For Star Trek fans, Mr. Spock’s Vulcan blessing, “Live long and prosper,” is a familiar greeting with the best of intentions. However, when it comes to retirement a long life may not be much of a blessing if you haven’t saved enough to cover your expenses well into your 80s or 90s.
Your TSP Is A Significant Source Of Retirement Income
A top regret of federal retirees is not saving more in their Thrift Savings Plan (TSP) to cover the ever-rising cost of living. Yet, a recent TSP survey found that only 41% percent of current federal workers say they have a good idea of how much they need to live comfortably in retirement. Unfortunately, those who have not made the effort to crunch the numbers are putting their golden years at risk.
Add to this, researchers say pre-retirees greatly underestimate their longevity increasing the possibility of running out of money when they need it the most: at the end of their retirement. The solution: roll up your sleeves and calculate your retirement expenses then make sure your TSP is enough to cover your needs well into your 80s.
“Since the cost of non-medical, custodial care is not covered by FEHB or Medicare, you’ll have to pay out of pocket.”
Plan For The Unexpected Expenses
It’s important for your retirement plan to anticipate unexpected expenses as much as possible. Costly home repairs like a new roof, health and dental care that your insurance doesn’t cover, a loved one in need of financial help – when you’re forced to tap into your TSP to cover unexpected expenses, you may end up draining your nest egg far sooner than expected. The solution: start building an emergency fund for retirement, ASAP.
Consider Working Longer
According to the Social Security Administration, one in four people turning age 65 today will live to 90. Since living longer costs more money, are you prepared if your retirement runs 10 years longer than you planned? The solution: working for Uncle Sam until age 62 qualifies you for the FERS 10% annuity bonus plus a higher Social Security check, and a larger TSP nest egg for your retirement.
Include Long-Term Care In Your Retirement Plan
According to LongTermCare.gov, someone turning 65 today has a near 70% chance of needing some type of non-medical, Long-Term Care (LTC) services as they grow older. Since the cost of non-medical, custodial care is not covered by FEHB or Medicare, you’ll have to pay out of pocket. The solution: Start thinking about purchasing LTC insurance around age 50 when premiums are considerably lower.
To learn more about planning for a long retirement, connect with an FRC® trained advisor.
