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The 10 Things You Need To Do Before Retirement

1. Determine when you are eligible to retire.

Be aware that there are specific service time requirements for federal retirement. Beyond that, additional provisions may apply for those in law enforcement, as well as those suffering from disabilities. Be sure to understand the specific target date and related variables.

2. Find out if all of your federal government service will be credited to your retirement.

Essentially, your service must be documented and meet the test of “creditable service”. If you previously served in the US Military, and then transitioned to a non-military type of federal employment, that time in uniform may be creditable.

3. Know your “High-Three”

Federal retirement benefits are based off of the average of your highest three years of base pay. Typically, this tends to be the last three years of your career, but this can vary on an individual basis. Be sure to understand the basic pay rate calculations made to determine your high-three.

4. Do you have family?

What happens when you are gone? Should you take a higher payout that only provides benefits while you are alive, or do you take a lower payout with the assurance that your survivors will have an income? It’s a big decision for any potential retiree to make, but even more so when retiring from government service. How does Social Security, FEGLI, and your Thrift Savings Plan factor into your calculus?

5. Find your paperwork.

Are your beneficiaries still correct? Divorce or death of a spouse, the birth or death of a child, or other life events may have occurred since you identified you beneficiaries. Do your beneficiaries know where to find these documents? Items to include would be any Federal Employees Group Life Insurance policies, your Thrift Savings Plan funds, any lump sums due to you at retirement, as well as anything detailing any unpaid compensation due to you.

6. Will Social Security be a factor in your retirement?

Social Security benefits will vary based upon factors like the level of your compensation while working, as well as the age you have reached when claiming the benefit. No matter what, it is important to factor in what these benefits will be as you plan your retirement strategy.

7. Take full advantage of the Thrift Savings Plan.

What a 401(k) is to our friends in the private sector, the TSP plays a similar role for Federal Government Employees. And just like a 401(k) plan, it is critical to diversify and re-balance your TSP account to give you the best chance to reach your retirement goals.

8. What insurance will you need?

If you meet the ‘five year’ test requirements and are otherwise eligible to retire, you may continue your federal health and life insurance coverage. But will that be enough? How does Medicare factor into this? What about long-term or assisted living care in your later years?

9. I’m eligible to retire, but can I afford to retire?

Your retirement benefits can change based on a number of factors, but the key question to ask is pretty basic: If I retire today, will I have enough income and savings to live comfortably? If the answer is “no”, then you likely need to work a few more years in order to get a higher benefit.

10. What kind of lifestyle do you want in retirement?

This is really all about you. A plan to live in Miami Beach may sound great, but can you afford it? Are there other locations you would consider that might have a lower cost of living combined with a high quality of life? Are you planning to buy or rent a retirement home? What size home is suitable for retirement? It is important to visualize where you want to go, and figure out a realistic budget to understand how much money you will need, and how long you’ll need to work to achieve your vision.