Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Estimating Your Benefits

ARCHIVES

In my travels to various federal agencies, I've found that employees are trying desperately to understand their retirement benefits and would love to be able to project their retirement income. Often, they are very dependent on the assistance of retirement specialists at their agencies to explain the intricacies of various retirement benefits and prepare an estimate. It can be very confusing. Witness the following e-mail I recently received from an employee covered under the Federal Employees Retirement System who participates in the Thrift Savings Plan:

I'm not exactly clear about the retirement pay I will receive under the FERS program and that which I will receive from the TSP. Are they totally separate or are they combined? I am 60 years old and recently completed five years of civilian service. I am looking at retirement at age 62. Will I receive a separate FERS retirement check and still be able to draw an annuity from my TSP, or are they combined for a total package? My personnel office is supposed to be sending me information regarding my retirement options, but it seems to be taking forever to receive anything.

Retirement under FERS includes three elements: the FERS Basic Benefit, payouts from the Thrift Savings Plan and Social Security benefits. It's a little simpler for folks under the older Civil Service Retirement System. They are eligible to participate in the Thrift Savings Plan and some of them qualify for Social Security benefits, but CSRS is designed as a single, stand-alone retirement package.

Estimation Tools

Whether you're in CSRS or FERS, though, it can be a bit tricky to estimate just how much income you'll have in retirement. I encourage employees who are planning to retire within the next year or two to request an estimate from their human resources office. Most likely, it will be prepared using one of two software programs:

These programs are designed to be used by trained retirement specialists who usually will review the employee's service history before using the software, to provide a more accurate estimate of an employee's CSRS or FERS basic retirement benefit. This can be a time-consuming process, especially if the review shows inconsistencies or indications that the worker has missing retirement contributions or a lack of evidence of previous service.

These days, retirement specialists are being inundated with requests for estimates, along with actual retirement applications. The applications obviously take priority, so be prepared to wait a few weeks after your initial request.

To ease the burden on their personnel offices, some agencies have begun using systems that employees can access themselves. Economic Systems, for example, offers a product called the FRB Web Integrated Solution, which allows employees to analyze their own retirement scenarios. Likewise, the Employee Benefits Information System allows employees to view a statement of their benefits, use calculators to evaluate various "what-if" scenarios and conduct benefits-related transactions online.

These do-it-yourself programs provide projections of Thrift Savings Plan and Social Security income in addition to CSRS or FERS basic retirement benefits. But employees should be aware that they do not include a review of existing personnel documentation or take into consideration unpaid deposits or unusual situations such as time worked under a part-time appointment. They may not be as accurate as needed for an employee who is close to retirement.

Another aid for employees is the fact that personnel records that have traditionally been maintained on onionskin papers in cardboard folders are being digitized and stored in a computer database. The electronic system will allow employees to gain access to deposit records, their part-time service history and other information that until now had to be manually retrieved from paper records.

What You Can Do

So what can you do right now to estimate your retirement income? Here are a few suggestions:

  • Do it yourself. The FERS basic benefit and the CSRS retirement benefit are simple calculations that you can figure out with a basic understanding of the concept of "high-three average salary" and "creditable service." The other thing you will need is the computation formula and an understanding of deposits and eligibility. If you've attended a mid-career or pre-retirement seminar, you should already know about these things. If not, consider signing up for one at your agency if it's offered.
  • Request an estimate of your basic CSRS or FERS retirement benefit from your benefits office. Even if you know how to do it yourself, this allows the person at your agency who will most likely have to prepare your records for retirement to take a look at them before you actually set a date. But remember that this is only an estimate based on information the specialist will put into the software program from your records. Be sure to review all the information that is shown and ask questions about anything that looks unusual or doesn't reflect the career that you've had.
  • Go to the Social Security Web site and use one of their calculators to compute your future Social Security benefits. One of the calculators is easy and quick, the other allows you to put in more detailed data.
  • Use the calculators at the Thrift Savings Plan Web site to compare scenarios for future TSP withdrawals and project your future account balance using different contribution and interest assumptions.
Still confused? Fear not. Next week, I'll provide a basic primer on computing CSRS and FERS retirement benefits.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

 

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at www.tammyflanagan.com and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on NITPInc.com.

FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.