Retirement is a seismic shift in an individual’s life. It’s a shift that closes one door and opens another. The life you leave behind upon retirement is a life full of familiarity. As you end your federal career, you leave behind your office, coworkers, normal routine, and salary—just to name a few. Retirement brings various degrees of uncertainty. Financial uncertainty is prevalent as the amount of funds you’ll have coming in and the expenses you will pay can change dramatically. How does one deal with the many retirement unknowns? Below are two practical steps to achieve clarity on your federal retirement.
1. Talk to those who’ve been there before.
Retirement is like landing on Jupiter in that it can be scary and take a lot of work to get there. Retirement is unlike landing on Jupiter in at least one very important way—it’s been done before! Thousands have successfully retired. Seek out the stories of those who’ve paved a path to retirement. Learn the things they did well and pay close attention to the warnings they give. Experience is a wonderful teacher, but lessons are often painful. One of the thousands of federal retirees before you may have made a mistake in retirement that you are heading straight for. Learn from those who have navigated this path—there’s no need to repeat their errors.
When listening to the stories of others, it is important to remember to use discernment. Though hearing the stories of others is a wonderful tool, not everything people say is helpful. This is where it’s important to know your source. Do you trust what you’re hearing, reading, or listening to? If you’re on the brink of a major decision regarding your health care, Thrift Savings Plan (TSP), retire date or some other aspect of FERS retirement, it may be helpful to seek the council of professionals in that field.
The Retirement Benefits Institute YouTube page has a wide selection of videos on federal benefits topics. Through hundreds of retirement trainings across the country, we’ve learned a few of the dos and don’ts of federal retirement. See some of those stories here.
2. Run an estimate.
What are some retirement unknowns when it comes to cost? Health care, life insurance, and long-term care are just a few that come to mind. Though the federal government will generally continue to pay the same amount of your FEHB premiums in retirement, you will begin to pay your share of the premiums with after tax dollars. This switch from pre-tax dollars while working to after-tax dollars in retirement is known as premium conversion.
Although you may never need it, the cost of long-term care can be expensive, if required. Federal employees have the option of long-term care coverage through the Federal Long Term Care Insurance Program (FLTCIP). Ltcfeds.com has a premium calculator which can give you an idea of the cost of FLTCIP.
For another wonderful resource about long-term care, visit lifehappens.org.
Many agencies offer a benefits report that will estimate your federal retirement income and give you an idea of future costs. We would encourage you take advantage of this service. It’s difficult to plan for the retirement unknowns, so take the steps needed today to begin shedding light on your federal retirement.