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Advice on how to prepare for life after government.
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Best Dates to Retire 2016

Download the Best Dates to Retire 2016 Calendar

Are you financially ready to retire? Will all of your sources of retirement income -- federal retirement benefits, Social Security, Individual Retirement Accounts and other savings -- cover your ongoing expenses? Will you be able to make them last for the next 20 or 30 years?

Also, are you mentally ready to retire? Are you looking forward to life after retirement, rather than dreading the loss of your identity?

If the answer to the above questions is “yes,” then it’s time to start thinking about the best dates to retire. This week’s column and the accompanying downloadable calendar will explore the best dates in 2016. (If you’re ready to go even sooner than that, check out Best Dates to Retire 2015.)

If you’re thinking about retiring now or in the near future, you may want to consider several potential dates, so you can compare their relative benefits. For example, you might consider retiring at the end of the leave year to accumulate the maximum leave accrual for a generous lump sum annual leave payout. Or you might wonder how postponing the date another six months or even an additional year...

Quiz: How Ready Are You To Retire?

More and more federal employees are taking a hard look at just how ready they are to retire.

If you’re among this group (or even if you’re not -- yet), we’ve developed a tool that can help you figure out  where you stand. The Retirement Readiness Assessment debuted last year, so some of you already may have completed it. If so, this is your chance to take it again and see where you stand now. If not, maybe now is the time to get a clearer picture of your prospects.

Based on your responses to the questions in the assessment, you’ll get a report on your status: Just Getting Started, Beyond the Beginning, On Your Way, or Retirement Ready. You’ll also get a few tips on next steps in the planning process.

Are you ready to take the assessment? Let’s get started.

Take the Retirement Readiness Assessment

(Image via Jerry Sliwowski/Shutterstock.com)

The High Cost of Health Coverage

Last week, we looked at some expenses to watch out for in retirement.  This week, let’s explore one area in which you can be almost certain your costs will increase over time: health care.

There are several reasons why this is the case:

  • Many Americans are going to live a long time. According to the Social Security Administration, about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.
  • Advanced technology, administrative expenses, hospital costs, lifestyle choices and chronic disease conditions continue to drive health spending upward -- more so even than doctors’ salaries, according to the Physicians Foundation.
  • Costs of long-term care continue to rise. According to a 2014 Genworth study, the average annual cost of a semi-private room is $80,300 per year. For single bed rooms, the price goes up to an average of $91,250 a year. The cost of care varies throughout the country.

There are two types of health care expenses you should consider as you enter retirement: Medically necessary care and personal care.

Medically Necessary Care

This the type of care needed to prevent and treat illnesses and diseases. Fortunately, most...

Let’s Get Real About Costs

There’s a common belief that retirees can live on a lot less money than active employees. The truth, unfortunately, is more complicated.

The good news about retirement is that some of the deductions from your earned income go away. You won’t be saving for retirement, so you won’t have funds withheld from your paycheck for Thrift Savings Plan investments (or other retirement savings plans). In addition, you will no longer contribute the required retirement contributions to either the Civil Service Retirement System (7 percent of salary for most feds) or the Federal Employees Retirement System (0.8 percent for most feds). Also, you won’t have to pay the wage taxes for Social Security (6.2 percent up to $118,500 in 2015) and Medicare (1.45 percent on all wages and an additional 0.9 percent for those with wages greater than $200,000).

But retirees do pay other taxes. Most retirement benefits, including CSRS and FERS benefits, are taxable on the federal level. So are most withdrawals from your retirement savings. (Roth IRA and Roth TSP savings can be withdrawn tax-free in most cases.) Some people don’t pay taxes on Social Security retirement benefits...

Get Counseling

Some agencies provide their employees with top-notch retirement counseling. Such agencies typically respond to requests for retirement estimates in a timely fashion. They allow employees to request estimates for several different retirement dates and offer to update those estimates as the employee gets closer to retirement. And they provide a variety of training opportunities for employees to learn how to take control of the retirement planning process.

Other agencies, unfortunately, do not put a high priority on retirement counseling these days. I know some federal employees who have been told they can’t request a retirement estimate until they’ve already submitted their application to retire. What? How can you plan for retirement without knowing how much your Civil Service Retirement System or Federal Employees Retirement System benefit will provide as a replacement of your salary? That’s like buying a car and not knowing what the payment will be until after you take it home.

Some agencies also fail to provide all of their employees with access to pre-retirement seminars or other training opportunities. With wait lists and restrictions on attending classes, it sometimes takes years to finally get enrolled. I’ve had retirees attend pre-retirement seminars after they...