If you’re ready to retire from your federal government career, congratulations!
You’re probably looking forward to time off to do new things. But ensuring you have the resources available to support those new things means you must be retirement-ready.
Retirement readiness is more than having enough money tucked away, though that’s important. Now is the time to focus on near-retirement planning as a federal woman employee. Doing so means you’ll have the support to enjoy your post-career life.
Maximizing TSP/IRA Contributions
You might have taken time off to raise a family or care for elderly relatives. As a result, you wouldn’t have contributed to your Thrift Savings Plan (TSP), which is part of your overall Federal Employee Retirement System (FERS) benefits. This means your financial base isn’t as large as it could be.
As a federal woman employee, it’s time to focus on TSP catch-up contributions. If you have an individual retirement account (IRA), increase contributions to that, too.
Another step is partnering with a federal government-focused Certified Financial Planner™ like one with Serving Those Who Serve. This expert can tell you how much to increase contributions, help you direct asset allocations for ideal growth, provide an idea of retirement living expenses, and other issues.
Reviewing Retirement Healthcare Options
Statistics from the U.S. Centers for Disease Control and Prevention report that life expectancies for women continue to outpace those of men. Additionally, you could suffer more health-related problems during that longer life span, like a cold, hearing problems, or hip replacement surgery. Then there are the chronic health problems—think diabetes, heart disease, or high cholesterol.
Here’s the good news. One perk of your federal government career is Federal Employees Health Benefits (FEHB) healthcare coverage. Even better news is that, in many cases, you can keep FEHB benefits into retirement. Many federal employees carry FEHB and Medicare to expand coverage and reduce out-of-pocket costs.
But which plan is best for retirement? For an answer, check out the Consumer’s Checkbook. This online resource offers an in-depth look at FEHB and Medicare plans while helping you calculate potential healthcare costs. The Consumer’s Checkbook membership is an affordable tool. You can save an additional 20% with the code stwserve.
Long-Term Care Insurance: Is It Worthwhile?
Another retirement question involves long-term care insurance. Such coverage is helpful when covering expenses that Medicare or FEHB don’t take on, like assisted living centers or home-health assistance.
Average premiums for a $165,000 policy are $950 per year. However, other factors impact premium costs. Costs can vary based on your state of residence. Also, the older you are, the pricier the premiums. Furthermore, some long-term coverage companies might not issue a policy if you’ve had a recent heart disease or cancer diagnosis. Or you could get that policy (at a higher premium), but it might not cover the care you need for those particular ailments.
Long-term care insurance can be adequate in plugging healthcare cost gaps. However, it’s important to research available policies and their prices to determine if such a move is cost-effective.
Learn more about your retirement benefits at our No-Cost webinars, featuring Ed Zurndorfer -
Planning The Income Strategy
You might have a lot of money in your TSP, IRA, and other accounts when you say goodbye to your work colleagues for the final time. But it might not be a good idea to begin your retirement by withdrawing massive amounts and splurging on that 274-day world cruise.
The goal of retirement funds is to cover food, clothing, shelter, and healthcare expenses. Then you can think about travel and other fun activities.
Here are some proactive planning tips to help plan a retirement income strategy:
- Develop a budget. Doing so while still working helps you mentally prepare for post-career costs and how much you’ll need.
- Delay Social Security benefits. Don’t apply for Social Security payments until you’re 70 if you’re in a financial position to do so. If you can delay those payments, you could end up with 132% of the monthly benefit.
- Work with a fed-experienced CFP®. This individual can take you through the steps of an effective income strategy that considers expenses and other factors.
Retirement Around the Corner? Plan Now!
While you’re assessing life after following your federal career, be sure your resources are in place to support that life. Increasing retirement account contributions, determining healthcare expenses, and planning a retirement income strategy are keys to a successful post-career life.
To help with these and other steps, consider contacting the team at Serving Those Who Serve. You’ll benefit from experts who can help you bridge the gap from your final career years to your fantastic retirement. Furthermore, 66% of our staff are women, which means we understand the unique issues female federal employees face during their careers and retirements.
To learn more about how STWS can help you, email us or visit our website.
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
