Federal Retirement Advice by Alexis Hongamen, CRPC

We all know how complex the federal retirement system is.  There are so many ifs, ands, or buts that it will make your eyes glaze over.  It makes for great reading material at bedtime.  So it makes sense that many details are not fully grasped by the average civil servant. These misunderstandings sort of take a life of their own, evolve and develop into myths.  I’ve spoken to many federal workers contemplating retirement that have stated these myths as fact to me.  These myths all have an element of truth to them which possibly causes people to believe them so readily.   Let’s take a look at these 6 common myths:   1. “I won’t get the Federal Employees Retirement System (FERS) annuity unless I work a full career” Incorrect. Many federal employees think the annuity is an “all or nothing” benefit.  They believe if they don’t fulfill the complete requirements of a full retirement, they’ll never be eligible or receive an annuity.  I...

The five years before retirement are probably the most critical there are in terms of getting ready for the big event. Here’s a quick list of some things to do when you believe you are five years away from retirement. Meet with HR to verify creditable service.   You don’t want any surprises when you are 90 days away from retiring that your eligibility date isn’t what you thought it was.  Another reason is to make sure any military service you want to get credit for is has been added. Envision what retirement “looks like” for you and if you are emotionally/mentally ready for that.   Some people’s identity is very interwoven with their work.  Are you going to be ok not having that be part of your life five days a week? Will your retirement be composed of leisure activities like golfing and gardening or will you volunteer and be active in clubs? Envision yourself in your new life. Maximize your savings until you retire.   You are probably at your ear...

The last thing someone who is middle aged and hasn't begun investing wants to hear is that they should have started 10 years ago. Although they are a little late in getting started, it isn't too late. They still have a long term horizon for when they probably need the money for retirement, and that gives them a chance for making for lost time. Q: What are some strategies and methods every day investors should consider or ask when they are in their 40s? A: Contribute to your 401K at work if possible. It is a method of putting money away for your retirement and deferring taxes. Plus, many employers match a percentage of what you contribute up to a cap. The money is also being socked away before you have a chance to spend it, so it helps those folks that need help budgeting. If you don't have access to a 401k at work, you can start an IRA and depending on your income it could be tax deductible. Q: For those that haven't invested yet, how can they get started t...