Like any good trip, your journey to retirement requires a lot of careful planning and thorough research to ensure you successfully reach your destination. As you take steps to prepare for this life change, there are several factors to consider.
Maximize Benefits By Retiring Without Penalty
You may have set a goal to retire by a certain age, but does this come with a penalty that could reduce your benefits? Avoid missing out on a percentage of your annual benefit by meeting one of the following requirements:
- Age 62 with 5 years of service
- Age 60 with 20 years of service
- MRA with 30 years of service
Have A Healthcare Plan In Place
Good news, federal retirees can continue their FEHB healthcare coverage. Better news, the government continues to pay the same premium amount (72-75%) in retirement as they did while you were working. Planning ahead is crucial as you need to have enrolled in FEHB at least 5 years prior to retirement to receive this benefit.
“It’s important to have funds in place to cover your monthly expenses in the event your benefits processing hits any snags.”
Is There A Specific Day or Month That’s Better For Retirement
December is a popular retirement month for employees who’ve accrued the maximum amount of annual leave allowed. Since annual leave equals cash, you’ll receive a check for the amount of unused leave that you carry over. Also, if you want to reduce the time between your last day of work and your first retirement check, your best bet is retiring at the end of the month.
Prepare For The Unexpected
In a perfect world, you’ll begin receiving your retirement benefits the month after your effective retirement date. But things don’t always go as expected. It’s important to have funds in place to cover your monthly expenses in the event your benefits processing hits any snags. If the delays drag out over several months, this safety net could be invaluable.
Reduce Debt To Increase Cash Flow
High interest rates on credit cards and loans can make a hefty impact on your wallet. Using any spare income to pay down balances and decrease the amount of interest you pay monthly will go a long way to freeing up your money. Remember, the lower your monthly bills are, the more money you’ll have to enjoy your retirement.
Make Sure Your TSP Is Aligned With Your Retirement Plan
With a variety of funds available in the TSP, does your retirement goal require an aggressive approach to investing, or does a low-risk route suit you better? When in doubt reach out. An FRC® trained advisor can help tailor an investment strategy that keeps you on track to retire with peace of mind.
