Things You Can Do To Retire Earlier
ARTICLE:
Early retirement can be possible with proper planning. Strategy is critical for a successful early retirement. The following are just some of the many suggestions by professionals you can do to ensure a burden free retirement, and may even help you to achieve that goal earlier than you thought.
INVESTMENTS:
Of all the things you can do, nothing is more critical than making sure you have sufficient income for your retirement years. Especially if you are planning on retiring early. Increase all your investments! No one has ever retired and said “I am so disappointed that I saved too much money.” It is essential that you increase your traditional TSP contributions to the maximum that you can comfortably afford. If you have other funds, such as private stock and investments, review the risk factors involved. While the higher risk stocks may bring more money in, if early retirement is possible then you may want to consider switching to safer alternatives to assure your funds are there.
TAXES
Decreasing your taxes before retirement is vital. This allows you to save more money before retiring. Consider using both a flexible spending account and a high deductible health plan. If you rarely visit the doctor and are in good health, you may be paying much higher premiums than you actually spend on medical care. To use more pre-tax dollars, you should really consider increasing the contributions to the thrift savings plan, not the Roth TSP.
RETIRE AT 62:
If you thought about retiring before the age of 62 and are a Federal Employee Retirement System (FERS) participant consider postponing retirement until after age 62. By doing so you will be qualified for a Social Security retirement and also your FERS annuity calculation will be higher. When you retire before age 62 there is a 1% calculation, after age 62 there is a 1.1% calculation when computing your FERS annuity.
CHECK YOUR CREDIBLE SERVICE
You must ensure that you have the correct number of years and months of credible service before early retirement. Consider buying back your military service if necessary. Every month of military service is worth 1/12 of a percent of your high three average salary. Records of past federal service should be filed in your electronic official personnel folder.
PROTECT YOUR INVESTMENTS AND SAVINGS
Consider getting a federal short term disability plan or a federal long term disability plan. Many people are set back financially from unexpected illnesses or accidents. Disability plans offset the risk of losing your hard earned savings and investments from the unexpected.
KEEP TRACK OF YOUR RECORDS
Whatever you do and whenever you do it always ensure that you make copies of anything that pertains to your personnel records. Follow these items and you will be just that much more ahead and have an excellent and secure retirement.
DID YOU KNOW that Federal Employee Disability Insurance is a good way to protect your family?
