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.
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
Let the Thrift Savings Plan (TSP) Help You Retire Well by Jay Hunt
Let the Thrift Savings Plan (TSP) Help You Retire Well
by Jay Hunt
Jay Hunt of Stratico Retirement and Insurance Solutions is in the business of helping people, and here he discusses the benefits of the TSP, and what it has to offer.
Each year many public sector employees face one of the most significant challenges of their work career – what they should and need to do with regards to their TSP account and TSP Fund Selection? Will you be ready for the next adventure in your life? Will your savings match your income needs? Will you have the tools needed to turn challenges into opportunities that will outlast you and allow you to maintain the lifestyle you have grown accustomed to?
In this article and several other articles, we will publish in the ‘Retire Well’ series we will share the ten most important things you need to know and do to ensure a successful, comfortable transition into your next adventure – retirement.
Item #1- Let the Thrift Savings Plan help you Retire Well:
The Federal Government offers two retirement systems – Civil Service Retirement System (CSRS) for those individuals employed before January 1, 1984 and did not convert to FERS, and the Federal Employees Retirement System (FERS) for those individuals hired on or after January 1, 1984.
For FERS employees, TSP is one of the three legs of the stool that make up their retirement system in addition to the Basic Benefit Plan and Social Security. If an employee fails to participate fully in the Thrift Savings Plan, it is like losing one of the legs of the stool causing an imbalance. As a matter of fact, the TSP is potentially the largest component of the FERS enhanced by the employee’s contributions and the matching agency contributions. Maximum participation from the Agency Employer is a huge benefit that should be given strong consideration to ensure that you will see the benefits of your hard work by capitalizing on all available resources to retire well.
Although under CSRS employees do no reap the benefit of the agency automatic l% matching contribution for TSP, participation in the TSP is allowed. Having the opportunity to defer tax obligations on one’s income is an advantage that should not be overlooked; thereby, being one of the primary reasons why CSRS employees should consider maximizing participation in the TSP.
In essence by deferring the taxes due on earnings, a greater savings over a period of time with the added advantage of earning interest is realized. For both CSRS and FERS employees participating in the TSP is a formula for saving towards your retirement future and generating a plan that will increase your opportunity to retire well and cement the lifestyle you have worked hard to achieve.
The Thrift Savings Plan contribution limits for catch-up contributions for those ages 50 and older change from year to year and federal employees should always keep themselves aware of the most recent year TSP Contribution Limits. P. S. Always remember to share what you know.
Contact Jay Hunt
Stratico Retirement and Insurance Solutions
(816)-260-6737
More From Jay Hunt
Article: FAQ Regarding New TSP Investment Options by Jay Hunt
Article: Leaving and Rejoining Federal Service: Benefits Retained and Benefits Lost by Jay Hunt
