For most federal workers, retirement may seem like it is forever away, right up until the point they are ready to retire. And, while being able to retire doesn’t necessarily mean you should, making sure you are prepared for retirement is always a smart idea.
Many federal employees think that once they are able to retire, they should, but this isn’t usually the case as there are quite a few factors that should go into the decision. Wondering what you can do to be prepared for retirement? Here are two things to keep in mind as you prepare.
- Be realistic about your financial needs during retirement.
When it comes to budgeting for life after retirement, many workers are not fully prepared. They make take their current expenses as a determination of income needs during retirement or simply use a percentage of their current income. But there is more to retirement than just paying bills. Do you expect to travel? Will you be staying in your current living situation? Can you cover unexpected expenses? Will you have the funds to help out struggling family members? These are just a few questions you should ask yourself when trying to prepare your retirement budget, but they are very important if you want to not only survive, but also thrive during your retirement years.
- Understand what true inflation is and how it could affect your retirement budget.
As mentioned above, many employees look at their current expenses as a guide to budgeting for retirement. This can be a very bad choice for multiple reasons, a big one being inflation. Certain things such as energy, water, food, medical expenses and even life expectancies continue to increase at a constant rate. Will you still be able to afford all of your bills, food and fun? How will inflation impact your retirement plans? This needs to be heavily considered when preparing for your federal retirement.