Is There an Advantage to Phased Retirement for Retirees
Well, first and foremost you cannot be a retiree and participate in Phased Retirement. There are a number of rules in order to participate in Phased Retirement. First, the agency must grant the request for a worker to take part in the program. Only those individuals eligible for regular voluntary retirement can participate in the program having the requisite age and service requirements. The age and length of service requirements differ between CSRS and FERS.
Because of the way the defined benefits programs (pension plans) are designed for CSRS and FERS employees, the salary amount would differ between the two for a Phased Retirement calculation as it does under ordinary circumstances. Individuals contemplating participating in Phased Retirement must do their homework and be just as diligent as they would be if they were retiring under traditional protocol.
It is always wise counsel to put the numbers on paper so they become real as individuals calculate the pros and cons of participating in Phased Retirement or simply retiring with the knowledge that their annuity will look decidedly different than their biweekly paycheck. However, adding on additional time for FERS employees who have already reached their FERS retirement age will not have the same impact as it would with CSRS employees. The same kind of analysis is needed here that is apparent when persons eligible for Social Security benefits decide if it is good to take the benefit now or wait until later.
You are the best advisor – you the Federal employee – because you know more about your finances and your issues than anyone else. There are private affairs you perhaps do not feel comfortable sharing maybe not even with a financial advisor. However, workers and their spouses, partners or family members should have an evaluation session that involves what you have and or likely to have weighed against your expenses. Although some expenses will decrease in retirement, others will increase, particularly medical expenses and no matter how you slice the pie, your annuity will not be as much as your biweekly paycheck.
There are a lucky few who will have enough savings and investments to ride it out and enjoy a secure and safe retirement. For the rest of us it is merely a wish list.
P. S. Always Remember to Share What You Know.
Dianna Tafazoli
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