401kcalculator.org

Plan Ahead and Reap the Benefits You’ve Earned

Get started early, and don’t just follow the crowd.

This week, I had the pleasure and honor of addressing the annual leadership training conference of Women in Federal Law Enforcement in Houston. I’m always inspired by the bravery and integrity of these officers as I hear stories of their challenging and sometimes dangerous careers. Besides leadership and other work-related training sessions, there were awards ceremonies honoring courage, heroism and outstanding service.

All of these women are very proud of the work that they do and are grateful to the women who entered the law enforcement field before them. The event highlighted for me why it’s so important for these and other federal employees to receive their earned retirement benefits after completing dedicated and productive careers in public service.

What I love most about presenting to the WIFLE audience is the fact that understanding retirement benefits and planning for the future is just as interesting and important to the Drug Enforcement Agency agent who has less than five years of federal service as it is to the Customs and Border Protection officer who is at midcareer. And of course, it’s definitely on the minds of the agents, analysts, and officers who are ready to retire within the next three to five years.

The length of a federal law enforcement career is strictly defined: There are a finite number of years before an officer faces mandatory retirement at age 57. So if officers want to retire in their 50s and not immediately embark on a second career, they need to plan ahead.

Younger workers (and not just those in law enforcement) need to know that starting the planning process early is critical. Not thinking ahead or making mistakes early in your career can be difficult to address when you’re five years away from retirement.

The WIFLE audience in Houston was made up almost exclusively of people covered under the Federal Employees Retirement System. That means they need to understand how Social Security, the FERS basic retirement benefit and their Thrift Savings Plan accounts will provide the income needed to replace their wages while employed.

Some of these women began their careers out of high school, first serving in the military and then embarking on a career in civilian federal service. That means they could meet their service requirement before they are old enough for retirement, but I reminded them of how a longer career would allow more time to save and for their savings to grow. In addition, accumulating more service allows for a more generous FERS retirement benefit.

At the WIFLE conference, I learned the importance of not following the crowd when it comes to planning your retirement. Members of the audience noted that they knew people who had already retired who had taken lump-sum payments from their TSP accounts to pay off debt, such as eliminating a mortgage. This doesn’t mean it’s the best decision.

In fact, my colleague Bob Leins of the National Institute of Transition Planning told me that it’s never a good idea to withdraw the amount of money in a lump sum from your TSP that would be required to pay off a substantial mortgage balance. First of all, the TSP will withhold 20 percent for federal tax pre-payment. But that may not be enough to meet your full tax obligation. In April following the year you received your distribution, you may be shocked to find out you owe an additional 5 percent to 15 percent federal tax on the amount of your withdrawal.

Bob suggested retirees use monthly payments from the TSP to continue to make mortgage payments as they did during their careers. To learn more about rebalancing and allocating your withdrawals from different types of investments, you may need to consult a financial adviser.

That brings me to another piece of advice I gave attendees: Choose an adviser very carefully. According to the Securities and Exchange Commission, undisclosed conflicts, fees and overcharges have become a recurring theme in commission cases involving investment advisers. Earlier this week, the SEC filed charges against four former Atlanta-area brokers for fraudulently inducing federal employees to roll over holdings from their TSP accounts into higher-fee, variable annuity products.

All in all, this week, for me and the other participants in the WIFLE conference, was a time of learning and being inspired to do better. I realized that all of us support each other, whether it is bringing justice to our communities or simply becoming better-informed federal employees who are able to plan for a secure financial future.

Photo: 401kcalculator.org

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.