As a federal employee, you enjoy one of the best retirement benefit systems around. But there will still be aspects of planning that are just as confusing and difficult as they are for everyone else. One of the biggest decisions you will make involves timing… When exactly can you stop working, and ease into the next phase of your life?
Obviously, we can’t answer that question within a single blog. But we can help you ask the necessary questions, that will hopefully point you in the right direction.
What will your retirement budget look like? Estimate your living expenses, including your house payment or rent, outstanding debts, out-of-pocket healthcare expenses, federal and state taxes, and so on. If you’re planning to move to a new location in retirement, carefully research the cost of living there. And of course, leave some room in your budget in case of unexpected expenses.
Are you emotionally ready? For some people, retirement can actually prove to be underwhelming. You might miss your regular schedule, the sense of daily purpose, or even your coworkers. Have you thought about what your daily life will look like, and planned for travel, volunteer work, hobbies, or other activities?
What can you expect from Social Security? Your Social Security benefits are based upon your work history, as well as the age at which you claim them. Filing your claim early will mean a reduced benefit amount, whereas waiting a few years after full retirement age can help you increase your benefit. Estimating these benefits can get complicated.
What can you expect from your pension? Your pension is based upon a complicated formula, including your length of service, high-3 average salary, and proration of cost-of-living adjustments, among other factors. We can help you estimate your pension payments so that you know what to expect.
Have you formulated a TSP withdrawal plan? If you’ve accumulated assets within your TSP, you will now need to make a plan for withdrawals. This will be based upon many factors, such as how much money you need versus how long you want to make the funds last.
We can help with all of these questions, but especially those involving your pension, Social Security, and TSP. Give us a call, and we’ll help you do the math and decide upon a target retirement date that works for you.
