Fed retirement tips after Wall Street roller coaster

Thursday - 8/18/2011, 10:05am EDT

Ed Zurndorfer, registered employee benefit consultant

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By Jack Moore
Federal News Radio

With the stock market's wildly uneven activity over the past week, many federal employees are wondering what the Wall Street roller coaster will mean for their retirement.

Registered employee benefit consultant Ed Zurndorfer has come up with a list of tips that can help feds plan for whatever happens. He previously discussed some of those tips on an earlier appearance on the Federal Drive.

"The whole idea behind these points is that employees can take control of their retirement," he said. "Employees cannot control what Congress is going to do with the benefits; employees cannot control what happens on Wall Street. But employees can do a certain number of things themselves that will hopefully ensure they'll have a good retirement with sufficient income."

In addition to better budgeting and reducing debt, Zurndorfer said feds should:

  • Consider delaying retirement if CSRS or FERS annuity and TSP are insufficient. "If an employee feels that he or she is not ready financially to retire ... then they're going to have to bite the bullet and continue to work," Zurndorfer said.

  • Take advantage of current low tax rates. How? Consider converting a traditional IRA into a Roth IRA and pay the taxes on that transfer now while tax rates are lower, he said.

  • Plan now for future longterm care. With the prohibitive costs of longterm stays in nursing homes, employees should consider longterm care insurance — and sooner rather than later, Zurndorfer explained. The federal government's longterm care insurance option a "solid, good program," he added.

Another key takeaway in discussions of federal retirement is that one size does definitely not fit all.

"Everybody has their own circumstances regarding their bills," he said. "Trust me, as someone who has retired from the federal government, your bills will not retire when you retire. Your bills continue to come in and you have to pay them."