Now is the time to pull together all of your receipts, pay statements, loans and bank account information. There are many things to consider for both CSRS and FERS federal employees and the sample spreadsheet included on this page will help you see the value of completing this form. A copy of the Microsoft Excel Retirement Cost analysis spreadsheet is available on this site. You can save the spreadsheet to your local computer hard drive and work on it off line. This spreadsheet shows approximately what you will have left over after you pay all of your bills before and after you retire. The last column represents what your survivor will have remaining from their reduced annuity after you die. This exercise provides an opportunity for you to review and make changes to increase you retirement income.

Gather Up the following Documents in preparation for completing this spreadsheet:

• Pay Stubs

• Insurance Policies

  • Life

  • Auto

  • Home

  • Umbrella

• Loans

• Utility costs

• Other expense items

• Last years taxes

Table R1, listed below, is not all inclusive and you can add or remove expenses as you see fit on the downloaded version. The sample here is for a federal employee who will soon retire at age 55. He is a CSRS employee and worked 35 years for Uncle Sam. His top grade was a GS-11, step 6.

All expenses are listed on the chart for pre retirement per year and month and again for post retirement per year and month. The last column is for calculating what your spouse will have to live on with current expenses after you pass on. This is a very revealing analysis. Note that in retirement this person will be living on an annuity of approximately $36,985. His total expenses after retirement are $33,835 leaving him with a buffer of just over $3,000 for emergencies. If there are unanticipated expenses or increased costs this person will need to be able to tap other retirement savings such as savings bonds, his Thrift Savings plan, or other investment income. The other option, if you don't have much in your other savings plans, is to continue to work at least part time some where.

After completing this chart you may determine that it is not feasible for you to retire if you were depending 100% on annuity income. Most in the federal sector have the Thrift savings plan which can substantially augment your retirement income. Others purchased savings bonds through payroll deduction and you and your spouse may be eligible for social security when you reach age 62 or older if you worked over 40 quarters, 10 years, in the private sector. If you are in the FERS system and retire at or after your eligibility date social security offset will help you make ends meet. 

The last column is significant to the surviving spouse. In this example, the surviving spouse's annuity reduces to 55 percent of the retiree's annuity, or $20,341. The survivor has expenses totaling $19,680, way to close for comfort. Ideally, insurance would add a blanket of security for the survivor along with social security, Thrift Savings and other investment income. The survivor may have to change their lifestyle considerably to live comfortably in retirement.

The above discussion should get you thinking about where you need to go from here. You can cut unnecessary expenses, possibly move to a less expensive home, sell the second car. There are lots of options. Also, in the survivor's case, there are a number of cost cutting things they can do immediately such as change their health insurance from a family plan to self only. This one action alone can save thousands each year.

SAMPLE RETIREMENT COST ANALYSIS
SPREADSHEET
(Table R-1)

 

EXPENSE	Pre/year	Pre/mo	Post/year	Post/mo	Survivor	Comments
Mortgage	13800	1150	0	0	0	Paid off mortgage at retirement
Mtg Taxes	3800	317	3800	316	3800
Gas	1050	87.5	1050	87.5	1050
Light	1100	92	1100	92	900
Phone	500	42	360	30	360
Water/Sewage	720	60	720	60	432
Security	0	0	0	0	0
Garbage	116	10	116	10	116
Lawn Service	0	0	0	0	0
Cable	540	45	540	45	540
Internet Access	363.4	21.95	363.4	21.95	363.4
Other
Other
SUBTOTALS	21989.4	1825.45	8049.4	662.45	7561.4
INSURANCE
Employee
FEGLI         59K	237.74	19.81	237.74	19.81	0	With 75% reduction to $0 at 65
Policy 1       25K	265	22	265	22	0
Policy 2
Home Care	457	39	457	38	0
Other
Spouse
Policy 1       25K	216	18	216	18	216
Policy 2        3K	0	0	0	0	0
Home Care	444	37	444	37	444
Other
Home	490	40.83	490	40.83	490
Umbrella	0	0	0	0	0
Car #1	585	48.75	585	48.75	0
Car #2	600	50	600	50	600
Mobile Home
Motor Cycle
Health Ins	3692	307.66	3692	307.66	1113.6	Survivor must change to self only
SUBTOTALS	6986.74	583.05	6986.74