Retirement reality check: Will it be a dream or a nightmare? Your call.

Working slightly longer than you planned can have a big time payoff. And it’s particularly true for federal workers.

As you get closer to retirement, do you find yourself smiling a lot, or sweating? Has the sudden rise in inflation jump started thoughts about the price of food, housing, travel, medicine and what a gallon of gas may cost in 20 years?

Some people can, do and should retire the first day they can. Better yet, if they are two high-paid long time feds whose starting annuity will be good and their TSP balance enough to see them through a happy, prosperous retirement. But for others retiring early — unless you are dying to join a year round shuffle-board group — might not be such a good move. Retirement could easily last 20 or 30 years — in some cases longer than you actually worked — so dollars-down-the-road are a major consideration. Or should be.

Unless you really, really love your job more than you think you’ll like inhabiting leisure world, the best bet for many is to set a first-possible-date then maybe keep working for another 1, 2 or 5 years. The financial rewards can be astounding:

By working another two years — from 60 to 62 — an employee earning $80,000 per year can boost their retirement income by almost $30,000. That’s an example of the time-is-money slogan. Big time.

My guest on Your Turn today is benefits expert Tammy Flanagan. She invented the best-days-to-retire concept. This morning at 10 am. ET streaming here or on the radio at 1500 AM in the D.C. area, she will talk about how working just a few years longer can make a massive difference in your lifetime flow of income. If you have questions for her, send them to me before showtime at

Tammy says that just working slightly longer, retiring later than you planned can have a big time payoff. And it’s particularly true for federal workers. Most are under the Federal Employees Retirement System, which offers them benefits based on a civil service annuity (for life and partially indexed to inflation), Social Security (fully indexed to inflation) and whatever they have in their Thrift Savings Plan. Although they are likely to have more in retirement than a private sector employee earning the same salary, chances are their total income will be reduced in retirement. So financially, the longer you work, the more you have to spend in retirement. And if you never retire, well, do the math.

Her theme for the show is Stop, Look and Reconsider. Here’s a preview:

Remember the “Retirement Countdown” clocks? Do they even still exist? Under the CSRS system, it was pretty simple to decide when it was time to retire. Once you were age 55, or later if you had less than 30 years of service, it made sense to retire. Set that clock and the countdown is on! Under FERS, it isn’t as easy to determine when the time is right. First of all, many retirees today want to maintain the same lifestyle, spend time traveling, and spoil the kids and grandkids. If so, you may need to replace your take home salary – and then some! Another problem is that your single paycheck is being replaced by potentially three or more streams of income: FERS retirement, TSP withdrawals, and Social Security. For some, there may be other retirement savings accounts and other pension benefits payable such as a military retirement benefit. When figuring out the shortfall or the overage, be sure to include tax withholding from each source of income along with any withholdings for insurance (FEHB, FEGLI, FEDVIP, FLTCIP, and Medicare). When it comes to withdrawing from your TSP, the sky’s the limit, but there’s no guarantee of lifetime income, so caution is required when designing a drawdown plan for your savings. For the FERS basic benefit, be sure that your federal service is creditable for eligibility and calculation. If you owe money to the retirement fund for pre-1989 non-FERS covered federal employment, military service or refunded FERS contributions – factor that into your planning. Are you married or divorced? Have you contemplated survivor benefit elections and former spouse entitlement as a result of a past divorce? Also, it is good to know the difference in a deferred, postponed, and the extra bump in the computation if you retire after age 62 with 20 or more years of service. There are lots of moving parts when it comes to navigating the road to retirement.

If you’re lucky (and planned well in advance), you will be able to proceed and retire on your desired date. If not, then you may need to make adjustments which may result in working a little (hopefully, not a lot) longer. Staying at work in the federal government will allow all three of your benefits (FERS, SSA, and TSP) to increase in value. Retiring from federal service and beginning a second (or third) career could also be an option, but be sure to continue living your previous lifestyle and save the rest. You’ll need the additional savings to make up for the possible loss of pension benefits and the reality that now all employers provide matching retirement savings contributions.

Nearly Useless Factoid

By Alazar Moges

Because of their long muscular tail, kangaroos can’t move backwards. Their tail lacks flexibility and serves as basically a third leg that limits their motion. The only time you will observe them move slightly in a rearward motion is during a fight to avoid injury.

Source: World Atlas

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