In my first article in this series, I requested that readers send me their burning questions on federal retirement benefits. I have been blown away by the massive response. Thank You!
I obviously won’t be able to answer everyone’s questions, but I will focus on the questions that appear to have the most common interest.
The primary questions asked were ones seeking information on topics such as:
- Federal Pension information and calculators.
- Social Security info. (A large assortment of questions on this subject).
- How much should be put into the Thrift Savings Plan (TSP)?
- What choices should be made inside and outside the TSP?
- Am I on the right path to retire when and how I desire?
In this second article of my five part series, I will provide more details on where to go to find answers to these various questions.
Note: I will openly acknowledge that I am not able to put every possible resource in this article. Instead, I will try to cover the resources that I believe will provide the greatest amount of assistance to the greatest number of readers. I apologize if I missed something that you think I should have covered.
Where can you find information about federal pensions?
- One major source that is available to all Feds is the Office of Personnel Management (OPM). If you are CSRS, learn about the ins and outs of your federal retirement, and for FERS. What can be learned on this site? Let me tell you, it is a virtual cornucopia of valuable retirement info: eligibility, what is considered creditable service, survivors, service credit and how to apply for retirement are some of the topics covered.
- Another good resource for many is your HR department. Some readers that responded to the first article said that HR is a little difficult when it comes to providing requested information, especially since many of them have merged offsite. Before you give up on them at least give them a shot. I know a number of these folks and they have a real desire to help as much as possible.
- Lastly, an experienced wealth advisor that deals with federal retirement on a daily basis. I am quickly learning, from many of the questions/responses submitted, that my species travels in small packs and are hard to track down. So, I have already decided that I will tackle this issue (finding qualified, licensed, advisors that are fluent in Federal retirement income issues) in the next article in this series. So, watch for it.
Where can I find info I need about my Social Security retirement income benefits?
The obvious answer is SSA.gov. Here you can learn about:
- Government Employees
- Supplemental Security Income
- Retirement Estimator
And a whole lot more. However, anyone who has tried to make sense of SSA retirement income benefits knows that it can be akin to trying to solve a puzzle wrapped in an enigma and shrouded in a riddle. There are numerous occasions when figuring out SSA income is some pretty heady stuff. If you have a hard time figuring out your specific needs, call SSA directly at (800-772-1213).
How much should be put into the TSP?
There isn’t anywhere to go that can tell you (precisely) how much you should be putting into your TSP/retirement accounts. However, there are calculators that can tell you how much to put in (now) to achieve an estimated value at a specific time in the future. Think of it as kind of a ballpark approach.
The Thrift Savings Plan has such a savings calculator. Remember, even if you can’t put in as much as you the calculator has suggested to meet your goals, put in as much as you can. You may find later in life that you are able to play catch up. Anything you put in now will make future catch ups less painful.
Where can I find out how I should be invested in my TSP and outside my TSP?
The answer to this question is the “Holy Grail” of investing! The trick is to find the right investments to create a balance between:
- Your retirement (financial) goals.
- Your retirement dreams and desires.
- The amount of time between today and the day you will start using the money.
- Your comfort for losing (risking) money.
There are numerous calculators that attempt to find the right investment options in the right proportions. The problem is that most of them pigeon-hole users into somewhat prejudiced and vague “term based” categories. Example: If you are older, you must be conservative with your investments or if you are young, you must be aggressive with your investments.
I don’t care for these term-based calculators. (Terms such as aggressive, conservative, moderate)
- I provide a free number based calculator on my website. It gives each person an individualized numerical score (kind of like a credit score) that is much more precise and is based on Nobel Prize winning framework. You can complete a VERY short questionnaire that will provide a “Risk Fingerprint.” Your fingerprint will show how you should be invested in your TSP. Note: You must be totally accurate in your answers or you won’t receive an accurate score…garbage in, garbage out!
- gov also provides a brief article on “Choosing your investment mix.” It may help you understand why picking the right mix is so important.
Are you on the right path to retiring when and how you want?
- Not to sound redundant, but, that is a major component to an advisor’s analysis and advice. It may also be beneficial to have your advisor work with your accountant/CPA to help with this question.
- The number based calculator I previously mentioned is also a good starting point for this question.
- You can use the different calculators on TSP.gov to give you some ballpark ideas. They offer, among other resources:
In the next article, I will cover where to find professional investment help. Please continue to send your federal retirement income benefits questions.
The following are links for anyone interested in learning more about the book (You FIRST) I published or past workshops.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, member FINRA/SIPC.