Yes, I know what you’re thinking. This is scary, confusing, take too long, I’m too busy, it can wait and, and, and. Trust me life will always get in the way. There’s never a “good time” and if you face it head on, you’ll find that it isn’t so scary.
Mostly this is common sense and reviewing your alternatives and options. If you don’t do it, no one will do it for you.
Opposed to being retirement ready or prefer to having retirement regrets?
The focus of more and more federal employees who are starting to consider retirement is shifting to what’s next. Some have regrets creep thoughts that are turning from the routine workday issues to concerns about how getting ready for retirement and how to go about funding those golden years. Some who are all that prepared, may find that retirement regrets may have real consequences. What can you do now to get ahead of the game?
Many retirees worry about that they haven’t saved enough and are finding they are unable to maintain their pre-retirement standard of living.
According to the recent report, “State of Retirement Finances: 2021 Edition,” retirees have saved only about 39 percent of what they are expected to need to fund their retirement.* The survey polled 1,500 Americans about their retirement funds, debt and financial worries. The report found retirees on average have about $179,000 in retirement funds, far less than what experts recommended.
What does this mean for a federal employee (or anyone retiring soon)?
Some tough questions for those who plan to retire:
How prepared are you? How much money do you really need to retire? Do you know the ins and outs of your pension? Are you familiar with your Thrift Savings Plan (TSP) and other retirement accounts that make up your nest egg and how conservatively or aggressively they are invested for you current station in life?
These 7 regrets are common for many working folks including federal employees who attended retirement workshops. I’m sure some of this looks familiar.
1. Is it too late to start saving?
Most people never feel really ready to contribute, especially a large amount of money, into an investment product. If you wait until you’re ready, you’re going to find yourself not having a lot of money when we retire. A relatively small sacrifice now will serve you well later! Better to start saving now than never save
2. Should I have contributed more and do it sooner.
This is not the right question to ask. If you’re not quite to the 5% match level, get there. No matter what it takes, get there, because otherwise you are giving up free money that you could be getting from your agency. If you’re already at a 5% contribution level, what can you do to get to 10%? If you’re at 10%, could you press it and max out the TSP at the $20,500 allowed by the IRS? Remember when you’re approaching age 50, can you stretch your budget and be able to contribute that extra $6,500 in catch-up contributions? Maybe you can find a way to up your game, by pushing yourself even more. You will be delighted you did in the future!
3. Why did I let myself miss out on my agency match?
I really does not matter why you did not do it. Simply contribute 5% every single pay period from now on. It isn’t hard to understand how important the agency match is. This is free money. Make sure that you’re getting it. Every dollar you contribute up to 5% counts as 2 dollars. Why would you leave (free) money on the table if you do not have to?
4. Was I too aggressive or too conservative?
You cannot change the past; however, you can change your future allocations keep your emotions out of your decisions. If you are conservative, however you had your money in the market-based funds like the C, S and I funds when the stock market tanked. You must have been scared because. What you probably did is get out of the market and into cash? You may have yanked money out of the TSP, or moved it over to the G Fund. The result is a big mess created by locking in actual losses.
5. Was if not smart of me to try timing the market?
Many people, smarter than my and you failed in trying to time the market. Just stop it! We aren’t smarter than the pros who watch the markets daily. The idea that lay people can consistently time the market perfectly so that we buy low and sell high is just a foolish day dream. Best think long-term when investing.
6. Why did I not take tax diversity seriously?
The current tax law sunsets in 2025. No one know what tax rates might be than. If you aren’t already contributing to the Roth TSP, considerate very seriously and how it may affect your short-term and in the long-term. Better pay taxes now, on your contributions, probably at reduced rates than later on the future value.
7. Why didn’t I seek professional advice?
It is not too late to tip the odds in your favor. Don’t wait until you’re stepping into retirement to ask for help, because at that point you’re just doing damage control. Do it now. Get the advice of a financial professional who operates in the federal space who understands not only the TSP, but all of your other benefits and can put you on a great path to get the retirement that you want.
What should I do next?
Retirement is something to look forward to at the end of your career, however without proper planning, you may find that when you finally arrive, it isn’t the end, but rather another part of your journey, and often, like climbing a mountain, even more traitorous than the climb to the top. Are you opposed to your retirement year being pleasant rather they full of disappointment? Lear from these retirement regrets. you can plan ahead now to ensure you have the best retirement possible, no matter where life takes you.
We are here ready to be your Sherpa and guide you to and through retirement.