We often say that the three-tiered retirement plan offered to federal employees rivals, or even beats, those offered within the private sector. But that doesn’t mean you should just assume that your retirement will be simple and easy. We still must pay close attention to the decisions we make along the way, so that we are more likely to retire as planned.
So, retirement planning is an ongoing process, even for federal employees. Every few years you should take the time to re-evaluate your strategy, to make sure you’re still on track toward your goals. These steps can get you started.
Step One: Evaluate your budget. Is retirement savings a top priority? Are you contributing to your Thrift Savings Plan each pay period, before budgeting for other expenses?
And speaking of that budget, are you in the habit of living a lifestyle far beyond that which you can afford in retirement? For many retirees, being forced to significantly scale back their spending can feel like a disappointment. So keep your overall budget under control, both to save more for the future but also to ease the transition into retirement.
Step Two: Get out of debt. With your budget in check, start paying down credit cards and other forms of debt. If you can retire free of them, you will enjoy more room in your budget and enjoy your retirement much more.
Step Three: Bump up your savings rate. Yes, you will also have Social Security benefits as well as your pension payments, but your Thrift Savings Plan can make a big difference to your future lifestyle. Once you’ve paid off debts and have your budget under control, devote extra money to your TSP. You’ll thank yourself one day!
Retirement planning is a complicated process, and you will face many more decisions along the way. These three steps can help you evaluate your current actions versus future goals, but don’t neglect to seek professional guidance as well. Give us a call, and we can help you evaluate your budget, make decisions regarding your TSP contributions, and take other necessary steps toward a satisfactory retirement.
