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

A Critical Part of Planning, By Any Estimation

Some years only have one Friday the 13th, but in 2015, there are three--and of course, one of them is this week. Maybe that’s why I’ve been thinking about unlucky or unfortunate federal employees who are trying to plan for retirement. This week, when I visited two different federal agencies, I heard some troubling news.

Employees at some agencies are being told they can’t request a retirement estimate unless it is part of their application for retirement. Others have been told they must rely on an online estimator until they are within a year of retirement, at which point they can request an estimate from a human resources specialist.

A retirement estimate provides valuable information to employees that not only helps them to plan for retirement, but to make sure they’re getting credit for all the federal service they’ve performed.

A thorough review of an employee’s service history will allow the employee to make sure that the agency has a record of his or her entire federal career. If something is missing from the employee’s service history, early detection will allow time for the agency to help in locating missing records while the...

What Happens When You Say 'I Do'

There are many benefits to working for Uncle Sam, but for some, the biggest one has been meeting their future spouse and creating a union of two federal employees. The human resources/benefits office at your agency calls this a “life event.” By the way, if you are getting married—it doesn’t matter whether you are marrying someone who is also a federal employee or retiree—this is a time to review your benefits and consider what changes might be in order. Life events also include divorce, birth or adoption of a child as well as the death of a family member.

I want to share a recent email exchange with a federal employee who has found love with a fellow federal employee:

Dear Tammy,

I turned 52 earlier this month and my “boyfriend” will turn 62 in July. We’re both feds, and we started seeing each other about six months ago. It’s pretty serious. Neither of us ever has been married and we have no children or dependents between us; marrying would seem to be folly.   

When I turned 50, I consulted an attorney who drew up all of my estate planning documents, including a medical...

Three (or More) Helpings of the TSP

My column last week on Thrift Savings Plan withdrawals attracted several responses like this one:

I do not understand what the following statement from your column is saying: “If you want to take out money on an ‘as-needed’ basis, the TSP doesn’t offer the ability to take more than three partial distributions.”  Would really appreciate an explanation!

Or this:

I was aware of the ability to take two partial distributions, but how do you take the third?

Many people think that there is only one partial TSP withdrawal available after you separate from federal service and that you then must take a full withdrawal. But to every rule, there are exceptions.

Here are three ways -- and maybe four -- that you can take partial withdrawals after your federal service has ended.

Partial Withdrawal No. 1

There is a post-separation, one-time partial distribution. This allows separated employees to withdraw a portion of their TSP balance and leave the remainder invested until later. Use Form TSP-77 for the withdrawal.

There’s also an option for employees who stay in federal service beyond age 59 ½ to exercise this one-time partial distribution as an “age-based in-service withdrawal” by using Form TSP-75. If you make...

You’ve Invested for Retirement. Now What?

Federal employees have done a fabulous job of accumulating wealth in the Thrift Savings Plan since 1987. Collectively, the nearly 4.7 million TSP participants have more than $400 billion in traditional (tax-deferred savings and growth) TSP accounts and a little over $2 billion in Roth (after tax savings, tax-free growth) accounts.

That’s incredible, considering that the TSP is still relatively young -- it will celebrate its 28th anniversary in April. Some of you may remember that in the early years there were many more restrictions on how much you could contribute and how you were able to manage your investments. For example, it wasn’t until 1992 that you were able to invest 100 percent of your money in the C and F funds. The S and I funds didn’t exist until 2001, and the Lifecycle options weren’t available until 2005.

So now the question is, what’s going to happen with all the money that federal employees have diligently put away? Remember, there are three stages to investing for retirement:

  • Accumulating wealth
  • Preserving wealth
  • Distributing wealth

Both the people who manage the TSP and many of its participants have reached the point where they’re concerned...

Who’s Paying for Your Health Insurance?

I recently had an interesting email exchange with a retired U.S. Army reservist who is also a retired federal civilian employee. He told me that during the recent health benefits open season, he decided to enroll in TRICARE, the health care program for military service members and retirees. He opted to suspend his Federal Employees Health Benefit Program plan.

His question was: “What happens to the approximately 75 percent that the government was paying into the FEHBP? Was that dropped, too?” He noticed that when he received his Feb. 1 annuity statement from the Office of Personnel Management, his premium had dropped from $444 per month to $0. He wondered if the government stopped paying its portion of his former FEHBP plan, which cost $971.90 a month. “How does TRICARE cover such an amount, since they apparently take nothing out of my military annuity for health care?”

He also noted that the copays for TRICARE standard are similar to FEHBP (20 percent if in network), and the yearly family deductible to meet is actually lower than in his Blue Cross Blue Shield FEHBP plan. Expenses covered under the two plans seem fairly similar. So is it correct to...