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TSP suffers in the midst of a Volatile Market

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Federal employees have their pick of retirement plans, but by far one of the most popular is the government’s Thrift Savings Plan (TSP). For employees under the Federal Employees Retirement System (FERS), the TSP is a 401(k) equivalent of a retirement plan, offering them many of the same benefits as their counterparts in corporations. This year, reactions to the TSP has been riding on the negative side. From proposed budget cuts to discouraging investment reports, things do not seem to be working out for TSP investors this year. However, financiers have expressed the opinion that despite the tumultuous behavior of the TSP, these bonds and stock investments might still be a good retirement benefit for federal employees.

Volatile Market is a Contributing Factor

The TSP works like a 401(k) plan in that employees can defer payment on their investments therefore allowing their money to work for them. Getting into a TSP is a straightforward process for employees. During any open period, employees choose a plan for their TSP accounts. Open periods run between April 15 and June 30 as well as October 15 through December 31. The plans are range from G funds to F, C, S and I funds. After choosing a plan, employees then contribute an amount of their choice towards the account. There is a limit to the size of the contribution employees can make. Typically, employers match the contribution made by employees under the FERS plan, while civilian employers are not obligated to do so.

In the past, many employees chose to utilize the G Fund plan – which deals in Treasury bills – when planning their retirement. TSP spokeswoman Kim Weaver wrote back in February that about 39% of federal employees who used the TSP placed all their savings in this security. Of all the employees using the TSP, 69% have some or all their savings in the G Fund plan, Weaver said in an email. However, a budget proposal announced back in February might curtail the effectiveness of this plan. According to TSP officials, the proposed cuts by the White House would reduce the yield of the G Fund almost by half. This is concerning especially during a time when the G Fund looks like the most effective TSP plan.

Over the past four months, F, C, I and S Funds have been on a downward spiral. G Funds also suffered a decline but remained the highest performing investments in the TSP in Q1 of 2018. This is in direct contrast to the bonds’ 2017 performance, notes financial planner Arthur Stein. Stein postulates that the present market volatility could be due to the political and economic instability currently plaguing the United States. However, he holds out that there might be hope for TSP investors in the long-term.

The decline of the investments’ performance also comes after a change in management in the TSP. Earlier this year, Sean McCaffrey took over from Ravindra Deo as the agency’s Chief Investment Officer.

It is not clear how the second quarter will treat Thrift Savings Plan investors but one thing remains clear: the market remains volatile and they should be prepared to accept any outcome in that period.


How prepared are you for federal retirement?

Compare FEGLI Rates against highly rated term life insurance companies

The United States Government has made federal retirement preparation easier to save up for the future by making available a contributions account called the Thrift Savings Plan. Members of the uniformed service are also a part of this program.

Federal Retirement preparation is not easy to understand.TSP makes it possible for retirees to have some form of income. With the TSP program, federal employees get similar retirement benefits as those in the private sector.
TSP is a component, among three others, of Federal Employee Retirement System. The other two are social security and FERS annuity. TSP gives the investor several options to pick from. These options can be broken down as follows:-
1. The government security investment fund – G Fund which has the lowest volatility.
2. The fixed income index investment fund – F Fund which has a low risk.
3. The common stock index investment – C Fund which has moderate risk.
4. The small capitalization stock index investment – S Fund
5. The international stock index investment – I Fund which is more volatile than the C Fund.
6. The specific lifecycle fund – L Fund
The L Fund series is a combination of all the G, F, C, S and I funds. However, if you’re not pleased with the L Fund, you can create your own combination of preferences from the other five investment options.
The good news is that it’s never too early to start your federal retirement preparation. You can start saving on your first day of work. Proper planning is key to a financially secure retirement.
FERS makes sure that later on your spouse and your kids are provided for, not only while you work but also after you’ve retired. It is therefore vital that you update your beneficiaries regularly in case there are changes such as divorce or any new children.
As a FERS employee, one has to make sure that they contribute a minimum of 5% of your salary to your TSP which the government matches up. Your contributions are matched at a rate of one dollar per dollar for the first 3% and fifty cents per dollar for the remaining 2%. Any contributions above 5% are not matched.
There are limits, however, whereby those below age 50 can contribute up to $18,500 annually while employees 50 years or older can contribute an additional sum of $6,000, called the catch-up contribution. It couldn’t get any better than this!
As you work, keep your retirement in mind. Make sure you live comfortably in future by getting a suitable Federal Retirement Savings plan.

Early TSP Withdrawal: What you Need to Know

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In a perfect world, nobody would have to withdraw from their TSP before it was time. But life isn’t perfect, and too often, we find we have no choice but to resort to early TSP withdrawal. But is this the only way? After all, if you withdraw early, you could end up with just a little over half of your money. There are several reasons for this: the possible 10% penalty for early withdrawal, the income taxes paid on the total, and a likely 20% withheld by your future employer if you go on to a new job and do not transfer your TSP funds to an IRA within 60 days.

The best solution, of course, is to talk to a financial professional. Your TSP withdrawal will be complicated to understand, but there are ways to withdraw that will minimize the penalties associated with early TSP withdrawal. Some of those are:

  1. Avoiding the early withdrawal penalty

Typically, an early withdrawal will take away 10% of your total TSP fund, but unlike an IRA, the TSP offers a workaround. This workaround has a tiny window of opportunity, but if you retire from federal service before the year you turn 50 or 55, and follow a life-expectancy withdrawal method, for either five years or until you are 59.5 (whichever is longer) you will be exempt.

  1. Check if you are a special category employee

Special Category Employees, or SCE, are exempt from the early withdrawal if you retire after you turn 50. There are several SCEs that may be eligible for this, such as a law enforcement officer, firefighter, air traffic controller, nuclear materials courier, Supreme Court or Capitol Police Officer, Customs and Border Protection Officer and DSS Special Agent with the Department of State.

  1. Try borrowing from your TSP rather than withdrawing

It is not always necessary to completely commit to withdrawing from your TSP. If you have a low credit score, the interest rate on TSP loans is usually better than going to a bank or other lender. Remember that you must still be in pay status to earn a loan since the TSP payments you make are through payroll deductions.

When withdrawing for reasons of financial hardship, there are special requirements that may apply- you must have a demonstrable need, meeting one of these four conditions:

  • Recurring negative monthly cash flow
  • Medical expenses (including household improvements needed for medical care) that you have not yet paid and that are not covered by insurance
  • Personal casualty loss(es) that you have not yet paid and that are not covered by insurance
  • Legal expenses (such as attorneys’ fees and court costs) that you have not yet paid for separation or divorce from your spouse


All in all, early TSP withdrawal is generally not a good idea. However, every case is different. Find a financial professional you trust and talk to them about your plans.

What You Should Know About Social Security Near Retirement

What You Should Know About Social Security Near Retirement

For roughly 50 years, American citizens could look forward to retiring at the age of 65 because it meant they didn’t have to work anymore. Thanks to the Social Security Act of 1935, they could retire at that age and get full retirement benefits that would help pay their living expenses.

However, the full age of retirement is no longer 65. That age has been increased up to age 67, although it really depends on the year that you were born. This is because Congress amended the law back in 1983 so that the retirement age would increase gradually throughout the next 22 years. The reason for this increase had to do with people living longer because of improvements in the field of medicine and health. Overall, the life expectancy of people increased which meant they’d keep getting those benefits for longer than originally intended by the government.

Of course, people who’ve paid enough into their Social Security from years of working can still retire at the age of 65. In some cases, they can even retire earlier at ages like 64, 63, or even 62. The only downside of retiring this early is that their monthly payments are lowered.

Therefore, if you want to find out the best age for collecting your Social Security retirement benefits, you should go to the Social Security website and read the online document entitled “When to Start Receiving Retirement Benefits.”

You can easily apply for your Social Security benefits online too. Just visit and fill out the online application.

Most people should still financially plan for age 65 as their age of retirement. Despite the age when you collect Social Security benefits, age 65 is when most working people are able to get their Medicare benefits. This is the health insurance coverage they’ll use for the rest of their life. But, you need to have enough work credits saved to get approved for Medicare at this age.

To find out if you have enough of these credits, you can visit and review your Social Security account to see how many credits you have and how many you need to qualify for Medicare.  If you don’t have an account, you can create one online too.

If you’re under 65 and already collecting Social Security benefits, hospital insurance (Medicare Part A) and supplemental medical insurance (Medicare Part B) will automatically be set up for you and ready to take effect immediately when you turn 65 years old. Your Medicare card will be mailed to you a couple of months prior to the day you turn 65.

If you’re not collecting benefits before 65 and you want to get Medicare Part A and Part B when you turn 65, then you can apply for it online at You must do this within 3 months before turning 65. This is when the initial enrollment period begins for Medicare. This enrollment period lasts from 3 months prior to turning 65 to 3 months after turning 65.

To find out more information about this, visit and use the array of tools on the website to figure out the best way to plan for your retirement.

Class Action Lawsuit Could Mean USPS could owe 130k Employees

A class-action lawsuit filed ten years ago is finally seeing a ruling, with a violation of the Equal Unemployment Opportunity Commission’s standards. An employee who had been injured on the job complained that USPS subjected its employees to a ‘pattern and practice’ of discrimination when she was told that her post-disability assignment was extraneous work and she was escorted off of the premises. This was under the National Reassessment Program, which was launched as a ‘return-to-work’ initiative that would also get rid of jobs that USPS deemed unnecessary or non-essential to their core functions.

USPS fought back against the claim, saying that its actions did not classify as wrongdoing, but internal documents, such as an email from 2010 that congratulated colleagues of a Texas district leader for reducing injured employees on the roll, say otherwise. The email played the song ‘Cripple Creek’ as the district leader said that the goal of reducing injured employees on the roll by 25% had been reached.

IOD (Injured on Duty)employees were not provided with the reasonable accommodations that they had previously been provided, and they were unceremoniously ousted without warning. In one case, an employee with a mild knee injury that prevented standing for long periods of time was given a job as a safety instructor, but under the National Reassessment Program, his role was deemed unnecessary and he was given indefinite leave without pay. The negative sides of the program were exacerbated by a toxic work environment, with employees commenting things like ‘see you at Walmart’, and saying that the rule was ‘past due’.

Employees subjected to this ruling need to proactively file claims to make sure that they get the appropriate payout for their discrimination grievances. The original person to file the claim received attorney’s fees and other ‘individual relief,’ but it is still necessary to actively file to make sure that it is possible to receive this payout.

If you are worried about this happening to you, there are some ways to pad the effect of an injury or illness. is a good resource to make sure that some essentials are covered, though the National Reassessment Program may not be relevant for much longer. There are an estimated 130,000 former postal employees who may be affected by this ruling and an anti-discrimination oversight body.

Living your Best Retirement Life is Easier Than You Think

the best retirement life is spent with making connections and having fun

As famous, or perhaps infamous, gonzo journalist Hunter S. Thompson once said, “Life should not be a journey to the grave with the intention of arriving safely in a pretty and well-preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!” Living your best retirement life is the perfect time to

Retirement is your opportunity to squeeze those last bits of joy from yourself, to finally do what you’ve always wanted to do. But how do you live your best retirement life and make sure that you leave this life with no regrets? If you’ve invested with intelligence, you could potentially be looking at thirty to forty years of retirement. What lessons do you need to learn before you start your journey?

First, and most important, remember that you have to actively seek out your dreams. Don’t just let yourself settle and become complacent- make that phone call, visit your friends and family, and reconnect!

Second, searching for happiness is a wild goose chase. Your bucket list, comfort, and seeing happiness as a goal to be reached- just slow down and do what you want. Go see the world, learn a new language, do something because you want to. You are responsible for your own happiness, and only your own happiness, and that is only found in the present.

Something to make your transition into retirement easier is to make sure you are not alone. Without the comfort and routine of a daily job, it can be a challenge to avoid the doldrums from your retirement and to become withdrawn. Making positive social connections, perhaps by taking up a new hobby or joining an organization, can be a good way to avoid this outcome and make your retirement a happy one.

Another important strategy to enjoy your retirement is to make sure that you are exercising regularly. Good health isn’t a guarantee as we age, but there are light exercises that can make your health slightly easier to maintain. Even just 30 minutes a day of light aerobic exercise can be enough—definitely not a massive commitment.

Finally, and most importantly, remember that this is not the end of your life. With the potential to live for as long as you worked over the course of your life, there are many things you can do that will make your retirement the best years of your life.

Remember to talk to a financial professional about your retirement so that you can live your best retirement life.

Late Retirement Planning: Pitfalls and Ideas

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Not all of us are the perfect retiree, with maxed-out IRAs and TSPs and a perfect financial plan. Sometimes, the realities of life have gotten in the way and make it hard to save appropriately for retirement. However, when it gets closer, there are still steps you can take to make sure that you retire safely and comfortably, with a good chunk of hard work.

Stash all the money you can

Since you haven’t had the time for interest to build up, now is the time to start fixing that. If you have access to a TSP account, this would be the best way to save, although you should talk to a TSP specialist to find the right funds for you. If you do not have access to a TSP or 401(k), then a traditional or Roth IRA would be the best place to start, making the maximum allowable contribution.

Don’t expect to rely on Social Security

Social Security and Medicare are currently in danger. While it is not very likely that the program will crash and burn entirely, the fact that the tax laws related to Social Security changed from being tax-free to getting taxed up to 85% in the highest tier means that going forward, relying too much on Social Security could end up being a disadvantage, even if you consider yourself to be in the middle class. However, staying with your job can add to your social security benefits by as much as 7% per year, so the option is still theoretically viable so long as you make intelligent investments.

Work Part-Time as a Supplement

One way to help you as you ease into retirement is downgrading to a part-time job instead of fully quitting the workforce. Not only does this potentially ease the transition into the 25 to 30 years you could potentially be living in retirement, but you could also make some extra money to supplement your savings.

Don’t forget to account for inflation

We are currently in a period of minor inflation, but to become complacent in this period is a dangerous idea. Since you could be spending twenty-five-plus years in retirement, even a minor inflation rate of 3% cuts your purchasing power in half over twenty years. Don’t just make sure that your post-retirement income will match your current cost of living- make sure that you account for the potential weakening of your money over a period of time.

If you feel like you cannot do all of this planning on your own, consulting a financial expert with specialization in the Federal space may be a good idea.

Retirement Income Tax: Five Tips to Reduce How Much You Pay

Retirement Income Tax: Quick Tips

As Tax Day is rushing up, it can be challenging to understand how to deal with retirement income tax. If you aren’t working, it may seem that you would be in the clear. However, between paying taxes on your TSP, cashing out your other investments, and any possible small jobs you may take on during your retirement years, it can pay to make sure that your taxes are as minimal as possible, primarily because of your limited funds during your retirement years.

Build yourself a good nest egg to pay for retirement income tax

Contribute Fully to the TSP

The most important part, of course, is participating in your company-sponsored retirement plan. For federal employees, this will be your TSP. Make sure that you are saving the maximum 5% up to retirement, as the government offers a match that means you effectively double your TSP just by saving money you will spend anyway.

Consider Some Types of Life Insurance

Whole life insurance policies can be a useful means of possibly gaining tax-free income during retirement. Often, there is the possibility, as with indexed life insurance policies, that the policy accumulates a cash benefit connected to the market that means that you could go throughout retirement without having to pay any life insurance premiums or withdraw the money and spend it freely. You can simply avoid retirement income tax as much as possible by saving it instead.

Look Into Tax Deductions for Business

Sometimes, if you supplement your retirement income with part-time self-employment, there are some business expenses and deductions you could include on your tax return. Consult with a financial professional before you make any significant decisions about your career or business, as there is a possibility that the profit you make might not be worth the investment. It is your retirement, after all- if the work you already do doesn’t appeal, consider trying a more low-investment job that could be an enjoyable source of income.

Examine Your Personal Debt

If you have auto or other personal debt, consider consolidation into a lower rate of interest. Unfortunately, rolling it into a home equity loan to deduct the interest is no longer practical since the Tax Cut and Jobs Act passed into effect. Once again, the best solution for this is to discuss your options with a financial professional to be sure that you are getting the best financial solution possible.

Pack your Bags and Move Away

Ever wonder why so many retirees move to Florida? The reason is simple; there’s no state income tax, which can eliminate a massive financial load. In some states, the income tax rates can be as high as 9.90%.

All in all, there is no one right way to retire, but at least with these strategies, retirement income tax may be a little more navigable. To learn more about your options for retirement, go to and talk to a financial expert.


6 Strategies to Maximize Retirement Savings

Notebook Finance and Retirement Savings
Do you have enough saved for retirement?

The best way to save for retirement is also fairly obvious; save while you’re young. Most young people justify their small investments by claiming that they have many years left until retirement. This route can be risky, however, since you can end up playing catch-up as you get closer to retirement. Don’t learn this the hard way, however- start as early as possible.

Apart from adding contributions from your paycheck, there are several other ways to add your retirement savings.

Permanent Life Insurance

Permanent life insurance can have a wide range of benefits beyond the death benefit; tax-free proceeds and a possibility of cash accumulation over your lifetime. Some instances of permanent life insurance include whole life insurance and indexed universal life insurance.

Take advantage of catch-up contributions

If you are 50 or older and you missed out on saving a lot early on, you can go beyond the normal limits on your IRAs and 401(k)s with the special catch-up contribution allowances. Check your specific policy or talk to your HR department about your options.

Automated Savings Contributions

It helps to automate your savings as it ensures that your retirement savings are not directed to other uses. Retirement plans such as the 401(k) plan require consistent contributions, and the best way to accumulate more assets is by having your savings on autopilot. You can decide to save up to 20% of your salary, which is an easy ‘set it and forget it’ that will be a great advantage when you retire.

Small Hedge Funds

Since 2008, most investors have stayed away from hedge funds in favor of index funds. However, this is an asset class that can still earn you some decent returns considering its consistent track record. Hedge funds are also less volatile, making them suitable for the current market conditions that can sometimes be very unpredictable.

Health Savings Account

Most people have health accounts but do not maximize them. In fact, some people do not make any contribution to their health account at all. The plan provides you with tax-free money for deductibles, copays, and Medicare premiums for those aging into Medicare. Importantly, you do not need to worry about your retirement healthcare expenses when you have a health savings account.

Purchase an Online Business

Stay abreast of the wave of the future and invest in an online business. There are nearly limitless options to choose from, and with startups like Uber and Dollar Shave Club going from nothing to dominating their fields, the initial outlay is low for a potentially amazing return.

Saving for retirement can be a challenge, and you shouldn’t do it alone. Make sure that you have a financial professional help you through your finances and make sure your retirement is safe.

Pet Life Insurance: It’s Real and You Might Want It

Black Dog and Pet Life Insurance
You’ve covered your family, but is your pet covered?

In a dog-eat-dog world, sometimes we forget what will happen to our furred friends. Over 68% of US households, in fact, own pets, and a surprising amount of those households are making financial plans regarding their pets. After all, in the same way, you want your family or beneficiaries to have a good life when you pass away, it is important to make sure that your pet will also be safe from being potentially abandoned. That’s where pet life insurance comes in.

The most famous case of estate planning for pets is the case of Leona Helmsley’s dog Trouble, the ‘Richest pet on Earth.’ Helmsley, an infamous billionaire who cut two grandsons out of her will, bequeathed a sum of two million dollars to her Maltese when she passed away in 2007. The dog passed away four years later, in 2011.

Though you may not be in the position to leave 12 million dollars behind for your dog, or cat, or goldfish for that matter, it is still sometimes a good idea to plan for your pets’ well-being. Before you purchase pet life insurance, though, you must check a few things:

  • If you have nobody to care for them. If someone is there to care for your pets, then there is no need to make special allowances for them.
  •  Make sure that you describe the pet to such a degree that it is not possible to commit fraud by replacing them with a similar animal.
  • Determine your Caretaker: make sure to determine both a trustee and a caretaker; the trustee will make sure that the money is properly used by the caretaker for your pet.
  • Provide for remaining funds: when your pet passes away, the fund may still have some remaining money. Be careful, though- stray away from making an individual the beneficiary, in case they choose to ‘accelerate’ the payout. Instead, choose a charity or cause where you will donate your money.

A recent survey indicated that 44 percent of pet owners have a financial plan to make sure their pets are covered. Some have verbal plans; others have written plans. Pet care, as a rule, is costly and complex, so make sure that you have covered every base. Find out how much it costs you on a monthly basis to feed and provide necessities to your pet, and use that as a basis to understand how much you must leave behind.

Be sure to talk to your financial advisor before you make any financial decisions regarding your pets and pet life insurance. In addition, when you draft your formal trust or will, consult your legal professional to make sure that you have covered all the necessary bases.

Do your Finances Need a Checkup?

Financial Health and You

When is the last time you went to the doctor for a checkup? You probably went at least once last year, and maybe you’ve gone sometime this year, as well. It’s important to have regular checkups; whether it’s your body, your car, or your family. Unfortunately, there is another vital check-up that most federal employees can’t remember doing: a financial checkup. Your financial health is one of the most vital parts of your life, and you should take every chance to check these nine things.

Image of a car's engine as a metaphor for financial health

1)  Are you taking full advantage of your TSP?

Federal employees can take advantage of retirement savings plans like the Thrift Savings Plan, which offers several excellent benefits, such as a match in contributions up to a certain percentage and the ability to invest in a wide variety of funds with more or less conservative growth and risk.

2)  Are you investing in the TSP appropriately?

Before you invest entirely in the TSP, make sure you fully understand the best way to invest to get the most out of your agency’s contribution matches. Be sure to talk to a TSP expert before you make any vital decision.

3)  Are you Missing Out on Better Federal Employees Health Benefit Opportunities?

Whenever you make a significant life change, you should check to see if there is anything that could change about your FEHB. Whether it’s retirement, a new child, or marriage, there is a chance that you could be getting a better rate. Be sure to take advantage of this year’sFEHB open season to learn how you could save your money.

4)  Are you ignoring the alternatives?

FEGLI is not the only life insurance provider on the market. Make sure that you are looking for better life insurance deals before you commit to FEGLI since your financial health could be at stake.

5)  Are you overestimating your H3?

Your H3, your three highest-income years before retirement, may be subject to change in the coming years if you are looking to get a raise in the years to come. Be sure that you have a reasonable understanding of how your finances will change in the future.

6)  Are you likely to miss out on creditable service time?

In calculating your retirement annuity, service time is one of the most critical aspects of how much you will earn on your investments. Be sure all your working time can accumulate service credit.

7)  Are you overestimating your Social Security benefits?

Social Security can be an intricate process to understand without the help of a professional. It’s based on a complicated formula that is subject to adjustment based on wage growth, so it is too easy to overestimate how much you will be receiving.

8)  Do you want the Survivor Benefit?

If you are married, you should make a decision now regarding how you want to handle your survivor’s benefit. Do you want a full benefit, partial benefit, or to reject the survivor annuity wholesale and put the money into alternative investments?

9)  Are your beneficiary designations up to date?

Make sure you know who your money is going to- it saves time and avoids complications when it comes to redeeming claims.

Use these 9 tips next time you talk to your financial advisor and make sure your financial health is acceptable for your future.

New Rules Would Combine Federal Sick Leave and Annual Leave

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Recently, a proposal to combine federal worker’s sick leave and their annual leave has begun to gain traction on Capital Hill. There has been some pushback from federal workers, but the approach is fairly standard in the private sector. Here’s more information:


All federal employees are entitled to both sick and annual leave and the allocation of the annual leave is based on the number of years they have been able to serve at their respective federal agency. For instance, a full-time federal agency is entitled to annual leave or vacation of 13, 20, or 26 days depending on how long they have been in federal service.


Also, a full-time federal employee is entitled to 13 days of sick leave. However, this does not apply to temporary or part-time federal employees as their days are pro-rated. Last month, there was a proposal by the White House budget plan to come up with paid time off by combining the two leaves.  However, it is important to point out that it was not clear whether there would be a reduction in the total amount or not.


According to the follow-up document, the primary objective of the proposal was to reduce the number of leave days that can be carried over from one year to another. Currently, federal employees can accrue as may leave days as possible during a particular year and this proposal will minimize the number of leave days that one can collect in a particular year.

However, the proposal does not in any way specify the number of days that will be reduced. It is this uncertainty that has left many federal employees worried about the new proposal.


The proposal is yet to move to Congress, and that is why some issues are not apparent. After moving to Congress, some of the pending issues will be ironed out for everyone to understand the real intentions of the new plan. Some of the issues that need to be made clear include; the number of leave days to be reduced, what would happen if a federal employee leaves government, and the number of leave days that an employee can carry over from year to another.


Most federal employees will not have peace of mind until all these issues have been addressed.  The problem of federal employees leaving the government with accrued leave days has been unclear, and this proposal will bring some clarity after it passes through Congress.


Presently, there are limits when it comes to annual leave accumulation. Regardless of a federal employee’s retirement eligibility, they receive a lump sum payment at separation. It is important to note that the accumulation limits only apply to the annual leave.


On the other hand, there are no limits when it comes to the accumulation of sick leave. For individuals that are not eligible for retirement, their sick leave has no cash value. The fact that sick leave is credited as the duration served toward a retirement annuity makes it unnecessary to have a limit on its accumulation.

New Bill Would Allow Former Temporary Federal Employees To Count Their Years in Temporary Service

Rep. Derek Kilmer (D-WA)
Rep. Derek Kilmer has proposed new legislation to help former temporary federal employees.

Congressman Derek Kilmer (D-WA) recently introduced a new piece of legislation to help temporary federal employees who had been employed on a temporary basis and then transferred to full time. A previous gap in the legislation had led to some significant complications when it came time for employees to receive retirement benefits, so Kilmer introduced this new legislation with the intent of rectifying these concerns.

Kilmer introduced the Federal Retirement Fairness Act (H.R. 5389) after he received complaints from employees of the Puget Sound Naval Shipyard, who saw many employees come and go earlier than others because they had been full-time employees throughout their careers. For instance, 54-year-old Allen Hodge began his career as a temporary employee and shifted to full-time employment five years later. Hodge, and employees like him, spoke out after they discovered that their years of temporary jobs would not count towards the minimum number of years required to retire before the age of 62.

Hodge began as a temporary worker, but after five years of temporary employment was offered a full-time position, and over the years, worked his way to becoming manager of the shop where he started his career. The frustrating part of Hodge’s situation was the fact that other employees who began later than he did were leaving earlier because they had started as full-time employees.

Hodge and some of his fellow shipyard workers eventually sought the support of Kilmer, who, after seeing the case’s complexities, joined their cause. “This is an issue that impacts the largest employer in our area—the federal government. We know there are a lot of workers in our area that are really affected by this,” said Kilmer, who introduced his proposed bill on the 22nd of March. As of the time of publication, the bill has not yet passed the House.

The challenge with potentially delaying temporary federal employees’ retirement, especially in a job that requires physical labor to any significant degree, is that not only does it put more risk on the employer, but the additional work could worsen the health concerns inherent to retirement.

Kilmer told the Kitsap Sun that federal employees who would be eligible for this bill would have the ability to pay catch-up contributions, but that they would also have to pay the government’s portion to offset the federal budget hit.

“I think that…would increase the likelihood we could get this passed,” said Kilmer. In the instance of Hodge, this would be around $50,000 to cover both his own and the government’s contributions, but he said it would be worth it for the chance to plan his life for retirement with security.


TSP Expands Maximum Contribution

new update

Did you save the maximum of $18,000 in your TSP last year? If you did, you might be interested to hear that the maximum for 2018 added $500 more to the ceiling, an excellent option for those who want to lower their taxable income. This option will create a tax-sheltered account that will grow and compound over the years until you withdraw it, at which point it will be taxed as income. However, this is not the only option- there is now the alternative of making after-tax Roth contributions. This offers no tax delay for the present, but down the road when you withdraw the money, you will not have to pay taxes on it. Note that to have this take effect, you must have contributed for at least five years as be at least fifty-nine and a half.

Some Basics of the TSP

The Thrift Savings Plan has several options, all of which have varying degrees of security and flexibility. The C fund holds large-company stocks, the S fund holds small company stocks, the F funds is made up of bonds, and the G fund invests in securities. L funds are a similar concept to target-date funds in normal 401(k) accounts; they invest in the other five, but as you get closer to your end goal they cool off to a low-risk, conservative portfolio. If your retirement is far off and you can stand some fluctuation, the C fund tracks the S&P 500. The risk of losing some of your investment is much higher than the other TSP options, but the potential returns are the highest possible.

Importantly, save at least five percent of your annual income. The government will contribute a total of 4% for your five, and if it is under the maximum, you can still participate in the added interest accumulation. If you are over 50, you may be able to contribute even more to your TSP, bringing the possible total to $24,500. That’s over twenty-four thousand dollars per year that you could be gaining interest on- not a bad quantity for a safe and sane retirement.

A Guide on Cashing out Annual Leave at Retirement


A lot of people lack enough information on how the cashing out of annual leave at retirement goes on. One of the most important things you should know is that the total amount of annual leave that you can be paid after you retire is determined by whether you are a postal or non-postal employee. Wondering what this means? Worry not! This article will explain in details about each of them. So, let’s learn!


Postal Service Employees


In case you are a member of Postal Career Executive Service (PCES), you are in a position to get a lump- sum payment for the amount of annual leave that is not used. The amount is not limited. On the other hand, if you are in the Executive and Administrative Scale (EAS), you are then in a position to get a lump-sum payment for over 560 and any annual leave that is earned or unused in your year of retirement. The EAS is composed of;








4.Other non-bargaining unit employees


This means that if you are on a calendar that has 560 hours, and you took no leave in between, you are supposed to get a payment of a total of 768 hours.  The employees who are covered by the union contracts can get a lump-sum of 440 hours at most.


Non- Postal Service Employees


There was a time the members of Senior Executive Service (SES) were permitted to get a lump-sum of an unlimited amount of the annual leave which was unused. That has changed now. To have 720 hours, you had to have more than the amount of your credit.  The 720-hour limit also applies to the senior level, the senior scientific and technical employees.


However, the rest of the non-postal employees fall under one category. Therefore, in case you are employed in the U.S or in any of its territories or possessions, you can have around 240 hours of your annual leave carried forward to your next year of leave. In overseas, employees can have even up to 360 hours.


When Do Leave Years Begin?


They all start on the first day of your first pay time in on the calendar year. At times, you can even get a lump-sum payment for more hours only if your agency restores or permits you to carry forward more hours than they should be. This can only happen if your leave was to be at the end of the year but something such as illness prevented you from taking it. Your agency could also cancel your leave for its own unavoidable reasons. Therefore, the time that you can hold on to the restored leave will vary depending on the time limit, that the agency set.


In cessation, to calculate your lump-sum, your agency projects the unused hours of annual leave and forwards them like you were on the payrolls. The total amount you get includes your basic pay, non-foreign area COLAs, locality pay and pay raises, that is if you had any.

Improving your Credit Score

Credit problems are all different. They are not the same since the cause of low scores depends on your factors on personal credits history, your financial situation and the style you use to manage your money. It could be late payments, collections, bankruptcy, a big number of inquiries or even credit report mistakes. It does not matter what your reason is. They all have a negative impact on your score. So how do you improve your credit score? We came up with a guide to help you do so in this article. So, let’s learn.


  1. Find out the Things that Impact your Credit Store Negatively


There are five factors that your credit stores depend on. They include;


  1. Payment History


It shows if you have paid your debts on time, always.


  1. Credit Utilization


It shows the total amount of credit you have used, that is related to the overall credit limit.


  1. Credit Age


It portrays the amount of time you have used to maintain the credit accounts.


  1. Credit Mix


This is the different credit accounts you have. If you have more than one type, then that is proof that you manage many credit products.


  1. Inquiries


They show the number of times you have applied for credit and the types you have applied for.


  1. Find Out Which Factors Cause Low Credit Score


After checking your free annual credit reports which are available at, you will see the factors that lead to your credit scores being low. After comparing them with your free credit report card on Credit Sesame, you will then know what it is that you are required to do to improve your credit score.


What’s the Worst that could happen to your Credit Score?


  1. Maxing out a credit card


  1. Letting go of an account delinquently.


  1. Picking up a negative public record


  1. Identity theft


  1. Improve your Credit Utilization


This is necessary to get a quick credit bump. You can do this by;

  1. Making Huge Lump Sum Payment


Make the payment on your credit card debt. The score will increase while the balances will decrease. Find ways to use the following bonus or the next tax refund to pay off the balances.


  1. Getting a Credit Limit Increase


Do this without increasing the debt. This will work if you have good credit. Make sure you can handle a more significant limit or the additional cards.


Lastly, in case you have poor credit, make use of different types credit accounts. You can also get a secured credit card to start paying on time. Do not forget to handle the unpaid collections carefully. There are consumers that succeed with debt settlement after a creditor accepts an amount less than what is owed to them. After paying off a collect account, keep track of your credit report.

9 Easiest Ways to Be Smarter about your Money

Do you have a problem with managing your money? Most people do. According to a survey from Money Management International, 70% of Americans are worried about their personal finances. So what can you do to fix your finances? Follow these nine steps, and you’ll be that much closer to becoming a money master.

  1. Salary and Savings are Two Different Things

In the long run, your salary does not matter as much as your net worth- the sum of all your savings and assets. If you have a big salary, but spend it as fast as you get it, you are actually in a worse situation than someone who may make less, but saves intelligently.

  1. Keep off Credit Card Debt

Credit cards are important- without a good line of credit, it can be a challenge to get favorable rates on loans. However, avoid credit card debt as much as possible-  it will suck away your net worth faster than you would expect.

  1. You’d rather Save Than Invest

Pay yourself before you do anything else. That idea may sound strange, but saving, especially with a high APY savings account, has a much larger margin of safety than investing, no matter what you may invest in. Pay yourself, and then play the market.


  1. Your Priorities are where you Spend Money


Get to know your spending habits first, to control your finances. Ensure you spend money on things that are important to you. If you pay yourself, you will not experience any problems budgeting your money. If it is challenging, free and secure financial apps like Mint can help you to get your budgeting on track.


  1. Live below your Means


You should live below your means – not within them. Staying behind your earning power is the best way to advance- if some catastrophe happened and you lost your source of income, or you had a significant drop in revenue, you are already prepared.


  1. Automate Everything


If you want to save more, then you have to avoid late fees. Be sure to automate all of your bills so that you never have to worry about whether you’ve paid your rent or your gas bill on time.


  1. Have a Solid Credit Score


The largest expense in your life could be the interest costs on car loans, student loans or maybe a mortgage. With a good credit score, you will save thousands of dollars since the borrowing costs will reduce. Use credit cards, but don’t forget to pay off your balance every month.


  1. Cover your Insurance Needs


This is one of the safety items. Therefore, ensure that you have covered your insurance needs. Do not forget that insurance is for protecting your wealth, and not creating or building it.


  1. Taxes are Important.


Taxes can help you save money. Make use of tax breaks and get to know your tax situation. Seek professional help if need be.


Lastly, keep saving more every year to add to your savings account.  Do not dwell much on retirement, but focus first on financial independence. Your goal should not be about making it to a certain age, but instead, it should be about being in a position where money is the least of your worries.




Is it Possible to Estimate Monthly CSR and Social Security Payments?

Most people are not sure about what they are likely to get regarding monthly pension from Social Security and CSRS, and this typically leads to a lot of confusion. However, there is no need to worry- it is possible to estimate your off-set amount and annual annuity accurately.


To begin with, you can get your annuity estimate from your HR office. The HR office has the responsibility of ensuring that you have access to your annuity estimate anytime you need it. However, it is important to point out that OPM has the final say when it comes to your annuity payments as the HR office only provides estimates.


As long as the agency has all the required information from the employee, its estimates can be very accurate. The calculation of Offset retirements is similar to a full CSRS annuity computation. The amount of the SS benefit is usually reduced from Offset retirements depending individuals Offset service.


Although the computation of Offset and CSRS is almost similar, offset retirement ends up being the lesser amount because of the deductions. You have to divide an employee’s offset service by 40 to determine the factor that is multiplied by the full SS benefit when finding the difference between the SS benefit without the offset time included and the total SS benefit with offset.


The smaller offset amount is attributed to the use of the factor in the computation. Credit for unused sick leave is part of the factor that is used in the computation of the monthly service for annual salary changes. An annuity can only be calculated using months of service and full years. In this case, odd days are not considered in the calculation. On the other hand, you can sign up for an annual statement on official Social Security website to get an accurate Social Security figure.


According to the current law, you must be ready for a reduction in your annuity if you qualify to receive SS benefits. Drawing SS benefits at that particular time do not exempt you from the annuity reduction. Also, those drawing on their spouse’s record have to face a similar fate. Your service record determines what you will receive from SSA and this forms the basis for your Offset amount. Therefore, an Offset retiree can take the SS benefit after 62 or at 62 years when they are retiring.

Four Ways to Fix your Money Mistakes

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Financial mistakes can be tough to accept. It’s difficult to move past when all you can think about is your error: ‘Why did I do that?’ ‘What could I have done instead?’ However, this doesn’t help you in the long run, and in fact, if you keep dwelling on it, the likelihood of repeating your mistake becomes much higher. With these four steps, you can instead take action on your mistakes and fix your financial future.

  1. Figure Out What Led To the Mistake

The first step to fixing any problem is to acknowledge it- in this case, figure out how you made a mistake, whether it was a poor investment, you took out the wrong loan or some other error. Understand what you did wrong, and move on to the next step:


  1. Take Responsibility

Don’t let your frustration turn into guilt- it is easy when you make any error, to throw up your hands and retreat from the situation, but this will not allow you to grow in the future. Instead, find a way to make sure that the problem doesn’t happen again with your new understanding of why you made a mistake. For instance, let us say you are a small business owner who loses a few thousand dollars on a training program that turns out to be a scam with no refunds. You wouldn’t give up- instead, in the future, you would investigate more closely into training programs to make sure your mistake doesn’t happen again.


  1. Forgive Yourself

It’s not easy admitting that you have made an error, and sometimes it’s harder still to move past it. However, this is, in its way, your responsibility to yourself- one mistake can’t define you and your financial future, and to reach the goals you want, you must move past your pitfalls.

  1. Seek Help

‘A problem shared is a problem halved.’ Find a friend or family member you can trust, in whom you can confide. While trusting the opinion of a friend alone for your financial woes is never a good idea, they can provide important emotional support and a way to help you get back to where you were. For financial advice, talk to a financial professional who can give you an honest, experienced answer. If your mistake is deep-rooted, get a financial counselor to help you recover.

Lastly, after you are done with all the steps we listed above, you have to move on. Acknowledge that you made a mistake, find out what led you to make an error and most importantly, forgive yourself. From there then you can set your goals and come up with a plan to achieve those goals. Be committed and note all the progress you make regardless of how small it is. Celebrate all the little victories and believe it or not, you will not even remember that past mistake. Use it as a stepping stone to your future financial success.

The New Military Retirement System Isn’t Bad

There has been a massive refurbishment of the military retirement system. The new system is more complicated. It is more of a mixed-up system since it gives a defined benefit pension from 40% pay for 20 years of service and a 401k design instead of offering the retirees the standard 50% of base pay after 20 years of service.  The new system includes a Thrift Savings Plan, which has the same contributions that one can carry even if they left the service earlier than expected. This is beneficial mostly to 83% of service members that don’t live long enough to get the old 20-year pension.  This is one of the reasons why the new military system is a little better than the old one. We compiled other reasons in this article. Ready to learn? Let’s go!


The 20-year pension may lead many people leaving the system while they are still young to enjoy more profit. This could lead to a more adverse selection of the people that make decisions on the ten-year mark.


Most of the new military leavers are likely to be veterans, who mostly think that they can get good jobs with a potential of advancing. However, the new system is entirely different. It ensures that the military does not lead to any workforce issues to the mid-grade officers and the staffs of NCOs.


How Can Military Cause Manpower Issues?


It can use the military system to do away with the retired personnel. Many mid-grade officers and staff NCOs are aware that they are there to stay. They only wait to reach 20 so that they can leave. This phenomenon is commonly referred to as “retired on active duty.”


Due to the Prize offered by the system to lifer 50% or get nothing, the military is reluctant to divide people after they hit the ten-year mark. However, it can do away with the rubbles and focus on giving its best.


This new system leads to a reduction in the difference between defined benefit portion of active duty, the reserve pensions and the TSP savings, which are portable whether in or out of the military. Therefore, it could offer service members more convenience in their pipeline.


The Former Defense Secretary Carter had two elements in ‘Force of the Future,” a plan he had. The two elements were;


  1. Allowing career sabbaticals


  1. Increasing permeability among active and reserve forces.


The plan was supposed to give members a chance to take some years off or on weekend duty in the military for them to pursue other things and interests such as advancing their education.  The plan was also to enable smooth transitions to and from the reserves to active duty.


In cessation, the diversity and adaptability are vital to fighting wars. Wars do not only involve killing enemies but also other experiences such as education and experience in cyber warfare. If formulated wrongly, the new system might be a reduction in the benefits for the individuals serving for long. However, if done the proper way, it could be a platform for upgrading the service members and making them more prepared for future threats and giving the leaving veterans a good base of retirement savings.