There’s a lot that goes into planning to retire from federal service.
Have you ever felt that sometimes you can’t get out of your own way, or that your mindset needs a little adjusting to be able to get retirement right?
It is my hope that with these 8 ProFeds Planning Principles—they will become a catalyst to inspire you to take control of your financial future. These underlying planning principles can really help you to take charge so that retirement happens for you, and it doesn’t happen to you.
The 8 ProFeds Planning Principles
Principle #1: It’s never too late, too early, or too often to plan.
However, the longer you wait, the harder it is! We see folks who have one foot in retirement and they’re trying to figure out life insurance planning. It’s really hard to do that late in life. But on the flip side, the 30 or 40-year-old that has a long way to go before they plan to retire, will think they have so much time ahead of them.
The earlier you do these things, the better. But wherever you are, it’s never too late to at least make progress. The progress won’t look the same, but there is at least something that you can always do to tweak and modify, in your retirement planning, so that you get more of what you want.
Principle #2: When you know your numbers, your financial decisions become obvious.
If you have no idea what the numbers tell you, you are going to have no idea how to make decisions. If I told you that if you retire today, you could maintain your standard of living based on your assets and all the things that you’ve done to prepare, and that was based on real numbers, you’d feel great about submitting your retirement application.
On the other hand, if I told you the lifestyle that you said you wanted to be able to live in retirement and the standard of living that you wanted to maintain, you’re not going to have, based on your numbers. I hope that’s equally as valuable to you. Maybe not as good to hear, but equally as valuable. It lets you know you’ve got some work to do. We want you to have good data to make informed and deliberate decisions with respect to your money.
Principle #3: You are free to choose, but you are not free from consequence.
Every single decision that you make has an outcome, even if it’s one you don’t like. And even if you make no decision at all. Not making a decision is a decision. It just likely doesn’t yield the outcome that you want. We have to always be thinking, what actions am I taking? What decisions am I making and what effect does this have on me, my family, and others who depend on me? What does this look like?
If we take responsibility for the choices that we make, good or bad, then we can be more in the driver’s seat of our own future. In this case, we’re talking about retirement planning, but this really goes into effect in all parts of our life if we’re being honest with ourselves.
Principle #4: If you don’t make a decision, someone will make it for you.
If you don’t make a decision, someone will make it for you, and it might not be one you like. That someone might be the government if you fail to make elections when you go to retire. The government will choose for you if you don’t make those choices. That someone might be the IRS. Your family members may be required to make a decision, and what if they’re ill-equipped to know the consequences of those decisions?
But someone’s going to make a decision for you if you don’t, and you might not like it. I would rather you be in control of the decisions and make them for how they serve you and your family best, instead of standing by and waiting for those decisions to be made on your behalf.
Principle #5: It’s okay not to like the government solution to your problem.
Federal employees have some really great benefits. My husband is a retired federal law enforcement officer. I understand the benefits from maybe a different angle as a spouse plus the work that I do, but I’ll tell you it is all right not to love the solution that the government has created for you. How could they possibly make the best decision for the millions of active federal employees and the millions of retirees on the payroll, on the retirement roles?
We have to understand the solutions that the government has set forth for life insurance, protecting your pension, determining long-term care solutions in the event that it’s needed, and saving for retirement through the Thrift Savings Plan (TSP). All of these have good elements to them, but do they continue to serve you well into the future? And you are fooling nobody if you say that the government has just figured it all out and it’s amazing.
That’s not how any employer-sponsored plan works. They have a generally acceptable solution for a lot of people, but it is not the end-all be-all. You would be very wise to look with a critical eye on all of the pieces of the benefits that you have to make sure that you get the best out of those benefits that you possibly can. And it might not be the default that the government has set for you.
If you don’t like the government solution to your problem, it doesn’t mean you don’t have a problem. You just don’t like the way the government is trying to solve it. Then you need to look perhaps to the private sector to start solving some of those problems on your own.
Principle #6: The hard conversations are always worth having.
When we’re talking about something as important and as big as retirement planning, we have to be willing to have the hard conversations. Sometimes we’re just having that hard conversation with ourselves. For example, what am I willing to live with? How is this going to work? But have the conversations, get real with yourself.
Sit down with your spouse, sit down with your children. Trying to figure all this out on your own is really quite tough. Don’t be afraid to ask for some help, but first you have to get clear on the conversation you’re having with yourself and/or your family or both and make sure that you’re honest with yourself in that conversation.
Principle #7: Retirement is complex. Getting help is admirable.
For some reason, a lot of people think that if you ask for help to get something right, that somehow you failed yourself or you’re less of a person, and that is absolutely false. I keep coming back to this idea of athletes. We see some of the strongest athletes in the world have coaches because they need a guide on their journey.
They need somebody outside of themselves to say, “You’re on the right track.” Or, “We need to make a couple little tweaks here.” Or, “You’re really going the wrong direction. We need to get you back on the path.” Having some help is admirable. Don’t be afraid to ask for help if you need it.
Principle #8: Nobody should care more about your retirement than you do.
Not me, not your agency, not your spouse, not your children—YOU. You have to care about your retirement. The fact that you’re reading this article tells me that you want to get this right, but it’s so easy for us to feel victimized with respect to money.
Maybe you lost a lot of money in the TSP in a down market. Maybe you got out of FEGLI and didn’t realize you couldn’t get back in, and there were some bad decisions made. Whatever it is, you have to own it and say, “I care about my retirement, and I’m going to do something about it to get it right.”
When you put yourself in the driver’s seat of these decisions and you are willing to take responsibility for all of your decisions, you get to become the hero in your own story.
Next Steps
Make the appropriate decisions based on real numbers, and you get to reap the benefits of a great retirement. I hope that these 8 ProFeds Planning Principles serve as a filter for the decisions that you’re making and how you’re showing up to conversations about these benefits.
This topic is important and I’m glad that I had a chance to dig into some of these details about the 8 ProFeds Planning Principles. But like most things, when it comes to money, and mindset, and your future, this is only a small part of what you need to know to be confident as you step into retirement.
After all, our job is to help federal employees take action. It’s not enough just to know about these benefits. You have to do something about what you’re learning. We teach retirement workshops throughout the country with a very specific mission of helping feds to bring together all of the various parts of their situation to see more clearly what things look like in retirement and the very real decisions that need to be made today to make that happen.
Remember, it’s never too late. It’s never too early, and it’s never too often to plan. If you have not been to one of our workshops, or if you need maybe a little refresher if it’s been a while, register to attend a workshop today!
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