Financial Planning for Retirement

Retirement Planning is Different for Federal Employees

Financial planning for retirement is different for Federal Employees.

As a Federal Employee, you know you have one of the most complex benefits systems around.  I also think it's one of the best, if you can learn to navigate all of the rules, regs and unique twists and turns.

Over the years I've had the opportunity to help my clients, individual federal employees, through the entire retirement process.

On thing I've learned over the years is that Federal Employees really do have unique needs when it comes to financial planning for retirement.  And these are needs that most generic retirement financial planning doesn't address.  

What's Good for Most  - Could be
Bad for Federal Employees

Over the years, I've found that many of the recommendations in standard financial planning for retirement make sense for most private sector employees.  

But when applied to federal employees - might cause them to lose out on some of their best federal benefits.

What's Different About Retirement Planning for Federal Employees?

What are some of the unique considerations Federal Employees need to think of when doing their financial planning for retirement?

As a Federal Employee...

  • Your income in retirement will start, stop and change in ways that befuddle most retirement planning software
  • You have unique investment and benefits choices that private sector employees don't have
  • You have benefits that give you a head start at retiring sooner than most private sector employees

But - as a Federal Employee you also have to navigate one of the most complex benefits systems in the world.  And if you make the wrong choices, you could miss out on some of your best benefits.  

And you'll also need to take responsibility for keeping your own records - as Federal Employees can also encounter more issues with getting credit for time worked towards their retirement than most private sector employees.

Your Retirement Income Starts, Stops and Changes

As a Federal Employee, one unique challenge you'll have in financial planning for retirement is handling how your retirement income may start, stop and change along the way.

Most financial retirement planning calculators are designed for private sector employees - whose retirement income is pretty straight forward. It starts at a certain time, and then keeps going.  And it might be increased by a small percentage over retirement - but there really aren't any dramatic changes.

But if you're a FERS - your retirement income will start, stop and change in unique ways.  This creates unique 'gaps' in your retirement income that most calculators can't compute.  


fers retirement income phases


You need to understand how your federal retirement income will change, and how you will fill your 'gaps'.  Determining how you fill your 'gaps' is a critical part of financial planning for retirement.  

You Have Unique Investment & Benefit Choices as a Federal Employee

As a Federal employee, you have access to some unique investment and benefits choices.  

I would say your top unique benefits would be...

Thrift Savings Plan

With the Thrift Savings Plan, you have a tremendous tool to help you accumulate retirement savings.  Not only does the TSP have some of the lowest fees around, you have simple, straight-forward investment choices in the different TSP funds.  And you just can't beat the TSP match for FERS.  

And while it's true that most of the TSP funds can be 'mirrored' by choosing other indexes, the G Fund is a unique investment choice available only inside of the Thrift Savings Plan.

Keeping FEHB in Retirement

Being able to keep FEHB into retirement is a *HUGE* benefit in and of itself.  But not only do most federal employees qualify to keep FEHB coverage after they retire - the government will continue to pay up to 72% of the premium.  That is almost unheard of in the private sector.

fehb in retirement

I don't think I can adequately explain in a paragraph just how amazing this benefit is to your retirement.  But not everyone is eligible to continue FEHB into retirement.  Make sure you will be eligible to keep your *BEST* retirement benefit.

For CSRS:  Voluntary Contributions Program (CSRS VCP)

For CSRS federal employees, you may be eligible for one of the most unique benefits of all, the CSRS Voluntary Contributions Program (CSRS VCP).  

Unfortunately, there is no equivalent in the FERS retirement system to the VCP benefit - and I've never come across anything like it in the private sector.  To learn more about the CSRS VCP, check out our page on CSRS Voluntary Contributions.

These are just a few of your unique benefits to consider when doing your financial planning for retirement.  And of course, there's more to know about the benefits we've just discussed.  

Let's look now at a few of your benefits that stack the deck in your favor when it comes to financial planning for retirement.

Federal Benefits That Give You a Head Start on Retiring Sooner

As a Federal Employee, you have some excellent benefits.  And some are so good that they really do give you a head start when it comes to financial planning for retirement.  

Not only do you have an excellent pension, as a FERS or CSRS, your ability to continue FEHB coverage into retirement is a phenomenal benefit that makes it possible to retire sooner than most.  

And for FERS, the FERS Supplement can provide extra income that helps make retirement easier to plan for.  

Find out more about federal retirement benefits that give you a head start on retirement.  

Very Few Financial Professionals Understand Your Federal Benefits

Federal retirement benefits are so complex and unique - it's important to approach them in their own light.  

Very few financial professionals really understand your federal benefits.

So when many financial professionals look at federal benefits - they try to compare them to a benefit in the private sector that they are familiar with.  

And this might be a fine place to start - but if a professional isn't fully familiar with the quirks of federal benefits - it can lead to faulty assumptions and bad recommendations.

Why *You* Need to Understand Your Federal Retirement Benefits

So you have some amazing federal retirement benefits - but you also have some important responsibilities.  

As a federal employee, you have to navigate one of the most complex benefits programs around.  And if you make the wrong choices, you could miss out on some of your best benefits.  

When you are doing your financial planning for retirement - you need to remember your unique benefits.  

And *YOU* need to understand them - because many financial professionals don't.  

If they don't understand your benefits - they could be making recommendations that don't make the most of your benefits - or worse, they could make recommendations that make sense for 'most people' but that make you lose out on some of your best federal retirement benefits.

Another reason for *YOU* to understand your benefits is that when you use most financial calculators - they won't compute your benefits correctly.  And you need to know enough about your benefits to spot those problem areas so you don't make retirement plans based on incorrect calculations.

Financial Planning for Retirement

Your Federal Benefits Are Just One Piece of Your Financial Puzzle

Your federal benefits are just one piece of your financial puzzle.  It's important to understand your benefits - and then understand how they fit into your broader financial picture.  

Because the areas of your financial life are all connected - and decisions you make in one area really do affect the other areas.  And if you make decisions by looking only at one 'piece of the pie' at a time - it can create unintended side effects for other areas.

This is why it's so important to understand your federal benefits from a financial planning perspective.

This is what I help my clients with - and this is what I want to help you with.

I've taken my experience as a financial planner for federal employees, and created a 'do-it-yourself' program you can use to plan your retirement.  It's specifically for FERS Federal Employees, and it's called FERS Route to Retirement.

FERS Route to Retirement

FERS Route to Retirement is a special program designed to help you understand your FERS benefits from a financial planning perspective. 

As you go through the program, you'll go step-by-step through your benefits - and as you do, you'll be creating your own financial plan for retirement.  


fers retirement planning program

Want to find out more?  Click here to learn more and see a [VIDEO] about FERS Route to Retirement.  

Ready to Sign Up?  
Choose Your Rate and Click Subscribe



FREE Sneak Peek Access Now Available

Are you interested in FERS Route to Retirement - but want to take a Sneak Peek first?

We've added a new option where you can sign up for Sneak Peek Access for *FREE*.  

With Sneak Peek Access, you can...

  • Watch the first lesson of Benefits Blvd (where you learn about your benefits)
  • Complete the first session of Planning Pkwy (where you start to create your own financial plan)
  • Use our handy FERS retirement calculators to run different scenarios
  • Flip through our Reference Library

The rest of the program is reserved for premium members - but with Sneak Peek Access, you get a chance to get in the program and make sure you like it before you sign up for the full version.  Of course, we're hoping you'll like what you see and want to sign up for the full version.

There is no cost to sign up for Sneak Peek access, and you don't even have to enter any billing information.  

Get Started with FREE Sneak Peek Access






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Micah Shilanski is a CERTIFIED FINANCIAL PLANNERâ„¢ professional who specializes in helping federal employees get the most out of their retirement benefits. Micah is a fee-based financial planner and works with a select group of clients. Micah works with each client to tailor a plan that is customized to their dreams, goals, and financial situation. Each client is unique, and so is their plan.

Plan Your Federal Retirement is not employed by the federal government and does not represent the federal government.

Plan Your Federal Retirement is a dba of Shilanski & Associates, Inc. Shilanski & Associates, Inc. is an independent financial planning firm headquartered in Anchorage, Alaska, that has been in business for nearly 30 years.

Shilanski & Associates, Inc., is an Alaska Registered Investment Advisor, with securities offered through Summit Brokerage Services, Inc., Member FINRA/SIPC. Shilanski & Associates, Inc. is not affiliated with Summit Brokerage Services, Inc.

All information herein is solely for informational purposes. This is not an offer to buy or sell securities. The presence of this web site on the Internet shall in no direct or indirect fashion raise any inference or implication that Shilanski and Associates, Inc., an Alaska Registered Investment Adviser, is selling, offering to sell or soliciting to provide investment advisory services to residents of any state other than the state of Alaska.


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