Government employees are at a distinct advantage when it comes to saving for retirement. You’ll have a pension, as well as the opportunity to participate in a defined contribution plan known as a Thrift Savings Plan (TSP) that functions much like 401(k)s and 403(b)s. But that doesn’t mean you shouldn’t plan for retirement.

Local and federal retirement planning isn’t all that different than what private-sector employees do. You’ll need to decide how much money will be necessary to live comfortably, then make sure you’re setting enough aside each year to cover it. But first, it’s important to fully understand the options available to you.

Understanding Federal Government Employee Retirement Benefits

Federal retirement planning starts by knowing your benefits. To participate in the Federal Employees Retirement System (FERS), you’ll have 0.8% of your basic pay contributed to the plan. The government will kick in 10.7% or more. At retirement, you’ll typically receive 1% of your pay during your top three earning years multiplied by your years of service. You can also contribute up to 11% of your income to a Thrift Savings Plan, an amount matched by the government by up to 5% of your basic pay, depending on the amount of your contribution.

Hired Before January 1, 1984

If you were hired before January 1st, 1984, check to see if your retirement is funded through the Civil Service Retirement System (CSRS). If this is your retirement plan, Social Security taxes aren’t taken out of your pay. Unless you pay into Social Security through other jobs, this means you won’t receive a Social Security payment upon retirement.

Hired in 1984 or Later

Those hired from January 1st, 1984 on are automatically added to the Federal Employees Retirement System (FERS). This is where you’ll get the best federal employee benefits, including Social Security. Your agency will contribute toward your pension, giving you a nice income at retirement, although it will likely be reduced compared to what you make while working.

Thrift Savings Plan (TSP) Contributions

Traditional TSP retirement advice goes along with what you’d hear about a 401(k) or 403(b) plan. You should, at the very least, contribute the amount necessary to get the full match. Your agency will automatically put 1% of your basic pay into the plan, whether you contribute or not, but a TSP financial advisor will likely say you should invest at least 5%. Your agency will contribute 4% of your base pay as long as you’re putting 5% into the plan.

State and Local Government Employee Pensions

If you’re a state or local government employee, you’ll also have a pension, although the details of that pension will vary. Pensions historically were funded by the government, but today’s pensions are primarily funded through investments. In some areas of the U.S., government employees contribute a small amount to their own pensions, but if you’re a state or local government employee, most of your pensions will be paid through the money your governing authority is investing.

Bottom line

If you’re a government employee, it’s important to learn about your retirement savings and calculate what you’ll need to retire at your desired age. There are local and federal retirement planning consultants who can sit down with you and help you calculate your savings, then make recommendations to boost it even further. You can even set up retirement savings that supplements your government retirement accounts to ensure you’re taken care of in your golden years.