Retirement Readiness

By Katie Stamper, Program Assistant and Dr. Michael S. Gutter

62-67-70. No, these are not last night’s lottery numbers. These numbers indicate the common ages at which people consider retiring. Having a plan can help you have the realistic lifestyle you would like to have. As part of this, is it is critical to know the misconceptions about retirement, and the importance of a Thrift Savings Plan (TSP).

There are several misconceptions about retirement! Have you caught yourself thinking or believing the following?

  • You have plenty of time to start saving for retirement
  • Saving a little won’t help much
  • You won’t spend as much once you retire
  • Retirement will last only 10 to 15 years
  • You can depend on Social Security and your pension to cover your living expenses
  • Your family will take care of you
  • Your pension benefits will increase with inflation
  • Your employer’s health insurance and Medicare will cover all of your medical expenses

As a member of the military, there are several things you need to consider before retiring… Factors include:

  • Current age
  • Planned retirement age
  • Estimated life expectancy (resources are below)
  • Source(s) of retirement income
  • Amount of income needed each year
  • Amount of money already saved
  • Your comfort level in taking risks
  • You and your spouse’s health
  • Employment options
  • Financial assets
  • Eligibility for pension benefits
  • Access to and cost of health insurance

The list of retirement factors may seem long, but retiring is not a decision that you want to make lightly. We all work to feel financially secure in our golden years and want to reap the benefits from our professional life. Taking the time to plan for retirement can be worthwhile to your finances.

Don’t fool yourself about retirement! Start saving money early and save the maximum that is allowed. Also, knowing your sources of income during retirement is beneficial. You might have more sources than you think. Sources of income could include Social Security, an employer pension plan, a personal retirement account (e.g., IRA), personal savings, and as military personnel, you have access to TSP.

The TSP is a defined contribution plan for service members and federal employees. It provides an agency match for civilian workers and you can join immediately upon starting work. The TSP has very low expense ratios. For more information TSP, visit their website.

If you are married, make sure your spouse is also taking advantage of any employer provided retirement plans such as a 401(k) or 403 plan. Both of these plans provide for tax-deferred savings and may also include some form of match from an employer. An employer match is free money that should not be left on the table. If his or her employer does not provide a plan, consider using a Traditional or Roth IRA. For more information on these, check out this article.

Retirement doesn’t have to be a scary or confusing decision when you consider several factors, understand the misconceptions of retirement, and know your sources of income. Taking the time to plan and prepare for retirement can make the golden years more enjoyable. As a military member, you have not only worked hard but have also sacrificed—you deserve to enjoy retirement!



Planning for a Secure Retirement

Life Expectancy Calculator Websites:

Life Expectancy Calculator (Social Security Administration)

The Longevity Game (Northwestern Mutual)

How Long Will I Live? (Blueprint Income)


For more information, watch Retire Ready, a Military Families Learning Network Personal Finance webinar:

This post was published on the Military Families Learning Network Blog on October 18, 2013

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