What are some mistakes I can make when planning my retirement?

  • Many mistakes can be made when planning your retirement if you don't stay informed and educated about the benefits that are available to you. Some more common mistakes include basing your investment decisions on what just happened in the market (for your Thrift Savings Plan investments), failure to educate yourself or work with a specialist who can help you, retiring on the spur of the moment, and the worst mistake: deciding to retire without discussing your plans with your spouse.

Under the Civil Service Retirement System (CSRS), when can I retire?

As a general rule, you can retire under normal retirement age as follows:

  • You are age 62 and have 5 years of full-time service
  • You are age 60 with 20 years of full-time service
  • You are age 55 with 30 years of full-time service

Under the Federal Employees Retirement System (FERS), when can I retire?

FERS has a component that is known as the minimum retirement age, or MRA. MRA is based upon birth year and age.

  • Before 1948: 55
  • 1948: 55 and 2 months
  • 1949: 55 and 4 months
  • 1950: 55 and 6 months
  • 1951: 55 and 8 months
  • 1952: 55 and 10 months
  • 1953-1964: 56
  • 1965: 56 and 2 months
  • 1966: 56 and 4 months
  • 1967: 56 and 6 months
  • 1968: 56 and 8 months
  • 1969: 56 and 10 months
  • 1970 and after: 57

What factors will impact my retirement annuity?

  • Your High-3 Average salary, which is the highest average salary your earned over 36 consecutive months, and your length of service (creditable civilian service, temp time, re-deposit, creditable military time, and sick leave).

Do I have to pay for survivor benefits?

  • Survivor benefits are of no cost to you during employment; upon retirement, though, survivor benefits will come at a cost. Your spouse must decide whether he/she wants these retirement benefits.

What is Federal Employee Group Life Insurance (FEGLI), and can I opt out of it?

  • FEGLI is group term life insurance. The basic insurance death benefit is your annual salary, rounded up to the nearest $1000, plus an additional $2000. There are optional benefits that will increase your coverage, but they do cost more. The basic insurance coverage and cost go up as your salary increases. You are automatically enrolled in FEGLI. To opt out, you must complete and file a waiver with the Office of Personnel Management.

What is the Thrift Savings Plan (TSP), and how much can I contribute?

  • The TSP is a defined contribution plan. It is used specifically to additionally fund and supplement your retirement income. TSP is voluntary, and the contributions made are separate from your FERS basic annuity and your CSRS basic annuity. You can contribute up to $16,500 as of January 1, 2010 for both the FERS and CSRS retirement systems.

Can I contribute more to the Thrift Savings Plan (TSP) if I am close to retirement?

  • It depends. If you are over the age of 50, currently employed, and in pay status, you can put in additional dollars, or what is commonly referred to as "catch-up contributions". You can put in an additional $5500 per year, giving you a maximum contribution of $22,000.

I heard that I can take out a loan against my Thrift Savings Plan (TSP). What are the provisions?

  • The TSP loan program has two types of loans: general purpose and home loans. The minimum loan amount is $1000, and the maximum is $50,000. A general purpose loan must be repaid within 5 years, and a home loan must be repaid within 15 years. The current loan interest rate (as of March 1, 2010) is 3.125%. There is a $50 loan processing fee, and you must wait 60 days between loans. You may only have one home loan and one general purpose loan.

When can I start planning for my future?

  • There is no time like the present! Contact one of our trusted, nationwide advisers to receive your complimentary retirement benefits analysis.
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