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Retirement Traps to Avoid for Federal Employees

By Kaleb Robuck

No matter where you’re starting from, your path to retirement may include unexpected twists, turns, and slides as a Federal Employee. Preparing for what lies ahead can make the journey a bit more enjoyable. Here are some of the twists you might encounter.

Market Volatility

Market volatility is inevitable. Changing interest rates, global developments, even investor psychology can cause markets to move higher or lower. In uncertain times, it can be tempting to react out of fear. But a balanced portfolio that reflects your goals, risk tolerance, and time horizon can help you weather market volatility while still taking advantage of opportunities.


Inflation is an upward movement in the average level of prices over time. Over time, inflation can act like a thief, stealing purchasing power from your retirement savings. But in the same way that you might protect your possessions from robbers, there are wise financial strategies that can help prevent financial strategies that can help prevent financial losses due to inflation.

Luckily, Feds do have some built-in protection against inflation. Federal employees under the Civil Service Retirement System (CSRS) receive a cost-of-living adjustment (COLA) every year. If you’re under the Federal Employee Retirement System (FERS), you receive a diet COLA. “If inflation is 2% or less, they get a full COLA. If inflation is higher, retirees get the COLA minus 1%. Better than most private plans, but still a problem.”5

Healthcare Costs

Healthcare costs could be one of the biggest expenses you will face in retirement. A healthy couple retiring at age 65 can expect to pay about $208,000 in lifetime out-of-pocket healthcare expenses during their retirement, even with supplement coverage such as Medicare Part D, Medigap, and dental insurance.2 It’s important to know that even though you have a COLA to protect against inflation, it does not account for the rise in medical costs.5 Also, remember to plan for extended care. Someone turning age 65 today has almost a 70% chance of needing some type of extended care and support in their remaining lifetime.3


Your retirement years may also be a longer season of your life than you anticipate. The average person’s life expectancy has risen by 25 years over the last century.4 Living longer can require more retirement savings. For some, it may mean changing their stance on working during retirement.

72% of today’s workers expect to keep working after they retire. However, only 30% of retirees actually remain on the job.5 The benefit of being a Federal employee is that you have a pension, which is rare today for anyone who isn’t a government employee. This means you have guaranteed income for the rest of your life, besides Social Security.


Perhaps the biggest trap to avoid on your journey is that of unrealistic expectations. Retirement, like the rest of your life, will be full of changes, challenges, and opportunities. Preparing yourself mentally and financially can help pave a clear path so you can enjoy all the adventures that lie ahead.

Having a financial plan in place can give you comfort and security in knowing you’ll be prepared for retirement and are already prepared for any of the twists and turns that retirement might take you on. If you’d like to learn more about how to get started, please contact us here or call us at 712-623-5726 for more information.


  1. https://hvsfinancial.com/wp-content/uploads/2020/12/2021-Retirement-Healthcare-Costs-Data-Report.pdf
  2. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
  3. https://www.statista.com/statistics/1040079/life-expectancy-united-states-all-time/
  4. https://www.ebri.org/docs/default-source/rcs/2021-rcs/2021-rcs-summary-report.pdf?sfvrn=bd83af_2
  5. https://federalnewsnetwork.com/mike-causey-federal-report/2021/03/inflation-the-retirees-biggest-enemy/