The GEBI Process

The GEBI Process

At GEBI, we believe that retirement is a process, not a date.
Most people look forward to retiring, but the effort involved can intimidate even the most stalwart investor. There’s a lot to learn and with all of the nuanced options to consider it can be tough to work through all on your own. While some will rely on friends, family, and hearsay, the problem here is that this information is usually inaccurate and almost certainly incomplete. Also, what’s correct for others might not be correct for you. Since each person is different, GEBI has a process that ensures you get information that is relevant to your specific situation.

The process:

Verify eligibility for benefits

Can you afford to retire?

Determine optimum retirement time-frame

Benefit Optimization

Evaluate alternatives

Proposal / Adjustment

Can you Afford to Retire?

Many individuals approach retirement without fully quantifying their post-retirement income, leading to unforeseen challenges if/when their income significantly drops. Crucially, basic planning such as quantifying lifestyle expenses — the foundation of determining retirement readiness — is often overlooked. Understanding income and assets is only part of the equation; it’s equally important to have a clear grasp of the expenses these financial resources need to cover.

Additionally, it’s vital to consider whether retirement income will keep pace with inflation and the inevitable increase in expenses over time, such as rising healthcare premiums and the general erosion of purchasing power. Family care needs also play a critical role in financial planning. Without a thorough analysis, there’s a real risk that the retirement distributions from your assets, like those from the Thrift Savings Plan, may not suffice to maintain your standard of living through your projected life expectancy. Ensuring that retirement distribution plans are inflation-responsive and account for gradual increases in living costs is essential for a secure financial future.

Optimum Retirement Time Frame

Choosing the optimal retirement date is a complex decision that requires careful coordination of various factors to ensure financial stability and maximize benefits. It’s essential to align your chosen retirement date with multiple elements such as income streams, expenses, and significant retirement calculation breakpoints. These breakpoints might include service milestones that affect pension calculations or boosts to your High-3 average salary, which is crucial in determining your pension benefits.

Additionally, selecting the right time of year to retire can significantly impact your financial outcome due to factors like leave accruals, service computation date anniversaries, pension accrual rules, your birthday, and the end of the leave year. Timing your retirement around these dates can optimize final payouts and benefits.

You must also consider the timing of when certain streams of income will commence or cease and when specific expenses might begin or end. For instance, certain benefits might kick in only after reaching specific ages or service years, which can include minimum retirement ages or mandatory retirement ages for those in special provision roles. Adjustments to your pension based on these factors need to be thoroughly planned.

Finally, coordinating with your family or spouse is crucial, as retirement not only affects the financial aspects of your life, but also lifestyle and relational dynamics. Discussing and planning retirement together ensures that all parties’ needs and expectations are addressed, paving the way for a smooth transition into this new phase of life.

Benefit Optimization

Optimizing your retirement benefits requires comprehensive planning that not only addresses your immediate needs at retirement but also anticipates your and your family’s needs 30 years down the line. Understanding how your benefits will evolve throughout your retirement is crucial, as the decisions you make when filing your retirement application are typically permanent and cannot be changed later.

It’s vital to have a clear understanding of what you need, which benefits are available, the various options you have, and the advantages and disadvantages of each choice. Equally important is knowing how these benefits interact and potentially impact one another, which can significantly affect your financial security during retirement.

Planning for retirement often involves making critical decisions well in advance—sometimes as much as three to five years before the actual retirement date. These choices can include selecting specific retirement dates to maximize benefit accruals or making changes in your investment strategies to align with projected needs.

A key aspect of successful retirement planning is synchronizing your benefits with your projected cash flow, integrating your overall distribution strategy to ensure a steady income stream throughout retirement. This strategic alignment is essential to prevent the risk of outliving your resources, securing financial stability, and maintaining your desired lifestyle in your later years. Such careful planning ensures that you are well-prepared to enjoy your retirement years without financial worry.

Evaluate Alternatives

Navigating federal benefits can be complex, especially since they are structured to cater to all eligible federal employees, which may not always perfectly align with your specific circumstances. Consequently, exploring alternative solutions may be necessary to adequately meet your personal and family needs.

A prime example of this is the Federal Employees’ Group Life Insurance (FEGLI). While FEGLI serves well during your working years, it may not provide sufficient coverage or be cost-effective during retirement. FEGLI is designed with escalating premiums post-retirement, which often makes it less viable for long-term coverage. It generally encourages opting for reduced benefits as you transition into retirement. Therefore, if you require life insurance to cover long-term needs such as a mortgage, estate planning, or charitable gifting, you might need to look into private sector life insurance options that offer better suitability for your retirement phase.

When considering paying for any benefit, it’s crucial to thoroughly evaluate all available alternatives. This ensures that you make the best possible choice that aligns with your financial goals and provides adequate support for you and your family. By carefully assessing each option, you can optimize your coverage to match your specific post-retirement needs, ensuring financial security and peace of mind in your later years.

Proposal / Adjustment

Considering the complexity of federal benefits and the unique financial circumstances each individual faces, it’s crucial to meticulously assess both what you need and what is available to you. This includes evaluating options within the federal benefits system as well as potential private sector alternatives that might better serve your specific requirements.

As we review your personal situation—taking into account all pertinent information such as your needs, projections, current benefits, and their future potential—it becomes essential to strategize how to optimize your circumstances effectively. This involves making informed decisions about which benefit options to choose, determining the optimal timing for your retirement, and deciding on the method of your retirement.

Key questions to address include: Do the benefits provided by your current retirement system adequately cover the needs of you and your family? If there are gaps or inadequacies, what adjustments should be made to better secure your financial future? This may involve opting for different benefit levels, supplementing with private insurance, or adjusting investment strategies to ensure a stable and comfortable retirement.

By carefully aligning your retirement strategy with both your immediate and long-term needs, we can help you make well-informed decisions that enhance your financial well-being and provide peace of mind as you transition into retirement.