Once you are done with your job responsibilities, you want to spend the remainder of your life, i.e. the retirement period relaxing, chilling, traveling around the world, or spending more time with your loved ones. If you are a federal employee and want to enjoy federal retirement benefits to the full, it’s important that you smartly and strategically plan your retirement. Mistakes committed during the process can cost big and lead to a financial crisis post-retirement. Here are a few mistakes that you should avoid to ensure a secure financial future-
1. Not Setting a Budget – A lot of federal employees don’t set a budget, which is a big mistake. In order to be able to effectively manage expenses after retirement, you must have a carefully prepared budget in place. The best thing to do is create a budget while you are working as it allows you to work on your spending habits and get expenses under control before retirement.
2. No or Late Savings – No matter which stage of life we are in, we can always find a reason not to save. Federal employees often don’t plan their savings early, primarily because they have access to a robust pension plan, however, they should know that pension isn’t always enough to maintain a high standard of living in retirement. You should proactively work towards saving money for retirement. By contributing to retirement benefits plans such as the Thrifts Saving plan or TSP, you can supplement your retirement income.
3. Drawing Social Security Benefits Early – Though social security benefits can be availed by federal employees after reaching the age of 62, if possible, you should try to keep these benefits for a later stage of your retirement. Drawing these benefits too early can reduce the amount of benefit to a great extent. You might want to use social security early to fill a gap in income, however, for every year after you reach full retirement age or FRA, the social security benefit increases by 8% in delayed credit up to age 70. Be a smart consumer and decide for yourself!
4. Maximizing your TSP account – Let us help you find the best lifetime plan to help you utilize your Thrift Savings Plan (TSP). You saved this for a reason and for most that will be either for income or to leave more to your loved ones later in life. We do both for our clients.
Let MyFederalRetirement Help Design a Comprehensive Financial Plan for You
MyFederalRetirement Help encourages federal employees to start building a thought through retirement plans and avoid the above-mentioned and other mistakes. Let us design a comprehensive financial plan for you that will help you best meet your requirements post-retirement.