Avoid These Mistakes While Planning for Retirement

It is terrible that some government employees who have worked for their country for 10 or 20 years will not be able to retire when planned because of unfinished business from their time in the service to the country.

This article focuses on employees’ most common federal retirement planning blunders. It doesn’t matter which retirement system these employees are covered by. They might be covered by CSRS, the FERS, or even a hybrid of the two (known as “TransFERS” employees). As a federal employee, if you plan to retire, you should avoid these mistakes to avoid any trouble.

Not reviewing personnel records.

Form SF 50 (Notice of Personnel Action), which is updated annually, should be reviewed by federal workers regularly to ensure that it is accurate and up to date. Important retirement-related information can be found on Form SF 50, such as: On Form SF 50, the “retirement plan” box 30 shows the retirement plan an employee is covered by, such as the Civil Service Retirement System (CSRS), the CSRS-Offset, or the Federal Employees Retirement System (FERS) (FERS).

It is the responsibility of employees to verify that they are enrolled in the right retirement plan. Federal employees have been mistakenly enrolled in the wrong retirement system when employed, a mistake they didn’t discover until they were about to retire.

Fails to request estimates of unpaid deposits.

By depositing military or non-deduction time, many employees do not realize that this resets their SCD for retirement backward, increasing the amount of their CSRS or FERS gross annuities. They may also find that they may retire earlier than they had anticipated.

It is possible to redeposit withdrawn CSRS or FERS contributions for federal employees who previously worked for the government, left before they were eligible for retirement, and then later returned to work for the government, restoring the years of service that were lost as a result of these withdrawn contributions (usually with interest charges). Some workers are only informed of their deposits or redeposits at the end of their careers, resulting in a higher interest rate and a more significant financial burden.

Not understanding the health benefits.

Federal employees’ health insurance coverage under the Federal Employees Health Benefits (FEHB) program is often misunderstood by those who work for the government. Notably, just 25-28% of total FEHB premiums are paid by workers and annuitants, with the federal government picking up the other 72-75% of the tab.

To depart on a “postponed” retirement under FERS’ Minimum Retirement Age “MRA +10” or “MRA +20” rules, an employee must retire under an immediate retirement (one that commences within 30 days of separation). In addition, the employee must have been enrolled in FEHB for five years immediately before retirement or since the retiring employee’s first chance to enroll in FEHB as a family member (such as a spouse) to be covered by FEHB.

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Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.

Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.

Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

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