eligibility for retirement and the amount of your annuity (pension).
8. Failure To Update Beneficiary Designations
All federal benefit programs require beneficiaries – from FEHB and FEGLI, to TSP and FERS/CSRS annuities. Make sure all your beneficiary forms are updated before you retire.
9. Not Purchasing Long-Term Care (LTC) Insurance
Non-medical, custodial care in a facility can cost as much as $7,000 to $10,000 monthly depending on where you live. Without LTC insurance it becomes an out-of-pocket expense you may not be able to afford.
10. Not Working With A Retirement Planning Professional
As you know, your federal retirement benefits are complex and subject to various rules and requirements. An FRC® trained advisor can help you navigate the ins and outs and make informed decisions.
