Federal Retirement Planning: Top Tips to Keep in Mind

Federal Retirement Planning: Top Tips to Keep in Mind

Is retirement just around the corner for you? Or maybe you are trying to get a head start on some federal retirement planning?

Either way, creating a federal retirement plan can be a bit confusing. This is because most retirement financial planning advice does not apply the same to federal employees.

As an employee of the federal government, you may be eligible for more benefits than most workers. Making sure that you get the most out of these advantages is key to starting a happy and stress-free retirement.

We’ll explain a little more in this federal retirement planning guide and help you understand the steps you should be taking.

What Are the Federal Retirement Systems?

Separate from private-sector plans, federal employee retirement plans offer some unique benefits.

First up is the FERS or Federal Employees Retirement System. The FERS plan includes benefits from three different sources: a basic benefits plan, social security, and a Federal Retirement Thrift Savings Plan (we’ll discuss this more later).

Next, there is the CSRS or the Civil Retirement System. This plan allows you to contribute up to 10% of your pay to a voluntary contribution account. The employing agency will match the employee’s CSRS contributions.

How Is Federal Retirement Planning Different?

Navigating federal retirement benefits can be confusing because there are just so many to consider.

Unlike private-sector employees, federal employees may have unique investment opportunities. For example, let’s take a look at a Roth TSP for Federal Employees.

A Thrift Savings Plan, or TSP for short, is the mirror for a typical 401(k) savings plan that a private sector employee would receive.

A TSP is useful because they generally have low fees and are mostly simple and easy-to-comprehend investments. Even though they are fairly straightforward, understanding the TSP investment funds can help you make a more informed decision.

Another big difference is in the help that is available for you. Many financial professionals aren’t well-versed in federal retirement planning.

While there are dedicated federal retirement planning consultants, it is important for you to keep track of your plan. If you don’t understand your benefits well enough then you won’t be able to catch any mistakes.

Finally, it is important to know that your retirement income as a federal employee will stop, start, and change. Knowing when you may experience gaps in your income can help you plan efficiently.

This is unique to federal employees and can sometimes throw a wrench in the workings of retirement calculators. This is further reinforcement to know your benefits inside and out.

Know Your Benefits So You Don’t Miss Out

Federal retirement planning may be confusing but it is worth it to plan ahead so that you don’t miss out.

Getting everything worked out ahead of time will ensure that your retirement is relaxing and that you can spend your time the way you want.

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