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

The Index: 2015 Edition

The year 2015 begins my 10th year of writing the Retirement Planning column. It’s been an honor and a pleasure to provide this weekly update to help you prepare for your retirement. My husband fully retired from federal service last month and while I’m going to continue my work for a few more years, we will be transitioning to a partial retirement lifestyle. But even though I’m not leaving, I’d like to take a little time this week to thank a few people who have helped me along the way.

First is the staff of Government Executive, who help make sure the column is concise and interesting each week. Writing this column has given me an appreciation of what it takes to get a point across through the written word.

I also need to show my appreciation for Bob Leins and all of my fellow presenters at the National Institute of Transition Planning, and Micah Shilanski at Plan Your Federal Retirement, who have helped me with their expertise on subjects ranging from financial planning to taxes. And I owe much to Mike Causey, senior correspondent at Federal News Radio, who was my inspiration and who continues ...

Beware of Scams

Many federal employees and retirees have amassed large balances in their Thrift Savings Plan accounts. That gives them some long-term retirement security, but it also exposes them to targeting by scammers who want a piece of their nest eggs.

No one wants to be misled by unscrupulous sales people. Unfortunately, it happens all too often -- sometimes even on federal property during pre-retirement seminars. The National Institute of Transition Planning, which pays me to provide unbiased information to federal employees at seminars, has been diligent about never selling anything to employees.

Beware, though of  “free” seminar presenters who ask only that they be allowed to pass out business cards or financial planning products in exchange for providing a presentation.  The North American Securities Administrators Association has issued a warning about “free meal seminars.”

“While the ads may stress that such seminars are ‘educational,’ and ‘nothing will be sold at this workshop,’ many of these seminars are intended to result in the attendees’ opening new accounts with the sponsoring firm, and ultimately, in the sales of investment products, if not at the seminar itself, then in follow-up contacts with the attendees,” the association says. “Seniors seeking educational insights and information should be ...

The TSP by the Numbers

This week, the Thrift Savings Plan held its quarterly meeting of personnel and payroll office representatives. This is when new and updated information is disseminated to agencies to share with their employees.

I thought it would be interesting to take a look at the latest numbers for the plan, as of the end of October.

The overall plan balance was $431 billion, divided as follows:

  • G Fund: 35 percent
  • C Fund: 28 percent
  • F Fund: 5 percent
  • S Fund: 10 percent
  • I Fund: 5 percent
  • L Funds: 17 percent

The average account balance for a Federal Employees Retirement System employee was $113,934 total and $5,463 for the Roth option. The average balance for a Civil Service Retirement System employee was $113,057 total and $8,947 for the Roth.

There are 4,677,445 total participants in the TSP. Some facts about them:

  • 302,000 FERS employees only receive agency contributions (equaling 1 percent of basic pay)
  • 113,000 CSRS employees contribute to the TSP (about 65 percent of the remaining CSRS employees in federal service)
  • 1,196,000 separated participants have left their money in the TSP
  • 274,000 active participants are not currently contributing, but still ...

Last Chance to Save Some Bucks on Health Insurance

The 2014 health benefits opens season will end on Monday, Dec. 8. For most of you, this will be the last chance to evaluate your health care choices until the next open season. There are a lot of reasons for federal employees and retirees to consider changing their current coverage and to evaluate whether to set up a flexible spending account or add supplemental dental or vision coverage.

Here are the excuses I frequently hear for not changing plans or adding benefits during open season:

  • It’s too complicated.
  • I’m afraid I’ll overlook something that will end up costing me more money next year.
  • I don’t want to change doctors.
  • My plan is accepted everywhere, and I’m not sure my doctor has even heard of some of these other plans.
  • If I don’t spend the money in my flexible spending account, I will lose it.
  • It’s too hard to read the brochures, since each one is over 150 pages long.
  • There are too many choices.
  • I’m happy with what I have.

Why It’s Worthwhile

All of the above concerns are valid. But even if you’re content with your current coverage, and ...

We Need to Talk About Your Retirement

Pull up a chair. Can I get you a cup of coffee? If you’re married, I hope you brought your spouse along. We’re going to talk about your upcoming retirement.

Welcome to your pre-retirement counseling session!

If you are retiring in the next few months, I hope you’ve had the opportunity to get pre-retirement counseling. Unfortunately, not all federal employees receive the same level of counseling before their retirement date. Some agencies have many employees retiring and very few qualified retirement specialists.

The job of a federal retirement benefits counselor is demanding. Navigating the rules and regulations governing Civil Service Retirement System and Federal Employees Retirement System benefits requires a lot of experience. Here’s a list of agency benefits officers, who are designated to advise employees about various aspects of benefits program administration. If you’re not sure who to contact in your agency for retirement counseling, this person may be able to provide you a point of contact.

Getting Started

In the meantime, I’ll provide a little counsel of my own. The Office of Personnel Management’s Publication 83-11, Thinking About Retirement?, offers a very good overview of what you can do and what ...