How Baby Boomers are Retiring

• By Tammy Flanagan
• August 23, 2013
• comments

One of the benefits of getting older is that your friends start to retire. My good friend Georgia left the State Department at the end of 2011 after more than 38 years of federal service. She worked for portion of time as a reemployed annuitant, but she’s been fully retired for six months. Georgia keeps busy doing all of the things that she didn’t have time for during her years of long hours of federal service -- taking power walks in the park (with me!), working out at the gym, getting a beach house, cleaning closets, and spending time with her 80-year-old mother and 102-year-old grandmother.

I asked what the best thing about retirement is so far and she said it’s not having to drink her coffee in a cup with a lid. At first I didn’t know what she meant. Then I realized she always took her coffee to go as she rushed out the door in the morning.

Georgia is one of many people in government -- and across the American economy -- who have made the decision to move into retirement. And now we’re beginning to get more information about exactly how baby boomers in ...

Let the Open Season Panic Begin!

• By Tammy Flanagan
• August 16, 2013
• comments

It isn’t even September yet, but there is a lot going on already in preparation for the 2013 Federal Employees Health Benefits Program open season at the end of the year. With the implementation of the 2010 Affordable Care Act under way, some employees and retirees are worried about its impact on their benefits. Here is an email I received this week:

As I understand, our insurance will change in January and the benefits won't be as they were before. I know, nobody knows exactly what will happen … but what about surgeries which could wait a few months (like hip/knee and similar). Would it be better to have it before 2014?

In general, for federal employees, there’s no need to panic. FEHBP will continue as you know it. Unless you are a member of Congress or congressional staff member, you will continue to be covered by an FEHBP health plan next year. (Under the ACA, those on Capitol Hill must obtain insurance through new health exchanges that are in the process of being set up.)

The 2013 FEHBP Open Season will begin Monday, Nov. 11 and end on Monday, Dec. 9. As usual, you will be ...

Your Own Retirement Savings Plan

• By Tammy Flanagan
• August 9, 2013
• comments

According to a Thrift Savings Plan report released in May, 146,000 Civil Service Retirement System employees currently contribute to a Thrift Savings Plan account. By comparison, more than 2 million employees covered under the Federal Employees Retirement System are putting money into the TSP, along with 312,000 FERS employees who only receive automatic contributions from their agencies.

The difference, of course, is that TSP contributions are a more important part of the retirement package for those under FERS -- and there are simply more employees covered under FERS these days as CSRS gradually goes away. Still, while I’m sure there are some CSRS employees who do not contribute to a TSP account, most I talk to do, to get the benefits of tax-deferred savings as they establish a nest egg for their future.

There’s another option for CSRS employees who want to invest in their own retirement, however. It’s called Voluntary Contributions. I last wrote about this program in a 2010 column. I figured it’s time for an update.

What It Is

Voluntary Contributions is a savings program open to current employees (and recently retired employees who are waiting for the final processing of their ...

The Mystery of the Vanishing Service Credit

• By Tammy Flanagan
• August 2, 2013
• comments

Regular readers of this column know that I’m a big proponent of making sure you keep your own copies of important personnel records, just in case you need them. This is particularly true at a time when the federal retirement system is switching over to electronic record-keeping, which, while more efficient, provides a new opportunity for errors to creep into the process.

A reader recently told me his story of how the electronic system almost cost him credit for several months of federal service, and how keeping his own files helped him correct the problem.

I’ll let him tell the story:

You suggest that employees, about five years from retirement, meet with HR to have them run their numbers and check out their paperwork to make sure that everything is in order.  About five years ago (actually seven, due to the financial downturn) I had HR run my numbers and check everything out. Everything was about as I expected.

The financial downturn took place and I decided to hold off [on retirement]. This past March, I decided that I was a year away from retirement and [remembered your suggestion to] meet with HR to start the process. I ...

You Can Afford to Retire! (2013 Edition)

• By Tammy Flanagan
• July 26, 2013
• comments

This is an update of a column I wrote in 2006. With many employees enduring salary reductions due to furloughs, some are wondering what to do. Some of them are in a position to retire comfortably -- and don’t even know it.

In a recent Washington Post column, a federal employee with 45 years of service said being furloughed has had a profound effect on how she spends her money. She might not understand that her retirement benefit will provide her with as much income as her full salary (maybe more, depending on how much she saves in the Thrift Savings Plan). In addition, since Civil Service Retirement System employees like her max out at 80 percent of their high-three average salary after 41 years and 11 months of service (although unused sick leave credit can allow a higher computation), she is entitled to a refund of three years of excess retirement contributions representing 7 percent of her salary annually -- plus interest.

I recently wrote about the 80 percent rule on how much of your income you need to replace in retirement. By looking at your own numbers, and considering how much money you have left over every month (or ...