3 Strategies for Federal Employees Planning to Retire in the Next 10 Years
Thousands of federal employees retire each and every year, a number that only continues to increase with the passage of time. The number of new retirees reaching retirement age within the COVID era was no exception, with thousands impatiently awaiting their turn within the next ten years. It is crucial to ensure you prepare financially for retirement well before reaching retirement age. You will be poised to realize all of your retirement dreams with just a bit of preparation.
It’s true that it may be impossible to know what the next ten or twenty years hold, especially in terms of the uncertain investment landscape in which we currently find ourselves. But by educating yourself early on the ins and outs of retirement, you will have a better grasp on the realities of retiring within the next decade, from necessary tasks to being financially responsible.
As tempting as it may be, you must avoid retiring early or late at all costs. Retiring in your 50s or early 60s appeals to most anticipated retirees, but it isn’t always the most beneficial route for several reasons. Employees covered by the Federal Employees Retirement System, or FERS, can retire with a minimum of 30 years of federal service once they’ve met the minimum retirement age. Depending on the year you were born, eligibility for retirement may begin somewhere between 55 and 57 years old. With a minimum of 20 years of service, many employees are eligible to retire at age 60.
Understanding the financial demands of retirement will go to great lengths to ensure financial stability well into your golden years. You don’t want to fully retire only to have to return to employment to meet your income needs as a new retiree. While the financial needs of your retirement goals may vary, many federal employees utilize a flat percentage of 70% to 80% of their current salary to estimate cash flow requirements. This number may vary greatly depending on your standard of living, whether you decide to move to another state, and more. By taking a realistic approach to the fiscal demands of retirement living, you will be well-equipped to enjoy a more positive outcome.
We are far past the days of low yearly inflation and must learn to adapt moving forward. Currently, inflation across the US is at its highest level in a 41-year period. Although economists struggle to express inflation expectations, they don’t expect it to continue at the current 9.1% trend. It would be unrealistic to hope rates return to the low numbers of the last five to seven years, though. To put it plainly, this isn’t the time to make the mistake of calculating off of your current yearly salary and assuming you can afford expenses moving forward. In retirement, especially if you plan to live off of Social Security benefits, the COLA (cost-of-living adjustment) is simply incapable of keeping up with inflation.
Having a firm grasp on your finances is of the utmost importance, especially in terms of retirement planning. While the uncertainty of our current day and age makes it difficult to foresee future challenges, sufficient preparation enables any employee to live the retirement life of their dreams. By planning ahead, you can avoid living strictly off Social Security benefits and enjoy a financially stable, comfortable retirement.
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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely withhelping them pursue the most comfortable financial life possible.Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.Aaron can help you and your family to create, preserve and protect your legacy.That’s making a difference.
Disclosure:
Disclosure:Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.
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