One of the top reasons why people don’t plan for retirement is that they don’t really understand what it entails or how it works. Add to this, they tend to think they have plenty of time before they need to worry about retirement at all. In reality, the sooner you estimate what your expenses and net income will be after you retire, the more time you’ll have to catch up if you haven’t saved enough for a financially-secure retirement.
Retirement Planning: The Simple Definition
It’s simple — retirement planning involves determining what you’ll need to maintain your current lifestyle once you’re no longer working. As straightforward as it may sound, estimating your future income, living expenses, plus future taxes and rising inflation isn’t easy. Add to this, the realities of aging into your 80s also require a long-term care plan otherwise you may find yourself living every American’s biggest fear: outliving your money.
The Complexities Of A FERS Retirement
As a FERS participant, you have two sources of guaranteed income for life: your FERS annuity (pension) and your Social Security. However, since these benefits are essentially fixed except for occasional COLAs, maximizing your TSP nest egg during your working years is a crucial part of your retirement plan.
Add to this, under FERS you have a number of options for retirement. Should you retire at your Minimum Retirement Age (MRA)? Or, should you work longer to qualify for the FERS 10% Bonus? Should you make post-tax contributions to the Roth TSP? Or, should you keep all of your money in the tax-deferred, traditional TSP? These and other decisions that are unique to federal workers should not be left for the last minute.
“Unfortunately, FERS participants who rely on do-it-yourself retirement planning may end up making irreversible mistakes.”
The Downside Of Do-It-Yourself Retirement Planning
According to a recent article CNBC.com, the vast majority of pre-retirees have not consulted a retirement advisor and likely won’t work with one at all. Unfortunately, FERS participants who rely on do-it-yourself retirement planning may end up making irreversible mistakes.
Financial professionals who earn the FRC℠ designation have completed comprehensive training in federal retirement benefits. They can help ensure you have the latest information you need to make the crucial decisions unique to federal workers:
- Choosing a FERS survivor benefit for your spouse.
- Continuing FEHB in retirement.
- Timing when to take TSP distributions and file for Social Security.
- Plus decisions about FEGLI, LTC insurance and more.
Get the information you need to successfully plan your FERS retirement — contact an FRC℠ advisor in your area.
