Federal Employee Retirement How to prepare & What are your options
Presented by Vince Bono: Founder of Federal Employee Advocates Carolyn Tobin: Editor of The Federal Employee Financial Blog. Vince can be reached at: Carolyn Tobin can be reached at: Retirement Five Important Considerations
Your Life Expectancy When you will be eligible to retire Will you befinancially prepared to retire When you can access your TSP money Your financial options Average Life Expectancy How many years will you need your retirement income to last?
Male 45: Years Female 45: Years Male 50: Years Female 50: Years Male 55: Years Female 55: Years Male 60: Years Female 60: Years Male 65: Years Female 65: Years Male 70: Years Female 70: Years Male 75: Years Female 75: Years Your pension alone probably will not be enough for you to retire on, so you needother sources of income to last at least this many years beyond your retirement. Eligibility for Normal Voluntary Retirement
CSRS: FERS: Age 55 & 30 Years *MRA & 30 Years Age 60 & 20 Years Age 60 & 20 Years Age 62 & 5 Years Age 62 & 5 Years *MRA & 10 Years Theres a 5% per year reduction if you are under age 62 Ex: At age 57 your pension amount would be decreased by 25% ______________________________________________________________ *MRA is your Minimum Retirement Age. VERAs & Phased Retirement Voluntary Early Retirement
The Voluntary Early Retirement Authority allows agenciesthat are undergoing substantial downsizing, transfer offunction, or reorganization, to temporarily lower the ageand service requirements. Both CSRS and FERS Age 50 with 20 years Any age with 25 years Will you have enough money to retire?
Most federal employees should be able toretire and still keep their same standard ofliving, if their retirement income is at least 80%of their gross pre-retirement income. For Sure you will no longer be paying payroll taxes. Hopefully your mortgage will be paid off. Hopefully your children have graduated college. Maybe you will downsize. Sources of Post-Retirement Income How do you get to 80%
CSRS or FERS-Defined Benefit Pension Social Security- Thrift Savings Plan-Similar to a 401K Other Sources IRAs Annuities Other accounts Inheritance (My Favorite) Social Security for CSRS
Many CSRS employees will not be entitled toSocial Security 40 credits needed for coverage CSRS Offset employees will be eligibleBut Your Social Security benefits may be reducedby The Windfall Elimination Penalty Numerous Iterations-Go to OPM website andin the Search Box type in WEP How do you get to 80% Of your Pre-Retirement Income Your Pension
CSRS FERS 20 Years: 36.25% Years: 20% or 22% 25 Years: 46.25% Years: 25% or 27.5 % 30 Years: 56.25% Years: 30% or 33% 35 Years: 66.25% Years: 35% or 38.5% 40 Years: 76.25% Years: 40% or 44% 42 Years: 80.00% Will never reach 80%)