Can you ever afford to retire?

When you decide that enough is enough, will you have enough to do something about it? Like retire? Or pursue your first love, taxidermy?

Many financial planners familiar with the federal benefits program say that in a society where pension plans have become a thing of the past, federal and postal workers will be among the nation’s best-off seniors.

Many companies that once offered generous defined benefit plans — often at no cost to the employees — have dropped them. Instead, workers must finance their retirement with Social Security benefits, investments in their 401(k), savings and other investments.

When Congress set up the TSP, congressional experts predicted that it would provide anywhere from one-third to one-half of all the money feds would have in retirement. They reduced the value of the defined-benefit federal pension program by replacing the Civil Service Retirement System (CSRS) with the Federal Employees Retirement System (FERS).

FERS has a much lower civil service benefit. And unlike CSRS retirees who get full cost-of-living adjustments (when there are any), the FERS group gets so-called diet COLAs which can over time permit inflation to eat into their retirement nest egg.

To offset the smaller CS pension, FERS workers can get a very generous government match of up to 5 percent. It’s a great incentive to invest at least enough in the TSP to get the match, which is the equivalent of a tax-deferred 5 percent pay raise.

So what’s your magic number? How much money — from all sources —will you need in retirement to match the lifestyle you had while working? According to the experts, the amount you will need when you retire ranges from as little as 55 percent to as much as 110 percent. So that’s a big help, right?

Whatever the magic dollar figure is for you, experts in retirement planning say that only about one in three Americans is ready now for retirement. Or will ever be ready.

For many, that means working a lot longer than anticipated or downsizing, big time and getting a good recipe book for Cat Food Cutlets.

So what can you do to make retirement not only happy, but possible? Obviously, invest in the TSP.

If you are in the FERS program be sure to put in at least enough to get the total 5 percent government match. You might also want to get a financial adviser you trust and are comfortable with. Also, check out a new white paper from the National Active and Retired Federal Employees written by William Matthews called, “How Much Money Do You Need To Retire?

And the answer, and you probably saw this coming, is: “It depends.”

Good luck.

Nearly Useless Factoid

By Michael O’Connell

Lurch, an African watusi steer owned by Janice Wolf of Gassville, Arkansas, had the largest horn circumference on a steer. The horn was measured at 37.5 inches on May 6, 2003.

Source: Guinness World Records