What You Should Know About Federal Retirement Planning
Retirement can be overwhelming, with both excitement and uncertainty for the federal employee considering the road ahead. The idea of leaving a workplace for a life of relaxation seems so far in the future. However, it’s a good idea to have a strong understanding of your benefits as a federal employee and start your planning now. We broke down some key points of federal retirement planning in hopes of making your life – and future – easier.
Tammy Flanagan, a federal retirement benefits expert, says in an article on Government Executive that there’s no special age or number of years worked to guarantee successful retirement; it’s based on each individual’s preference and life circumstances. In that sense, it’s really best evaluated on a case-to-case basis.
However, the National Active and Retired Federal Employees Association (NARFEA) strongly urges employees to purchase their long-term health care insurance in their 50’s, a time when you will have a better understanding of your financial assets, so that you can determine what you can afford in the future.
There are several different forms of benefits, and as confusing as it may be, it’s crucial to understand every option available. There are three types, including The Basic Benefit Plan, Social Security, and the Thrift Savings Plan. Each is based on different data and provides different benefits. Again, for a jump-start in the planning process, sort out the benefits ahead of time to determine your best option.
One key tidbit to know is that federal employees who leave their position by age 55 are able to withdraw a “partial payment” from their Thrift Savings Plan accounts without being charged a 10 percent tax penalty, according to Flanagan.
Additionally, a relatively new development in federal retirement created two years ago grants employees 100 percent credit for their unused sick days, Flanagan reports.
These brief and simple steps can help you sort through the process of federal retirement planning. To share more tips, tweet us at @VectorIT.