Retirement Cost
Analysis.
Before you retire, you need to know exactly what your life will cost — and whether your post-retirement income covers it. This section walks through a complete pre/post retirement expense analysis with a sample spreadsheet and a three-column view: before retirement, after retirement, and what your surviving spouse will have.
Pull together
your numbers.
Now is the time to gather your receipts, pay stubs, loans, credit card balances, and bank account information. The sample spreadsheet below shows exactly what to do with that information — and what it reveals about your retirement readiness.
Your expenses, pre- and post-retirement, must be reviewed so that you and your spouse will know how much you will have to live on after you leave federal service. This analysis will show you whether your retirement lifestyle will change dramatically — and whether you will need to work part-time to supplement your income.
The spreadsheet below has three income/expense scenarios side by side: what you earn and spend while working, what you will earn and spend in retirement (annuity only, before any TSP or Social Security), and what your surviving spouse will have after you die. The last column is the most important — and the most often ignored.
The last column is very revealing. The surviving spouse's annuity reduces to 55% of the retiree's at death. In the sample, that leaves only $661 of annual buffer against total expenses.
Gather these documents before you start
Federal retirement
cost analysis.
Sample analysis for a CSRS employee retiring at age 55 after 35 years of service at GS-11, Step 6. His mortgage was paid off at retirement. Spouse's income is excluded intentionally to show what the annuitant's income alone covers. Download the free Excel version to enter your own numbers.
| Expense category | Pre / Year | Pre / Month | Post / Year | Post / Month | Survivor | Comments |
|---|---|---|---|---|---|---|
| Housing & Utilities | ||||||
| Mortgage | $13,800 | $1,150 | $0 | $0 | $0 | Paid off before retirement |
| Property taxes | $3,800 | $317 | $3,800 | $316 | $3,800 | |
| Gas / Heating | $1,050 | $88 | $1,050 | $88 | $1,050 | |
| Electric | $1,100 | $92 | $1,100 | $92 | $900 | |
| Phone | $500 | $42 | $360 | $30 | $360 | |
| Water / Sewage | $720 | $60 | $720 | $60 | $432 | |
| Garbage | $116 | $10 | $116 | $10 | $116 | |
| Cable | $540 | $45 | $540 | $45 | $540 | |
| Internet | $363 | $22 | $363 | $22 | $363 | |
| Subtotals | $21,989 | $1,826 | $8,049 | $663 | $7,561 | |
| Insurance | ||||||
| Employee policies | ||||||
| FEGLI (59K coverage) | $238 | $20 | $238 | $20 | $0 | 75% reduction — free at 65 |
| Life policy 1 (25K) | $265 | $22 | $265 | $22 | $0 | |
| Home care insurance | $457 | $39 | $457 | $38 | $0 | |
| Spouse policies | ||||||
| Life policy 1 (25K) | $216 | $18 | $216 | $18 | $216 | |
| Home care insurance | $444 | $37 | $444 | $37 | $444 | |
| Home insurance | $490 | $41 | $490 | $41 | $490 | |
| Car #1 | $585 | $49 | $585 | $49 | $0 | |
| Car #2 | $600 | $50 | $600 | $50 | $600 | |
| Health insurance (FEHB) | $3,692 | $308 | $3,692 | $308 | $1,114 | Survivor changes to self only |
| Subtotals | $6,987 | $584 | $6,987 | $583 | $2,864 | |
| Pay & Deductions | ||||||
| Gross pay / annuity | $56,900 | $4,741 | $36,985 | $3,082 | $20,341 | |
| CSRS contributions (7%) | $3,983 | $332 | $0 | $0 | No contributions after retirement | |
| State income tax (3%) | $1,707 | $142 | $0 | $0 | PA does not tax retirement income | |
| Federal income tax | $7,567 | $630 | $3,500 | $291 | $1,500 | Varies by exemptions |
| Medicare tax | $804 | $67 | $0 | $0 | ||
| TSP contributions | $3,983 | $367 | $0 | $0 | No contributions after retirement | |
| CFC / charity | $26 | $2 | $0 | $0 | ||
| Savings bonds | $1,300 | $108 | $0 | $0 | ||
| Subtotals | $19,370 | $1,648 | $3,500 | $291 | $1,500 | |
| Automobiles | ||||||
| Car 1 payment | $1,200 | $100 | $600 | $50 | $0 | Check for rate reductions |
| Car 2 payment | $600 | $50 | $500 | $41 | $400 | |
| Car 1 maintenance | $200 | $17 | $200 | $17 | $0 | |
| Car 2 maintenance | $200 | $17 | $200 | $17 | $300 | |
| Car loan | $2,592 | $216 | $0 | $0 | $0 | Paid off by retirement |
| Subtotals | $4,792 | $400 | $1,500 | $125 | $700 | |
| Food & Miscellaneous | ||||||
| Groceries | $8,500 | $704 | $7,000 | $583 | $4,000 | |
| Clothing | $1,500 | $125 | $1,000 | $83 | $1,000 | Depends on habits |
| Subtotals | $10,000 | $829 | $8,000 | $666 | $5,000 | |
| Entertainment | ||||||
| Dining out | $1,800 | $150 | $2,400 | $200 | $1,000 | Often increases in retirement |
| Miscellaneous | $1,200 | $100 | $2,400 | $200 | $1,000 | |
| Subtotals | $3,000 | $250 | $4,800 | $400 | $2,000 | |
| TOTAL ALL EXPENSES | $67,105 | $5,592 | $33,835 | $2,819 | $19,680 | Annuity: $36,985 | Survivor: $20,341 |
Table R-1 is illustrative. Spouse's income is intentionally excluded. Add or remove rows as needed in the downloadable version. Download the free Excel spreadsheet to enter your own figures.
Reading the
results.
What does this sample analysis actually tell us? The numbers are specific enough to be instructive — and in the survivor column, alarming enough to motivate action.
Post-retirement income vs. expenses
Surviving spouse — annual buffer
Key opportunities for survivor
Decision time — what to do with the results
After completing the spreadsheet with your own numbers, you may find a gap — less income than you need in retirement. The earlier you discover this, the more options you have.
If your analysis reveals a deficit
Pay off the mortgage before retirement. This single action eliminated $13,800/year in expenses in the sample above — the single largest line item reduction possible.
Increase TSP contributions now. Every additional dollar invested today reduces the gap in retirement. Catch-up contributions are available from age 50.
Delay your retirement date. An additional year or two of service increases your annuity, adds to your TSP balance, and reduces the number of years the annuity must cover.
Plan for part-time income. Many federal retirees work part-time after retirement. Even modest earned income of $10,000–$15,000/year significantly changes the math — though watch the Social Security earnings test if collecting SS before full retirement age.
For the surviving spouse scenario
Identify all cost reductions a surviving spouse can make immediately: switch FEHB from family to self-only (potentially $2,000–$3,000/year savings), eliminate a car payment, reduce entertainment and miscellaneous. Then ensure the FEGLI and life insurance picture adds a meaningful financial buffer above what the reduced annuity provides.
Visit our Survivor Annuity Concerns page for a complete discussion of survivor annuity elections and their long-term cost.
Calculators to complete this analysis
Annuity calculations
& further reading.
FERS and CSRS annuity calculation guides, savings and wealth management articles, and budgeting worksheets.