Commentary: Afraid of retirement unknowns? There’s help

By Robert TimmonsJuly 24, 2024

Is thinking about retirement scary for you? Does the fear of the unknown give you a double take? Do you think you have prepared enough?

If you think of these, you are not alone.

I recently stopped by Army Community Service to see just how prepared I was and quickly determined I was in the right place.

The financial counselors there can help you start preparing whether you are on your first enlistment or in the twilight of your career.

I am not exactly nearing the end of my career, but I can see the faint light at the end of the tunnel and wanted to make sure I was on the right track.

I spoke with Kim Bottema, an ACS financial counselor who has been in civil service for 35 years, who gladly helped me find out where I stand.

It’s up to the individual on when they will retire but it’s better to plan earlier rather than later.

“If I can get a client that comes in when they first start civil service, I really feel like we can make a huge difference in the retirement pension,” she said.

“But it’s a personal issue when it comes to retirement.”

The clients might say I’m tired of working. I was retired military and I’ve been in civil service for 15 years, or I just don’t want to work anymore.

“It’s about can you afford it too,” Bottema said.

One thing that helps is to create a budget and see where you are.

“If I retired this is what the dollar amount will be in my pension,” she said. “If you’re going to draw Social Security, this is the amount of Social Security I’m going to receive. I’m retired military, this the dollar amount. Then you add up all these and do a budget with your rent, your utilities, car payment, insurance …

“Oh, can I afford it? My goodness, I’m going to be in a deficit. So, then we have to change some of our spending habits and stop some of the things now before we retire,” she said. “It’s a personal choice when you retire and if you can afford it.”

One of the most important parts of preparation for retirement is can someone afford it. It’s best to start preparing now, like Bottema said. If I don’t have the money to retire right now, I can work at saving money so I will have it in the future.

She showed me I am on the right track heading to retirement, but I can improve where I’m at by looking at some areas that can boost my savings and put my retirement plans in the black. These included tweaking my Thrift Savings Plan; making sure I have adequate savings and emergency money accounts; and (since I am retired military) maximizing my disability rating. One area that shocked me was life insurance.

Bottema counseled me (ACS has counselors not advisors by the way) that taking a look at my life insurance can help me increase my retirement pension.

As I get older insurance will get more expensive. Will I need all the coverage I pay for, and did I realize that the premiums from the Federal Employee Group Life Insurance policy will decrease the amount of my monthly civilian retirement annuity?

Not at all. It didn’t even cross my mind. Wow that will be something I will have to take a look at. Will civilian term insurance beat the FEGLI and Veterans Group Life Insurance I have?

Another way I could save more is by examining my TSP.

There are three areas I needed to look at: how much I am putting in, how that was being dispersed and if it was a Roth or Traditional Individual Retirement Account.

As a government civilian, the amount I put in will determine how much my agency will contribute. The government will match my contributions up to 5% .

I should also look at how its dispersed within the TSP as some funds have performed better over the past few months than others. For instance, the G Fund or Government Securities Investment Fund has a lower rate of return than the C Fund or Common Stock Index Investment Fund.

Finally, if my TSP is a Roth of Traditional IRA will also help in my retirement due to when the contributions are taxed. If I have a Roth IRA, the taxes are paid up front so when I would withdraw it in the future I wouldn’t pay taxes on it. However, a traditional IRA is not taxed until I withdraw it.

Hmm, I could pay the tax now and have a lower paycheck each pay period, or have the money taken out and I would have a larger paycheck, but maybe a higher tax later on. It’s a difficult choice that ACS can counsel me on, but not advise me to take.

Bottema and the other financial counselors, Esperanza Romero and Shawn Smith are ready to help active-duty service members, Family members, retirees, and Department of the Army Civilians.

“We can see you,” Bottema said. “Our primary clients are our active-duty Soldiers, of course, but we absolutely see all ID card holders.”

For more information, or to set up an appointment with ACS counselors call (803) 751-5256. The Garrison Workforce Development program also hosts retirement seminars occasionally throughout the year.