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

Open Season Trick or Treat

Since its inception in 1960, the Federal Employee’s Health Benefits Program has offered only two enrollment types, but now it’s finally offering a third option for a family of two.  According to the Office of Personnel Management, Self Plus One enrollment allows you to cover yourself and one eligible family member you designate. Starting in 2016, all FEHB plans will offer Self Only, Self Plus One, and Self and Family coverage options.

Employees and retirees will be able to enroll in Self Plus One coverage during the 2015 open season. Employees who neglect to make a change during open season will remain in their current enrollment unless they experience a qualifying life event, in which case they will have the option to make changes at that time. Retirees may decrease enrollment at any time, however. Open season changes are effective Jan. 1, 2016, for annuitants, and on the first full pay period in January 2016, which for most employees will be effective on Jan. 10, 2016.  Employees can make open season enrollment changes using Standard Form 2809 or Employee Express if offered by their agency; retirees can use Office of Personnel Management Form 2809 or OPM’s Annuitant...

Looking for Expert Advice? TSP Has It.

My previous two columns have focused on working with a financial professional to manage your Thrift Savings Plan investment. But it’s important to know that the TSP itself is a good resource. Today, I will share some tips from TSP Supervisory Training and Liaison Specialist Randy Urban, who took part in a recent webinar titled, “Your TSP Account: What to Consider When Retiring from or Leaving the Government.” 

Urban pointed out that one of the best reasons to leave your money in the TSP is the low administrative expenses, which are based on the size of your account balance. For example, the G Fund’s expense ratio for 2014 was .029 percent. Therefore, if you invested in the TSP in 2014, your earnings were reduced by 29 cents per $1,000 of your TSP balance. That’s substantially less than most private plans.

Here are some other things to consider about your TSP account:

If you apply for a TSP loan before you retire (or separate) and choose not to repay the loan balance after you leave service, this does not count as against the one-time post-separation partial distribution. But you should also know that this will delay the...

Why Your Retirement Spending Estimates Are Probably Wrong

This week, I thought it would be interesting to conduct a roundtable interview with five financial planners who work with federal employees. I spoke with Diana Davis from Money Concepts; Karen P. Schaeffer with KarenSchaeffer Financial, LLC; Micah Shilanski at Shilanski & Associates Inc.; Kristina E. M. Sturgis, with Valenstein & Patterson; and Joe Sullender with the Financial Strategies Group of Wells Fargo Advisors.  

How do you plan for retirement in a volatile market? 

Sturgis: As we are several years into a bull market, we frequently recommend that clients approaching retirement with significant wealth in their TSP consider two allocations: a more conservative one for the wealth they have already built, and another allocation for future contributions, which takes advantage of the market roller coaster. This allows them to not only reduce loss during market declines, but to have a place to draw from to buy into a correction at attractive prices.

Shilanski: A basic rule of thumb is not having any money you are going to spend in the next 5 years in the market, and this would go for the TSP as well. 

Sullender: You have to first evaluate your need for the funds. Today is no different than yesterday...

Who Can You Trust?

The Thrift Savings Plan recently sent a brochure to agencies offering guidance for choosing vendors for financial planning events.

But federal employees face a similar challenge—finding qualified financial advisors who act in a worker’s best interest as they consider what to do with the TSP after retirement and how to manage the TSP in a volatile market. Federal employees have done a great job of saving a portion of their salary in the TSP, but now that many are approaching retirement, they aren’t always certain about how to handle their savings.  There are many resources available. It might be tempting to hire someone to take over the management of your retirement savings, but you need to be able to distinguish fact from fiction and reliable information from scams. 

Lesson No. 1: If you are going to hire someone to assist you with your financial planning for retirement, it is important to hire someone who is both qualified and who will look out for what is in your best interest, not their best interest. This is called a “fiduciary” responsibility. 

There is a clearinghouse of information at that can help you learn more about investing...

Be Ready for the Long Term

A few weeks ago, I shared a “Dear Kids” letter from a father to his adult children about the importance of planning for retirement. As I was thinking about that letter, I realized it’s also a good idea to let your family know how you’re preparing for long term care if you reach the point where you can no longer live independently. In my family we have dealt with long term care issues for my dad, who passed away in 1998, and my husband’s mom, who we lost more recently. My mom and my husband’s dad both passed away more suddenly and did not need long term care, so the way I see it, our odds are 50-50 that my husband and I may someday need such care. To help readers weigh the issues, I decided to share a letter I wrote to my own adult children to let them know the steps we've taken to prepare for whatever may come. 

Dear Kids,

As you know, I spend a lot of my time helping other people prepare for retirement. As I was thinking about this, it seemed a good time to let you know about...