It is never too early to start thinking about retirement. Planning is key when it comes to this stage of life. Hiring a financial planner is a decision some federal employees choose to make. If this is something you are considering, make sure you find one who knows the difference between retirement in the public sector as opposed to the private sector.
Pensions under both the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) are determined by the length of federal service and your High-3 salary. It is not dependent upon stocks and bonds as in some private sector jobs. Your pension is taken as an annuity in federal jobs. There is no lump sum option. The annuity lasts for the rest of your life, so there’s no danger of running out of money, as with a lump sum payment.
Cost of Living Adjustments (COLA’s) are built into the retirement package in the public sector. If you retire under the CSRS retirement system, you receive a full COLA at retirement. FERS annuitants must wait until the age of 62 to being earning a COLA. There are a few exceptions to this including federal disability retirees.
If you don’t select any level of survivor benefits, and you die before your spouse, your spouse would be ineligible to continue with Federal Employee Health Benefits (FEHB). Another important factor to look at is your spouses’ health benefits. This is especially important if they have their own benefit plan. There could be interactions with your benefits and their benefits.
Look for someone who is a Chartered Federal Employee Benefits Consultant when looking for a financial planner. These people have a special knowledge of the benefits available to you as a federal worker, and they are more likely to help you make an informed decision about retirement from federal service. We have several Chartered Federal Employee Benefits Consultants on staff here at Harris Federal Law Firm. We know about the benefits that are available to you. If you would like to someone, please call us at 877-226-2723 or fill out this inquiry form.