The main question that federal employees ask every time is if they are making enough contributions to their retirement plans, such as the Thrift Savings Plan and the 401(k) plan. They want to know the amount of money they should set aside from their paycheck every month. They want to make sure that the money they save will, in turn, benefit them in the future when they retire.
Like most questions, there is no definite answer to how much you should save for your retirement. If there was a perfect answer, the financial planners’ job would be much easier.
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Determining how much you will need when you retire is a bit difficult since everyone has a diverse retirement plan, needs, and goals. For employees without a mortgage or consumer debt, Social Security and pension will cover all their expenses when they retire. They only need fun money from their TSP when they retire.
On the other hand, some employees may still owe some money after retirement. These employees will therefore need a considerable amount of money from the TSP if they want to pay off their mortgage. Other factors determining the amount you will need during retirement are tax rates, inflation, and returns on investments.
The depletion of Social Security funds is one thing that may affect every one of us. If there is no government intervention, the funds will not pay the full Social Security benefits to people. The money will be insufficient beginning in 2035. The government can fill this gap by coming up with a strategy, but this strategy will still rely on the taxpayers.
No matter what happens to Social Security benefits, federal employees still have many benefits that they will receive from the federal government. Nevertheless, it would be best if you did not depend on the government to make your retirement plan. If you rely on the government, you may experience financial difficulty when you eventually retire.
One important thing you need to know is that TSP is something that you can control. You have control over how you invest, the amount of money you invest, and how you utilize your investment during retirement. TSP is one of the best tools you can use to fill the gap in your retirement plan since you have full control over TSP.
If you consider how much you should invest, you should endeavor to save and invest as much as possible. Life becomes more comfortable when you have more than enough money after retirement. Still, it is not advisable to postpone entertainment and trips until you retire just because you want to fill your TSP account. You must find a balance that will maintain your current lifestyle and care for your needs after retirement.
The rule of thumb is that once you start something earlier, the easier it will become over time. If you save earlier, you will have more time to prepare for your retirement while making the necessary adjustments to your retirement plan.
If you did not save earlier before your retirement period is near, you could not make a measurable difference within the last two years before you retire. You need to start saving now if you have not started, and if you are already saving for retirement, you can increase the amount you save. When you have enough savings in your retirement plan, you will thank yourself later in the future.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
