Page 82 - The Informed Fed--Hearn (edited 10.29.20)

CHAPTER EIGHT

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Maxing Your Retirement

Income

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We will use this chapter to address some important questions about
the two primary retirement systems: Civil Service Retirement System
(CSRS), and Federal Employee Retirement System (FERS). With a very
few exceptions, CSRS employees are those hired prior to January 1, 1984,
or those with at least 5 years of CSRS service who left and returned to
work before January 1, 1988. FERS employees are those hired after
January 1, 1984.The CSRS pension grows by 2% each year up to 42 years
of service which, on a $52,000 annual salary, is about $80 in additional
monthly retirement income for every year of additional work.
The FERS employee pension will grow by 1% each year, adding
about $40/month in retirement income. In addition, the FERS employee
who delays drawing Social Security until age 66 will generally add $300-
400/month in retirement income. Working 2 or 3 extra years also gives
time to add to TSP and other investment funds, which will increase
future income. Working into your retirement years may not be your first
choice, but sometimes it simply becomes a necessity. No matter what
your situation, the closer we get to retirement, the more important it
becomes to get the most out of every dollar. We have already suggested
that the best way to grow your TSP account is to contribute the amount

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