Tuesday, 16 February 2016

Longest Holiday: The ‘When’ And ‘Why’ In Retirement Planning

Image source: boston.com
Retirement is foreseeable for anyone with a job, whether in the government, private sector, or as a self-employed professional. Retirement is like an inevitable destination that demands preparation.

Despite the good sense in preparing, however, many still end up struggling during their retirement years. Indeed, retiring often paints a picture of relaxation and endless free time—it is known as life’s longest holiday. However, it also means having a large nest egg to pay for leisure activities and probably, for long-term care needs. Here, financial readiness and stability play crucial roles.

Gradually, people are learning the benefits of financial management in retirement. Relying on government-sponsored retirement alone is not advisable because of unstable economic conditions and for the usually low yield it offers to civil servants. However, even private sector pension plans can be affected by corporate tides and changes in the business climate.

In addition, as people grow older, healthcare-related expenses increase and the retirement age is where most medical problems occur or get worse. To prevent financial catastrophe, a backup plan—like long-term health insurance and investments in various securities—must be available to take care of these future needs. 

Image source: marketwatch.com
Everything may seem a lot to take in when it comes to planning one’s own retirement, but it’s actually a task that’s easier accomplished early. Starting to invest in retirement at around 20 years old seems ridiculous, but this is a smart move often ignored by many.

The earlier people start investing, the more earnings they get once they reach retirement. Moreover, insurance is at its cheapest during the younger years. This will help holders prepare for future healthcare costs and have a buffer against possible large financial obligations. Insurance assures a generally comfortable and happy retirement.

Linda Foster works with federal employees to help them understand their benefits and maximize their retirement plans. For more about financial planning, subscribe to this blog.

Friday, 12 February 2016

Three things Federal Employees Need to Know about Retirement

Government employees may be aware of the Federal Employees Retirement System or FERS, but there are more benefits in store for those who have served their country for more than five years. Before making retirement plans, here are three things every federal employee should know.

Image source: Themilitarywallet.com

The basic benefits

The monthly cut from the paycheck goes to these three plans: Basic Benefit Plan, Social Security, and Thrift Savings Plan. The agency also gives a share on behalf of each worker. The TSP and Social Security can still be used even after retiring in federal service while the share from the Basic Benefit Plan can be obtained after working for five years for the government.

Counseling and assistance

Every government agency is obligated to give counseling and assistance to their retiring employees. Would-be retirees will be assisted from the application to the selection of the retirement date to facilitate the transition. Even after the retirement date, they may receive help for getting deposits and creditable service.

Unused sick leaves

Beginning January 2014, federal employees with unused sick leaves will receive 100 percent credit. Those who retired on or before Dec. 31, 2013 are still going to receive 50 percent credit. A formal letter must be filed with the employing agency to get credit for these absences.

Government employees deserve to get first-class benefits for serving the nation. It is only best to treat them well even in retirement to reward them for their contribution.

Image source: Usnews.com

Linda O. Foster from Poulsbo, Washington is a federal employee benefits specialist helping employees of all ages reach their financial goals. Read more articles on retirement planning here.