Survey after survey shows that the most consistent concern for working Americans is outliving their retirement savings. In fact, for those close to retirement, the fear of outliving their money is greater than their fear of death. Without a strategic financial plan, it may well be a realistic fear.
Let’s Look At The 4% Rule
The 4% rule is a general rule of thumb that estimates how much you can withdraw from your Thrift Savings Plan (TSP) and other retirement savings to prevent running short on money over a 30-year retirement. Let’s say you have $1 million in retirement assets. Withdrawing 4% in your first year would provide $40,000 of retirement income. However, thanks to inflation, you would have to withdraw more each year as the cost of living rises.
And then there are income taxes on your retirement income including your FERS pension, Social Security, the traditional TSP, and Required Minimum Distributions (RMDs). Add in the rising cost of living and healthcare inflation one has to wonder: will $1 million in savings over a 30-year retirement be enough?
“Don’t go it alone. Without professional help, you may make an error that lowers your retirement income forever.”
Pro-Actively Plan For The Financial Realities Of Retirement
According to a recent article published on the CNBC.com website, the vast majority of pre-retirees have not consulted a retirement advisor. And there’s a good chance an even higher percentage of FERS pre-retirees rely on do-it-yourself retirement planning because it’s difficult to find an advisor who is knowledgeable about FERS and related benefits. However, attempting to do it yourself is a risk when you consider the crucial components of a good retirement plan:
- Tax planning to help lower taxes on your FERS pension, Social Security income, and distributions from your traditional TSP.
- Purchasing life insurance products like a Fixed Indexed Annuity (FIA) that provide a guaranteed stream of income for life.
- Maximizing your Social Security income by filing for benefits at age 70.
- Buying Long-Term Care (LTC) insurance to cover the expensive out-of-pocket cost of non-medical care in a nursing facility.
Don’t go it alone. Without professional help, you may make an error that lowers your retirement income forever.
Consider Working With A Federal Retirement Consultant℠ (FRC)
Financial professionals who earn the Federal Retirement Consultant (FRC) designation and certification have completed comprehensive training in all of your federal benefits. Since the FRC℠ designation is professionally listed with FINRA, it signifies that graduates of the program adhere to the highest ethical standards. From insurance and financial consultants to attorneys and tax experts, the FRC® network of professionals is dedicated to helping federal workers nationwide.
