Federal employees enjoy terrific retirement benefits, but you still face difficult decisions. One of the hardest decisions involves setting your target retirement date. Many different factors will influence this decision, and some of them are highly personal in nature. But for most people, examining the following factors can help to establish a retirement timeline.
Calculate your retirement budget. How much money will you need in order to cover your living expenses each month? Have you paid down your debts? What about your home; will you be selling it and moving to a new location, or keeping it (and the mortgage)? If you’re moving, have you investigated state taxes on your retirement benefits? All of these, and more, are important questions to ask yourself when you begin to calculate your retirement budget. Remember to leave some wiggle room in your budget for unexpected expenses.
Estimate your benefits. Your length of service, high-3 average salary, and proration of cost-of-living adjustments will all affect your retirement benefit amount. Sit down with us before you retire, so that we can carefully estimate your benefits and compare them to your expected budget.
What about Social Security? As you know, the timing of your Social Security claim will influence your benefit amount. You can claim your benefits as early as age 62, if you’re willing to accept reduced payments. Or, you can wait until full retirement age to claim your full scheduled benefits. Waiting beyond full retirement age can increase your benefits checks by about 8 percent for each year that you wait, up until age 70.
Ask yourself if you’re emotionally ready. If the financial side of things looks good, you still have to ask yourself one more important question: Am I really ready to stop working? At first, the idea of giving up your desk sounds like a fantastic idea. But over time, some retirees miss the routine of regular employment, socializing with their coworkers, and the sense of fulfillment they gained from public service. Make sure you have planned a full schedule for retirement, including hobbies, travel, volunteer work, or anything else that interests you.
There is no perfect time for everyone to retire. But if you need some input on the matter, feel free to give us a call. We can sit down and discuss your budget, expected retirement benefits, and hopes for your retirement years. Then we can help you put together a plan for a happy retirement.
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency
