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Understanding The Civil Service Retirement Plan

Civil Service Retirement Plan

The civil service retirement system is in place for employees of the government. The retirement system for those that work for the federal government went into effect in 1920 and has undergone many changes since that time.

The civil service retirement system is a benefit that retirees are entitled to, which is clearly defined. The public employee's retirement system allows employees to make a financial contribution towards retirement financial planning.

The public employee's retirement system includes employees contributing to their retirement plan, but they do not generally have to make additional contributions to the special security systems, as their retirement plans differs from that plan. However, they are required to pay towards disability insurance and Medicare.

Retirement financial planning for federal employees can include a contribution from their pay of up to ten percent. However, they are not required to contribute the full ten percent, which is made tax free or before taxes are paid on earned income.

These fund can be utilized in certain circumstances, when the employee selects early retirement. For example, those that become disabled, can collect from the fund early if they are unable to work. In fact may of the rules which govern Social Security and Medicare, also apply to the public employee's retirement system. Early retirement may also include involuntary separation from the employer and determinations about the fund will be made individually, based on the specific circumstances of each case.

NEXT: Basic Information Individual Retirement Accounts

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