If you’re like many federal workers, you made a number of benefit decisions at the beginning of your career that may affect your retirement. However, as life changes your retirement plan usually needs to change as well. Considering you can you can retire at age 55 to 57 under FERS, it’s a good idea to review your benefits when you hit your half-century birthday.
By Age 50, You Should Have About 4X Your Salary In Your TSP
You may have read the recommendation that you should have at least six times your pre-retirement income saved by age 50. This benchmark likely applies to people who work in the private sector because they don’t have a pension like your FERS annuity. If, by age 50, you haven’t saved at least four times your salary in your TSP, don’t despair. You can start making Catch-Up Contributions in addition to your regular contributions. Also make sure you’re contributing at least 5% of your pay to get the maximum agency match.
“If you’re in good health, a private insurer may offer you more bang for your buck on a permanent life insurance policy that provides a cash value you can access.”
At Age 50, FEGLI Part B Starts To Become Cost Prohibitive
Around age 35, the cost of FEGLI Option B premiums begin to increase and continue to rise every five years. Once you turn 50, Option B premiums essentially double for every successive five-year age band. In fact, FEGLI Option B premiums become so cost prohibitive as you age, at some point the death benefit is less than all the premiums you’ve paid over the years. If you’re in good health, a private insurer may offer you more bang for your buck on a permanent life insurance policy that provides a cash value you can access.
Review Your Beneficiary Designations at Age 50
If you can’t remember who you designated as your TSP beneficiary, it’s definitely time for a check-up. While you’re at it, update beneficiaries on any retirement accounts you may have from previous jobs in the private sector. Also update your beneficiaries after a significant life event like divorce, remarriage, or when a spouse you’ve named as a beneficiary passes away before you.
Look Into Purchasing Long-Term Care (LTC) Insurance At Age 50
If you didn’t enroll in the Federal Long-Term Care Insurance Program (FLTCIP) before the OPM stopped accepting new applications, age 50 is a good time to consider getting LTC insurance from a private insurer. Since the cost of LTC insurance is based on your age and health, premiums will be higher if you wait too long to purchase a policy.
For a complete retirement check-up, connect with an FRC® trained advisor who understands your federal benefits.
