In several ways, the retirement plan offered to federal employees is more comprehensive than the plans enjoyed by many workers in the private sector. You have the opportunity to enjoy income from three different sources in retirement, so you might be feeling more optimistic about retirement than the average person. Still, we all face risks, and the following four factors will impact us all to varying degrees.
Your lifespan. The average lifespan is increasing, which is great news. You’ll probably live longer than your ancestors did. But of course, the “downside” is that you need to plan for a much longer retirement. It’s common for people to live to 90 or even 100 years old these days! Your Social Security and pension benefits should last indefinitely, but what about withdrawals from your Thrift Savings Plan? Are you counting on that income to make ends meet?
Inflation. The rate of inflation is currently quite low, and we barely notice the change in prices from one year to the next. But even at low levels of inflation, you can expect prices on many goods and services to double over a 20-year period. Can your retirement budget accommodate that?
Healthcare. The cost of healthcare is actually rising at a much faster rate than the rate of general inflation. Plus, that longer lifespan exposes you to greater risk of developing serious health conditions. Since Medicare won’t cover everything you need, make sure your budget includes co-pays, premiums, deductibles, and so on.
Long-term care. Those serious health conditions might lead to a need for long-term nursing care at some point. In fact, about one in three people will need this type of care during their lifetimes. Research the cost of long-term care in your area, analyze your retirement budget, and consider whether you should enroll in the Federal Long Term Care Insurance Program.
We can help you include these factors in your overall retirement plan. Call us to schedule a consultation, and we can help you decide whether to make any changes.
