Many federal employees are reaching retirement age only to be surprised that they missed an important step and now need to push back their retirement. As a federal employee, there are several details you should be aware of if you don’t want this to happen to you. Here are five actions you can take to make sure you retire on time.
1. Review The Accuracy Of Your Official Personnel Folder (OPF) Annually
The main document you need to worry about in your OPF is Form SF 50 (Notice of Personnel Action). This document is updated on an annual basis, so you should take the time to ensure its accuracy regularly throughout your career. On Form SF 50, there are two essential boxes you should be paying attention to and validating.
The first is Box 30. This box shows what retirement plan you will be covered under (CSRS, CSRS-Offset, or FERS). Data-entry mistakes are not uncommon, so it’s a good idea to verify this information is correct.
The second important box to familiarize yourself with is Box 31. This box shows your Service Computation Date (SCD), which is used to determine your retirement date as well as what your monthly annuity will be. It’s important to understand what actions may push your SCD for retirement forwards or backwards. (1)
2. Understand The Requirements To Maintain Federal Health Insurance
In order for you to maintain health insurance benefits offered by the Federal Employees Health Benefits Program (FEHB) during retirement, certain conditions must be met. For example, one requirement is you must be covered by FEHB for five years immediately leading into retirement. If these conditions are not met and you wish to keep your health benefits, you may have to delay your retirement.
3. Contribute As Much As Possible To Your Thrift Savings Plan (And Start Early)
The retirement income of those covered by FERS is highly dependent on Thrift Savings Plan (TSP) contributions. Because of this, it is essential to try to always contribute the maximum amount and to start contributing as soon as you enter the workforce. This will allow time for your TSP to grow and ultimately permit a higher quality of life when you reach retirement age.
If you haven’t already been doing this and feel like you’ve fallen behind, all hope is not lost. When you turn 50 years old, you will be able to to make extra “catch-up” contributions. Although these additional donations are helpful, it is much more effective to start young and not have to depend on them.
4. Make Sure Your TSP Account Is Invested Correctly
It is important that your TSP is invested with a long-term strategy in mind. The goal is for it to continue growing even after you retire. In order to make sure your funds are invested appropriately, it is vital that you seek the help of a professional wealth advisor who can make sure your money is invested in a way that will help you reach your unique goals.
5. Attend Mid-Career And Retirement Planning Seminars
Along with working with a wealth advisor, one of the most important actions you can take to retire on time is to attend any mid-career and retirement planning seminars offered by your government agency. Here, you will learn everything you need to know to plan for your future. It’s essential to attend one of these early in your career to make sure you have a solid game plan and start off on the right track.
The worst thing you can do is put off retirement planning for “someday.” Too many have procrastinated until it was too late. Then when it came time to retire, they realized they weren’t ready because they hadn’t taken the time to plan appropriately. Don’t let this happen to you.
One of the best ways to protect yourself is to seek the advice of a wealth advisor who has expertise in setting people up for retirement success. At Beacon Wealth Management, we’ll make sure you’re ready when retirement comes knocking and that there are no unpleasant surprises. If you would like help making a plan for retirement success, contact my office today by calling (304) 626-3900 or emailing firstname.lastname@example.org.
John is the founder and owner of Beacon Wealth Management. He specializes in helping entrepreneurs, professional practitioners, and retiree red-zoners overcome the major financial challenges facing affluent families.
As a trusted and friendly financial partner, John delivers a collaborative client experience that empowers and guides people to reach a greater purpose for their wealth and pursue their financial dreams. He understands the multifaceted set of financial worries people face as they become more successful and get within the retirement red zone.
John is well-regarded throughout the business community for his expertise. He has appeared as an expert guest on The Brian Tracy Show and Hollywood Live with Jack Canfield, is the co-author of the book Masters of Success with Brian Tracy, is the host of the WDTV News 5 segment “Solutions 4 Financial Independence,” and has conducted hundreds of educational events on Retirement and Investment Advisory, Tax Reduction, and Wealth Transfer Planning. These include many Universities, Federal Employee Organizations, Professional Associations, and Large Energy Companies throughout the eastern United States.
With more than two decades of experience, John is credentialed as a Certified Wealth Strategist (CWS), Accredited Investment Fiduciary (AIF), Certified Estate Planner (CEP), Chartered Federal Employee Benefits Consultant (ChFEBC), Professional Plan Consultant (PPC), and Registered Financial Consultant (RFC). He is also a past multi-year member of Ed Slott’s Master Elite IRA Study Group.
A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a Wealth Advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he is passionate about giving back to his community, coaching youth sports, landscaping, architectural design, and playing racquetball.