Retirement Prep as a Federal Employee
Recent statistics have revealed an alarming trend about retirement savings in this country: on average, you’re going to want to have around $1.5 million in your savings in order to live comfortably. If you take a look at the average savings families have at this stage, many of them are falling short, even those with decent earning power.
Federal employees are in a unique position, especially long-term ones, in that they have a lot of different benefits they can take advantage of. This doesn’t guarantee a happy retirement though. Many experts recommend that you want to start prepping early in order to see all their benefits come together. Here’s how to make that happen.
What Can You Do?
One part of getting ready for retirement early is making sure that you that you make sure that all your work records are complete and accurate well before you decide to retire. Ken Zawodny, Office of Personnel Management associate director for retirement services, goes into greater detail.
“If I were to retire a year from now, I’m behind the power curve. I should have been looking at my records four, five, six years ago, ensuring that there’s no missing service in there, that my [human resources office] has all of the information that they need to have.”
A major reason for this is the fact that employees wait too long to think about what they want in retirement in terms of withdrawals, medical coverage, and other benefit issues. This leads to delays in the processing of retirement paperwork. The reason why this is so important is that the OPM only pays a portion of full benefits while examining the initial order, meaning that you could find yourself in financial hardship just because you didn’t take the proper time to learn your options.
Not everyone’s prep is going to be the same, either. Federal employees hired prior to 1984 may be grandfathered into something called the Civil Service Retirement System (CSRS), which provides retirement, disability and survivor benefits. Note that this means that you may not have Social Security benefits because taxes are not deducted from your paycheck.
Those hired after 1984 are covered by Federal Employees Retirement System (FERS). This combines social Security benefits, a basic benefit plan (pension), and a thrift savings plan. The exact degree of benefits you get from these will vary based on your age, length of service, and contributions.
All of these tips are good advice to ensure that you have a relaxed and calm retirement for you and your family. What you should realize, though, is that the best way to ensure this future is to not try and go it alone. At Secure Choice, we supplement the benefits that federal employees get in a variety of ways. Part of this is comes from our insurance plan options, but another important component is providing financial planning. With our help, you can take the benefits you have and put together a financial foundation that is perfect for your retirement.