thrift savings plan
The Thrift Savings Plan is one of the most important parts of a Federal Employee’s retirement plan. The Thrift Savings Plan is similar to a 401(k) plan offered to Private Market employees and has very similar rules and regulations. An Advantage of the Thrift Savings Plan is the automatic contributions that FERS eligible employees receive along with the relatively inexpensive average internal expense ratio that is charged to Federal Employees on TSP Fund investments.
Federal / Postal Retirement Planning Report Card
Retirement Planning Report Card
From your Thrift Savings Plan to FEHB to FEGLI, each of us will be ‘graded’ on our Planning Report Card. Much like when we were kids in school how well prepare ourselves on these topics, will have an impact on how well we do. If you got good grades in school, your parents often rewarded you with something special, sometimes even money to show the value and significance of getting good grades. Your Retirement Planning Report Card, however, is far more important than if you got an ‘A’ in your Social Studies class. This Report Card will truly impact the rest of your life.
You have reached another milestone in our lives where once again a report card is important. The difference is if you get a good report card by planning ahead for retirement (such as using your Thrift Savings Plan fully), your reward is to live in comfort and security. Proper planning allows you to retire on your own terms and take the worry out of how you are going to survive now that your income is much lower than it was as an active employee.
Your planning report card should include estimates of your pension income which will resemble reality the closer you get to retirement. Your Retirement Planning Report Card should also include information on your TSP.gov account any Social Security Benefits you might be eligible for and even your life expectancy. If you are postal employee you will need to access your LiteBlue account and gather any forms that you would like to maintain in retirement. Look to include your total estimated monthly retirement income and your estimated monthly expenses. Do not forget to include any additional savings and IRA’s that you have along with your spouse’s savings too. Other items you think are relevant will help you paint the best picture possible of your retirement future. It is always a good idea to consider talking with a financial professional who focuses on Federal and Postal retirees (Liteblue information can be found HERE). They are tough to come by and the average ‘Advisor’ probably doesn’t know much about your benefit package, but if you can find a FERS, CSRS and FEGLI expert – you should do yourself the favor and sitting down with them to discuss your needs.
There is quite a bit of work to do to get ready for retirement, but the sooner you get started the closer you are to reaching your retirement goals.
P. S. Always Remember to Share What You Know.
Income Sources for Federal and Postal Retirees
Sources of Income for Federal and Postal Retirees
The majority of retirees will get income from a number of sources. However, the only sources they can really depend on are –certified – sources of income. What are certified sources of income? Income that you know will be there – Social Security, Employee Pension Plans and other Personal Savings and Investments, such as your TSP.gov account.
Some of us may receive income from an inheritance, equity in our home, life insurance, and Individual Retirement Accounts (IRAs). Principally income generally comes from the three primary sources named above and quite often the third one might be missing for many retirees – Savings and Investments. Even if you are currently missing the Savings portion, it is never too late if you put a savings strategy in place and stick to it.
When you are planning for your retirement, your plans should not be based on what ifs, like winning the lottery. We would all like to win the lottery, but the odds are pretty slim. Therefore, your plans for retirement must be based on certified sources of funds. As federal and postal employees, whether you are eligible for CSRS for FERS you know that your Pension and Social Security where applicable will be there. Everything else is an add-on to enhance your comfort and security in retirement.
Whatever your financial profile, the greatest way to protect it is by always making sure that your expenses are below your income. Careful planning can help you reach this position with what you have when you make adjustments to fit your circumstances.
P. S. Always Remember to Share What You Know.
Related Articles
Click HERE for information on Postal LiteBlue
Click HERE for information on your Thrift Savings Plan
Quiz for Federal and Postal Retirement
Retirement Readiness Quiz
If you took a retirement readiness quiz how ready do you think you would be? If you find that you have already completed a task, then you are a STAR. If you need to still get busy accomplishing the task, then simply make it a part of your Individual Action Plan (IAP) for implementation. This is not actually a quiz where you get graded but more of a global positioning system to help you navigate successfully to where you want to go. Beside each item indicate if it is COMPLETE OR PENDING. If the item is pending estimate a date when the item will be complete and the action you will take to make it happen.
• Have you quantified your financial objectives? In other words, have you estimated how much money you will need to live the life you desire in retirement?
• Have you set goals for retirement?
• Do you have doable strategies to achieve those goals?
• Can you itemize the strategies to achieve the goals you have set for retirement?
• Do you know where all your important records are?
• Have you informed someone you trust about your important records?
• Do you know how to reduce your FEGLI expenses and who to work with to make that happen?
• Do you know how you spend every single dollar and cent?
• Do you know how to access the TSP.gov website
• Are you saving enough money in your Thrift Savings Plan (TSP) and is your current mix of funds right for your needs?
• Have you prepared an estimated retirement budget and devised steps to help you operate within your budget?
• Do you intend to leave a big inheritance to your children, other family members, or a charity? If so, have you set aside money or made provisions to accomplish that goal?
• Have you thought about where you will live in retirement and the cost involved?
• What would you do in the event of an unexpected and extended disability before you retire?
• Do you have an emergency fund?
• If you are a couple, are both parties completely aware of the status of the financial situation?
• If something happens to either of the parties, is each member capable of managing the family’s finances independently?
• Are you taking full and total advantage of any tax-deferred savings options offered by your employer?
• If you have dependents that rely on your income for survival, what plans have you put in place in the event of your death?
• Are you taking care of your health so that you can have a good quality of life in your retirement years?
There are many more retirement readiness questions we could pose, but I think we have sufficient fuel to allow us to take a good look at our readiness for retirement. Remember if you have not done any of the things listed, it’s ok, you need only make them a part of your individual action plan and get started activating that plan as part of your goal to Retire Well.
P. S. Always Remember to Share What You Know.
Click HERE for information on CSRS
DO YOU HAVE A SAVINGS STRATEGY?
Setting Up a Savings Strategy
It is good management of your resources to have a savings strategy, but how do you know when it is not working. If you decide based on your PLAN to save $400 per month but before month’s end, you have chipped away at $300 or more. There is something dramatically wrong with your strategy. As a matter of fact, it is not a SAVINGS strategy, but a revolving door account. You deposit in one door and spin right around and withdraw it from the other door. You really should consider your Thrift Savings Plan account as the perfect savings vehicle. The Agency match (and the 1% contribution) make your TSP.gov account a fantastic place to commit to adding money every month.
There might be a number of things happening. Perhaps, you are attempting to save more than you can afford to save. We’d all like to save in big pieces, but that might not be the fit for your circumstances. Saving small amounts consistently is much more beneficial than saving large amounts only to withdraw those amounts virtually as soon as you deposit them.
You will be amazed at how small amounts saved over a consistent period of time add up to be much more than you think. There is an old proverb that states – Each man must cut his coat according to his own size- otherwise it will either be too small or too large.
Develop a Savings Strategy that really is a strategy for saving and leverage for you to retire well.
P. S. Always Remember to Share What You Know.
Plan for Pre-Retirement Debt Reduction
Debt Reduction Plan
By now your laundry list of things to do as you prepare to Retire Well should be growing. There are a lot of things we want to take into retirement with us, but one thing we want to leave behind is HEAVY DEBT. Since most of us will be living off of an income that is decidedly less than what we earned as active employees, reducing our debt is a key laundry list item.
Unlike our parents and grandparents, our mortgage obligations may not be retired when we retire. Therefore, taking that debt into retirement may be unavoidable. The good news is that you might be able to trim the cost of your mortgage. One way of doing that might be to downsize, since the nest might be empty and the space you once needed while raising your family may no longer be needed. There are also other choices and options concerning your mortgage liabilities that you may want to research and examine to see if they fit your lifestyle and budget. Some of those options will be discussed in subsequent posts.
As for now there are many steps we can take to reduce our debt. First step, identify and categorize your debt as small, medium or large in terms of the balance owed. Second, we are going to evaluate the interest owed on all debts. Third, we should analyze how long we have been carrying the debt. The fourth step is to assess what percentage of your debt is comprised of NEED and what percentage is comprised of WANT.
Once you have taken the suggested steps, then begin to pay down little, small, nagging debts no matter the interest rate. After you have taken care of that, begin to pay down the debt that has the highest interest rate first because the more interest you have to pay out, the more of your hard earned money you are handing off to someone else. Then follow through by paying the remaining debts with lower interest rates. The key to making your debt reduction plan work is once you begin to pay down the debt take care not to accumulate additional debt. Dividing your debts into things you purchased because you needed them versus things you wanted, will help you avoid impulse spending.
Regardless of whether you are eligible for CSRS or FERS, part of your Retirement Plan should be to make sure you have as little debt as possible (and hopefully one at all) as you enter retirement. Think about establishing a debt reduction plan at least five years before you retire so that you can get a handle on how to use your restructured income to enjoy some of the things you wanted to do that were otherwise restricted by your commitment and obligation to work.
P. S. Always Remember to Share What You Know.
Click HERE for information on TSP.gov
Click HERE for information on LiteBlue
Click HERE for information on Retirement Planning
Plan Building: How Do I Get Started?
~~HOW DO I GET STARTED WITH A PLAN?
By now you are probably asking – How do I get started setting goals that are SMART and putting a plan into action? You get started by first simply writing down what you desire your retirement picture to reflect. Write down your goals, evaluate and analyze them so they fit your circumstances and values.
Create a strategy that is doable with short, intermediate and long-term goals with time horizons that are based in reality. Make certain that the plan you create can be put into action without causing undue stress on your emotional and financial well-being. Lastly, make room to monitor and track the movement of your plan, leaving time and space to modify the plan as circumstances and conditions change in your life both for you and your family.
A plan that starts out SMART ends with giving you in retirement the lifestyle you desire and deserve.
P. S. Always Remember to Share What You Know.
Plan Building for Retirement
Building an Action Plan
Remember we discussed what separated people who get it about money from the rest of us – they have a plan and they stick to it. Building your individual action plan starts with building your Financial Plan for retiring well.
So that you achieve your goal of retiring well, you must embrace the urgency of identifying and setting goals that give you the flexibility to make adjustments as circumstances in your life change. That means making certain that your goals are SMART in order to have a workable financial plan, a budget that fits you and makes sense – all implemented via your individual Action Plan.
Making certain that your Action Plan gets you to where you want to be in retirement, it is important to distinguish between WANT and NEED. We can intellectually differentiate between WANT and NEED, but living on less money in retirement is a reality that compels us to prioritize NEED over WANT.
Are NEEDS and WANTS the same for everybody? The answer is NO.
However, all things being equal, we all have the same basic NEEDS and WANTS. Although, NEEDS determine what is absolutely necessary for human survival, WANTS often drive us to succeed. The challenge is knowing the difference, amassing and utilizing the requisite knowledge to choose options and make decisions that will lead to the goal of retiring well.
Your individual Action Plan will only serve your purpose if you put it into ACTION.
P. S. Always Remember to Share What You Know.
For information on saving with TSP.GOV
How to maximize federal benefits with a benefit analysis
RELATED ARTICLES
What Is Your Financial “Type?”
Your Financial Type
When it comes to money, what kind of financial person are you? Experts say that there are generally three kinds of people when it comes to money. There are those who live paycheck to paycheck. There are those who simply never have enough money, those that put the minimum away in their TSP and finally those who absolutely get it.
Those who get it just didn’t suddenly wake up one morning in Oz, a realm off limits to the rest of us; they had a financial plan and they followed it. Remember the equation below. Put it in a heavy traffic area of your home so that you can see it and let it be a constant reminder of your desire to retire in comfort and security.
Your plan is an achievable and trackable, weekly or monthly financial goal. Set the Goal – pay down your debts (those with the highest interest rates first), put money aside for a rainy day and then save for retirement (every little bit helps).
Having a Plan + Following the Plan = Retiring Well.
We are off to a good financial start!!
P. S. Always Remember to Share What You Know.
Financial Plan for the Federal and Postal Employee
Like all Federal and Postal Employees we must all consider the importance of our Financial Plan as we prepare to live in retirement – on our own terms. Whether you are part of the CSRS system or FERS you should know the importance of having an overall financial PLAN and how vital it is for a successful retirement future. Part of THE PLAN should include a financial piece – your financial plan.
What is a financial plan? It is a thought process of what is important to you and what is required for your life in order to make your dreams a reality. A financial plan assists us in identifying what we want, how to get it and how to keep it. Sometimes it is as simple as identifying the small changes that you can make today which will have large impacts in the future? Devising a financial plan means making choices, sometimes difficult ones, in order to reach your retirement goals.
The process of building your financial plan has much to do with your value system. Our value system is often shaped by our parents. As we mature our value system may change. The values we have today, we probably did not have them when we were younger. One reason being, our responsibilities and obligations have changed.
Often when we make one decision, it simply causes us to make another decision. Constructing a financial plan and making decisions also involve trade-offs.
For instance: Would you like to maintain a Life Insurance policy on yourself or your spouse so you can protect your family? The trade-off is the cost of the insurance for the benefit of that protection. Then if you make the decision to protect your family in this manner, what is the best way (most cost effective way) of managing this expense? Should you stay with FEGLI or find a different policy? Is there a ‘best and cheapest’ policy for your needs?
Another decision you will need to work through is with regard to your TSP Account. The decisions you will need to make consists of the amount and manner you take income from your savings. Additional TSP consideration include rolling your funds into an IRA or and whether or not you should hire a professional to help you with your investments
You may have to give up something today in order to gain something tomorrow that might ultimately be of far greater benefit in the future. We save now and we plan now so that our retirement years can be spent in comfort and security.
The most educated Federal and Postal employees and retirees will likely be working with a Financial Professional to help them with these decisions. That is to say – the federal employees who choose to enjoy more of their free time and worry less in retirement will likely want someone else to manage the day-to-day minutiea of their investments and retirement plan. We may know a lot about our own circumstances and may even know a lot about the economy or the markets – but I suggest that you find a financial expert in your benefits to ensure that you are looking at all of the possible savings and advantages that you have as a result of your employment.
P. S. Always Remember to Share What You Know.
Annual Leave (Gap Money)
Annual Leave (Gap Money)
We have talked about saving and taking on more personal responsibility for our retirement years and a federal or postal employees unused Annual Leave can represent an important vehicle to accomplish this goal. We also spoke about saving by fully funding the Thrift Savings Plan (TSP) as one way to build up your financial resources for your retirement years. But in addition to any savings you have built up in your TSP, by the time the average federal worker retires, their annual leave accrual represents 8 hours per pay period or 16 hours per month, roughly 2 days per month. Postal workers earn slightly less in Annual Leave accrual (check LiteBlue for more information). Accumulating and saving your annual leave can make your transition from work to retirement much easier.
The Office of Personnel Management (OPM) continues to deal with the challenge of eliminating ‘interim annuity’ payments to retirees. Interim payments represent approximately 75% or slightly more of the full retirement annuity. As you put your PLAN for retirement in place, recognize that your full annuity check may not be immediately available and you may need to wait to access your TSP money too and this is where your unused annual leave may come in handy. Evaluate what your expenses will be and how much income you will need to cover those expenses. If you find that a gap exists, your annual leave check might be the GAP MONEY you need to close the divide.
Your annual leave check arrives about the same time as your final paycheck; perhaps weeks before you receive your interim annuity check. Carefully looking into all resources available to you, such as your TSP or unused Annual Leave, and managing those resources well will allow for a smooth transition to retiring well.
P. S. Always Remember to Share What You Know.
SAVE-SAVE-SAVE
Save
Remember the laundry list of things we talked about building in order to retire well in our FLEXIBLE Plan post. Now we come to the all important aspect of SAVING. We learned from our parents as children to save in the event of the unexpected. There is no avoiding the unexpected – things happen. No matter how well we plan, how careful we are – things happens.
As such when things do happen and most certainly most things that happen require financial resources to move towards a solution or remedy. We are not saying that money is the great equalizer or problem solver; we are simply saying that in most cases having some extra money might help to make the rough spots smoother.
When we speak about saving, the very notion seems to conjure up something big. Therefore, if we cannot save a lot, many of us end up not saving at all. If you look at any financial picture – any amount of money outweighs ZERO. Each individual’s retirement goals and savings capacity will be starkly different.
However, our collective goal as Americans is to retire well with financial security and comfort. After working for a greater part of our adult lives, every American’s aspiration is to live on their own agenda with a high quality of life.
Americans have long moved away from the passbook savings accounts of our parents and grandparents. However, the need to save has not lost its importance. Today, we must be more aware of the financial markets, our TSP investments and participate more passionately in building and securing our own retirement future. Saving needs to become contagious to us whether a little, a lot or somewhere in between. It is imperative that we become more financially literate and apply the economic principles of supply and demand in our everyday lives in order to meet the challenges of retirement.
Most of us rely on savings through employer-sponsored plans such as some version of the 401K plan, for our purposes, the Thrift Savings Plan (TSP). Although, new employees to the federal service are automatically enrolled in TSP, they may opt out since it is a voluntary program. However, not participating in the TSP at some level would not be one of the best choices to make. Fully maximizing your participation in the TSP on the other hand might just be one of the wisest choices you make to enhance your resources in retirement.
The TSP has a diversity of funds, including its safe Government Securities Fund (known as the G fund). The principal amount of your investment is always safe, guaranteed by the Government. The average American’s income comes from three sources in retirement – employer pension, savings and investments. Federal employees, unlike many Americans, have the luxury of all three – a life time annuity from your federal retirement plan (CSRS/FERS), savings and investment via the Thrift Savings Plan.
In order for your plan to work towards building a safe and secure retirement future so that you have the luxury to retire well, SAVINGS must be at the forefront of your plan.
P. S. Always Remember to Share What You Know
Baby Boomer – The Reality of ‘Now’
Baby Boomer: The Reality of ‘Now’
The baby boomer generation will be the first generation of retirees who will enter into retirement while their parents are still living. That is a reality because Americans are living longer. This means that in addition to baby boomers planning their own retirement future, they must also help and sometimes manage their aging parents’ retirement too. There are many questions that come to mind, but the main question about retirement is – “Will I have enough money?”
Many times family members neglect to communicate those things that will help to lighten the load on one family member or a few. Being a caretaker whether directly or indirectly is a challenge and that challenge can be exacerbated by the fact that aging parent also need care and attention. But that challenge can be made easier by building a strong support system of family, friends and the many resources now available to seniors living in retirement.
As a baby boomer, it is a good idea to begin looking into resources and options for your parents as well as yourself before it becomes a must. Taking the initiate to be proactive will save you a lot of time, money and stress.
If you are a baby boomer living in a community where the reality of taking care of a parent is imminent, it might be wise to start or join a community focus group that will look into the best options possible for your situation – where to live, how to live, how to manage the unexpected and how to enjoy retirement in difficult situations.
Having support is one of the strongest links to riding out a storm.
RELATED ARTICLES
Are your parents’ Medicare elections up to date?
Retirement Planning – Now or Later?
Retirement Planning
The most important step a Federal or Postal employee can take toward a successful retirement is recognizing how and when to begin the retirement planning process. As a FERS or CSRS eligible employee the earlier you begin educating yourself and gathering as much information as possible about how your benefits will work in retirement the better off you will be. Due to the complexity of the FERS and CSRS programs Federal and Postal employees may wish to speak with a financial expert who has a clear understanding of the FERS, CSRS, FEGLI and your TSP.gov account.
When is the ‘Right Time’ to start planning for retirement?
As the adage goes – The best time to plant a shade tree was 40 years ago. The second best time is right now.
Although our early years are not typically spent planning for retirement, they should be. Retirement planning is a very important component of the work-life cycle. The earlier we start building your nest egg (such as making contributions to your TSP.gov account), the longer it will be able to grow for you. Not only will your work and your savings begin to add up, but the compound growth that can take place over time means that your money is working for you. Reviewing your TSP.gov account regularly and making sure that your the investments and the ‘allocation’ you have matches your desired retirement plan is a must.
The first day of your first full-time adult job is when you should start your retirement planning. Don’t just take that myriad of papers handed to you by Human Resources and stuff them in your desk drawer. Read them, ask questions and learn what you can do right away. And absolutely, make contributions to your TSP.gov account.
Although it is never too late to start preparing to retire well, the earlier we start the greater our options and opportunities to design the kind of life we want to live in retirement. Your TSP.gov account and other investments are important when you are younger but they grow even more important as you get closer to retirement. This is when a financial professional can help you ensure that your retirement goals and income needs will be met.
P. S. Always Remember to Share What You Know.
Will your income will be enough in retirement?
Are your TSP funds getting you to where you need to be?
Tips to Getting Your House in Order to Retire Well
~~Sharing Information
Pension systems and retirement plans often have many provisions that can be challenging to navigate and understand, the Federal Retirement Systems are no different. However, sharing information and provisions of your retirement system with spouses, partners and family members are important.
There are questions to be considered when putting plans in place for retirement, be it at the end of one’s career or at the beginning. Sharing information is key to proper planning.
• Are the people involved in your life appropriately aware of your financial picture (your Thrift Savings Plan, FEGLI selections, Last will, etc.)?
• Do they share the same financial values, objectives and goals as you?
• How will the loss of your income impact their ability to independently handle finances?
• If you’re a postal employee – have you printed out and saved copies of your LiteBlue.usps.gov information?
• Has there been a discussion as to the location of important documents and files including any TSP withdrawals?
• Do they know who to contact in the event of a tragedy at your place of employment and what action to take concerning your benefits?
• Have you talked with them about your Thrift Savings Plan , your Annuity, how much they might receive from your (FEGLI) life insurance and who your beneficiaries are if you were to pass?
Whether you are single or married everybody needs someone they trust to know these things. Sharing information with these trusted individuals ensures fewer details are missed.
Everybody needs a partner when it comes to planning the business of our lives and for planning for the safety and security of retirement.
P. S. Always Remember to Share What You Know.
Access your TSP.gov account from here
Simple Formula For Estimating Retirement Income
~~A Simple Formula for Estimating What Your Retirement Income Might Look Like
Estimate of Social Security eligibility and payments plus Estimate of your pension or annuity plus any income that you Thrift Savings Plan is able to produce equals the Estimate of Your Retirement Income
Until you actually get ready to retire and submit you retirement application this formula is a moving target because your earnings are changing, thus impacting the outcome of what your retirement income will look like. However, checking the health of your financial picture, such as looking at how your TSP account is performing and making any necessary changes is a good exercise to keep you on track to retiring well. About 5 years before you are going to retire (and certainly within 1 year and consistently thereafter) you should be working with a financial expert who is knowledgeable in Federal Benefits and TSP Fund choices and alternatives and looking for financial guidance.
This exercise will also alert you to whether you need to consider other options for your retirement future such as increasing savings or contributions to your TSP and evaluating Annuity expenses and spending habits. It can also be very useful in determining what your income and expenses represent at various stages in your work career and life. It is easier by the inch than the mile. Getting a snap shot view of your financial health early is tantamount to a successful retirement future.
P. S. Always Remember to Share What You Know
Information on your Annuity Calculations can be found here
Check out your Social Security Benefits
How can you access your TSP account
Postal employees can access their Thrift Savings Plan through LiteBlue
Where Will Your Retirement Income Come From?
~~Where Will Your Retirement Income come from?
The majority of Americans will receive income from Social Security, an Employee Pension, and Savings and Investments. Will you have all of the sources listed? If you are a federal employee chances are you will. As a federal employee you have the advantage of an Employee Pension (Annuity), FERS employees lso have Social Security under their retirement system. CSRS employees may have Social Security if they have worked outside of the federal service. Each group has the opportunity to have savings and investments through the Thrift Savings Plan.
Although retirement income may come from many other sources such as an inheritance, life insurance, or equity in your home, the majority of Americans will receive income from Social Security, a Pension or personal savings and investments.
Where will your retirment income come from when you retire is a question to ponder and give deep consideration when evaluating your financial health and readiness for retirement. If you are nearing retirement you should absolutely speak with a financial professional who is an expert in your unique benefits before you make any decisions.
P. S. Always Remember to Share What You Know.
More information on your TSP.gov account
Postal employees can access their LiteBlue information from here
Can I Choose My Own Retirement Date?
Can I choose my own retirement date?
Is there a best day to retire? The answer is yes, but with some qualifiers. Choosing a retirement date should certainly be of your own choosing. However, there are some important factors to consider when choosing the best retirement date, like are you getting the maximum benefit available to you.
To be on the safe side, it is a good rule of thumb to visit your human resources office where your employment records are kept to discuss best options for your retirement date and other subjects. Your human resources office should be able to determine if you meet the age and length of service requirements based on the date you have chosen. It is good to select a number of potential retirement dates so that you are not disappointed if the first choice is not to your advantage.
The human resources office will not only help you choose the best day to retire but will speak to you about when your annuity payments will begin based on the selected date of retirement. They will also counsel you if you do not meet the age and service requirements and help you understand how the additional requirements can be met. Human resources cannot, however, help calculate how your TSP account balance or help you make TSP related decisions, or any other savings may impact your decisions about retirement. You will need to talk with a financial professional who is also an expert in your benefits for that type of calculation.
For example, under the Civil Service Retirement System (CSRS) if you retire between the 1st thru the 3rd of the month your annuity will begin the following day and you will receive your check on the 1st of the following month. If you retire on the 4th and after your annuity will begin the following month and you will receive your check on the 1st of the next month. Example: Retiring on the 4th of October and after, annuity begins in November and you will receive your check in December. There is a remarkable time difference based on when you retire. Therefore, knowing when to retire is very important information to have at your disposal.
The annuity begins the 1st day of the following month for employees retiring under the Federal Employees Retirement System (FERS). Having the right information, carefully evaluating all of the available information (including TSP allocations, etc.) and selecting options that offer you the greatest benefit is without question the best date to retire well.
P. S. Always Remember to Share what You Know.
What should you do 1 Year before Retirement
Postal employees should regularly check their LiteBlue information (FEHB, TSP.gov allocations, etc.)
Retire Well – How Long Should I Work?
Deciding how long to work to ensure you retire well.
That question is easily answered by another question – What do you want? Many employees want to work long enough to retire well and take control of their choices and options. They want to have enough money to live on. In other words, they want to retire rich. Does retiring rich mean having a million dollars in your Thrift Savings Plan? Not according to my calculations, it means very simply having enough money to take care of all your expenses with some left over to do as you will without feeling strained. It means further having the option to work or play and whatever the option, it is based on want and not need.
Any of us will gladly take the millions, but having your assets outweigh your liabilities will put you in the comfortable category and ensuring you retire well. Now, it helps to know as you are evaluating what you want, what are the maximum benefits you can receive based on your length of service.
If you are a part of the Civil Service Retirement System (CSRS) you must work 41 years and 11 months in order to receive the maximum 80% of your high-3 average salary. However, if you are a Law Enforcement Officer (LEOs) under special computation provisions you may be eligible to receive the 80% limit with fewer years of service.
Individuals under the Federal Employees Retirement System (FERS) are not subject to the CSRS limitation, but use a different computation for length of service and high-3 average salary. Understanding which limitations apply to you are key to retire well.
It is also important to know that if you work beyond the years needed to achieve the maximum benefit under CSRS, the time will not be used to compute your annuity. The contributions you make during that time will, however, be automatically refunded to you with interest at a rate of approximately 3% per year, compounded annually.
P.S. Always Remember to Share What You Know.
LINKS
You should consider your TSP.gov contributions and balances and allocation.
Postal Employees – LiteBlue.usps.gov
Tips to Getting Your House in Order to Retire Well – Interim Payments
Interim Payments
The term Interim Payments is a term Federal and Postal employees should become thoroughly familiar with. Although the Office of Personnel Management (OPM) works diligently to get annuity checks to retirees in a timely manner, good planning dictates that we should be prepared for the unexpected or the glitches that often occur during the normal course of conducting business
Interim Payments represent approximately 75 to 80 percent of what you will receive in your full annuity check. Don’t despair, all deficits will be recovered when you begin to receive your full annuity check.
It is important when you are submitting your Retirement Application papers for both CSRS and FERS retirement and for all Federal and Postal Benefits and that you are certain to check and recheck your retirement application to make sure you have crossed all your T’s and dotted all of your I’s. Overlooking pertinent information will cause a delay in the processing of your application. I always recommend that potential retirees do a –dry run- or test drive of the application package to become familiar with its contents and requirements before submitting the actual package. You may even want to solicit the help of a financial professional to ensure that you have the ability to maximize your Federal and Postal retirement benefits. Potential retirees need to know what their responsibilities are towards enhancing a seamless process to retirement. Retirement packages are on-line and information about your TSP can be found at PSRetirement’s TSP portal which will give you valuable information as you begin getting our house in order to retire well.
P. S. Always Remember to Share What You Know.
For more information visit and to access your retirement accounts visit;
LINKS
For information on how to log into your TSP.gov account
More information on Interim Payments
Complete CSRS information for Federal and Postal Employees
Explanation of Federal Employee Retirement System Benefits (FERS)
Emotional and Psychological Readiness
~~Item #2 – Emotional and Psychological Readiness
Psychological Readiness is an underrated part of adjusting to retirement. There is no denying the importance of those concrete items such as maximizing the benefits of the Thrift Savings Plan (TSP) and understanding how all of your Federal Benefits work in retirement. But in order to chart a workable course for retiring well one must be emotionally and psychologically ready to embrace change, accept new beginnings, expand horizons and brace for the sometimes unexpected.
There are things we need to know and do so that we chart a feasible course to retiring well. Whether you’re eligible for CSRS or eligible for FERS often concrete items that we can touch, sort of put our hands on prioritize the list of things we need to know and do in order to retire well.
Below is a list of things we can do to get ready psychologically and emotionally to retire well and ensure the resources we need to live the life we deserve outlast us.
• Define who you are, absent of your job’s title and work environment
• Outline your gifts and skills and how you can use them to improve the world around you
• Think about what you’ve always wanted to do but were restricted due to the time constraints of your job
• Do a 15 minute self-evaluation of where you are, where you’ve been and where you’d like to be 3-5 years post-retirement
• Write down 5 of the most intriguing places in the world where you’d like to live, one just might be in your own back yard
• Think about what you are going to do on the first morning of your retirement
We spend more waking hours on our jobs and with our work families than we do in our homes with our own families. Psychological readiness ensures you’ll be ready to tackle all the issues a new retiree faces. Retiring well means getting ready to face new challenges and opportunities, meeting new people, going to new places and understanding a new and better you. These are critical tools needed to get you emotionally and psychologically ready to live a life on your own agenda. Getting ready now means success when you enter your next adventure – retiring well!
P.S. Always remember to share what you know.
LINKS
For complete information on FERS benefits
