Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Are You Ready to Retire? A Self-Assessment

An ever-increasing number of government employees are eligible to retire, and with Congress considering changes to federal retirement benefits, many are contemplating their next move. But even if you’re not in this group, it pays to be prepared for your long-term future.

In fact, regardless of where you are in your career, it’s in your interest to be well-informed and to develop a long-term plan for your financial future.

With that in mind, three years ago, we developed a Retirement Readiness Assessment to help federal employees determine where they stand. It contains a series of questions covering everything from Thrift Savings Plan accounts to health insurance decisions. This week, we’re re-launching the assessment.

Based on your responses to the questions, you’ll get a report on your status: Retirement Ready, On Your Way, Beyond the Beginning, or Just Getting Started. You’ll also get a few tips on next steps in the planning process.

Are you ready? Click here to take the Retirement Readiness Assessment

Photo: Flickr user Andrew_Writer

Benefits Spared the Budget Ax

The House voted Thursday to approve the Senate’s version of the fiscal 2018 budget resolution, an action that was noteworthy because that version does not mandate reductions to federal retirement benefits.

The House’s initial version of the budget resolution had directed the Oversight and Government Reform Committee to come up with $32 billion in savings over the next 10 years. Since the panel oversees federal compensation spending, that level of reductions would likely have involved changes to retirement benefits.

The Senate, however, declined to require savings in the area of employee compensation and benefits in its resolution, and the House ultimately went along with the Senate’s approach.

This doesn’t mean that feds are out of the woods, though. Even though the budget resolution doesn’t require benefits cuts, some reductions could ultimately be included in the fiscal 2018 spending measures Congress comes up with after the current continuing resolution funding federal agencies runs out in early December.

Then there’s the issue of next year’s budget. Last week, a memo from members of the White House Domestic Policy Council surfaced that recommended a number of retirement benefits cuts be included in the Trump administration’s...

5 Things You Should Do to Prepare for Health Benefits Open Season

I can hear the groans now. In only three weeks comes the start of another health benefits open season. For many federal employees and retirees, this is not a cause for celebration, but a time of frustration and confusion. As I’ve written before, open season can cause paralysis from analysis or inaction due to so many choices.

But what if I told you that you can narrow your choices and might be able to save over $1,000 next year by choosing carefully?

Choosing the best health plan is like putting together the pieces of a puzzle. You need to fit the premiums with likely out-of-pocket expenses and potential tax-saving features to come up with the complete picture of your 2018 health insurance needs. The health plan you chose 25 years ago, or even five years ago, may not be the best for next year. You owe it to yourself and your family to spend a few hours between now and mid-December to learn more about your options. After all, you most likely have more than 20 health insurance plans to choose from, up to 10 different dental supplemental plans and four vision plans. Tax-saving features include flexible spending...

Are You Mentally Prepared for Retirement?

It is important to visualize a life after your federal career has ended. Some people may want to ease into retirement. Congress created a phased retirement option in 2012. Not all federal employees are eligible for it, but some agencies have implemented the option for those who are. Assuming your agency offers it, you also must be currently eligible to retire with 30 years of service at your CSRS or FERS retirement age or be at least age 60 with 20 or more years of service. You must also be working full time and not be subject to mandatory retirement.

Under phased retirement, your work schedule changes from fulltime to part time (20 hours per week) and your retirement is paid at one-half the full amount. There is a mentoring requirement as well. Eligible employees may spend a few months up to several years in a period of phased retirement prior to fully retiring. If you are interested, check with your supervisor or a retirement specialist in your human resources office.

Another way to mentally prepare for full retirement is to stagger your retirement benefits. For example, in our family, my husband retired from his 26-year career in federal law...

When Can You Retire?

I get this question a lot: When can I retire? The person asking sometimes means When am I eligible to retire? or When can I afford to retire? Every once in awhile, it means When will I know I am ready to retire?

The eligibility question is easy. Under CSRS or FERS, you have to be old enough and have enough creditable service to retire under one of the available options. There is a difference, depending on whether you are applying for an immediate “regular” retirement, an early retirement benefit, deferred or disability retirement.

When considering your service requirement, be sure to review your federal service history and to understand the rules. Sometimes, your past federal service counts for leave accrual, as shown on your leave service computation date (SCD), but not for retirement eligibility or benefits. For example, temporary service performed after 1988 that was not covered by FERS retirement contributions does not count towards retirement eligibility or benefits computation. Other types of service such as military service may require a deposit—a payment into FERS or CSRS—in order to be fully creditable towards retirement.

Your work schedule might also impact your eligibility. Most federal employees work full...