As Alaska federal employees approach retirement, having a clear roadmap is essential. While our comprehensive FERS Retirement Roadmap provides a detailed timeline from 5 years out to day one, we’ve found that many federal employees still have pressing questions about their retirement journey. Today, we’re addressing the most common concerns we hear in our Fairbanks office.
1. “What if my retirement timeline gets accelerated unexpectedly?”
Life doesn’t always follow our ideal schedule. Whether due to agency restructuring, health concerns, or unexpected opportunities, many federal employees find themselves facing an expedited retirement timeline.
What you need to know: While a 5-year planning window is ideal, the essential steps can be condensed if necessary. Focus first on verifying your Service Computation Date (SCD), understanding your FERS pension eligibility, and confirming you meet the 5-year requirement for Federal Employee Health Benefits (FEHB) continuation.
2. “How do I maximize my unused leave for the best retirement benefit?”
Strategic planning around your leave balances can significantly impact your retirement benefits.
What you need to know: Unused sick leave may be used to add to your creditable service for pension calculation purposes (though it doesn’t count toward retirement eligibility). For annual leave, many Alaska federal employees strategically time their retirement date to maximize their lump-sum payout, especially considering Alaska’s higher locality pay.
3. “Should I take a lump sum from my TSP or monthly payments?”
The TSP distribution decision is one of the most consequential choices you’ll make.
What you need to know: This isn’t a one-size-fits-all decision. Your withdrawal strategy should align with your overall income needs, tax situation, and legacy goals. Many Alaska federal employees benefit from a combined approach that provides both immediate liquidity and long-term income security.
4. “How does the Alaska cost of living affect my federal retirement planning?”
Alaska’s unique economic environment creates special considerations for federal retirees.
What you need to know: While Alaska has no state income tax (a significant advantage for retirees), the higher cost of living for essentials like healthcare, utilities, and food requires careful budgeting. Your FERS pension will receive cost-of-living adjustments, but they’re based on national averages rather than Alaska-specific inflation.
5. “When should I claim Social Security benefits as a FERS retiree?”
This timing decision can significantly impact your lifetime benefits.
What you need to know: While you can claim as early as age 62, each year you delay (up to your full retirement age) increases your benefit amount by approximately 6% per year. While delaying your benefit from full retirement age to age 70, increases your benefit amount by approximately 8% per year. For many FERS retirees, a strategic approach might involve using TSP funds during the gap years before maximizing Social Security benefits.
6. “How do I coordinate FEHB with Medicare once I’m eligible?”
Healthcare planning is a critical component of retirement security.
What you need to know: Most federal retirees should enroll in Medicare Part A (hospital insurance) when eligible, as it’s premium-free for most. The decision to enroll in Part B (medical insurance) is more complex and depends on your specific FEHB plan, expected healthcare needs, and budget considerations.
7. “What survivor benefit elections make the most sense for my family?”
Protecting your loved ones is a priority for most federal employees.
What you need to know: FERS offers survivor benefit options that provide continued income to your spouse after your passing. However, these come with a reduction to your monthly annuity. Many federal employees evaluate these options alongside alternatives like life insurance to create the most efficient protection strategy.
Get Your Complete FERS Retirement Roadmap
These questions only scratch the surface of what Alaska federal employees need to consider when planning for retirement. For a comprehensive timeline and checklist that walks you through every critical step from five years before retirement to your official retirement date, download our free FERS Retirement Roadmap: From 5 Years Out to Day One.
This valuable resource will help you navigate the retirement process with confidence, ensuring you don’t miss any crucial deadlines or opportunities to maximize your federal benefits.
Need Personalized Guidance?
At SBS Retirement Consultants, we specialize in helping Alaska federal employees navigate the complexities of FERS retirement planning. Our team understands the unique challenges and opportunities facing federal employees in Alaska.
Contact us today at 907-374-0487 to schedule your complimentary discovery appointment, or visit our office at 907 University Avenue, Fairbanks, AK 99709.
Advisory services offered through Commonwealth Financial Network®, a Registered Investment Advisor.
