Financial Planning for Federal Employees
Make the Most of your Dreams & Circumstances
Everybody wants the retirement rewards that their long years of hard work merit, and the dream life they hope their efforts will bring.
But depending on where you are on your personal journey, the idea of reaching the place where you’re able to live prosperously without a regular paycheck can be daunting. By ‘prosperously’ we mean being healthy in body and mind, financially secure, and looking forward to tomorrow with confidence.
At WestStar we are mindful that federal employees have unique financial considerations due to their employment benefits and retirement plans.
When federal employees first sit down with us, we regularly get asked these questions:
‘How should I maximize my Thrift Savings Plan contributions?’
‘When can I retire and what benefits am I entitled to?’
‘How can I manage my federal employee benefits effectively?’
‘How can I navigate the complexities of Social Security and Medicare?’
‘What should I consider when creating a financial plan outside of my federal benefits?’
If you’re looking for answers to these and other financial questions, don’t hesitate to get in touch with us!
Federal Employees' 8 Major Financial Concerns
- Job Security: Federal employees may be concerned about the stability of their jobs, especially during times of government shutdowns or budget cuts.
- Salary and Benefits: While federal employees often receive competitive salaries and benefits, they share concerns about pay raises, cost-of-living adjustments, and the overall adequacy of their compensation package.
- Retirement Planning: Like many workers, federal employees may worry about whether they are saving enough for retirement. Changes in retirement plans, such as adjustments to the Thrift Savings Plan (TSP), can impact these concerns.
- Healthcare Costs: The rising costs of healthcare can be a significant concern for federal employees, especially if they have dependents. Changes in health insurance plans and coverage options can also contribute to these worries.
- Student Loan Debt: Federal employees, particularly those who may have recently entered the workforce, may be dealing with student loan debt. Concerns about managing and repaying student loans can impact their financial well-being.
- Housing Costs: The cost of housing can be a major worry, especially for federal employees living in areas with high living expenses. Changes in housing markets or difficulties in affording a home can contribute to financial stress.
- Budget Constraints: Federal agencies may face budget constraints, which can impact resources available for training, professional development, and other work-related needs. This may be a concern for employees looking to advance in their careers.
- Inflation and Economic Factors: Economic factors, such as inflation and changes in the cost of living, can impact the purchasing power of an employee’s income, potentially leading to concerns about financial stability.
Individual financial worries typically vary based on personal circumstances, career stage, family situation, and the overall economic climate, and WestStar Provides financial education, planning, and advice to help individuals address and manage these concerns.
We Offer Personalized Guidance Based on Your Individual Circumstances
We have advisors who have a special interest in helping people plan and prepare for retirement, and real experience helping Federal Employees coordinate and maximize their benefits and retirement accounts to retire with confidence.
The Thrift Savings Plan (TSP)
The Thrift Savings Plan (TSP) offers tax advantages and low-cost investment options, and our Federal Employee clients typically have questions around understanding contribution limits, choosing between traditional and Roth options, and selecting the right investment funds within the TSP.
We will encourage you to consider maximizing your contributions to the TSP to take full advantage of employer matching contributions and tax-deferred growth.
Retirement Systems
Federal employees frequently seek guidance on determining their eligibility for retirement, and understanding the benefits they will receive.
They may have questions about the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS), and their considerations typically include the impact of retiring early, or the use of sick leave towards retirement calculations.
Knowledge is Power
We help you understand the retirement system you are enrolled in, and to familiarize yourself with the eligibility requirements, pension calculations, and survivor benefits associated with your retirement system.
If you are covered under FERS and retire before becoming eligible for Social Security benefits, you may be eligible for the FERS Annuity Supplement. We help you to understand the requirements and potential impact on your overall retirement income.
Federal employees nearing retirement age often have questions about integrating Social Security and Medicare into their overall financial plan. Many seek information on the optimal age to claim Social Security benefits, how their federal pension might affect those benefits, and the enrolment process and coverage options for Medicare.
Federal Employee Health & Insurance Benefits
Federal employees also have questions about their benefits package, including health insurance (FEHB), life insurance (FEGLI), and long-term care options. We encourage you to understand the coverage, compare plans, and make informed decisions based on your specific needs and circumstances.
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“Why Participating in The Federal Long Term Care Insurance Program Could Be a Very Smart Move.”
We help you evaluate your health insurance options through the FEHB program. We’ll focus on the costs, coverage, and flexibility of different plans to choose the one that best suits your needs and your potential retirement healthcare expenses.
Social Security
Federal employees are generally eligible for Social Security benefits. We’ll make certain to understand how your federal service affects your Social Security benefits, including the potential impact of the Windfall Elimination Provision (WEP) or the Government Pension Offset (GPO).
Leave and Payouts
We will review your accrued leave balance and determine how much unused annual and sick leave you can carry over or potentially cash out upon retirement. These payouts can provide a financial cushion or contribute to your retirement savings.
We will integrate your leave and payouts review into your broader retirement planning efforts. Consider how your leave balances and payouts align with your retirement income needs, savings goals, and overall financial strategy.
Long-Term Care Benefits
The Federal Long Term Care Insurance Program (FLTCIP) offers several benefits to federal employees.
We will consider the need for long-term care insurance to protect your retirement savings from potential high long-term care costs. Evaluate the Federal Long Term Care Insurance Program (FLTCIP) and compare it with other private insurance options.
Survivor Benefits
It is important to know that you and your spouse will be well cared for in the event that something unexpected should happen to either of you.
We will help you assess the survivor benefit options available under your retirement system. We’ll also make certain to understand the implications and costs associated with providing survivor benefits to your spouse or other beneficiaries.
Estate Planning
We can assist you in developing a comprehensive estate plan, including wills, trusts, powers of attorney, and healthcare directives. We will encourage you to consult with an estate planning attorney to ensure your wishes are properly documented and your assets are protected.
What Should You Consider When Creating A Financial Plan Outside Of Your Federal Benefits?
Imagine having a plan for your money to last the rest of your life and potentially help you leave a legacy for your kids and grandkids?
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"Why Specialist Financial Planning is Essential for Federal Employees”
Many federal employees are interested in developing a comprehensive financial plan that incorporates their federal benefits. They may inquire about strategies for saving for major life events like buying a home or funding their children’s education, as well as investing outside of their TSP and diversifying their retirement income sources.
To read further about the Retirement Planning Services we offer, visit out Retirement Trailblazers’ services Suite.
Also read up on our Investment Management, Tax Planning, and Education Planning Services and you’ll see how our holistic 360˚ Financial Planning approach covers all aspects of your future and all-round prosperity.
Disclosure: “Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty. A Roth retirement account offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth account must be in place for at least five tax years, and the distribution must take place after age 59½, or due to death or disability. Depending on state law, Roth accounts distributions may be subject to state taxes.”
Relationships Built on Trust
At WestStar we believe that trust is earned. Our relationships are real, honest and candid. We say what we do, and we do what we say.
Our personal touch and care is evident in all of our relationships, many of which have served business owners and their families’ best interests for decades.
If that sounds like a relationship worth pursuing, then please get in touch.