The G Fund, has long been the low-stress haven of TSP participants looking to shelter their nest egg from market volatility thanks to its combination of safety and liquidity. It is the most popular of the TSP funds, holding nearly 36% of all TSP assets because of its ‘safe returns’. But in todays interest rate environment, the G Fund’s ‘safety’ comes at a cost…Read More
Many articles, websites, and newsletters focus their efforts on helping you learn more about how to grow your TSP prior to utilizing it in retirement to supplement your fixed income. Many of these resources provide a plethora of knowledge to help you understand the different TSP funds, to track their performance, and even monitor your TSP account to quickly communicate market downturns… but the way these resources are often interpreted, it leaves readers with the impression that if they can ‘hit their number’ prior to retirement then they will simply have enough money to ‘coast’ through their golden years. As a result, there are still far too many feds around the country that view retirement as the financial finish line… which couldn’t be farther from the truth.Read More
Pt 2: Chronic Illness
In the first article of this series we learned that Living Benefit Riders are additions to a life insurance policy that allow the policy owner to accelerate a portion of the Death Benefit during their lifetime in the event of a qualifying emergency. Holistically designed life insurance plans coordinate Living Benefit Riders that provide access to tax-efficient emergency funds by “accelerating” some or all of the policy’s Death Benefit. In this article we will continue to explore the ways in which Living Benefits are utilized and the real world application of these features. For this conversation, though, the emphasis will be finding the most tax-efficient manner to provide for Long Term Care and discuss the different options commonly available to today’s federal employees.Read More
Part 1: Critical Illness & Terminal Illness
Let me open up with a simple question, how much of your FEGLI coverage is available for you to access while you still have a pulse?
Some of you may scoff and say, “Duh, NONE! It’s life insurance, clearly it is not meant for me!”
Now, while we are all well aware of the traditional application for life insurance… What if your life insurance could also provide coverage for you, the owner, during your lifetime?What if there was a way to access a portion of your Death Benefit in the case of a non-fatal emergency?There is! Strategies designed using Livin
g Benefits do exactly that
Is the (antiquated) TSP Annuity Appropriate for You?
An annuity, in the broadest terms, usually refers to an investment or program where the participants exchange a sum of money (contributions) for a guaranteed stream of income. In general, programs like this look to mitigate longevity risk – or the risk that you will outlive your personal life savings. Since no one knows exactly how long they are going to live, an annuity refers to a family of investments generally designed for individuals to pool their money together in order to collectively mitigate the risk of any individual participant outliving their own personal savings.Read More
A Review of Your Federal Benefits After the (Proposed) Changes
There has been a maelstrom of gloomy articles referencing the proposed changes to federal retirement benefits published lately and, while it is critical that you stay informed, it is also important to remember how many benefits you will continue to have in even the most aggressive of the budget reduction proposals. We cannot control what happens with the budget, but we can control how we interpret and respond to the hurdles it creates… Remember, as a federal employee, you are still offered some of the best benefits on the planet – even after 2018!Read More
When It’s Best To Be Part of & To Stand Out From The Masses
When looking at the FEGLI there are 3 main factors in evaluating whether or not it is still the best option for coverage at this point in your life/career. The first is your ability to qualify through the underwriting process for individual protection – generally determined by the combination of your age, health, and lifestyle habits (smoking, home-made-parachute skydiving etc). The second is the time horizon for your protection needs - eventually the vast majority of Feds will be priced out of the FEGLI coverage (usually in their 50’s and 60’s). The third factor is in determining what you want/need your life insurance to protect you from…Read More
How to Define & Design Your Federal Retirement
When you get in your car, pull out of your driveway, and leave your neighborhood, how often do you have your destination in mind, a goal to end up somewhere specific? You might adjust the route for traffic but it’s rare that you actually start your car without a pretty good idea of where you want to be when you shut it back off, right?
That’s because knowing your destination before committing to a path is the only way to accurately decide on the best route to get there! Is it a weekday or weekend? Is it rush hour? Are the back roads faster? Are there stops you want to make along the way? Without a clear idea of where you want to arrive it is hard to determine the best way to go about getting there.Read More
What You Need To Be Aware of Entering Retirement
As the largest segment of the population prepares for and enters retirement, there has been an increased emphasis on researching and analyzing the unique risks retirees face.
When we separate from service we transition from wealth accumulation to wealth distribution. Dr. Pfau, one of the industry’s leading researchers states, “traditional
wealth management approaches do not sufficiently address a retiree’s needs”. Retirees face additional risks and as such there is a dramatic difference in the decision making of someone who is saving for the distant future and someone who is relying on their nest egg today.
The 4 Motivations Behind Every Retirement Decision
Behind the scenes of every Fed’s personal decision to retire is a set of justifications for why the time is now right. Every one of us will eventually have this mental tug of war comparing the pros and cons of retiring. Every justification, every reason, every inspiration, or excuse that gets attached to our final decision falls into 4 underlying categories.
The good news is that 1 of these 4 motivations will almost always result in a secure retirement with true financial freedom. The bad news is that 3 of these 4 reasons commonly won’t. The scary part is how few of us are really aware (or choose to acknowledge) which of the 4 influences are driving our own retirement decisions.
The 4 Motivations are:
Your Situation, Your Emotion, Your Information, and Your Finances.Read More
A Fresh Take on an Age Old Debate
In this article, we are looking specifically at the Surviving Spouse Benefit (SSB)– a benefit available to both CSRS and FERS retirees that provides a continuation of a portion of your FERS/CSRS pension to your surviving spouse should you predecease him or her.
The goal of the SSB is to provide income continuation to your surviving spouse in order to help them maintain the standard of living your family is currently accustomed to.Much like life insurance, the Surviving Spouse Benefit has a cost (premium) and only begins replacing income to your spouse after you pass away and full pension payments end.Read More
Where will you sit?
Who’s heard of the FERS 3-Legged Stool before? The 3 legs are the “foundation” of the generic FERS Retirement Plan that they preach during your initial training. Each leg equates to one of the 3 main streams of the FERS retirement income –specifically: the FERS Pension, Social Security, and Thrift Savings Plan. In this metaphor, your career is spent on your feet and your retirement goal is to build a seat as far off of the “ground” as possible. But keep in mind, the “seat” you build is the only place you can rest for the entirety of your retirement.Read More
The 10 Year Period That Will Shape Your Retirement Lifestyle
There is a critical period in retirement planning, a span of roughly 10 years that largely determines the sustainability of your lifestyle throughout the length of your retirement. This 10 year time frame has no set start age, like Medicare or Social Security. It is unique to each individual’s true retirement date – the point when you finally stop trading your time for a paycheck and begin relying on your assets to ensure your lifestyle. But the most critical 10 year period of your retirement begins well before you stop showing up to work. You may be in the most decisive decade of your retirement right now without ever having been told since there is no formal announcement.Read More
Project, Protect, and Perfect
Pre-tirement: The 5 year period before one’s ideal retirement date.
Pre-tirement is the phase during which we begin to adapt our views about money and investing in preparation for the transition to living on our assets rather than contributing to them. Growing our retirement accounts (the Accumulation Phase) and spending them down safely (the Distribution Phase) are separate chapters of our lives with unique objectives and unique risks. These phases are quite different and as such they require different approaches. It is critical that you mentally recognize the transition from the Accumulation Phase to the Distribution Phase requires understanding a different mindset.Read More