Most Common Federal Retirement Planning Mistakes
There are no mistakes, just growth opportunities. At Federal Educators, we believe that to be true in all things, but especially when it comes to retirement planning. But, in order to maximize both your earned benefits and your time, we’ve put together a list of the 5 most common federal retirement mistakes…er, growth opportunities. Let’s dive in.
- Don’t expect immediate pension payments after retirement
Also known as the OPM Trap, there can be a 2-6 month delay before you receive a full pension payment. Because of the many forms that OPM must process in order to adjudicate your retirement benefits, this can cause a delay in payment. Prepare yourself with sufficient savings to cover expenses and any emergencies during this timeframe.
- You can buy back military time
Many federal employees serve in the military but not always long enough to receive a military pension. In that case, it’s possible to buy that time back and have it count towards your federal retirement calculations. In order to get the credit, you must make your deposit in full before you retire.
- Make sure to establish an estate plan
This can be said for any retiree but especially for federal employees! Ensure that an estate plan is written, your beneficiaries are updated regularly and that you have advocates on your behalf who can handle any issues in case a disability arises.
- Selecting a Thrift Savings Plan (TSP)
There are a number of accounts available under the Thrift Savings Plan (TSP), but which one is right for you? Most employees chose a G Fund, but it offers a low return, sometimes less than 1%. It’s a great time to learn and understand the differences between C, S, I, F, L and G funds. Make sure you’re taking advantage of any matching funds too!
- FEHB planning
To continue receiving Federal Employee Health Benefits (FEHB) as a retiree, you must enroll in it at least 5 years before your planned retirement. You don’t want to miss out on these amazing benefits so that’s why your enrollment date is critical!
Federal Educators is here to help you reap the reward of your hard-earned benefits. Schedule a complimentary virtual meeting here or give our St. Petersburg office a call at 813-536-6955 to get started today.
