Cruising along or penny pinching in retirement? Your call.

While the majority of current retirees are under the CSRS or Offset system, the vast majority of people working for the government right now are under the Federal Employees Retirement System (FERS). When they retire under a less generous formula, they will get a lower annuity because of the diet-COLA provision of FERS. Some years that reduction — based on an already smaller than CSRS annuity — means they will get a COLA that is 1% less than their CSRS colleagues. Over time that can really hurt. Imagine what your FERS annuity will be worth 10-to-30 years into retirement, especially if we hit future peaks of high inflation.

So what do you do in retirement whether you are under CSRS or FERS? How do you prepare for it? We asked financial planner Arthur Stein what people should be doing. That’s what we’ll be talking about today on Your Turn.