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

Greatest Hits of 2013

Later this month, I’ll present my annual index of past columns. (Here’s last year’s index.) In the meantime, here are some of the most popular columns I wrote in 2013, in case you missed any of them:

What Is Your Full Retirement Age? (Nov. 14)

Ask someone what their full retirement age is and you are likely to get a variety of answers. The response will depend on whether you are referring to the Civil Service Retirement System or the Federal Employees Retirement System, or maybe it is the age when people plan to begin withdrawing from their retirement investments. There is also Social Security’s full-benefit retirement age.

What does this magic age really have to do with the age you plan to stop working? 

7 Signs You’re Not Ready To Retire (Oct. 18)

If you were one of the many federal employees who weren’t able to work during the 16-day government shutdown, you may have given some thought to the question, “Should I stay or should I go?” If you are eligible to retire, did you think that maybe now is the time to call it quits?

How do you know when it ...

How Much TSP Can You Take?

Last week, I began answering some questions that I have received, but was unable to address, in recent webinars. Here are a few more that seemed to interest a lot of people.

How do I determine what percentage of my Thrift Savings Plan funds should be paid to me annually? One financial planner recommended investing 100 percent of the funds, with no payments to me.

I like to think of the TSP as the icing on the cake. The first step is to look at your monthly income from all sources (CSRS or FERS retirement benefit, Social Security and military retirement, if applicable). Then, determine if you will need additional monthly cash flow from the TSP (or other retirement savings). If so, you have several ways to create that cash flow. The TSP offers a monthly payment option, in which you can select a specific dollar amount of income (which you can change annually), or the TSP will compute a payment for you by dividing your account balance by your life expectancy each year. You also can take some or all of your TSP balance and purchase a life annuity. This provides a stream of monthly payments for the rest ...

Spared from Pension Hikes

I've recently conducted several webinars, and each included a question-and-answer period at the end. But there were many more questions than I had time to answer. So I thought I’d address some of them here.

In the current fiscal environment and pressures of sequestration, how likely is it that changes will be made to the federal retirement rules and benefits in the next year or two?

I don’t like to be the one to say “I told you so,” but I did. I keep my optimism that Congress won’t make too many changes to the retirement benefits of federal employees since this group represents such a large voting population and federal employees are well-represented in in the political system by a variety of labor unions and associations.

This week, House and Senate budget leaders spared current federal employees from cuts in retirement benefits in the deal they announced. That means feds’ highest three years of salary will still be used to determine benefits, the method of calculating the cost of living allowance for retirees remains unchanged and the FERS supplement lives on. And the budget talks actually resulted in a proposal for an enhancement to federal ...

Getting Something For (Next to) Nothing

I’ve asked the question before, and I’ll ask it again: Have you considered switching to a high deductible health plan? This week, I want to update a column I wrote in 2010 and re-introduce you to HDHPs, which are available under the Federal Employees Health Benefits Program and can reduce your premiums to almost nothing and provide some incredible tax benefits.

HDHP plans are cousins to consumer-driven plans, but the big difference is the ability for most enrollees to contribute tax-free dollars to a health savings account. The funds in an HSA are owned by you and may be rolled over from year to year. HDHPs have been available through FEHBP since 2005, but very few people have chosen to use them.

Nationwide, about 15.5 million people are enrolled in HDHPs. They’ve grown at an annual rate of about 15 percent over the last several years, according to a study by America’s Health Insurance Plans, an organization of American health insurance carriers. The gender split among those who use the plans is about even between men and women. Usage also is about equally divided between those over 40 and those under 40.

Are federal employees ...

Five Steps to Picking a New Health Plan

Once again, open season for the Federal Employees Health Benefits Program is under way. That means active employees and retirees are all choosing the best health plan for them for 2014. Or are they?

Open season can be overwhelming. Many people seem to think it’s easier just to keep their current coverage and maybe put some money in a flexible spending account. It’s true that all of the federal health plans are very good and you really can’t make too much of a mistake regardless of your choice. But there are ways to save some serious money if you take the time to compare your options in FEHBP health plans, Federal Employees Dental and Vision Insurance Plans and FSA plans.

The Office of Personnel Management has run the gigantic open season effort every year since 1960,  and has a wealth of resources available to help make the choices more clear and to guide you in your decision-making process. But how do you begin?

I recently received an email from a federal employee who pays attention to his benefits. When he doesn’t understand something, he asks about it. He let me know he tried to compare health ...