When it comes to retirement, there are a couple of purveying myths that often not only hinder one’s progress and excitement heading into this next phase in their lives but also could end up costing you big financially. In this article, I will explore some of the more popular myths surrounding retirement and give you some tips on how to avoid getting caught up by them.
1. Human Resources Has All the Answers
While the human resources department might be an excellent resource to utilize, it is far from the end all be all when it comes to answers, and simply informing them that you are retiring is just the first step of many more that you will have to take.
Your human resources person might be well versed in the different options that your particular retirement accounts offer you, they are far from financial advisors, and will likely not understand the bigger picture when it comes to your individual retirement plan. HR is simply meant to collect your information and help process all the paperwork. When it comes to giving advice, they are neither properly studied in the area, nor are they allowed to share.
It is up to you, the retiree, to figure out all your options, and it takes a lot of planning to make sure everything is allocated properly.
In order to avoid any issues, it is suggested that you learned how each of the seven different benefits offered to you by FERS is figured out, what it does, and what kind of penalties you might receive if you don’t accept it. On the FERS website, they have practice applications that you can fill out so you can get used to the red tape of it all, and it will help you make your eye keener when it comes to spotting any irregularities that might come up from misfiled applications.
2. You Have Time to Plan
Obviously, you will know when your retirement date is approaching, but even still, making sure you have allocated enough time to get your affairs in order is essential, and often times people don’t realize how much work will need to be done and done give themselves enough time to do it in.
When you first started employment with federal service, you signed a whole bunch of paperwork while onboarding. This could have been years, or even decades ago. This includes the retirement paperwork you’ll need now, as you prepare to segue out of working life.
The truth is, its all comes down to familiarity and comfort with the material. There is a lot of terminology you might not be familiar with, and a lot of tools (such as the TSP calculator) that might confusing when it comes to how it works. The more you look into it, the more you will be faced with these sort of hurdles, and the learning curve is steep. If you are overwhelmed and start putting off the process, it will only compound this issue.
What you need to is start with your retirement planning as soon as you possibly can. Even if you’re a new hire, and retirement is still years away. FERS can be complicated, and the more familiar you are with it now, the easier it will be to navigate when you actually need to. And when it comes to figuring out how much you’ll need to save, constantly review what you’ve been doing and adjust accordingly.
3. There’s No Button You Can Push That Can Fix Everything
Employers often offer classes for people approaching retirement. You see this and think you’ll attend, learn the ins and outs, and be set to go. Unfortunately, the amount of information you’ll likely need to know is too big for a single class to hold, and these employer-sponsored seminars will often leave you overwhelmed and even more stressed out than you were before you began.
The problem is, knowing information simply isn’t enough without the knowledge plan ahead to execute them, and that’s not what most of these classes are designed to do. Being told over and over what your benefits are and how to access them will do little for you when it comes to actually implementing a successful retirement plan that suits you and your individual needs.
If you intend to take classes focused on retirement, what you’ll need to do is find ones that focus on what you need: planning and methodology. And don’t wait until the last minute, you should seek out these classes now, especially if you’re in the onset of your career, and start your savings right.
The truth is that FERS is a solid program that should help immeasurably with your retirement plan, but that plan is something that is not just going to work itself out. You’re going to need to do the legwork yourself.
Start with a base of knowledge, learn the benefits FERS offers and what they do, then build the architecture of your retirement plan around what you have determined to be your sources of income and savings. This can include not just your FERS, but Social Security, TSP, and other annuities or investments you might have. And then before you start signing all that retirement paperwork, review what you’ve done and make sure you’ve taken all the proper steps to land you where you wanted to go.
You don’t need to be stressed out about retirement. Take control of your future, get informed, and start taking the steps you need to take today. Your future self will thank you.