How “Committed” Federal Employees Can Save for Retirement?

You’ve decided to continue in your current position in the federal service until you’re eligible to take full advantage of your federal retirement benefits. Deferred or postponed retirement allows you to collect federal retirement benefits even if you are not yet qualified. You’ll have served the federal government for 15 years as a “committed” federal employee.

Several options are still available to you to establish a retirement that is more than merely surviving. Here are some crucial planning techniques to maximize your remaining years of service.

The Pension Formula

We will use the FERS system for this article, not Law Enforcement or Special Provisions.

This formula has a handful of noteworthy features:

  • Your retirement service credit date calculates your service years based on your Retirement Service Comp Date (RSCD). We will further explain this in detail below.
  • For instance, taking sick leave will be counted toward your total service time.
  • 20 years of experience in the workforce at 62 has several advantages. You probably won’t retire before the age of 62 with 20 years of service if you realize the long-term influence on your retirement. This can make all the difference in the world!

Be Aware of Your Retirement Eligibility Requirements

Your RSCD is the most important date for you and your retirement plan. Your eligibility for a FERS or CSRS pension will be determined as of this date by the Office of Personnel Management (OPM). Some believe that it counts because they have obtained leave credit for retirement purposes.

Occasionally it does, but most of the time, it doesn’t until you do something about it. Make sure you obtain credit if you served in the military or were a volunteer in the Peace Corps, VISTA, or a government contractor.

An agency will occasionally grant employees leave credit, but not retirement credit, as it might take months or even years to sort this out. Your RSCD may be impacted if you change agencies or discontinue service. So it is important not to check your RSCD until the last minute.

Manage Your Sick Leave and Vacation Time With Care

As mentioned above: sick leave matters! Your yearly leave is paid out in one lump sum when you resign as a federal employee following a conventional immediate retirement plan. In the pension calculation, sick leave is counted as a year and a half of service.

A maximum annual leave can be carried over each year, but sick leave has no restrictions. The bottom line is that you can receive a more excellent pension based on your accumulated sick leave for the rest of your life. It’s also worth noting that days of sick leave used for fewer than 30 days aren’t reimbursed. So stay on the job longer to use the entire month of sick leave you’ve accrued when you retire.

The Perfect Moment To Start Thinking About FEGLI is NOW!

“I wish I had known that” is the most common comment about Federal Employees Group Life Insurance (FEGLI). Do you realize how much more costly your FEGLI will become as time goes on? If your health is good, aren’t you able to acquire the exact insurance for less money by being proactive during these years?

For instance, after you reach the age of 50, the cost of option B coverage, which costs five times your wage, will nearly double every five years. Being proactive has saved federal employees tens of thousands of dollars in life insurance rates.

Pension maximization is a concept distinct from FEGLI. You may be told that purchasing life insurance might help you avoid paying the future survivor benefit on your pension.

However, permanent life insurance does not give the same future benefit as a guaranteed survivor pension. It’s impossible to anticipate when an annuitant will die. Therefore, a policy’s death benefit might be millions of dollars. So proceed with extreme caution before making any such decision.

Conclusion

To summarize, it may be tempting to assume that retirement plans will be as they are after 15 years of working for the government. To avoid being caught off guard when it comes time to file your retirement application, being proactive in your planning is essential. And remember that the objective in retirement is not to survive but to flourish.

Contact Information:
Email: mark.heinrich@grfci.com
Phone: 9187441333

Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.

Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.

Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564

Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402

Member FINRA www.finra.org / SIPC www.sipc.org

Broker Check http://brokercheck.finra.org/

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Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark's passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families. Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation. Additionally, we've counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

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