With the average lifespan increasing, and costs on everything from gas to healthcare fluctuating, you might feel concerned about your future retirement income. As a federal employee, you enjoy a terrific, three-tiered retirement system. But that doesn’t make you immune to income quandaries in retirement. The following four methods can help you boost your retirement income, so that you can feel a bit more confident about the future.
Contribute the maximum. Your Thrift Savings Plan contributions not only help you save for retirement; they also offer a valuable tax deduction each spring. So make sure to contribute the maximum allowable amount each year before December 31. For 2016 the maximum allowable contribution is $18,000.
Make catch-up contributions. If you’re like most people, perhaps you didn’t prioritize retirement savings when you were younger. Back then, it was hard to picture yourself retiring one day, or maybe you had other financial priorities like saving for a home. The good news is that even if you’ve fallen behind on your retirement contributions, you can get caught up. Once you reach age 50, you can contribute an additional $6,000 to the TSP each year.
Pay off debts. It goes without saying that lowering your monthly bills will help you stretch your retirement dollars farther. There’s not a lot you can do about the electric bill, but paying down debts before you retire can shave hundreds (or more) off of your monthly expenses. Tackle high-interest credit card debt first. It’s worth a bit of personal sacrifice, if you can enter retirement free of excessive debts.
Postpone your retirement. We’re not saying you should put it off indefinitely, but consider waiting just another year or two. You can build your retirement savings a bit more, have extra time to pay down debts, and accumulate more annual leave which you can sell back to your employer for a nice little “retirement bonus”.
These are just some of the more common ways to stretch retirement income. For more strategies and tips suited specifically to your situation, call us to schedule an appointment. We specialize in helping federal employees identify the retirement income strategies that work best for them.
