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

How Much Life Insurance Do You Really Need?

When is the last time you evaluated your life insurance needs? Now is a good time to reconsider your options since there will be a rare open enrollment next month for the Federal Employees Group Life Insurance program. During September, feds will be able to enroll in any FEGLI coverage, including Option C, family coverage. You won’t have to answer any health questions and there’s no need for a life event to elect coverage. If you're already enrolled and want to add more coverage, you can do so.

Here’s the catch: Your coverage will not take effect until the first full pay period on or after Oct. 1, 2017, which is also when you will begin paying premiums for the new coverage. In addition, if you would like to carry this additional coverage into retirement, you will need to wait five years or until after October 2022 to retire. Retirees will not be able to increase their life insurance during this open enrollment event.

Beyond this rare open season, you will still be able to make changes to FEGLI coverage if you have a qualifying life event (marriage, divorce, death of your spouse, or acquisition of...

A Retirement Guide for Every Stage of Your Career

Last week, we looked at some of the factors federal employees fear could threaten their financial security in retirement. The results came from a recent in-depth research study of federal employees conducted by Government Executive’s research unit, the Government Business Council. Another question posed in this survey that I thought would be interesting to explore involved the resources available to federal employees to help them in the retirement planning process.

Most respondents to the survey (68 percent) indicated they had access to retirement classes and workshops to help them prepare. However, far fewer respondents said their agencies offered personal retirement and benefits counseling, external resources such as retirement or benefits guides, professional financial planning assistance, and career fairs.

When asked how satisfied they were with the availability of resources, 29 percent of respondents indicated they were satisfied or very satisfied, 29 percent said they were somewhat satisfied, and 34 percent said they were not very or not at all satisfied. Respondents also had mixed feelings about the quality of their agency’s resources: 34 percent were satisfied or very satisfied, 27 percent were somewhat satisfied, and 28 percent were not very or not at all satisfied.

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Fear of Losing Benefits

Recently, Government Executive’s research unit, the Government Business Council, conducted an in-depth research study of federal employees. The results revealed some interesting trends.

Most of the people who responded to the survey (68 percent) were planning to retire within the next five years, with another 25 percent saying they were likely to leave government within the next 15 years. These are typical of the audiences I address at pre-retirement or mid-career planning seminars. Nearly 900 people took the survey, representing more than 30 civilian federal agencies and defense organizations.

Click here to read the full report on the survey: Surfing the Retirement Wave

One of the survey questions jumped out at me. It asked what federal employees see as potential disruptions to their retirement preparedness. Almost 60 percent of respondents listed changes to employee and retiree benefits as a concern. Should you be worried about future changes to your benefits? Let’s take a closer look.

Federal employees under the Civil Service Retirement System enjoy a generous pension benefit. Those under the newer Federal Employees Retirement System have a smaller pension but their basic benefit is supplemented by Social Security retirement and access to the Thrift Savings Plan.


Long-Term Care Insurance: What Should You Do About Rate Hikes?

If you’ve been reading the news over the past two weeks, you’ve probably heard aboutthe recent large rate hike for participants in the Federal Long Term Care Insurance Program. I’ve been getting quite a bit of mail asking my opinion about what participants should do. A lot of people are angry, and understandably wonder why their policies weren’t priced more accurately when the insurance was first offered. I’m sympathetic (because I’m a participant in the program, too), but I also think it’s important to at least consider the benefit of considering some coverage to reduce the risk caused by the expense of needing long term care.

According to Long Term Care Partners, which administers the FLTCIP, the bottom line on the rate increase is that current premiums are insufficient to meet the program’s projected claims costs. (Disclosure: I produce educational seminars for Long Term Care Partners under contract.) All insurance programs depend on having a large, diverse pool of insured people, sufficient premium payments to cover anticipated losses, and reliable statistics on the probability of loss.

FLTCIP has had difficulty finding reliable statistics on long term care usage, especially when it comes...

Is Phased Retirement For You?

Slowly but surely, phased retirement is being rolled out in federal agencies. Assuming your agency provides the option, now or in the future, would you consider it?

There are several reasons why phased retirement might provide a good way to transition to retirement:

  • You might love your job and your co-workers, but also be interested in working less than full time as you move towards full retirement.
  • Phased retirement allows your Civil Service Retirement System or Federal Employees Retirement System benefit to increase as you work less than full time. If you were to retire first and then work part-time, your retirement benefit would not go up.
  • Phased retirees who are over the Social Security full retirement age are no longer subject to an earnings limit and can choose to receive Social Security retirement benefits while continuing to work in phased retirement.
  • Phased retirees who are age 59 ½ or older can take a one-time in-service withdrawal from the Thrift Savings Plan. This allows them to begin using their retirement savings during the period of phased retirement and continue to contribute to the TSP and (for those under FERS) receive agency contributions.
  • The only withholdings from the CSRS or FERS partial...

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