How’s your endgame going?


If you’re like most people, you probably have, or will, spend more time deciding how, when and where you’ll retire than you did deciding how, when and where you would spend the majority of your career.

The good news for most long-time federal and postal workers — whether Civil Service Retirement System or Federal Employees Retirement System — is that in retirement, you may be better off than many of your private sector neighbors. Especially if your retirement is a long one.

While retired feds can look forward to full CSRS or partial FERS protection from inflation, few, if any, private plans have any cost of living adjustment mechanism. Defined retirement benefits in the private sector are becoming rare. Employer-backed pension plans are fast disappearing. And of those employers who offer 401k plans, fewer and fewer provide any matching contributions.

While Congress and the White House have proposed cutting the civil service retirement programs, they’ve failed to act so far. As the 2020 elections approach, the political heat is being turned up daily. That makes it unlikely there will be any retirement changes —good or bad — this year. At any rate, you have to work with what you know. That is what the current rules, regulations, perks and penalties are in the retirement plan covering everyone from your friendly postal letter carrier to Customs and Border Protection officers, Agriculture Department meat inspectors, DEA agents, park rangers and civil servants circling the earth in a space station.

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Retiring under the old CSRS program was, and is for the few who remain under it, relatively easy. The longer you worked, and the more you earned, the better your starting annuity. Up to 80% of final salary for long-time, 41-plus years, workers. Of whom their were a lot. And that annuity, a pension in private sector terms, is fully linked to the cost of living. Because of their annuity benefit, most CSRS employees don’t have to invest in the Thrift Savings Plan, although the vast majority wisely do. Some CSRS employees don’t touch their TSP money for years because they don’t have to. FERS is a different story.

FERS is great for the majority of people who come to work for the government. That’s because most of them don’t make a career in government and don’t retire from government. They get, and pay for, Social Security and a FERS annuity, less generous than the CSRS benefit, that is portable. Meaning they can take it with them — like their 401k plan — when they retire. People who make a full government career under the FERS system need to work a little harder, max out in the TSP and pick the best time and situation to retire. So how do you know?

These are some of the key questions you should ask, and answer, yourself:

  • Am I eligible to retire?
  • Can I afford to retire?
  • How does my net income while working compare with my net income in retirement?
  • What factors may reduce my CSRS or FERS retirement?
  • Am I mentally prepared for retirement?
  • When is the best time to apply for Social Security?
  • What are my options to withdraw from the TSP?
  • How much life insurance should I keep?
  • Do I need Medicare AND FEHB?
  • Do I need long-term care insurance?

Knowing what to ask is very important. Knowing the answers is critical. Where to start? Relax, we’ll come to you. Today at 10 a.m., EDT, benefits expert Tammy Flanagan will be my guest on our Your Turn radio show, streaming online at Federal News Network or 1500 AM in the D.C. area. The show will also be archived here on our home page so you can listen anytime, much of it will bear repeating, pass it on to friends or coworkers.

Listen if you can, her seminar could be one of the most financially rewarding you’ll ever hear.

Nearly Useless Factoid

By Alazar Moges

The shortest war in history is the little known Anglo-Zanzibar War of 1896. The war lasted under 45 minutes. The conflict began after the death of the pro-British placed Sultan, which led to a very, very brief struggle for power before the British quickly regained control.

Source: Britannica

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