Are You Planning Retirement or Going Back to Work?
2020 is one year that will be talked about for a long time for many reasons. The coronavirus pandemic changed everything and affected just about everybody. Fortunately, cases are declining, and things are gradually going back to normal.
Before the pandemic, federal employees worked from offices or approved sites but rarely from home. Agencies were actually cutting back on work-from-home programs either to improve delivery or appease federal unions.
But all of that has changed now and maybe forever.
People who never thought they would have to work remotely and those in agencies cutting back remote work had to spend months working from home. Most liked it and actually experienced increased productivity.
But it’s not only work that was affected by the pandemic. December and January were considered the best months to retire as federal employees. Individuals who calculated their retirement properly could get a higher lump sum annual leave payment, lower taxes, and other breaks.
But according to long-time federal and financial coach Abraham Grungold, the federal employees’ retirement system has changed. He advised feds to consider the various variables and their objectives when filing for retirement.
Asking yourself these ten questions would help you tweak your retirement preparation and ensure a seamless transition from work to retirement.
- What will be your monthly annuity? Get an estimate of the amount you’ll earn monthly from annuities. Decide on a joint annuity option if married and obtain the estimation for your accrued sick leave to know whether it will increase your annuity.
- How much can you withdraw from your Thrift Savings Account in retirement? Determine how much you can withdraw monthly and the percentage of your balance to be paid every month.
- When should you file for Social Security? Social Security eligibility starts at age 62, but filing your claims at that age can reduce the amount of benefits you get. Determine if you can delay filing for Social Security until you are 67 or 70 years old.
- What are your choices regarding health insurance? What do you want to do about dental and vision plans? It’s important to outline your medical options going into retirement.
- What are your choices regarding long-term care insurance? Would you need long-term care? If yes, determine the level of coverage you need.
- What are your choices regarding life insurance? Determine whether you need life insurance. If you do, choose a government-sponsored program or a private insurer.
- Should you use your annual leave during your last year? Saving your annual leave can provide you a bigger check in retirement.
- Have you done all your beneficiary designations? Update your beneficiaries for life insurance and Thrift Savings Plans.
- How much income can you potentially earn in retirement? Can you earn working part-time? Would this affect your Social Security benefits?
- What would be your federal and state tax rates in retirement?
Answering these questions will help you better prepare for retirement during this period. Set out time and map out a great retirement strategy that would ensure you have a comfortable retirement.
