5 years to Retirement

5 years to Retirement

It shows up faster than you think. Lets look at 5 of the most important considerations

Review your Service History

  1. Request a copy of your Official Personnel File (OPF) or an SF-50 from the HR office within your agency
  2. Verify all of your civilian and military service, if applicable
  3. If any records are missing, your employer should help you document the service and find any missing records

Health Insurance *

Double and triple check this one because there are very strict requirements to keep your health insurance into retirement, which are listed next.

  • You must be covered for health insurance when you retire
  • You must have been CONTINUOUSLY covered for the 5 years immediately before retiring
  • Your annuity must begin within 30 days of retirement
    • OR If retiring under MRA + 10, Insurance is suspended until your annuity begins, even if it is postponed

Check your Eligibility for Social Security Benefits

From your local office or on the SSB website, request an Earnings and Benefits Estimate. This can be done with Form SSA-7004, – Though this estimate does not reflect and reduction for GPO or WEP

Government Pension Offset (GPO)

If applicable their benefit will be reduced by 2/3rds of any federal pension not covered

If you receive a federal pension and are eligible for Social Security benefits based on your own employment record, there is a different formula that may be used to calculate your Social Security benefit

Windfall Elimination Provision (WEP)

Some of your spouse’s Social Security benefit may be offset if you have a government pension that is not covered by Social Security.

Does not apply if:

  • You were eligible to retire before January 1, 1986; or,
  • You were first employed by the government after December 31, 1983; or,
  • You have 30 or more years of substantial earnings under Social Security.

The Accumulation Phase

These last 5 years before making the transition to retirement are when we want to emphasize saving efforts and managing asset allocation. This can be a fine line to walk between safety and growth in order to allow for a realistic projection of retirement income and expenses, as these 5 years can and more than likely will have the greatest impact on your nest egg.

Catch up contributions are allowed as soon as you turn Age 50 and allows for retirement accounts to accept larger annual contributions to “catch up” on any contributions that may have been missed up to now.

It will also be incredibly helpful to begin identifying income and expenses that you will carry over into retirement in order to assess if the assets and allocations that you have will be sufficient for you month to month.

Projecting Retirement Outcomes

Nobody can see what the future is going to hold for you, but we have seen tens of thousands of scenarios from good, to bad, to ugly. And there is no way to make the best decision for yourself without being well informed of all the options that you have ahead of you. By scheduling a One-on-One appointment or attending a in-person seminar; we can not only give you all the pieces to the puzzle that is your retirement, but also hold the picture so that you can fit them together.

We can do all calculations for any scenario that you can imagine!

*FEHB qualifies as a minimum essential coverage and meets the Patient Protection and Affordable Care Act.