tsp funds
tsp funds are the funds involved in the Thrift Savings Plan which is one of the finest retirement plans available to the federal employees of the US.
TSP Investing in Chinese Companies
/by joe carrenoIn recent years, environmental, social, and governance-oriented (ESG) investing has seen an upsurge. The Federal Retirement Thrift Investment Board (FRTIB) decided to join the trend last fall by investing in an index fund with some Chinese companies. Despite much criticism from some US senators, the board has announced that it is still on track with the plans.
In November 2019, the FRTIB had voted to confirm a 2017 decision to move the International Funds under the TSP to the Morgan Stanley Capital International All Country World Ex-U.S. Investable Market Index. Since the story broke, the board has been receiving criticisms from different quarters.
Joseph M. Giglio of D’Amore-McKim School of Business is one of the people heavily critical of the decision in mainstream media. The professor of strategic management rebuffed the board for wanting to invest in “shady” Chinese companies connected to the Chinese government and the Chinese Communist Party. Giglio explained that the move shows that the FRTIB is not acting in the best interest of the United States and knows there will be no adverse consequences for such actions.
Giglio also pointed out that the US government sanctioned some of the companies for undermining national security. He specifically points out China’s state-owned Aviation Industry Corporation, which supplies military aircraft to the Chinese People’s Liberation Army.
Members of the US military are also under the TSP, and it is anyone’s guess how they will react to the board using their money to strengthen the Chinese government and military.
FERS Act of 1986 established the Thrift Savings Plan (TSP), which offers five index funds to federal employees to help them prepare for retirement. It is similar to what is available in 401k plans. The index funds, which are invested in short term US Treasury securities, or national, international, or bond index funds, include:
- The Government Securities Investment (G) Fund
- The Fixed Income Index Investment (F) Fund
- The Common Stock Index Investment (C) Fund
- The Small Capitalization Stock Index (S) Fund
- International Stock Index Investment (I) Fund
Some US senators (Republicans and Democrats) have also criticized the FRTIB’s decision to shift to the new index fund. On August 26, 2019, Senator Marco Rubio (R-FL) and Senator Jeanne Shaheen (D-NH) wrote a letter to the chairman of the board, Michael Kennedy, asking the board to reconsider investing in the index fund. Like Giglio, the senators also stated that investing in Chinese companies poses a threat to the national security of the US.
The senators, joined by Senators Mitt Romney (R-UT), Kristen Gillibrand (D-NY), Rick Scott (R-FL), and Josh Hawley (R-MO), sent out another letter on October 22, 2019.
In response, the members of the FRTIB said political pressures would not influence them in deciding how to invest the funds under the TSP. They also explained that the Act that established the TSP lists the funds controlled by the board as private property.
To stop the board from going ahead with its plan, Rubio, Shaheen, and Romney introduced the Taxpayers and Savers Protection Act in November 2019, but the bill has not advanced beyond that stage.
But some stakeholders of the plan support the move to shift the I Fund. These people have urged Congress to stop trying to influence the FRTIB’s decision, stating that the plan is an independent entity. They also stated that the decision would put the TSP at par with other retirement plans. They also want Congress to drop the Taxpayers and Savers Protection bill.
The group cited a review from Aon, a British-American multinational professional services firm that first recommended investing in the index fund. According to Aon, TSP should expand to the emerging markets benchmark to risk being an oddity compared to other retirement plans.
The pandemic has also had a severe toll on TSP account balances. In December 2019, the number of millionaires under the plan was 49,620. By March 31, 2020, there had been a significant drop of over 45%, with only 27,212 participants having 1 million dollars or more in their accounts.
The highest TSP experienced a 14% decrease in value, moving from $7,395,476.29 on December 31 to $6,375,795 on March 31, 2020.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
TSP Account; Do You Know Your Beneficiary?
/by george learnedThere is a need for people to be certain of their TSP-3 beneficiary. Thus, this article focuses on the ways to do that.
The person listed on your most recent TSP-3 form may be someone you know, but the TSP (Thrift Savings Plan) may not know who they are. Some individuals have stated that the website’s beneficiary information is correct for their primary beneficiary but not for contingent beneficiaries.
Indeed, the Thrift Savings Plan admitted that 266,000 beneficiary designations were not transferred to the new system due to data quality issues. Then they cryptically say that the beneficiary forms are still on file.
Please do not assume that the beneficiary information you have provided is accurate. Here are some suggestions:
If you haven’t already, set up your new TSP account immediately. Examine the account to ensure that your beneficiary designations are correctly recorded.
If your designations are incorrect, take the necessary steps to update your TSP-3.
You can submit a new TSP-3 in the following cases:
- When you do not have a beneficiary form on file
- If your account needs to be updated
- When your designated beneficiary has passed away
The TSP-3 form is available in the Forms section, but you may need to be patient with the website. The Thrift Board’s website is still not up and running as smoothly as it should be. When you reach the TSP-3 link, you will be allowed to download the form or use a “wizard.” TSP form wizards make it simple to fill out any TSP form; they ask pertinent questions and, based on your answers, direct you to the next section that needs to be completed. With a wizard, you won’t have to wonder which parts of the form to fill out and which to leave blank. Printing out a filled-out version of the form allows you to take it to a notary if you need it notarized, which is frequently the case with TSP forms.
What if you don’t have a TSP-3 on file or if it was “lost” during the system transition? In that case, the Thrift Savings Plan will use the standard order of precedence to determine who will receive your TSP funds when you pass away. The TSP will disregard any wishes you have expressed in a will or trust. In estate planning, it is a general rule that beneficiary forms (or the standard order of precedence) take precedence over any other stated wishes. The legal order of priority for federal benefits after your designated beneficiary is:
- Surviving partner
- Children (per stirpes) (unless formally adopted, stepchildren are omitted)
- Parents (except step-parents who have officially adopted you)
- The legal representative of the estate, such as an executor or administrator as appointed by the court
- Next of kin
The TSP-3, like most beneficiary forms, allows you to name contingent beneficiaries who will receive the funds if the designated beneficiary dies before you. You can also select multiple beneficiaries. If you choose this option, ensure the total adds up to 100%.
If your beneficiary is:
- Your federally employed or retired spouse: they have the option of taking the money out of your TSP, rolling it into their own, or choosing an inherited IRA.
- Your non-federally employed or retired spouse: they may take over your TSP account, elect an inherited IRA, or withdraw the funds. The TSP will set up a beneficiary participant account for the beneficiary if they choose to take over your account. The beneficiary participant account’s initial allocation is in the age-appropriate L fund.
A non-spouse may choose an inherited IRA or withdraw the funds. The SECURE Act has restricted the “stretch IRA” for almost all non-spouse beneficiaries, who must now deplete the account entirely within ten years.
You’ve been saving for retirement your entire career. You want to ensure that if you don’t live long enough to deplete your TSP, the remainder is distributed to a person or persons of your choosing.
Contact Information:
Email: [email protected]
Phone: 3037587400
Your Life or Your TSP? Your choice
/by kevin wirthWhat Is the Value of Your Life? Imagine someone pulling a gun on you as you are crossing the street.
If you don’t give them your wallet, they’ll shoot. Most of us would unquestioningly hand over our wallets. But what if they compelled you to turn over your house or TSP?
Selling Your Life to Get Rich
Even this choice is simple when facing death. You’ll want to live even at the expense of your finances. But what if it’s the other way around? Instead of the man requesting payment in return for your life. What if he demanded payment in exchange for a portion of your life?
Would you accept that exchange?
It seems that you already are. You guarantee a portion of your life as a federal employee in exchange for a salary today and a pension tomorrow. Now, this is not advocating against ever exchanging your time for cash. Everyone needs money.
However, it is critical to understand precisely what you are losing in exchange for your cash.
How much are you paid in reality?
Most people can name their annual income off the top of their heads, but do you know their hourly rate?
Not your hourly rate as it appears on your pay stub, though. Your hourly wage is in actual dollars. If you work eight hours a day, for instance, you might actually spend ten hours a day on job-related activities like getting ready, traveling, etc.
What about the additional costs that result from your job? Consider your gas money, work clothes, etc.
So even if a person is paid $50 per hour on paper, after deducting all the additional time and money needed to do their work, their actual hourly wage may only be $35.
Then if you account for additional costs like Social Security tax, Medicare tax, income tax, etc., your actual hourly rate will decrease even further. But there’s no need to go there to keep this post straightforward. You could be shocked if you do the math for yourself.
How much does this boat actually cost?
By this point in the essay, you should know that you are exchanging your time or your life for money, and you ought to be able to estimate your hourly rate more accurately.
Now that you know that, you’re ready to move things along.
The fact that your money is much more than just money may now be dawning on you. It stands for the time and effort you put in to earn it. If you decide to spend money on something, you are trading a portion of your life for that object.
For instance, if you exchange 2,857 (100,000/35) hours of your life for the $100,000 wakeboarding boat, your actual hourly rate is $35/hour.
So consider the gunman once more. However, he is exchanging 2,857 hours of your life for a boat this time. Do you want to do it?
This doesn’t mean the transaction is a bad one. It may be a fantastic trade for someone who is passionate about boats. However, when you invest your hard-earned money, it is crucial that you fully understand what you are buying and selling.
You only have one life, and once it’s over, it’s over.
The hope is that when you look back on your lives, you can all say that the money and time you invested were worthwhile.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
Turning TSP Money into an Annuity
/by jeff boettcherThe Thrift Savings Plan is a retirement investment made available to federal and uniformed workers. Withdrawals can be made in a large sum once or paid monthly or form an annuity; however, an annuity is the least common choice. Fewer than 1% of all withdrawals from TSPs are used to buy annuities.
Before completely dismissing it, you should know what it is and how it works. Then, you can tailor the TSP annuity benefit to satisfy your specified needs with the conventional retirement benefits given by FERS and CSRS.
DIFFERENT TYPES OF ANNUITIES PROVIDED BY TSP
A TSP account holder can select an annuity from one of three available options:
Single life
A single-life annuity offers you steady payments for the rest of your life.
Joint life with a spouse
You will continue receiving payments from a joint life with a spouse annuity as long as you and your spouse are alive. Upon a partner’s passing, the survivor will continue receiving annuity payments until their death.
Joint life with someone other than your spouse
This refers to an annuity paid out for your lifetime and the lifetime of another person you choose (who is not your spouse). Even when one of you dies, the other will continue to receive annuity payments for the remainder of their life.
Those considered to have an insurable interest in you include your
- Former marriage partner,
- Biological or adoptive relatives closer to you than first cousins, and
- Those with whom you live in a relationship, which forms a common-law marriage in countries that recognize such unions.
NOTE THAT:
1) The TSP is not an annuity; instead, it transfers money to a private commercial company.
2) You may also mix different annuity options with various available features of your choice, including a predetermined payout made to you after ten years. The payments will rise with time. The standard repayment sum will increase by 2% per year. It is necessary to know that not all annuity features can be combined with the basic annuity types.
3) Let’s say you and the other annuitant pass away before the annuity payments equal the account balance used to acquire the annuity. In such an event, the difference will be returned to the beneficiary in cash. Payments will go to your beneficiary if you pass away during the first ten years.
4) A joint life annuity may provide a 100% or 50% survivor payout. If you have a joint annuitant, your monthly annuity payments will stay the same (100%) or be reduced by 50% upon the first death.
5) If you are a married participant with a balance over $3,500, your withdrawal choice must meet the requirements of your spouses’ rights.
6) Suppose you and your spouse are FERS members. In that case, your spouse will be eligible for a joint and survivor annuity with a 50% survivor benefit, level payments, and no cash return feature unless you sign a written waiver of this right. As a married CSRS member, the TSP must notify your spouse of your withdrawal election.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
How To Build A Profitable TSP Account
/by george learnedThe Thrift Savings Plan (TSP) of the US government is a unique retirement plan that provides significant benefits to people who enroll and use it wisely to manage their retirement accounts and ensure their future.
While some may see its simplicity as a drawback, it makes managing one’s retirement quite simple for the average person.
The TSP’s difficulty is that it only employs five critical proprietary funds. Yes, there are just five primary funds to pick from, which means you aren’t able to invest in your favorite company, no matter how much you enjoy Apple, Disney, Ford, or any of the thousands of other companies. Investing just in energy or retail mutual funds is also not possible.
On the other hand, you don’t have to think about or evaluate dozens of funds, ETFs, or thousands of equities.
Because you may only select from five funds, the inference is that it’s simple to invest and save for retirement. Unfortunately, the government doesn’t make things as simple as they appear.
The government intends to deposit your automatic contributions in the TSP G Fund. Unless you withdraw your money from the G Fund, it won’t grow. That’s a bond fund that is designed to match inflation. Yes, it will keep up with inflation so that you won’t lose money, but you won’t be building a retirement account to support you in your retirement years.
So, what are your TSP options?
The other four funds are as follows:
F Fund – similar to the G Fund, but with higher gains, so your money grows significantly more.
C Fund – is intended to replicate the core of the S&P500 market index of the top companies in this group of 500.
S Fund – aims to replicate the largest US corporations that compose the Dow Jones group of US companies.
I Fund – a collection of foreign funds.
L Funds are supplementary lifecycle funds. Depending on when you retire, these funds will switch between the five principal funds. The issue with these funds is that the government administrators assume that everyone is the same and that everyone will have the same financial needs, objectives, and challenges throughout both their investment years and in retirement.
Using a customized investing program allows you to expand your account to satisfy your preferences and goals. While an investing software cannot assess and make judgments using the government TSP funds since the government does not share daily data, a few mutual funds and ETFs accurately imitate the TSP funds. By putting these funds into a program and developing back-tested strategies, you can know when to move your money from one fund to another or even create a portfolio with your money split amongst the various funds to deliver the best return, the best bang for your buck, based on your personal preferences.
Implementing an effective TSP management plan necessitates a few precautions and an overall strategy:
The TSP trading rule – other than into the G Fund, only two (2) trades (transfers) can be made monthly. Payroll contributions are ideally designed to be put into the F Fund and then re-distributed (trade/transfer) the following month.
Personal investment management software can help you decide when and where to shift your money among the many TSP funds.
Making your retirement account work for you will result in a larger retirement account and less personal financial stress. Once you’ve established your TSP tactics, this should only take 20-30 minutes every few weeks.
Contact Information:
Email: [email protected]
Phone: 3037587400
Life Planning Resources About You That Your Loved Ones Will Need
/by bill hoffYour spouse, partner, or children will appreciate this article if you become incapacitated due to cognitive deterioration or pass away. First and foremost, the information comes from you. Second, the informational sources are all government entities they must become acquainted with to comprehend their position as your advocate, care provider, or beneficiary. Third, these digital resources are updated regularly, ensuring that the material is up to date when needed.
This article is designed to be used as an attachment to be shared with others through email. The idea is that by giving this information, you’re presenting them with several reliable digital resources that can be shared with them now, electronically archived by them, and made available to them when required in the future.
Remind your close ones about the article when you give them specifics about your estate planning instructions, such as your will, advance directives, powers of attorney, etc.
Important Federal Agency Resources
Office of Personnel Management (OPM)
During their retirement, all federal annuitants, regardless of the federal agency they worked for, are subject to the oversight of the Office of Personnel Management (OPM).
Here’s an example of how to collect information using the OPM search box. For example, entering “death” into the OPM’s search box yields 49 results. Each outcome provides a two or three-sentence summary of the associated material, for instance, FAQs on the death of a government employee or annuitant. All the links provide paperwork, extensive descriptions of a procedure, or other relevant information.
Thrift Savings Plan (TSP)
Almost everything a spouse, partner, and children need to know about the Thrift Savings Plan (TSP) may be found in a special section for beneficiaries on their website. The site includes a PDF document entitled “Your TSP Account: A Guide for Beneficiary Participants,” which may be accessed via the website.
Social Security Administration (SSA)
Social Security offers various resources that others close to you may find valuable. The first is about people helping others and how Social Security can help you when a family member dies.
Medicare provides information on important Medicare-related matters such as where to sign up for Medicare, how to change plans, the advantages of Medicare drug coverage, and where to get Medicare paperwork for claims and appeals. It offers a searchable database of Medicare-accepting medical providers.
Centers for Disease Control and Prevention (CDC)
The CDC provides an overview of Alzheimer’s disease and offers a wide range of information on the subject and the option to get email updates.
National Library Service for the Blind and Print Disabled (NLS)
The NLS provides a plethora of resources for senior citizens and their families. At least once a year, various organizations, online tools, and publications from government, academic, and nonprofit sources are updated. Connections for caregivers, legal, eyesight, physical health, and psychological health services are a few of the topics covered.
Conclusion
These tools aren’t meant to be a replacement for thorough estate planning. Conversations with the receivers of this article may be just what you need to get started on a personal estate plan.
Contact Information:
Email: [email protected]
Phone: 2178542386
Bio:
Bill and his associates of Faith Financial Advisors have over 30 years’ experience in the financial services industry.
He has been a Federal Employee (FERS) independent advocate and an affiliate of PSRE, Public Sector Retirement Educators, a Federal Contractor and Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
Bill will help you understand the FERS Benefits and TSP withdrawal options in detail while also helping to guide you in your Social Security choices.
Our primary goal is to guide you into your ment with no regrets; safe, predictable, stable and for life using forward thinking ideas and concepts.
Bullet points:
> Financial Services consultant since 1984
> FERS independent advocate and an affiliate of Public Sector Retirement Educators (PSRE), a Federal Contractor and Registered Vendors to the
Federal Government
> Affiliate of TSP Withdrawal Consultants
> His goal is to guide individuals into retirement with safe, and predictable choices for stability using forward thinking ideas and concepts.
10 Strategies for Federal Employees Planning to Retire Before 2030
/by jeff boettcherThousands of federal personnel have retired since the COVID-19 pandemic began in March 2020. Many more eligible employees plan to retire during the following eight years.
Employees who are eligible to retire must be financially prepared to do so. With enough planning, an employee may do more than fantasize about a pleasant and financially secure retirement.
No one can know what the national economy and investment landscape will be like in 10, 20, 30, or more years. Hence, all employees who plan to retire in the next eight years should know what to expect financially after they retire and what should be done to complete the necessary tasks to prepare better for their retirement years.
Here are three recommendations to help employees who plan to retire within the next eight years:
1. Recognize and comprehend the link between investment risk and investment return and how it applies to TSP investing.
Unfortunately, risk connotes something negative for some TSP members. However, because the TSP is a long-term tax-advantaged savings plan, the “risk/return” ratio cannot be overstated. There is no doubt that investing in the stock market is risky. Investing in the TSP’s three stock funds (the C, S, and I funds) carries a certain amount of investment risk.
However, by taking the risk of investing at least half of a TSP portfolio in the C, S, and I funds, a TSP participant will be rewarded with a better investment return over the long run. Participants in the TSP should also be mindful that inflation may be disastrous to a long-term portfolio like the TSP. Stock investments have proved over the years that they can outperform inflation in the long run.
TSP participants are consequently advised to avoid attempting to dodge the current-year stock decline by investing in the so-called safe US Government Securities G fund. While invested in AAA-rated short-term US Treasury securities, the G fund doesn’t outperform inflation in the long run.
2. Decisions on Social Security.
The majority of government employees are entitled to monthly Social Security retirement benefits. The three most frequently asked questions about Social Security retirement benefits among employees and retirees are:
(1) At what age can I apply for my monthly retirement benefit, and are there any benefits to deferring the commencement of my payments?
(2) Do I qualify for any of my spouse’s, former spouse’s, or deceased spouse’s Social Security payments, and if so, under what conditions?
(3) Will my Social Security monthly income be reduced if I stop working in my late 50s or early 60s and wait until my late 60s to begin receiving Social Security benefits?
Individuals fully insured for Social Security can apply for retirement payments as early as age 62. However, if they choose to begin receiving benefits at age 62, their monthly amount would be permanently reduced. Delaying the start of their monthly Social Security retirement benefit increases the individual’s monthly payment by 7 to 8% each year they postpone their benefits beginning at 62 and continuing until 70.
Employees who will retire within the next eight years and are near their 62nd birthday are advised to delay obtaining Social Security benefits as long as possible (preferably until age 70). A guaranteed 7 to 8% rise in monthly benefits should keep up with the current cost-of-living increases. Married couples where both spouses are eligible for Social Security payments should seek counsel on coordinating their benefits. That covers which spouse should apply for benefits first and the choices available to the surviving spouse if the first spouse dies.
3. Even with the right to maintain FEHB health insurance, out-of-pocket health care costs will continue to rise.
After retirement, federal employees are entitled to maintain their FEHB health insurance coverage, with the federal government continuing to pay, on average, 72 – 75% of the FEHB program health insurance premiums. However, this doesn’t imply that a federal retiree can expect to pay the minimum out-of-pocket for health care during their retirement.
For instance, FEHB health plan rates, like other health insurance premiums, will continue to rise. Retirees are urged to enroll in Medicare Part A (Hospital Insurance) at no cost and Medicare Part B (Medical Insurance) with a monthly payment paid by the retiree (depending on the retiree’s income). If married, a federal retiree and spouse can reduce out-of-pocket health care costs by enrolling in an FEHB health plan and Medicare Parts A and B.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
Most Common TSP Mistakes During Bear Markets
/by jeff boettcherEven the most diligent investors have difficulties in bear markets. No two bear markets are identical, and the factors that affect them are often challenging to put together in real time. As a result, many investors struggle with portfolio decisions.
This article will go through the most common mistakes federal employees make when dealing with their TSP this year.
Neglecting Rebalancing
Whether due to forgetfulness or being paralyzed by indecision, not rebalancing quickly and appropriately during bear markets can cause issues.
If you’re approaching retirement, your portfolio should have enough liquidity to provide you with the necessary income for the foreseeable future. That’s less important if you’re still generating income. However, if you’re already retired and drawing on your portfolio, the need for low-volatility assets and cash increases. During bear markets, it increases even more.
When markets are turbulent, your capacity to generate cash in a sustainable mannerâ€â€keyword: sustainableâ€â€is hampered. That’s because volatility enhances the market’s short-term unpredictability.
What are the chances that if you need cash in 12 months or less during a bear market, the markets will have dropped even more by the time you’re ready to earn that cash? It’s higher, so you must plan for these cash needs ahead of time.
There’s one exception: if you have a taxable account (individual, joint, or trust), strategic rebalancing can result in considerable tax savings over time. As a result, the timing of your portfolio rebalances is critical. So, you may want to postpone earning income to align more closely with the added goal of achieving tax savings.
Being Too Cautious
This point has major cognitive dissonance. True, you want to protect your wealth during bear markets, but how long do bear markets last? Will you spend all of your money throughout this period?
We began prepping our clients for a bear market in January this year. Historically, bear markets run around ten months on average. Some are shorter, some longer, but they all have one thing in commonâ€â€they all come to an end.
Due to this, portions of your portfolio must be invested for the years following the bear market. In 10 years, you’ll most likely need your portfolio. Volatility between now and then is far less critical than volatility on the money you need between now and the end of this year.
We know it’s not easy, but try to divide your money into distinct piles with different jobsâ€â€some for satisfying your immediate needs, some for the long term.
Having a well-planned investment strategy ahead of time is quite beneficial in this situation. It frees you of the weight of decision-making when the gut takes over your brain. Investors attempting to forecast declines have wasted much more money than has been lost in the corrections themselves.
Transferring to the G Fund in Panic
Unsurprisingly, G Fund transfers are at an all-time high. Employees in the federal government are struggling as their portfolio values plummet. Transferring money from riskier assets to safer ones, such as the G Fund, helps to safeguard the principal against future decreases.
However, this type of transfer is a double-edged sword. It also prevents you from participating in the regrowth when it returns. Furthermore, if these transfers are made after experiencing losses, an investor may effectively make those losses permanent. We want to warn investors to avoid the “G Fund Trap.”
Not Planning Distributions in Advance
This mistake is closely related to the first. It’s vital to make a strategy for your expected cash needs, so you know how much cash you’ll need on hand. Meanwhile, you must also consider how you’ll obtain this money.
If you request a TSP withdrawal, your account will draw proportionally from any money contained inside. We just discussed how you want to make cash ahead of time so you don’t have to sell stocks after they’ve fallen even further.
Please reconsider if you intend to use the G Fund to meet your cash needs. The distribution request may trigger sales of other more aggressive funds in your TSP, potentially realizing investments when they have declined, thus, making those losses permanent.
The risk of sequence-of-returns occurs when the market declines when you need to withdraw funds. This risk is mitigated by not having to touch the falling investments. This feature of withdrawing distributions from all TSP funds presents a difficulty for federal employees who use their retirement portfolio to supplement their needs.
If possible, try meeting your cash needs using sources that don’t have this restriction. However, be cautious since having too much cash in your portfolio might put your money at risk of not growing quickly enough to maintain your lifestyle for the rest of your life.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
Government Employee Retirement Strategies
/by jeff boettcherAs a government employee, there are several ways to manage retirement for stable financial security well into your golden years. Aside from Social Security benefits and 401(k) plans, it’s essential to understand the federal retirement benefits made available to you, specifically as an employee of the federal government. Depending on your hiring date, you may receive coverage through a different retirement system than your peers. So let’s delve deeper to see what applies to you and how it will benefit your retirement.
Hired in 1984 and Beyond
Civilian service employees hired in 1984 or later receive coverage from the Federal Employees Retirement System (FERS). This program provides government employees with Social Security benefits, a Thrift Savings Plan (TSP), and a basic pension plan. The TSP comprises government contributions, matching, and voluntary employee contributions. These retirement benefits are structured as an annuity, depending on years of service, plan contributions, and the participant’s age.
Hiring Date Prior to 01/01/1984
Those who began working before January 1st, 1984, might have access to the Civil Service Retirement System (CSRS). This distinction provides older civilian service employees with disability, survivor benefits, and retirement. Unfortunately, you will be ineligible to receive Social Security benefits because your employer did not deduct Social Security taxes from your paycheck. However, you may qualify for some Social Security benefits if another employer employed you to earn them or qualified through a current or former spouse.
Contributing to a Thrift Savings Plan (TSP)
The TSP is a defined contribution plan that allows federal employees to determine the amount of money and the method they’d like to invest. Ultimately, the amount available upon retirement is up to you, utterly dependent on your financial determinations according to your plan. Additionally, a TSP is not available to FERS employees alone. A CSRS employee may also make contributions to a TSP. The most significant difference here is employer contribution eligibility, with FERS receiving another 1% of their salary toward contributions made by their employer.
Furthermore, those covered by FERS can also receive matching employer contributions by increasing employee contributions accordingly. Calculating your maximum contribution amount according to the available employer match will reap big rewards. This strategy will enable you to accrue the necessary years of service to receive the automatic 1% match. If you had a retirement account through a previous employer, you could also roll these funds into your TSP.
Investment Options
Depending on your risk appetite, TSPs provide several investment choices, including low-risk funds (U.S. Treasury investments), higher-risk funds (international stock investments), and beyond. A life-cycle fund is another investment composition that changes as you age. In doing so, this design meets retirement goals with minimal effort overall. Low expense ratios are just one of the many reasons to utilize a TSP. In 2021, for example, TSP participants paid around $0.42 per $1,000 in net administrative expenses depending on the fund.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Not affiliated with the U.S. Federal Government or any government Agency. Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured.
Working Longer Not the Only Way to Boost Retirement Funds
/by todd carmackSeveral strategies increase the amount of money available to pay for your retirement. In this post, we’ll examine two additional strategies: 1) continuing to work part-time after retirement; and 2) downsizing or relocating to a region with a cheaper cost of living.
You can work part-time after retirement if continuing in your government position is not an option because: 1) you detest it, or 2) you must resign by law. You can postpone applying for Social Security by working part-time, allowing it to increase to a higher sum. It will also keep you busy since not everyone adjusts well to having an extra 45 to 50 hours per week to fill.
If you choose to, nothing will prevent you from continuing to work full-time after retirement. Consider working at a job you enjoy, or that makes use of your existing skills.
Consider downsizing, moving to a region with a cheaper cost of living, or doing both if working after retirement is the last thing you want to do. This is ideal for people who have lived in high-cost areas for a long time and have built up home equity in the high six figures.
Additionally, you might not require as much space as you did when raising your children (in fact, reducing the number of bedrooms in your house is an excellent way of keeping your children from moving back in). Downsizing will result in savings even if you stay in the exact location. You will discover that expenses (such as taxes, utilities, and so forth) will be lower for your new, smaller home, in addition to the difference between what you paid for your previous home and what you received when you sold it.
You can increase your retirement income by moving to a region with a lower cost of living because you will spend less for a similar home and even less if you downsize.
According to statistics, most individuals do not relocate after retirement. Thus not everyone may benefit from the relocation strategy. A survey from Boston College’s Center for Retirement Research found that 17% of seniors move at the time of retirement, and a further 16% move later in retirement, usually when health issues dictate it.
Do you have to pay taxes on the capital gain you made when you sold your primary residence?
Due to the sale, you will likely owe little or no tax. You can shield $250,000 in capital gains from taxation if the house you sell has been your primary residence for two of the previous five years or $500,000 if you file jointly.
There are many ways to improve your finances in retirement, but if you’re still young and the methods we’ve covered here don’t particularly appeal to you, there is something you can start doing right away. That is, make as many TSP contributions as possible to ensure that there won’t be any income gaps when you retire.
Contact Information:
Email: [email protected]
Phone: 6232511574
Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.
Meet ‘AVA,’ a TSP change that affects more than just the investment window
/by mark heinrichWhile participants who satisfy specific criteria can invest a portion of their accounts in outside mutual funds, which has garnered the most attention among the planned reforms, the TSP is also emphasizing other new features, such as an artificial intelligence chat-bot known as “AVA.”
The TSP said in a statement detailing features coming in June that AVA will be available 24/7 through tsp.gov and an app to “provide a secure means to ask inquiries about your account and will even link you to a live Thrift Line agent through chat during work hours, when necessary.”
That will be one of the several ways the TSP will encourage more transactions online and through the upcoming app, including a new feature in “My Account” for messages, documents, and statements about the account, the option to opt-in to receiving text messages for transaction confirmations, and quarterly statements will be posted rather than mailed by default.
Almost all transactions on the website will be available on the app, including transactions, tracking investment performance, altering investment elections, and submitting specific forms and documents, according to the company. The software will allow users to log in using biometric controls such as fingerprints or facial recognition.
In addition to this, account holders will have a new ability to shift money from one or more specific funds to another particular fund or funds without affecting the balance of the account. Now, moving money already invested requires a new percentage allocation for all chosen funds.
Contact Information:
Email: [email protected]
Phone: 9187441333
Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.
Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.
Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.
Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564
Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402
Member FINRA www.finra.org / SIPC www.sipc.org
Broker Check http://brokercheck.finra.org/
An Overview of TSP’s Early Withdrawal Penalty
/by bill hoffIf you’re a federal employee leaving the government, you may have heard that early withdrawals from accounts like the Thrift Savings Plan (TSP) might result in penalties.
Penalties, especially levied by the IRS, should be avoided when possible. Let’s go through an overview of the early withdrawal penalty.
Background
So, let’s start. You’ve worked hard to save money in a tax-deferred account like a Thrift Savings Plan (TSP) all your career. You plan to use that money in retirement, but the IRS has set rules for when you can withdraw it. Remember, the IRS granted you a tax break when you earned that money. You know you’ll have to pay them eventually, right? When you earned money, they handed you the pass, but there were some strings attached as you can only access it at 59.5 years or later.
There are certain exceptions, and we’ll discuss them for the TSP. But first, let’s explain the IRS rule. A person who withdraws money from a tax-deferred account before age 59.5 will be charged a 10% IRS early withdrawal penalty. This penalty is in addition to any standard tax you owe.
TSP’s Special Rule
There are some special rules for the TSP. Federal employees who retire or leave federal service in the calendar year they turn 55 can take TSP funds without penalty.
First, note that the TSP doesn’t differentiate between retiring and separating. Either you work, or you don’t. Some things are allowed if you’re employed, and others if you’re separated or retired (of all the actions that TSP can do for you).
Next, let’s discuss if you retire “in the calendar year you reach 55.” If you turn 54 in October and want to retire at the end of the year, that won’t be the calendar year you turn 55. That year, you turned 54. To avoid a penalty, you must wait until the following year.
This exception, the TSP’s special rule, only applies to funds straight from the TSP. You can’t move money from the TSP to a private IRA and then obtain a dividend from it. You’ll be penalized if you do so. Special provisions employees, like police enforcement officers, firefighters, and air traffic controllers, have a special age of 50, not 55. You can retire considerably earlier than the usual government employee. Therefore they’ve made an exception for you if you fit into one of those categories. Everything else is the same.
Who’s Affected
Employees with regular retirements are exempt from any penalty. Regular retirement is when employees have reached their minimum retirement age (MRA) and have the required years to go. They include those who aren’t special provisions employees, law enforcement officers, firefighters, or air traffic controllers.
A penalty may be imposed on an employee who retires early. That’s where a job vanishes—someone retiring under deferred retirement regulations, unable to collect their pension immediately. Then there’s the special provision workforce. So even though they have special rules, they may still be penalized. We’ll explain how later.
Triggering the Penalty
There’ll be different rules if you do or don’t fulfill these special rules, and you trigger the penalty. So, let’s look at a few scenarios.
If you’re under the age of 59.5 and don’t meet the special rules, you’ll be penalized regardless of whether you take your money immediately from the TSP or roll it to an IRA and subsequently take it. You can roll the entire account into a private-sector IRA or keep it all in TSP. Any money taken before age 59.5 will be subject to a penalty.
If you’re under 59.5 and meet the special rules, you’ll enjoy penalty-free access to your TSP money until you turn 59.5. Don’t forget that when the funds touch an IRA, they lose the special rule allowed by the IRS.
Moving TSP Money to an IRA
Don’t worry. There’s a way to move some money to an IRA without penalty. Assuming you have money in the TSP, you know that moving the entire account to an IRA will result in a penalty on any withdrawals made before 59.5 years of age. The key is leaving enough money behind to cover the time between separation and 59.5. You can put the rest in an IRA and let it grow and do its thing. Just don’t touch it till you reach 59.5.
You can get the best of both worlds if you do as mentioned above. You can avoid paying the penalty on the money you take from the TSP. And with the private IRAs, you get all the flexibility and control. The trick is to wait until you’re 59.5 or older to get the money.
Other Options For Avoiding The Penalty
There are alternative ways to avoid the penalty inside the TSP. For example, if you’re a disability retiree, it has to be a total and permanent handicap; you won’t also be penalized if you withdraw your TSP in particular ways, like taking a TSP annuity which is not recommended for many reasons.
Another alternative is if your deductible medical expenses surpass 10% of your adjusted gross income or if you prefer to have your money paid in substantially equal installments. It can be straight from the TSP or from an IRA. Getting those payments out, not in a monthly form that you choose, but allowing the entire account to be calculated as if it was paying you out throughout your lifetime, would be enough to avoid the penalty. The downside is that you could face a total penalty if you change your mind.
Assume you depart the federal service at 55 as a regular employee. In this case, if you decide to make these substantially equal payments and have the TSP calculate your monthly payments but not annuitize them, and then at age 58, you decide to change your mind because you’re not getting enough income from your TSP, they will assess the penalty as if you hadn’t done anything properly from age 55 to 58.
Contact Information:
Email: [email protected]
Phone: 2178542386
Bio:
Bill and his associates of Faith Financial Advisors have over 30 years’ experience in the financial services industry.
He has been a Federal Employee (FERS) independent advocate and an affiliate of PSRE, Public Sector Retirement Educators, a Federal Contractor and Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
Bill will help you understand the FERS Benefits and TSP withdrawal options in detail while also helping to guide you in your Social Security choices.
Our primary goal is to guide you into your ment with no regrets; safe, predictable, stable and for life using forward thinking ideas and concepts.
Bullet points:
> Financial Services consultant since 1984
> FERS independent advocate and an affiliate of Public Sector Retirement Educators (PSRE), a Federal Contractor and Registered Vendors to the
Federal Government
> Affiliate of TSP Withdrawal Consultants
> His goal is to guide individuals into retirement with safe, and predictable choices for stability using forward thinking ideas and concepts.
How Are Investment Options Going To Expand In Federal Retirement Savings Program?
/by bill hoffFederal and military employees will soon be able to choose from a wide selection of new investment alternatives for their retirement savings plans.
The Thrift Savings Plan (TSP) administration said it would open a long-planned mutual fund “window,” enabling participants to access some 5,000 products provided by approximately 300 mutual fund companies and the index-based funds that TSP itself provides.
Some financial consultants who have coached government employees regarding their TSP funds have emphasized that the opportunity should be taken with prudence.
Underwork from Years
The TSP had more than 6.5 million account holders and $740 billion in investments, thanks to a law implemented in 2009 that authorized more expansive options for TSP. In addition to additional web services and security precautions, the TSP’s operational platform is being upgraded to include a mobile app.
To participate in the mutual fund window, investors must have at least $40,000 in assets, and no additional investments can exceed a quarter of an account’s total value, which is why only those with at least $40,000 in investments will be eligible.
Current and Former Federal Workers
Only roughly 350,000 of the almost 2.5 million current and former military people with accounts in the TSP have balances over that level.
There are also yearly fees of $150 and $28.75 per trade for mutual fund users due to a 2009 law that mandated that they pay for the fund window’s operations.
Funds Tracking Stock and Bond Indexes
This is the TSP’s standard lineup of 5 funds that track broad stock and bond market indexes and funds that can be diversified by the predicted withdrawal date. There was a significant increase of choices before the approaching transition, including expanding the number of target-date funds from 5 to 10.
Over the years, several pieces of legislation have been filed in Congress to expand the TSP’s investment options or eliminate specific enterprises from its portfolio. As a result of political resistance, the program withdrew its original 2020 proposal to expand its fund monitoring overseas equities to cover markets in around 24 different nations.
How to Access It?
It will be available to investors who fulfill eligibility requirements and will contain a screening tool that allows users to choose mutual funds fitting their criteria, including what the funds invest in and how much they charge for their services.
So, it was all about the investment options that will expand in the federal retirement savings program. Ensure you have read this post completely so you don’t miss anything.
Contact Information:
Email: [email protected]
Phone: 2178542386
Bio:
Bill and his associates of Faith Financial Advisors have over 30 years’ experience in the financial services industry.
He has been a Federal Employee (FERS) independent advocate and an affiliate of PSRE, Public Sector Retirement Educators, a Federal Contractor and Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
Bill will help you understand the FERS Benefits and TSP withdrawal options in detail while also helping to guide you in your Social Security choices.
Our primary goal is to guide you into your ment with no regrets; safe, predictable, stable and for life using forward thinking ideas and concepts.
Bullet points:
> Financial Services consultant since 1984
> FERS independent advocate and an affiliate of Public Sector Retirement Educators (PSRE), a Federal Contractor and Registered Vendors to the
Federal Government
> Affiliate of TSP Withdrawal Consultants
> His goal is to guide individuals into retirement with safe, and predictable choices for stability using forward thinking ideas and concepts.
5 Common Federal Employees Retirement Regrets You Should Know Today
/by mark heinrichHave you ever asked how federal retirees are coping with lesser income after retirement? Most federal employees admit that they struggle financially after leaving their workforce because then they earn less compared to their working days.
Here is a list of the five common things retirees wish they had known before they retired. You should make the best use of this list while planning your retirement.
1. Use Roth TSP for your retirement savings
The major complaint from retirees relates to their retirement savings accounts. Most retirement savings accounts make your retirement assets taxable whenever you take distributions. Not saving in a Roth IRA should not affect your retirement, but no retiree regrets saving in Roth TSP and Roth IRA.
You will benefit more during retirement when you have access to several taxable buckets. The three major tax buckets include income tax-free, taxable, and tax-deferred bucket. You have more taxable income control when you have the three major tax brackets. If you retire with these buckets, you will also save more taxes for life.
Some retirees may not prefer Roth TSP, but having a tax-free income fund after retirement is incredible.
2. Talk with a financial expert.
The fact that all kinds of financial information are available on the internet does not make all information suitable for use. Finding the most relevant information may be challenging if you don’t know about finance. However, you can easily develop your retirement plan and evaluate your retirement goals with financial advisor assistance.
Young federal workers don’t need asset management help, but the following financial advice may be helpful. The advice includes:
• How much TSP savings is enough for retirement?
• Should they use HSA or not?
• The right time to retire.
• Which TSP is best? Roth TSP or TSP?
• The best life insurance policy.
The advice can cover different aspects while answering other questions. You should talk with a financial expert soon if that is beneficial.
3. Save for retirement early
Building a greater nest egg for your retirement usually depend on your retirement savings. The earlier you start saving, the more money you will save. If you start saving when you are young, you have a higher chance of having more investment than those who start saving when close to retirement.
Federal employees retiring in a few months or years will like to maximize their TSP. Although this act is not bad, such money will have little growth due to the short interval between the saving period and retirement.
4. Leave the TSP
Some employees leave or change their Thrift Savings Plan (TSP) investment because they don’t want to take more risks. This decision is usually based on feelings, and they eventually move their funds from stocks into the G fund.
You need to understand how stocks work and their emotional influence if there is a market decline. However, most retirees with a higher TSP balance invest their funds in stocks without making any change.
5. Abandon FEGLI
FEGLI start to increase as employees get older. Most federal employees are unaware that the FEGLI increases as they get older. Different FEGLI options have varying increase rates, but option B has the most worrying increase rate if it passes beyond 60. Because of this increase, seniors will want to get rid of this insurance.
If you are a federal employee with a good health record, getting your insurance policy earlier while starting your career will be best. With this, you can save a considerable sum of money over your career period.
Some federal retirees have regrets because they are unaware of these five common things they wish they had known earlier. Take your time to evaluate this list, and identify the changes you need to make to avoid such regrets.
Contact Information:
Email: [email protected]
Phone: 9187441333
Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.
Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.
Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.
Disclosure:
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Why TSP Is The Way To Go by David Chan
/by David ChanWhy TSP Is The Way To Go
By David Chan
Thrift Savings Plan aka TSP, is similar to a 401(k) but one that the government provides to all the federal employees. The TSP plan is a perfect fit for people who want to save but don’t like the hassle other ordinary savings plans possess. Let’s take a look at why exactly it is what you might be in need of:
The Quick Breakdown
Diversification:
TSP has a diverse choice of funds. Through it, you can get your hands on government bonds, various indexes and even the S&P 500.
Low Fees:
Many of the funds have a low cost attributed to them and have become a great choice over many other funds in the marketplace. However, there’s also room for alternative options.
Roth option for IRA:
In 2012, the Roth feature was added for TSP accounts. Roth TSPs are a great option when considering your entire investment strategy. There are options for tax-free withdrawals and after tax investments. Of course, always consult with a professional first before you take any withdrawals.
Summary
The TSP is a great retirement vehicle. It is one of the most popular investment programs you have available as a federal employee. Of course, don’t discount the help and advice of a professional you can trust. Whether it is to ask questions about your investment options or if you are now preparing to retire, a planning professional who knows and understands your options are vital.
Contact David Chan:
Phone: (510) 440-7110
Email: [email protected]
More David Chan Articles:
Article: Finding the Balance with TSP Contributions with David Chan
Article: How to Utilize the Soaring TSP by David Chan
Article: Utilizing Your Thrift Savings Plan: 7 Tips by David Chan
TSP Funds Show Positivity in March 2016
/by AdminThe TSP funds, which are a preferred retirement saving option of the federal employees has been far too close to the red line. The investors have been waiting for some good news since last 3 consecutive months. The hope of the investors proved to be right when TSP funds became positive in the month of March. All the funds saw an increase for the month of March but the growth of the funds in the year 2016 was not positive for all the funds.
Details of the TSP Funds Growth
All the TSP offerings grew in the last month. The S fund grew to 8.24%. This fund is mostly invested in the stocks of mid-sized or small companies. Unfortunately, the growth was not able to erase the damage done in the past few months and it was down by 0.7% for the year 2016.
The C fund that includes all the common stocks saw a growth of 6.79%. It was up by 1.37% for the year. International stocks also gained 6.59% in March and yet they were down by 2.24% for the year 2016.
The F fund gained a very low boost during the last month when compared to its peers. It was just up by 0.93%. The growth of this fund for the year has been 3.13%. This fund has only the fixed income bonds. The G fund that implies government securities fund was the fund that achieved the lowest growth. It grew by just 0.15% in March which took its overall growth till now to just 0.49%.
L Funds Proved to be the Constant Positive
The L funds had a good growth too. This fund is designed to help move the investors to a portfolio that is slightly less risky. The L Income which is meant for people who have already started with the process of withdrawing their money saw a growth of 1.53% in March. Other L funds also grew slightly. L 2050 saw a growth of 5.94%. L 2040 grew by 5.25%. L 2030 had a growth of 4.54%. L 2020 grew by 3.35%.
A good thing for the TSP investors who have invested in the L funds is that all the L funds have managed to stay in the black till date for this year. L income growth has been 0.62% till date. L 2050 grew by 0.15% till now. L 2040 has grown by 0.3%. L 2030 saw an increase of 0.39% and L 2020 of 0.47%.
How Do TSP Investments Compare? by Paul Kalra
/by Paul Kalra
Paul Kalra is a financial planner and federal retirement expert in Lake Forest, California.TSP Investment Advice from Paul Kalra
Despite the roller coaster stock market over the past few years, it seems that, on average, the account balances in the TSP (Thrift Savings Plan) appear to be going up. The participants who assumed more risk – or at least those who seemed to do so – by going with the S and I funds, attained a return of just under 5% for the first half of 2015. And, those who stuck it out with a bit more volatility in foreign stocks were rewarded with just under a 6.5% return during the same time frame.1
By almost year-end 2015, FERS held an average balance of nearly $117,000 in their TSP plan, with an average Roth account balance for these same individuals of just over $7,100.2 If you are a CSRS employee, the average was closer to just under $119,000 in the TSP plan, with a Roth balance of just a tad over $11,500.3
How is the Money Distributed?
In terms of where the funds are being distributed by TSP plan holders, there seems to be a larger percentage of allocation being placed in both the G Fund and the C Fund, at 35% and 28% respectively.4
The remainder of the TSP fund balances sort out as follows (as of November 2015):
- L Funds – 17%
- F Fund – 5%
- I Fund – 5%
- S Fund – 10%5
Tracking Your TSP Investments
If you have money invested in the Thrift Savings Plan and you want to see how you’re doing – or even if you just want to check a hypothetical example – Check out the Thrift Savings Plan official page for information on TSP Fund prices and historical performance.
More about Paul Kalra, CFP, ChFC, CLU:
Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.
In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.
Making the Most of TSP Contributions by Paul Kalra
/by Paul KalraThrift Savings Plan (TSP) Advice from Paul Kalra
Paul Kalra, CFP, ChFC, CLUIf you are a FERS (Federal Employees Retirement System) employee who contributes to the TSP (Thrift Savings Plan) each year, there are some important things to know when it comes to making your contributions. This is because maxing out your deposits too early in the year could actually put you at risk of losing some of your matching contributions.
Each year, the government can contribute up to 5% of your salary to the TSP plan in a number of different ways. These include:
- Agency automatic 1% contributions
- Dollar-for-dollar contributions (on the first 3% of pay that you contribute)
- 50 cents on the dollar (on the next 2% of pay that you contribute)
While it is a good strategy to obtain as much of the employer matching as possible, because there is an annual limit on TSP plan contributions, by “maxing out” your annual contributions too early in the year, employer matching contributions can be lost by not making any deposits after the plan has met its annual contribution limit.
Things to Consider
When it comes to making your annual TSP contributions, there are several important factors to consider. For example, you need to be aware of when you actually reach you annual contribution limit for the year. This is because when this limit has been reached, your employee contributions into the plan must be suspended for the rest of the year. In fact, the TSP system won’t even allow any contribution by an employee to be processed if it will cause the total amount of deposits for that year to exceed the annual limitation.
In addition, if you have reached your annual contribution limit prior to year-end – and further deposits have been suspended – this also means that agency matching contributions will also be suspended. This is because these contributions are based on the amount of contribution that an employee makes into the TSP in each pay period. Therefore, if you aren’t making any contributions, then there won’t be anything to match.
It is important to note, however, that if you are a FERS employee, your agency is still required to make an automatic 1% contribution – even if your employee contribution and agency matching contribution has been suspended.
More about Paul Kalra, CFP, ChFC, CLU:
Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.
In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.
Why should every young person rely on TSP?
/by Admin
TSP which is better known as Thrift Savings Plan is a long-term retirement plan that helps you to retire in comfort. As a part of this scheme, you are allowed to invest a certain amount of money from your individual funds (F, G, I, C and S) and get it back when you retire. You also have the option of choosing whether you want to pay tax on the money you are investing now or you can choose to pay it when you finally withdraw it from the amount.
Choosing TSP at a Young Age – Wise or Foolish?
If you are wondering that why anyone should choose TSP at a young age, then here’s a list of reasons that may be useful.
- Saves You from Stress– The first reason is quite obvious. If you invest in a good investment plan now, you will not have to worry about your finances a lot. The money you are investing in this scheme would always be there to help you when you are old and need money for your day to day expenses.
- Career Liberty– When you invest in this plan, you would have the liberty to choose any career path you might like. There will be no restrictions on staying to only a single career path with this scheme. So, no pressure of keeping your job will be there. If keeping a job or straight career path has become tougher for you in the current global economic conditions, it’s the right time to think of an investment plan like this.
- Low Costs: This scheme is also very low cost. The TSP C fund charges only a fee of 29 cents per 1000 dollars invested by you. People who are not too fond of investment schemes that have an exorbitant fee should opt for this scheme. Young people should especially be fond of the low fee because when you are young, the fee may not matter much but when you get old, you will be proud of your decision of saving every penny.
To conclude, it can be said that TSP is really useful for young people as it provides many benefits with low risks. If you are willing to explore more about this plan, you should take help of an expert before deciding the amount of money you can invest so that your financial position stays comfortable. After all, it’s not wise to live too scarcely in exchange for enjoying the financial benefits at the time of retirement, is it?
For TSP investors, the Stable G fund was in the lead in 2015
/by Matt Pierce
The SI or the stable investment fund or the Government securities fund ( G Fund) is considered the most conservative choice for all the investors out there because it normally has the best returns and 2015 was no different for it.
G fund had the best returns:
Specifically, the G fund gained around 2.04 percent for the whole year while other funds that were linked to bond and stock indexes normally saw a lot of ups and downs for all the 401 (k) style program (for military and federal employees) investors.
We all are aware of the fact that the G fund is indeed the largest of the offerings made by TSP and it held around 35 percent of the 463 billion dollars that were on investment at the end of November last year; the month past which we don’t know anything.
The G fund is invested in a variety of government securities that make yield returns that are identical to those made by mid length government bonds. The reason why the losses don’t increases as the interest rates rise for it is the specific way the investments are made. The risk of enduring loss with respect to principal is considerably low.
After G fund came the C fund, which is also known as the common stock fund; it gained around 1.46 percent in 2015. The fund is responsible for tracking the S&P’s 500 index of all the large US firms, was responsible for holding around 28 percent of all the investor assets through and till the end of November.
The trends are estimated to be similar once we examine the results after the end of 2016 but if the interest rates go further up, we might have to see some deviations in the charts come the end of another fiscal year.
