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Advice on how to prepare for life after government.

Retirement Quiz: The Basics

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It’s quiz time! I’ve designed this one to cover some of the basics, with relatively new federal employees in mind. But midcareer and pre-retirement age federal employees may also find they have a few things to learn.

  1. There is no minimum age to make contributions to an Individual Retirement Arrangement.
    1. True
    2. False

  1. Which of these is a type of retirement savings plan:
    1. IRA
    2. 401k
    3. TSP
    4. 403b
    5. SEP
    6. MyRA
    7. All of the above

  1. The word “vested” relative to a particular retirement benefit means:
    1. It belongs to you; you have the full and legal right to this benefit.
    2. You are not yet entitled to receive the full benefit.
    3. It is the sleeveless layer of your retirement plan.

  1. The money you contribute to the TSP, along with the matching government contributions, is immediately vested.
    1. True, however, there is a three year vesting requirement for the 1 percent agency automatic contribution.
    2. False, it takes three years for your TSP account to be vested.

  1. What is the minimum number of years of service required to qualify for a federal retirement benefit?
    1. Three
    2. Five

  1. An annuity is a term used to describe a fixed income stream paid over a specific period of time, usually for the life of an individual.
    1. True
    2. False

  1. A pension is a fixed sum paid following retirement, generally for the life of an individual.
    1. True
    2. False

  1. It is accurate to refer to the federal retirement benefit as an annuity or a pension benefit.
    1. True
    2. False

  1. If you resign from federal service before meeting the age requirement for an immediate retirement, but you have a minimum of five years of federal service, you may be entitled to a deferred annuity.
    1. True
    2. False

  1. Social Security benefits provide a lower replacement of income for those earning lower wages and a higher replacement of income for those earning higher wages.
    1. True
    2. False

Ready for the answers? Click here.

(Image via Africa Studio/Shutterstock.com)

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.

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