As a federal employee, you have awesome retirement benefits. That’s why it’s important to start working on your retirement to-do list – sooner rather than later.
Build A Cash Reserve To Cover The First 4 To 6 Weeks Of Retirement
Since OPM can take up to six months to finalize the amount of your monthly FERS annuity (pension), you’ll need a cash reserve to cover living expenses during the interim payment period. The interim payment period starts about four to six weeks after your last day of employment but you’ll only receive about 80% of your full annuity during that time.
Without a cash cushion, you may have to tap into your Thrift Savings Plan (TSP) to cover the temporary income gap. Even worse – if you withdraw from your traditional TSP balance, you’ll owe taxes on the distribution. With a cash reserve, you can protect your TSP from unnecessary withdrawals.
Don’t Wait For The Last Minute To Check The Accuracy Of Your OPF
One of the biggest mistakes you can make when applying for your federal retirement is waiting until the last minute to check the accuracy of your Official Personnel Folder (OPF). The OPM uses the information in your OPF to determine your eligibility to retire, the amount of your annuity (pension), and much more.
Failing to correct errors before you retire can end up delaying when you receive your first full annuity (pension) check. Give yourself plenty of time to correct any mistakes and notify your agency of missing information. For access to your OPF, contact your agency’s HR office.
“And there’s a good chance an even higher percentage of FERS participants rely on do-it-yourself retirement planning and co-worker advice which can lead to costly mistakes.”
Update Your Beneficiary Designations
If you can’t recall who you designated as the beneficiary for your Thrift Savings Plan (TSP), and other federal programs with a death benefit, it’s time for a beneficiary update. Especially after significant life events like divorce, remarriage, or when a spouse beneficiary predeceases you. Otherwise, death benefits may go to the wrong person like an ex-spouse or a distant relative.
Get A Professional Opinion On Your FERS Retirement Plan
According to a recent article published on the CNBC.com website, 63% of pre-retirees age 50 and older have not consulted a retirement advisor and likely won’t work with one any time soon. And there’s a good chance an even higher percentage of FERS participants rely on do-it-yourself retirement planning and co-worker advice that can lead to costly mistakes. When you meet with an FRC® trained advisor they can help you analyze the “big picture” of your FERS retirement benefits and lay a financially secure foundation for your golden years.
