By: Jesse Black
As I’m writing this, it’s December 2023, the end of the year. I have met with many Federal Employees this year, and over many years, and today I want to talk about one key thing I see consistently that helps Feds be more prepared than others for retirement.
I do approximately 50-60 meetings a week with federal employees, I do webinars and seminars for agencies, public webinars and write many articles, so I have a lot of experience with talking to federal employees. The one thing that I see federal employees do consistently to be more prepared for retirement is education.
Federal Employees who have taken the time to educate themselves on the complicated process of federal retirement, who know the most about the system and how it pertains to them, and most importantly they’ve researched the right time to retire based off their personal goals, those people are more likely to be very successful. They’ve attended the webinars, they’ve read the articles, they already have a good foothold on what their personal retirement is going to look like. Those are the Federal Employees who are the most prepared. However, the most important thing is they know how this education pertains to them. They know how much they need to save in the TSP. They have an idea of when to start Social Security and how it all fits in.
You want to be educated, but you also want to take the information out there and verify it. OPM can be a great resource for information, but their site can be quite daunting and sometimes a lot of information and jargon that’s kind of hard to understand. So when you’re getting information and education, when you’re reading an article online or you’re watching a YouTube video on how to invest through TSP, make sure you take the time to verify that it’s correct information, instead of just applying that general information to your situation.
Which brings me to my next point; Education is key, but taking all that education and making it specific to you is equally as important. You want to get educated on the information that’s available and then take that and make it applicable to you. For example, you can read when you’re eligible for retirement and that you can go as early as your minimum retirement age with thirty years, but then you have to take that and apply it to your situation. When are you going to have 30 years? Is it before you turn 60? Can you go at your MRA? And if that’s the case, how much pension are you going to get? What’s your pension going to be? How is your FERS supplement? Is that going to be enough income for you to retire or do you need to wait till 60? Or maybe even 62 and get that higher pension computation that you learned about when you educated yourself.
There are a lot of factors that you wouldn’t know about unless you’re educated. I’ve talked to people that retired when they were 59 and they didn’t know they weren’t going to get a cola until 62. So for the first three years they weren’t getting a cola. Knowing that is ultimately the responsibility of the employee. As frustrating as it is, your benefits department or OPM may not proactively be educating you. You want to make sure that you’re taking the time to read through the information. It can be boring information, but you want to read through it and make that applicable to you.
Federal Employees who are set up for retirement are also very proactive. When you read information and get educated, take that information, apply it to your specific situation and then ask yourself, “OK, what steps can I take to make sure that I apply the information that I’ve learned so that it betters my situation?” If you’re going to retire at 59, you’re not going to get colas, that does not mean you shouldn’t retire. That means you need to have a plan to make sure you have more than enough income. Maybe you need to throw more in your TSP. Maybe you were planning on saving only 10% of your salary, but now knowing that you need to save more, maybe you should be putting in 15% in instead of 10%. And so you want to go out there and get the education and you want to apply that information to your specific situation.
Know your goals too. Write down your goals of what you’re trying to accomplish, and then you can tailor your retirement to your goals. If you need to work a couple more years because you need a little bit more in your pension, you want to kind of artificially delay Social Security while you’re working. You can do that even though you might not want to. Tailor it to your specific situation. And again, all the information that you read out there, if it’s not from OPM, if it’s not directly from the source, take it with a grain of salt, verify it, make sure that it’s correct before you hang your hat on it. You don’t want to make a life altering decision based on information that could be incorrect. I talk to people who have healthy TSP balances. They know exactly what they’re going to get in retirement, or they at least have a pretty good idea and they want to verify it. They’ve made some educational choices.
So where do you go to get this information? You want to be educated, but it’s hard to get that information. OPM.gov has books and books of information. It can be hard to read, but that’s a good resource out there. Fedsmith.com is another great resource. I do see a gap out there right now where benefits departments are overworked. They have so much going on it’s hard for them to proactively educate their employees. I am constantly putting out resources on the FedSmart Facebook Page and podcast, I do a few webinars each year, and I also have some other exciting resources coming in 2024. I really want to make sure that I am doing my best to educate federal employees and I’m going to continue to put out more and more content to help people, not just people close to retirement, but at all stages of their federal career. So keep a lookout for some really great resources coming from FedSmart Retirement here soon.
Take the information that that’s out there, verify it and apply it to your specific situation. If you start searching for information, you can find it. Have a great rest of your year, finish 2023 strong and look forward to an amazing 2024.
Tags; FERS, Federal Retirement, Federal Retirement Planner, FedSmart, FedSmart, FedSmart Retirement Planners, Financial Advisor For Federal Employees, Thrift Savings Plan, TSP, Steven Puckett, Steven Puckett Financial Advisor, Steven Puckett Financial Planner, Steven Puckett Federal Retirement, Jesse Black, Jesse Black Financial Advisor, Jesse Black Financial Planner, Jesse Black Federal Retirement, Federal Employee Retirement Planning, Federal Employee Retirement Income, federal employee retirement planning
