You Need More Than Just Social Security for a Comfortable Retirement

The SSA says that Social Security is not meant to replace all of your income in retirement; therefore, it’s also critical to do your own saving.

Don’t plan on relying just on Social Security income alone in retirement if you want to have enough money to live comfortably after you stop working. That is some recent advice from the Social Security Administration.

The SSA said in a blog post:

The first thing you should remember is that Social Security replaces only a portion of your pre-retirement earnings. Most financial advisers say you will need about 70 percent of pre-retirement income to live comfortably in retirement, including your Social Security benefits, investments, and other savings. A solid retirement plan includes planning for more than Social Security. (emphasis added)

Other Income Sources

Fortunately for federal employees, their benefits include some important sources of retirement income. While Social Security is a component of this (under FERS), it is just a small portion.

Federal Employees Retirement System (FERS)

The Federal Employees Retirement System provides benefits from three different sources: Social Security, a basic benefit plan, and the Thrift Savings Plan (TSP).

Two of the three parts of FERS (Social Security and the TSP) can go with you to your next job if you leave your federal job before retirement.

Basic Benefit

The Basic Benefit and Social Security parts of FERS require you to pay your share each pay period. Your agency withholds the cost of the Basic Benefit and Social Security from your pay as payroll deductions. Your agency pays its part too. Then, after you retire, you receive annuity payments each month for the rest of your life.

The amount you get in retirement is based upon how long you worked for the Federal government, what age you retire and how much you earned.

Thrift Savings Plan

The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency, if you are eligible to receive agency contributions) put into your account during your working years and the earnings accumulated over that time.

The TSP part of FERS is an account that your agency automatically sets up for you. Each pay period your agency deposits into your account amount equal to 1% of the basic pay you earn for the pay period. You can also make your own contributions to your TSP account and your agency will also make a matching contribution.

You Can Be a Millionaire

The TSP in particular is an important source of income in retirement. Contributing regularly to the TSP over the course of an entire career while taking full advantage of the government’s matching portion can reap tremendous wealth building benefits over time if the money is invested well.

Many federal employees have accumulated over $1 million in their TSP accounts by regularly saving and investing (and staying invested, even during down times). We published one federal employee’s story of how he became one of these TSP millionaires by investing regularly during his career. Becoming a millionaire by investing in the TSP is really not as daunting as it may seem as author Lyn Alden has pointed out.

You can also save even more by contributing to an IRA outside of the TSP, thereby allowing you to have even more money invested and growing in a tax free or tax deferred account.


Social Security is treated differently for federal employees under the Civil Service Retirement System. For more on this, here are some recent articles which cover aspects of Social Security as it relates to CSRS:

Viability of Social Security

With reports coming from the government about potential future instability of the Social Security program, it is that much more important to save diligently for your own retirement.

Last year, for example, the Social Security Trustees’ report said that combined reserves of the program are projected to be exhausted in 2034, at which time the system could pay 77 percent of scheduled benefits.

A recent poll found that 80% of millennials are worried that Social Security may not be there for them when they reach retirement caused by growing concerns of the program’s financial instability.

One can debate whether or not Social Security will remain viable and for how long. But the point made by the SSA is that, regardless of if or how much you ultimately get from payments from Social Security, it was never intended to replace all of your retirement income. Therefore, it is critical that you do as much of your own saving and investing as possible during your working years to have a secure and enjoyable retirement.

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.