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

It’s Not Just About the Money

What is wellness and what does it have to do with retirement planning? That’s what I wondered when I heard the topic of the For Your Benefit radio program that I was asked to co-host earlier this week. Once I understood the definition, it makes perfect sense. As my dad used to say, take care of your health. Without it, money (and retirement) won’t really matter.

Paula Jakub, executive vice president and CEO of the American Foreign Service Protective Association, was our guest on the show, and she wanted to focus on wellness. Jakub oversees the various insurance and specialty programs offered by the association. If you visit the Foreign Service Benefit Plan website, you’ll see its commitment to helping participants maintain their health and well-being. They’ll reward you financially if you take the time to participate in opportunities to maintain and improve your health. What’s in it for them? Fewer claims. What’s in it for you? Better health and fitness—and possibly some money in your wallet.

Many other plans in the Federal Employees Health Benefits Program do the same thing, and the Office of Personnel Management encourages them. “The leading causes of...

Retirement Facts: A True-False Quiz

Over the years, I’ve conducted more than 3,000 retirement planning seminars. That’s a lot of talking. Teaching is very rewarding for me. It doesn’t matter if it’s an auditorium of 500 people or a consultation with one employee, the best part is when you see the “ah-ha” moment of understanding in your students’ eyes.

The other thing I’ve learned over the years is to know when to say, “I’m not sure, but I’ll get back to you.” There’s nothing that will cause you to lose credibility faster than getting caught saying something dead wrong with great conviction.

Let’s test your understanding of the retirement process. See how you do with the following true or false statements about subjects that commonly come up in pre-retirement or mid-career seminars. Answers are at the bottom of the column.

  1. In order for your spouse to be entitled to continue federal health insurance after your retirement, they must have been covered for five years before you retired.
  2. Federal retirees do not have to enroll in Medicare Part B when they reach age 65. Their Federal Employees Health Benefits Program plan will continue to provide coverage...

Avoiding Tax Pitfalls

Will Rogers once said, “The difference between death and taxes is death doesn’t get worse every time Congress meets.” Many people today would probably still agree with this sentiment.

The obligation to pay taxes doesn’t end when your federal career ends. Federal retirees generally have to pay federal and sometimes state tax on their retirement income, including their Civil Service Retirement System or Federal Employees Retirement System benefit, income generated from their Thrift Savings Plan accounts and Social Security benefits.

Congress approved a major tax overhaul last December. It remains to be seen exactly what impact it will have, since the specifics of the implementation of the law are still being worked out. The IRS has been providing updates as information becomes available.

Federal retirees can use the following resources to find information about taxes on their TSP withdrawals, federal retirement benefits and Social Security benefits:

The Benefit That Already Can Be Cut

If you’re covered under the Federal Employees Retirement System and are potentially eligible to receive the FERS Annuity Supplement, you may have heard that proposals are circulating to eliminate it. But even if that doesn’t happen, you should be aware that the supplement can be reduced or eliminated if you return to work while you are receiving it. Many FERS employees have questions about how and why that happens.

Before I try to explain, here’s a quick overview of this benefit.

The FERS supplement serves as a monetary bridge between retiring under FERS and qualifying for Social Security retirement benefits. The income produced from the FERS supplement helps to fill in the gap of the missing Social Security retirement benefit.

Employees who retire under FERS with an unreduced, immediate retirement benefit and who are under age 62 are eligible to receive the supplement. This includes those who retire at the FERS minimum retirement age with 30 or more years of creditable service and also those who retire at age 60 with 20 or more years of service. In addition, the supplement is payable to “special provision” retirees, including federal law enforcement officers, firefighters and air traffic controllers...

The Benefits of Retirement Counseling

I recently received an email from an employee that highlights a key issue: the loss of the personal contact that used to be the norm for retirement counseling in most federal agencies. Starting in the 1990s, the consolidation and centralization of retirement services and pre-retirement counseling has become ever more common in agencies.

The email I received included a response from a federal human resources manager to a suggestion that someone from HR be made available for retirement counseling appointments at the agency’s Washington office:

Thank you for the suggestions but unfortunately they are not feasible due to budgetary constraints. As you are aware, our agency has 11 regions situated throughout the United States and we have Benefits and Retirement Specialists available to employees in every region. I would like to point out that in FY17 my team provided over 1,800 retirement estimates to customers throughout the agency and we processed over 380 retirements to OPM; and so far in FY18 we have provided over 770 retirement estimates and have processed 200 retirements to OPM. The excellent service we provide is not only for employees located in the DC area; we consider the needs of the entire agency...