Make 2025 the year that you get proactive about becoming financially prepared for your FERS retirement. Here are a few resolutions to help get you started.
If You Don’t Have An Emergency Fund, Start One
Your Thrift Savings Plan (TSP) was never meant to cover rainy-day expenses. Similar to a 401(k), it was created to provide retirement income for a lifetime. If you use it to pay for emergencies, you not only deplete your balance but you’ll also lose earnings. When you have an emergency fund you can use it to cover a range of unexpected costs while your TSP balance can be left to grow.
“A high debt load in retirement may have you withdrawing more funds at a faster pace from your TSP.”
Start Paying Off High-Interest Consumer Debt
Carrying high-interest credit card debt into retirement can put a burden on your income once you’re no longer working. Make one of your New Year’s resolutions to stop using your high-interest credit cards and put together a plan to start paying them down. A high debt load in retirement may have you withdrawing more funds at a faster pace from your TSP. This could put you at risk of running out of money in the later years of your retirement.
Calculate Your Retirement Income & Expenses
If you don’t know how much retirement income you’ll need to cover your monthly expenses, you can’t fully understand how much you need to save. Knowing your net retirement income after deductions is crucial because, if you miscalculate, you may find yourself with a serious income gap once you’re no longer working.
Take Advantage Of Super TSP Catch-Up Contribution If You’re Age 60-63
One of the most significant changes under the SECURE Act 2.0 is good news for working feds who turn age 60, 61, 62, or 63 in 2025. Nicknamed TSP Super Catch-Ups, eligible TSP participants can make a catch-up contribution of up to $10,000 or up to 150% of the regular Catch-Up contribution for those 50 and older — whichever is greater. For federal workers between the ages of 50 and 59 years old, catch-up contributions will remain at $7,500 in 2025.
Start Working With An FRC® Trained Advisor
One of the biggest challenges for federal workers planning their retirement is finding an advisor who understands the ins and outs of their FERS benefits. Many end up navigating the rules and regulations on their own. One unintended mistake can negatively impact your financial security for the rest of your life. Connect with an FRC® trained advisor who has successfully completed a comprehensive course in federal retirement benefits and can provide a level of knowledge and expertise you can trust.
