See If You Can Pass the Retirement Readiness Test

At some point in the not-too-distant future, many federal employees will be called back from “maximum telework” arrangements to work in traditional offices. Some may opt to retire rather than return to the cubicle life.

For those contemplating moving on to a new stage of life, I thought it might be a good time to update a quiz I created in 2017 designed for federal employees to assess retirement readiness.  For each of the 10 questions below, choose the answer that best describes your situation.

1.) Which of the following best describes your contributions to the Thrift Savings Plan?

A. I’ve increased the amount of my contributions within the last two years

B. I plan to increase them with my next salary increase

C. I’m already contributing the maximum

D. Any combination of A, B and C

E. I can’t afford to contribute more than I currently am contributing

F. I don’t save in the TSP because I put my savings in an IRA, bank or other outside investment.  

G. I don’t participate in the TSP

2.) When was the last time you reallocated your TSP funds or rebalanced your overall retirement investments?

A. I am invested mostly in one or more of the life cycle L Funds, so I generally don’t need to rebalance or reallocate

B. I am mostly invested in the G Fund because I have other retirement investments outside of the TSP that are diversified

C. I check at least once per year and rebalance as necessary

D. I have rebalanced my TSP account when it was in need of realignment with my retirement goals

E. All of my retirement savings are in the G Fund, so no need to rebalance

F. I know I should, but I don’t know how to do it

G. I don’t participate in the TSP

3.)  How do you plan to handle your TSP funds in retirement?

A. Delay my withdrawal until I’m fully retired or until I’m required to take a distribution after I’m 72 and retired

B. Leave my money in the TSP to take advantage of the simplicity, low management and administrative fees, and options for withdrawals

C. Move some or all of my TSP investments to an individual retirement arrangement to take advantage of more flexible withdrawals and more specific investment options

D. A and B or A and C

E. Cash out a large lump sum of my TSP and use it to pay down debt or pay for a long-awaited retirement expenditure, such as a home remodeling project

F. I haven’t really given my drawdown options for the TSP much thought

G. I don’t participate in the TSP

4.)  Which of the following best describes your beneficiary designation forms for retirement benefits, life insurance, TSP and unpaid compensation?

A. I’m pretty sure my designations are up to date, but I’ll add checking on this to my to-do list

B. I have copies of some or all of the forms in a safe place (such as a home safe or fireproof box) where my beneficiary can find them

C. I didn’t file some or all of my beneficiary designation forms because I’m comfortable with the standard order of precedence for payment

D. A and B

E. I didn’t know there were so many beneficiary forms

F. I don’t think I updated my forms and am not sure how to change them

5.)  The following question is directed to those within five years of retirement eligibility. Which of the following best describes your situation?

A. I’m more than five years from retirement eligibility, so this question doesn’t apply to me

B. I have a recent estimate of my retirement benefit computed for a retirement date within five years from now

C. I’ve reviewed my Electronic Official Personnel Folder and have made copies of documents that show my health benefits, life insurance coverage, beneficiary designations, beginning and ending dates of creditable service, changes in my retirement plan or work schedule, and any other documents that might be relevant to my retirement benefits

D. B and C

E. I’m not sure how to get a retirement estimate and/or I don’t know how to access my eOPF

F. I am not concerned about getting a retirement estimate because I know how much service I have and the basics of how to compute my retirement benefit

6.)  Where do you stand when it comes to factoring Social Security into your retirement planning process?

A. I’ve created a mySocialSecurity account that allows me to check my earnings history and view updates of my estimated Social Security benefit amounts or I am 60 or older and I receive my Social Security Statements three months prior to my birthday by mail

B. I’m not eligible for Social Security benefits because I haven’t earned 40 credits of coverage or I’m already receiving benefits because I’m over the full retirement age and no longer subject to the earnings test

C. I’m not ready to begin receiving benefits, but I have considered the pros and cons of filing for benefits at various ages between 62 and 70

D. A and B, or A and C

E. I’m not sure when to file for benefits, but I realize the importance of including Social Security in my retirement planning

F. I haven’t considered Social Security retirement as part of my retirement plans, although I do have 40 credits of coverage

G. Social Security is too confusing and I don’t think it will be around much longer to worry about it

7.)  Which of the following have you done to learn more about retirement planning?

A. Attended at least one mid-career or pre-retirement seminar, webinar or class

B. Learned about my benefits by conducting online research

C. Scheduled or attended a personal retirement consultation with my agency retirement specialist, a financial adviser, a benefits specialist, an accountant or other retirement planning professional

D. Any combination of A, B and C

E. Discussed retirement with my co-workers, family and friends

F. I haven’t really done too much yet to plan for retirement; it seems too far away

G. I really don’t have time to think about retirement at this stage in my career

8.)  What have you done to prepare for the possibility of needing long-term care later in life?

A. I’ve considered the possibility and researched options for cost of care

B. I’ve already purchased coverage 

C. Although I didn’t purchase long-term care insurance coverage, I have a plan in place in the event I need long-term care in the future 

D. Any combination of A, B, and C

E. I’m sure my family will take care of me, if needed

F. I don’t want to think about the possibility of needing long-term care

G. I have no idea how to assess long-term care options

9.)  What is your life insurance situation?

A. I’ve reviewed my current life insurance coverage and determined it is adequate for my needs

B. I’ve reduced or increased my life insurance coverage within the past five years as my needs have changed

C. In addition to using Federal Employees Group Life Insurance for my basic needs, I’ve considered purchasing or have purchased additional life insurance

D. Any combination of A, B, and C

E. I’m not sure how much life insurance I need, but I have FEGLI in the same amount that I had when I was first hired

F. I haven’t given serious consideration to my life insurance needs

10.)  What is your understanding of health insurance?

A. I always review my insurance needs during the annual open season or when I have a major life event (including those who may have coverage under TRICARE or those receiving benefits from the VA)

B. I’ve changed my health plan at various times in my life to coincide with my specific health needs

C. I take advantage of tax savings by using flexible spending accounts, health savings accounts, and making sure I pay my health insurance premiums with pre-tax dollars

D. Any combination of A, B, and C

E. I have the same health plan I chose when I was first hired, and haven’t reviewed my coverage options

F. Health insurance options confuse me, so I enrolled in a plan that a coworker, friend, or family member recommended

G. I don’t have health insurance coverage

BONUS QUESTION: I have computed the approximate value of my net income from all sources that I will have in retirement and compared this to my net income that I currently bring home.  As a result, I am…

A. Going to begin my life after retirement with income that will potentially exceed my income while working

B. Confident that the amount of my retirement income will allow me to have a financially comfortable life after retirement

C. Close to being able to retire with confidence that my finances will allow me to retire comfortably

D. Any combination of A, B, and C

E. Planning to make necessary changes such as downsizing my life or living on a  strict budget so that my retirement income will be adequate to cover my living expenses

F. Certain I will need to have a second career to become financially secure

G. Going to retire with considerably less income and am worried that I will have to change my lifestyle

H. Never going to be able to retire with financial security

Scoring Guide

For every answer, assign the following value:

A. 4 points

B. 4 points

C. 4 points

D. 5 points

E. 3 points

F. 1 point

G. 1 point

H. 0 points

Your Results

40-55 points: You’re doing a great job preparing for retirement. Keep up the good work!

20-39 points: You’re hitting the mark on some retirement planning issues, but may need to address others with a little more research and preparation.

10-19 points: There are items that are important to your future financial security that you may not fully understand or that you may need to revisit. One way to start is by making a list of items you need to assess based on the questions above.