Being a federal employee comes with numerous advantages. Employees in this sector are among the elite since the hiring process is drawn out and fraught with extensive roadblocks. Still, once you make the cut, being a federal employee offers countless opportunities, chances to advance, and ways to potentially make a difference. Of course, the employee benefits can’t be overlooked, either. They’re among the best in the nation. Having said that, they’re not exactly easy to sort out. People in virtually every sector struggle to make sense of their benefits, but those set aside for federal employees are even more complex than most.
Helping Federal Employees Make the Most of Their Benefits
At Walker Capital, we are dedicated to helping federal employees make the most of their benefits whether they’re located near our headquarters in Charlotte, North Carolina or not. Our team combines a thorough knowledge of retirement strategies with an in-depth understanding of how federal benefits work and secure communication technology for highly engaging virtual consultations. We use this unique blend of expertise to aid clients from nearly all 50 states in paving the way to financial freedom and creating their ideal retirement scenarios. We also offer an array of additional resources to further benefit clients in planning for the future.
How a Federal Benefits Consultant Can Help with Your Retirement Plan
Planning for a comfortable retirement requires a multifaceted approach. It has long been said that no one should put all their eggs in one basket when creating a successful plan for virtually anything from choosing a college to building a business. This hits particularly close to home when preparing for the future. For federal employees, no single savings plan or investment option will cover all your future needs. Though federal benefits include several future-oriented components, putting them all together now in just the right way is the foundation of a solid retirement plan. Benefit strategists and retirement planners can help with this in many ways.
Assistance with Understanding Employee Benefits
With such an expansive range of employee benefits available and so many unique caveats within different agencies, fully understanding the benefits your years of service have earned for you can be a major challenge. You will have everything from pension plans to insurance coverage to mull over as you progress throughout your career and near retirement. Each benefit option comes with its own advantages and disadvantages but determining which ones would benefit you most can be daunting without assistance.
Though you may receive emails, booklets, pamphlets, and other materials to remind you of which plans you’re eligible for and when open enrollment begins, just keeping up with all the variables can be a struggle. On top of that, some of the benefits that could be immensely helpful in the future may evolve as public policy changes occur along the way. To make matters even more complicated, your needs and those of your family are bound to change over time. Knowing how to make provisions for all those changes can be confusing.
A benefits consultant can help you sort through all the details and figure out what types of plans are available. They’ll help you better understand what each one covers and what gaps may still exist in that coverage. Additionally, they’ll take a look at your overall situation to assist with determining how key benefits apply to you and your family both now and in the future. Benefits consultants also offer help with understanding how to maximize those benefits and make them all work together for optimal results.
Getting Your Retirement Goals in Order
Having a solid grasp on your benefits is crucial, but setting them into motion for the future is also essential. Still, there’s really no way to effectively do so unless your retirement goals are clear. One of the most important aspects of retirement planning is determining what your goals are with clarity. Charles Kettering, the lauded former head of GM research explained that if you can clearly define a problem that you are already halfway towards solving it. Defining your vision for retirement entails knowing what your sources of income may be, the types of expenses you’ll be facing, and other factors like how you would like to spend your time.
While we all love to dream big, we also know that the reality is that our retirement vision only goes as far as our retirement income takes it. Do you want to travel? Would you like to enjoy a quiet, minimalistic retirement and pass along most of your wealth to your children? Once you’ve ironed out those goals, you can justify why you should start saving to cover them. Changes are likely to come into the equation over time, but having a clear vision of your retirement goals will make it easier to make modifications when they do.
Retirement planning is divided into three basic phases: accumulation, distribution, and generational legacy. The accumulation phase encompasses growing your nest egg to support your retirement income whereas distribution covers the phase where you’ll start receiving payments. Financial decisions and benefits you use now will have a significant impact on the future.
While your pension is important, it’s only one piece of the puzzle. Your thrift savings plan also comes into play. Contributions will be made to this plan during the accumulation phase, so additional income will be available upon retirement. Employees must decide how much of their own money to contribute and just how to invest it. It’s up to you to decide between pre-and post-tax contributions as well.
Those decisions and many others will impact how much income you’ll have to rely on in retirement and how long it will last. They’ll partially determine what you’re able to leave behind for loved ones, too. Benefits consultants cover all these points and many others to help clients pinpoint their retirement goals and develop an effective strategy for reaching them.
It’s no secret that insurance coverage is essential. Without it, the financial aspect of medical care can cause serious hardship, and covering the cost of care as we lose our independence could fall on the shoulders of loved ones if not properly addressed. Income continuation is a key consideration for families as well. Unfortunately, deciding how much insurance you need and which types of policies would meet those requirements can be difficult.
Numerous riders are also available to bridge the gaps often left behind by basic coverage. Which ones are a waste of money, and which are most likely to work out in your favor? How much coverage is too much or not enough?
Certain types of coverage provide protection if you’re out of work due to a medical emergency. They can assist with the need for long-term care should it arise. Life insurance policies can simultaneously address these concerns while providing a legacy if you choose the right ones.
Having the right types of insurance coverage will go a long way toward maintaining your health now and in the future. It can keep you from having to draw from retirement savings to cover unexpected medical expenses, too. Benefits consultants help with choosing the best types of insurance coverage to protect you, your family, and those retirement savings in both the short- and long-term sense. Keep in mind, they can aid in making sure your coverage evolves to meet the growing and changing needs of your family as well.
Tax Planning with Retirement in Mind
Like almost all of the nation’s workforce, you’re probably well aware of the toll taxes can take on your income. Right now, a portion of your income goes straight into taxes. Exactly how much depends on the tax bracket you’re in. This will also apply to your pension. In fact, a considerable portion of that pension will be taxable, and the amount that’s deducted will be determined by the size of your income during retirement. The more you earn, the more the IRS burns.
Receiving smaller pension payments will place you in a lower tax bracket once you reach the distribution phase of retirement, but it could also hamper your lifestyle. Planning your other sources of retirement income around taxes may help keep the scales balanced. Unfortunately, that’s much easier said than done. Each source of retirement income is taxed differently. A traditional thrift savings plan gives rise to 100-percent taxable distributions during retirement while gains from other investments fall under completely different sets of regulations.
In short, effective tax planning now allows you to keep more of your income in the future. With help from benefits and tax coordinators, you can also keep more of it in the present. Several measures can help prevent taxes from detracting from your retirement and legacy. It’s also possible to make provisions for changes in tax laws and rising tax rates as they come into play.
Setting Your Retirement into Motion
As a federal employee, you have several benefits to take advantage of. Making the most of them isn’t a clear-cut situation. Understanding which benefits are on the table and how to make them work in your favor is the key to enjoying a comfortable, financially secure retirement. Federal employee benefits strategists can help you do just that. They offer a range of services designed to help clients plan for retirement. Feel free to find out more about the options at your disposal.
No two people’s circumstances or retirement goals are the same. A retirement plan that was designed for someone else won’t lead to the future you’re hoping for. Having a federal benefits consultant from Walker Capital on your side to help you take full advantage of your benefits can pave the way to success. From understanding your benefits to finding the right insurance coverage and planning for future taxes, turning to us can make all the difference.