Why Federal Employees Should Act Now to Secure Their Retirement
With potential legislation threatening to increase retirement contributions and reduce benefits, federal employees must take proactive steps to safeguard their financial future. The proposed changes could impact FERS annuities, TSP growth, and overall retirement security, making strategic planning more critical than ever.
Potential Consequences of the New Proposal
- Lower Lifetime Earnings: Reduced annuity benefits mean less monthly income in retirement.
- Higher Out-of-Pocket Costs: Increased payroll deductions may strain budgets.
- Greater Reliance on TSP & Personal Savings: Employees may need to contribute more aggressively to offset benefit cuts.
Expert Recommendations for Federal Employees
- Optimize Your TSP Strategy
- Contribute at least 5% to maximize the agency match.
- Consider Roth TSP for tax-free growth if you expect higher taxes in retirement.
- Diversify investments to balance risk and growth.
- Explore Supplemental Retirement Options
- Individual Retirement Accounts (IRAs) can provide additional tax-advantaged savings.
- Health Savings Accounts (HSAs) offer triple tax benefits for healthcare costs in retirement.
- Evaluate Your Retirement Timeline
- If close to retirement, assess whether retiring before changes take effect is advantageous.
- Younger employees should plan for higher contributions and adjust savings accordingly.
How Internal Benefit Advisors Can Help
Navigating federal retirement changes requires expertise. At Internal Benefit Advisors, we offer:
✔ Personalized Federal Retirement Planning
✔ TSP Optimization Strategies
✔ Comprehensive Benefit Reviews
📅 Schedule a consultation to ensure your retirement plan remains resilient against legislative shifts.
