Federal Retirement

Image Contributor: Anthony Ricci

As a federal employee, you have spent years in your career and want a comfortable retirement. But it’s often tough to find advice in this area that fits your situation with government employment.

If you read the newspaper or surf the web, chances are you have come across some articles with retirement advice. For many people, these insights can be quite helpful: catching up on retirement savings, estimating how much retirement income that you will need, deciding when to retire, and so on.

But in many cases, these insights don’t matter as much to federal government employees. In fact, a great deal of the advice may not apply at all. Why?

Federal Employees Need Tailored Retirement Guidance

As a government employee, you need information that covers your unique federal employee benefits and they fit into your financial picture. One big question: how you can optimize your employee benefits for a comfortable and secure retirement after you separate from service?

It’s important to be able to answer questions such as this, so that you can make confident and well-informed decisions for your family and yourself.

Here’s a few reasons why generic retirement planning advice doesn’t cut it for federal employees – and, instead, how tailored guidance can make a world of difference for their unique employee benefit programs.

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The TSP Modernization Act has finally arrived. With it comes a host of new rules designed to give plan participants more freedom with taking distributions from their TSP accounts.

The new provisions have greatly expanded the withdrawal options that are available to TSP retirement savers under various circumstances. These provisions came into effect on September 15, 2019.

TSP investors haven’t wasted any time in taking advantage of these new rules. In the weeks following the release of the new rules, there were about 5,000 distribution requests in the hopper.

It’s not clear whether the avalanche of new requests is a show of accumulated demand or just that participants are willing to explore the new rules. But the number of requests is likely to continue at this rate for the foreseeable future.

The act has given the Federal Retirement Thrift Investment Board until November of 2019 to make the necessary changes in order to facilitate the new rules. Read More

While many private-sector workers build their nest eggs through 401(k) plans, federal employees and members of the uniformed services have their own retirement savings and investment plan. This is called the Thrift Savings Plan (TSP).

With more than 5 million participants and close to $500 billion in assets, the TSP is recognized as the largest defined-contribution retirement plan in the world.

This fall, TSP plan participants will see significant changes to their withdrawal options.

Many participants have been asking for expanded options. But it took the TSP Modernization Act, which Congress passed and the president signed into law in November 2017, to make them a reality.

Starting November 15, 2019, after two years of planning, the Federal Retirement Thrift Investment Board (FRTIB), the agency that administers the TSP, will offer new options.

These new additions and changes are designed to give plan participants and plan retirees more choices for withdrawing their investments. Read More

If you are an employee of the U.S. government, then you and millions of your colleagues have access to the largest life insurance program in the world: the Federal Employees’ Group Life Insurance Program (FEGLI). It’s one of a number of employee benefits available to the federal civil service.

Created in 1954, FEGLI provides group term life insurance that may serve several purposes.

Federal employees depend on FEGLI for many reasons in the event of untimely death: income replacement, death benefit protection, coverage for debts or expenses that may overwhelm survivors, financial safeguards for young families, and other benefits.  

FEGLI often features a lower requirement for participation compared to other life insurance policies. For private-sector group life insurance – or just personal life insurance coverage in general – people are often required to undergo a medical examination or to meet other eligibility criteria. Read More

Are you part of the majority of federal civilian employees in the Federal Employees’ Retirement System? Or maybe you are a member of the uniformed services. If so, you probably have access to the Thrift Savings Plan, one of the workplace benefits that people receive as United States government employees.  

The Thrift Savings Plan (TSP) is a 401(k) like plan for federal workers. It allows you to contribute to your retirement fund and receive a matching contribution from your federal agency.

According to recent statistics, over 5 million people participate in the TSP, which has more than $500 billion in assets under management.

One common issue for many federal employees is they don’t understand their TSP accounts and what it can offer them. If you find it hard to navigate, no sweat. Here’s a quick rundown of some must-know facts about your Thrift Savings Plan account that can be of benefit. Read More

As a postal or federal employee, you have high-quality federal benefits. In time, they will play directly into your retirement, whether you will be eligible to retire in the next 15 years or are a new career hire.

Among your many benefits are programs that directly affect your financial future. Tax-advantaged retirement savings plans, guaranteed-pension payouts, and cost-efficient life insurance coverage are just a few of those programs.

Your challenge is to ensure that you maximize what is available to you. Making smart choices early will help you reap rewards for the rest of your life. So, it’s important to weave your federal employee benefits into your complete financial picture to set yourself up for the most successful retirement possible.

To get there, you need to avoid the mistakes some federal employees make with their benefits and retirement planning. These slip-ups can cost you tens of thousands of dollars in lost benefits. And what’s more, once these mistakes are made, they can’t be reversed or changed. Read More

Editor’s Note: This article is not intended to be and should not be used for tax advice. We have published this to be a source of information and for educational purposes only. Please consult with a qualified tax planning professional for guidance with your personal circumstances.

Update: In November 2017, Congress passed the TSP Modernization Act, which gives Federal Workers more flexibility with their plan withdrawal options. While the legislation has been passed, the Federal Retirement Thrift Investment Board is in the midsts of adapting new policies and procedures into its publications and websites. You can read more about that here. Some of the information below may be subject to change with these new procedures and policies.

As part of the federal civil service or the uniformed services, you may participate in the Thrift Savings Plan (or TSP). According to the Thrift Savings Fund, there were 4.8 million plan participants and approximately $458 billion in plan assets under management, as of December 2015. But while millions of federal employees rely on the plan, many are confused about their TSP distribution options for retirement.

In retirement, you will need access to your money for income. However, it’s prudent to be aware of all implications before you start taking money from your account. The Thrift Savings Plan has a unique framework for withdrawals. Making a withdrawal before knowing everything involved can greatly affect your future money access options.

Here are some basics on different distribution options you may have with the Thrift Savings Plan. Read More