Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Uncertain Times

Amid natural disasters, the threat of terrorism and financial instability in our world, it's hard to approach the retirement planning process with a sense of certainty these days. Last week, I wrote about a survey undertaken by the MetLife Mature Market Institute and the Scripps Gerontology Center at Miami University that was detailed in a report titled Best-Case Strategies for a Flexible Retirement.

The study described how life events and experiences can affect retirement planning. More than half the people surveyed said they had experienced a change in their lives that had an impact on their potential financial security in retirement. The study included a dozen such challenges. Some are not as common in the federal government as they are in the private sector, but others are universal:

  • Declining or stagnant work income or loss of job.
  • Loss or erosion of pension. So far, pension benefits under the Civil Service Retirement System and the Federal Employees Retirement System are intact. But the Obama administration this week proposed that employees contribute more toward their benefits, and additional changes could be on the way.
  • Catastrophic illness or disability.
  • Loss of health insurance or escalating health care costs.
  • Death of a spouse.
  • Caregiving demands.
  • Financial problems of children or other family members.
  • Investment losses.
  • Loss or erosion of Social Security or Medicare benefits.
  • Outliving one's retirement income.
  • An unexpected combination of scenarios, each of which individually might not present a problem.
  • An unexpected windfall -- the one scenario that most of us would welcome.

Major Threats

The study identified four major issues that could threaten the retirement plans of even those who were the best prepared. On the whole, these are factors that most federal employees don't have to worry about -- yet: Tenuous health care coverage. Most federal employees keep their health insurance when they retire and enjoy the same coverage and benefits they had during their working lives. The government continues to pay its share of the premium, and federal plans work very well in tandem with Medicare after age 65. But Congress could change the way premiums are calculated under the Federal Employees Health Benefits Program. To take just one example, a voucher program could result in a set payment by the government for health insurance with the remainder of the cost to be borne by the enrollee. And it's possible the U.S. Postal Service could leave FEHBP, affecting the overall strength and stability of the program.

Long-term care costs. Although federal employees have a long-term care insurance program available to guard against catastrophic expenses, many employees and retirees have not purchased a policy and are more afraid of the cost of the insurance than of the potential cost of long-term care.

The vanishing or eroding defined benefit pension. Gone are the days of a single-benefit pension plan, unless you are among the minority of federal employees who remain covered under CSRS. FERS, however, also has a basic benefit or defined benefit, plus a defined contribution (the Thrift Savings Plan) and Social Security. But now, many fear that Congress could take away the defined benefit portion of FERS, as has happened in many private sector retirement plans and even many state systems. As we saw this week, retirement benefits clearly are on the table in deficit reduction negotiations.

The vagaries of the stock market. For federal employees, the importance of investing varies based on length of service and salary. If an employee works long enough, he or she can achieve retirement security with the basic government retirement benefit and Social Security. But most people don't want to work that long. For them, savings are an important part of making sure they have sufficient retirement income. The TSP has the benefit of being a low-cost and relatively simple way to invest for the future, but the amount saved and the choice of investment options are completely up to the individual employee. Since the stock market is unpredictable, but still the best hedge against inflation, it is important that federal employees -- especially those covered under FERS -- gain an understanding of personal investing.

The MetLife/Scripps Gerontology Center study concluded that "best-case strategists" for retirement planning have a sense of self-reliance, expect the unexpected, set and live by personal financial rules, do the math and start as soon as possible. In my experience, many federal employees fall into this category. But if you're among those who don't feel confident about your future retirement scenario, a good place to start planning is at the pre-retirement or midcareer planning seminars offered at most federal agencies. It's never too early -- or too late -- to focus on your future.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Mondays at 10 a.m. EDT on, or on WFED AM 1500 in the Washington-metro area.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.