Federal employees enjoy one of the most comprehensive retirement systems in the country. But, like anyone else, you still need to plan carefully to take best advantage of all those benefits. While many different factors work together to create your retirement plan, for most people the situation boils down to living expenses versus retirement income.
So, first, let’s discuss your living expenses in retirement. Some things will change, while others might remain about the same. When estimating a reasonable budget for living expenses, consider the following:
- Daily living – rent or mortgage payment, food, utilities, car payments, insurance, and so on.
- Inflation – the cost of all the above will increase over time.
- Wants – do you want to travel? Pursue a particular hobby? Buy yourself a particular retirement gift, like a boat?
- The Unexpected – what if you need long-term nursing care at some point? How will you handle home repairs? Do you have insurance for these things, or cash set aside in an easily accessible account?
Next, we need to decide if your retirement income, from Social Security, your annuity payments, and withdrawals from your TSP, will match your needs. This is the part that concerns most soon-to-be retirees.
If you feel doubtful that your retirement budget will be adequate to cover living expenses, you can take action now. The following choices can help you better prepare:
- Start contributing more to your TSP – remember, you can make additional catch-up contributions after age 50.
- Examine your budget and decide if you can lower expenses.
- Extend your working years a bit more, to claim a larger Social Security benefit later.
- Generate additional income in retirement, such as through part-time work.
You might also have additional options available to you. The point is that retirement planning can involve numerous decisions, that will be made throughout your career (and particularly during the last decade of that career). Meet with us now, so that we can discuss your plans and guide you through your options for a secure retirement.
