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Advice on how to prepare for life after government.

Happy Financial Literacy Month!

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Since April is officially Financial Literacy Month, the Office of Personnel Management has been providing information to help employees plan for the future. Some of the tips involve things you might have forgotten about -- such as savings bonds and other Treasury securities. The savings bonds my parents and my husband’s parents gave to our two boys as they were growing up helped to pay for a significant part of their education. We weren’t sure at the time how $50 bonds that cost only $25 would ever make a difference, but their value over 20 years turned out to be thousands of dollars in college money.

Another tool that OPM is promoting this month is the Federal Ballpark E$timator. It’s designed to encourage federal employees to think about options for retirement savings so that they’ll have additional sources of income beyond government retirement benefits and Social Security.

One of those key sources is Thrift Savings Plan investments. As of March 31, the TSP had a total account balance of $313 billion -- a clear indication that the 4.7 million plan participants are aware they need to save for their retirement. But it turns out that more than half those funds are invested in the superconservative government securities G Fund -- if you factor in the portion of life-cycle fund investments that end up in the G Fund.

Why is the figure so high? Is the G Fund really that safe? Many people don’t realize there is a risk in relying on it to meet your retirement goals. It’s called inflation.

Another thing to remember, especially during Financial Literacy Month, is you’re not going to get investment advice from the TSP or from your federal agency. Their job is simply to make benefits available to you and explain how they work.

If you’re not comfortable making decisions about investing for the future, then you might want to hire a professional financial adviser. Here is a link to 10 questions that can help you choose a qualified financial planner.

 

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 www.tammyflanagan.com 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 NITPInc.com.

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