Top Tips for Mid-Career Federal Employees Planning for Retirement
Ensuring you have done everything to get the most out of your retirement benefits should be on your mind before retiring. Of course, there are quite a few tasks to complete throughout your federal employee career, even in the early stages and beyond. However, for individuals in the mid-career years of said tenure, there are particular tips for improving the outcome of retirement benefits.
Federal employees with 5 to 15 years of active service would be considered mid-career. Mid-career federal employees are eligible to receive a pension once they reach 60 to 62, should they decide to leave government employment. However, this only applies if retirement contributions are left within the retirement system, even with only five years of service. You must adhere to specific rules if you are considering leaving government service mid-career and well before retirement.
Maintaining eligibility is not automatic, especially when filing for a future pension. Once you have met the 5-year service mark, additional specific actions can enhance your benefits upon retirement. For example, making deposits eligible is crucial as “buying back” the appropriate time served in the military. As a mid-career employee, there’s never been a better time to start researching this before retiring. The longer you wait to calculate the possible interest owed, the more it will accrue. Unfortunately, most federal employees owe thousands in interest unnecessarily due to a deposit that wasn’t made early on.
Working until your MRA, or Minimum Retirement Age, is an often overlooked way of maximizing your federal retirement benefits. It is best to determine your MRA based on your birth year and your youngest possible retirement age. With at least ten years of service, upon reaching your MRA, you may be eligible to retire from your position within the government onto an immediate annuity. Deferred and postponed are two other types of annuities available upon retirement from government service. By learning the difference between each annuity, you are poised to take advantage of all the benefits available.
FEGLI insurance continues to rise, and while you are in your mid-career years, it may be easy to overlook these small increases. However, there has never been a better time to be proactive about life insurance and estate planning. A thorough life insurance review could save thousands of dollars or more. This practice includes a look into your applicable Health Savings Account (or HSA) to ensure you receive the tax-saving benefits before retiring.
Contributions made into a Thrift Savings Plan (or TSP) should increase every year. As a federal employee, you should strive to improve your TSP through good investment strategies to further increase your retirement’s value. As a result, you are more likely to thrive in retirement than those throwing caution to the wind and hoping for the best.
Regardless of whether you want to remain under federal employ, undoubtedly, you have already invested in your future with a mere 5 or 10 years of service. Should you choose to leave well before retirement, there are many trade-offs regarding future benefits whether or not you remain in the federal career path. You will be well-equipped to enjoy your golden years by maximizing the available benefits.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial planning.
[email protected]
914-302-2300
Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.
