GovExec Daily: How to Plan For Your Retirement

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Ross Gianfortune
This is GovExec Daily, where we bring you the federal stories that really matter.  It's July 25, 2022 . I’m Ross Gianfortune.

Federal employees have to make a lot of important choices while working in order to have a successful and pleasant retirement. No matter where they work or how old they are, feds know that a lot of decisions need to be made before federal employees retire. Some of these choices can have lifelong consequences and should be carefully evaluated.

On GovExec Daily, we bring on experts to examine some of the ways that public servants can use information to inform their decisions about the TSP and other financial issues that will shape their retirement.  After a short break, you’ll hear some of the information about retirement that we’ve heard over the last year on GovExec Daily.

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Ross Gianfortune
The COVID-19 pandemic has certainly changed the way that retirement is done in the federal government. For one, many feds have reevaluated their relationship with work and their retirement timeframe. But, the bigger issue is the already-lengthy processing times for requests at the Office of Personnel Management have increased. Our guests were quick to note how important patience is right now.

Tammy Flanagan writers the Retirement Planning column on GovExec.com. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She spoke to GovExec Daily last year about the pandemic’s effects on retirement strategies.

Tammy Flanagan
With everyone teleworking, things have slowed down a little bit there have become more backlogs, there's more people leaving. So all of this means have cash on hand, you know, if you can possibly have six months of expenses on hand, you know, you won't worry as much you'll feel a little bit more secure. If things do take a month or two longer. You know, keep in mind that retirement is still a paper process. We're not doing these, these processing actions electronically. It's all manual. So someone's sitting with a stack of papers in front of them. If you have things that are going to complicate your retirement like a divorce decree that splits your retirement with an ex spouse or you might have maybe a lot of part time work in your career that causes a little bit more of a manual calculation. You have to allow time for that in addition to the typical backlogs we're seeing right now,

Ross Gianfortune  
Erin Carter, Director of Programs at the National Active and Retired Federal Employees Association, works with public servants and retired feds. She echoed the call for patience and to save money in anticipation of wait times.

Erin Carter
I think that folks who are approaching retirement need to have a realistic frame of mind and know that this is not going to be a short process. We are recommending that everybody has at least six months worth of finances saved and that is at least six months. I'm working on a couple of cases now with North members who are going into the eight month territory and their retirements have not yet been finalized.

Ross Gianfortune    
Jason Howell is an adjunct faculty member at George Mason University and a Certified Financial Planning professional. He outlined the connection between freedom, knowledge and retirement on our show in April.

Jason Howell
There's a saying:  “awareness gives you choice, choice gives you freedom.” If you ask most people, that's what they're looking for. And so many people take the opportunity early in life to reach after what folks call financial freedom, but it's really, you know, life freedom.

Ross Gianfortune    
Carter emphasized the complexity of the federal retirement process shwen she noted that public servants need to do their due diligence before submitting any paperwork. 

Erin Carter 
The first thing I would recommend is they take the time to really read all of the forms, including all of the instructions, you know, some of the questions or have circular in nature, where one question down at the bottom of the form might refer to a question at the top of the form. So being aware of what that question is really asking, and then answering it, understanding the elections, like things like the survivor benefits that have very lasting implications, some of those decisions cannot be reversed. So knowing what you're really signing up for is key. And then to take advantage of the services offered by your agency, if they have retirement classes. And, you know, things along those lines, definitely participate in those double and triple check every entry on the form to make sure that every question that should be answered is answered

Ross Gianfortune  
Knowledge is power, especially within the Thrift Savings Plan. Bryon McGannon is the Director of Policy and Programs for US SIF and he told the podcast that participants need to have knowledge to plan for retirement.

Bryon McGannon 
Participants in the thrift fan need to understand what they're doing first, and be really, you know, aware and understand what they're the investments that they may be looking into. But I think this is a really, really important step, especially for sustainable options that now, retirement savers in the largest retirement plan in the world, to be able to have some of these other choices. And I think, you know, the more I think the federal employees know about the the initial form, and the more excited they'll get about it, the more they'll look into it and kind of just poke and I think that's good for them to take your time to kind of understand what, and be able to find options that are good for their retirement,

Ross Gianfortune  
Carter emphasized the importance of getting the proper amount of match money in the TSP while working for the government.

Erin Carter  
I think another opportunity very often overlooked is the agency match to the TSP. My parents who were both federal employees themselves, always preached to us that we have to maximize the employer match with our 401 K's. And they said, if you start doing that, when you're younger, you get used to it and you don't miss it. And it would be really it would be a shame to miss out on any of those matching contributions that could have an impact on on your retirement. You know, health and longevity of funds available.

Ross Gianfortune   
Retirement is a big deal and planning for retirement shouldn’t be taken lightly. Dallen Haws is a financial planner and host of the Haws Federal Advisors YouTube channel and podcast. He noted that even TSP investors need to have a goal in mind, like all of us, when planning for retirement.

Dallen Haws 
it all comes down to when do you need the money? And you have to have a long term view. If you view investing in how do I have the most money possibly in the next six months? Then you're just going to kill yourself over and over and over again. You have to okay, what's the goal? Is the goal to just be safe now in the G fund? Or is the goal to have an incredible retirement to have as much money and freedom later? Which one is it you can't have both? You have to pick and you have to prioritize your goals and your investing based on what you're trying to do. And for most people, they're trying to optimize their retirement. And yeah, we'd love to have as much now to that sometimes you got to pick and pick an investment strategy that's going to optimize for you what you really care about.

Ross Gianfortune 

Thanks for listening to GovExec Daily. Our show was produced by Adam Butler and hosted by me, Ross Gianfortune. Our music is the song “Signals” by Catfish Dancing. Be sure to rate, review and subscribe on Apple Podcasts or Google Podcasts or wherever you get your podcasts. You can email us any feedback at podcast @ govexec.com or hit us on Twitter @ Govexec. 

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https://www.govexec.com/pay-benefits/2022/07/govexec-daily-how-plan-your-retirement/374816/