[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]Federal employees that have been working for the government for over 30 years and have been managing their contributions and investments correctly may more than likely be a millionaire
One way is that they invested consistently in C and S funds (which are stock indexed) within the Thrift Savings Plan (TSP). This means that they continued to invest times both good and bad, even during and after the crash back in the late 2000s, when stocks were being sold at low prices.
A majority of federal TSP participants have become millionaires by not determining their actions based on market volatility.
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
Along the TSP, those that retire with annuities under the Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) will also always have cost-of-living adjustments (COLAs) increase their payments. Participants under FERS and some under CSRS will be eligible for Social Security benefits as well.
With an increasing amount of Americans not being offered pensions, federal employees will be able to appreciate their benefits and be comfortable during their retirement as their income will also be adjusted to meet the cost of living that always goes up. However, these COLAs have been under attack to be changed by Congress, but so far, there have not been any successful changes made to eliminate or alter this policy.
So for those of you have that have a nicely padded TSP and a pension plan that is safeguarded against inflation, you will want to ensure that these assets go where you want them to go when you are no longer here on this planet. Though wills are standard, these have been overridden in the past in certain situations. Be sure to plan and prepare what needs to be done to be sure that those you wish to receive your worth will get them.
For a majority of federal workers, a good amount of their estate are assets that have been earned during their careers.
First would be their CSRS or FERS pension, which can be more than $1 million for some. For instance, if a federal worker goes into retirement at age 65 and has a yearly annuity payment of $50K, the annuity is worth $1.1 million.
The second asset earned throughout federal employment would be their TSP amount. A lot of federal workers have accounts worth hundreds of thousands of dollars, and some that have more than a million. Typically, if a federal worker contributed $1,750 every year with an annual 5% percent increase, along with matching contribution, the TSP balance would be close to around $700K when they retired if the average yearly yield was 8%.
The other assets included would be their life insurance and any accumulated or uncompensated leave.
All of these assets will go to a beneficiary that was designated within the system, and it has always held up against a trust or a will. There are other assets like IRAs or investment accounts that should have a designated beneficiary listed. This is why you should review all of your designated beneficiaries for all of your assets to ensure that they will go where you want them to.
Another thing you may want to consider is to provide a power of attorney to a family or friend that you believe will follow your wishes and handle your benefits in case you are unable to make such choices due to health issues that render your incapable.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”36168″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
