Interview transcript:

 

Terry Gerton We’re sitting here after weeks of uncertainty and missed paychecks during the government shutdown and a lot of people are probably feeling kind of anxious about their finances. How does that stress from just day-to-day situations spill over into how people make decisions about investments?

Art Stein Well, stress and emotion make a big difference in how people make their investments. And with the TSP, it makes a big difference in how much people are putting in the stock funds, which are the C and the S and the I funds, and then how much they’re putting in, well, especially the G fund, which is a short-term bond fund, really, it’s more of a cash account. And you know, what I’ve seen time and again for 30 years is that when the stock market crashes, federal employees and retirees tend to get disgusted and move money into the G fund. And the problem with that is, there’s never a good time to take it out of the G fund and reinvest. Usually they’ve made that move after the market has declined and frequently don’t get back in until it’s gone back a lot. So really what we caution our clients to do is to set an investment plan. And part of the investment plan is to know what you’re going to do when the stock market does crash. Because inevitably it’s going to. We don’t know when. Stock market crashes average about one every four years or one every seven years, depending upon the time period, or somewhere in between. But they are a regular part of the market cycle. And what we mean by a stock market crash is that a particular stock market like the S&P 500, which is the basis for the C fund, goes down 20% or more from a previous high. And that’s also called a bear market. A bull market is when, let’s say, the S&P 500 increases more than 20% from a previous high. And people really avoid investing in stocks or putting too much money in stocks because they fear the bear markets, they fear the crashes, they don’t like the volatility. But we’re always having volatility in any market except a bank account or the G fund. Volatility is just a fluctuation in value. Now stocks are more volatile than bonds, that’s clear. But what investors should do is trying to determine appropriate allocation between stock investments and bond investments and bank accounts. And the TSP, that means what percentage of your investments do you want in the G and the F funds, which are bonds and cash accounts, and what percentage do you want in stocks, which are C, S and I? And once you choose that percent, stick with it unless there’s a good reason to change. And the stock market crash is not really a good reason to change. And if the stock market crashes, especially for employees, that’s an opportunity. They’re investing money every two weeks. And of course they’d rather buy shares in the C and the S and the I funds when those are down and cheap than when they’re high and expensive. So just being able to stick to it really makes a difference.

Terry Gerton It’s really hard to imagine that the market is going to crash anytime soon. It’s been on such a steady upward climb for so many months. And yet you talk about when that correction, which is impossible to predict exactly, but pretty possible to predict generally happens, people do the opposite of standard recommendation. They sell low and then try to buy again high instead of buying low and selling high. Talk to us again about what kind of planning can help people avoid the emotional response to that sort of occurrence.

Art Stein Well, I think it’s very important to one, know and admit to yourself and take into account that the market’s going to crash. I mean, it’s going to happen. And it’s not unusual. It’s typical. And two, especially for employees, don’t change your investment allocation if the stock markets crash, unless you’re increasing your percentage allocation of your biweekly investments into the TSP fund. If you’re increasing the percentage going into the stock funds, that would make sense. And, you know Terry, when we speak to TSP millionaires, one consistent theme is that they had most of their investments going to the stock funds. And they did not change that when the stock markets crashed. They just kept investing. They accepted that. It was a long-term investment. And they just stuck with it.

Terry Gerton I’m speaking with certified financial planner Art Stein of Arthur Stein Financial. Art, we’re talking about a disciplined, non-emotional approach to investment here, but we’ve just come out of the longest government shutdown in history. And the current continuing resolution only goes through the 30th of January, about two and a half months from now. So how should feds think not just about their investments, about building up or building back their emergency savings if they had to dip into it during the shutdown?

Art Stein Well, this shutdown was horrible, as we know. People were living on credit card debt in many cases. It shows how important it is to have an emergency fund, three to six months of expenses in a bank account, or maybe the G fund. And what we sometimes have to recommend to people, we don’t like doing it, is to reduce your contributions to the TSP to 5%. Because in many cases, Terry, we’re speaking to people who are maxing out their contributions. But no, if you don’t have an emergency fund, that’s a mistake. Reduce it to 5%. Don’t go below that because you want to get the full 5% match from the federal government. Take that extra money that you were investing and use it to build up a bank account, three to six months of expenses. And especially, you know, this is so crazy. We’ve gone through this long shutdown, and then they had this big victory. But when you look at the victory, it only funded the government for two and a half months. I mean, how short term is that? So now is a good time. Just get on the TSP website and reduce your contributions to 5% and build up some cash. I mean, I’m praying and hoping that they won’t do another shutdown on you know, January 30th, but as we all know, things are not good with these negotiations.

The post An objective, unemotional investment strategy for your TSP, easy to say but hard to do in uncertain times first appeared on Federal News Network.

© AP Photo/David Dermer

• Most funds in the Thrift Savings Plan saw minimal growth in November, with 15 of 16 coming in higher than where they finished in October. But no fund saw an increase greater than 0.64% for the past 30 days. And only the S fund saw a month over month decline, dropping 0.45%. The I Fund remains the biggest winner for the year with a total increase of 28.54%, while four L Funds also produced returns of greater than 20% in 2025.
  (TSP returns slow in November, but remain mostly positive - TSP)
• The Postal Service’s new delivery vehicles are rolling out on routes across the country. USPS said more than 35,000 of those vehicles are out on the road. That’s about a third of its new fleet. More than 100,000 vehicles will be deployed by 2028 and nearly half of them will be electric vehicles. Congress gave USPS $3 billion in 2022 to buy more electric vehicles than it could afford to buy on its own.
  (USPS is delivering its new fleet - USPS)
• The Trump administration is taking down yet another government program tailored toward early-career employees and talent development in the federal workforce. The Office of Personnel Management will soon sunset the Federal Academic Alliance. This is a governmentwide program that let federal employees access advanced degree opportunities at reduced tuition costs. The agency attributed its cancellation decision to a low participation rate, as well as more internal training options becoming available to employees over time. Employees currently in the program have until Jan. 19 to enroll into programs using the benefits through the end of their current academic term. OPM will shut the program website and other assets down by Jan. 30.
  (OPM sunsets ‘Academic Alliance’ - Office of Personnel Management)
• The Department of Health and Human Services faces a months-long backlog of reasonable accommodation requests from its employees. HHS said it will centralize the processing of reasonable accommodation requests on behalf of its component agencies. HHS said it’s taking on a backlog of more than 3,000 requests from the Centers for Disease Control and Prevention. It’s not clear how long it will take HHS to review each individual request. But the department said it will need about six to eight months to clear the backlog. A CDC memo said telework “should not be given as an interim accommodation,” while a reasonable accommodation request is under review.
  (HHS faces a months-long backlog of reasonable accommodation requests - Federal News Network)
• The Coast Guard is at risk of more cost overruns on one of its newest class of ships. That new warning comes from the Government Accountability Office, which said the service is pressing ahead with plans for its Offshore Patrol Cutter without a stable design. GAO said moving ahead with the second stage of the acquisition program too quickly could mean a repeat of some of the missteps the service suffered during the program’s first phase. In stage one, starting construction before designs were stabilized wound up leading to expensive rework.
  (Coast Guard risking cost overruns for Offshore Cutter - Government Accountability Office)
• The Defense Department is putting more than $400 million toward immediate barracks repairs. Defense Secretary Pete Hegseth said the department is also launching more than $800 million in critical barracks renovations. Hegseth recently stood up a “barracks task force,” which he said has completed wall-to-wall assessments of facilities across the Navy, Marine Corps, Air Force, Space Force and the 18th Airborne Corps, with Reserve and National Guard inspections expected to wrap up by the end of January. “In our first 30 days, we've purchased new furnishings and mattresses for 81 barracks, reaching more than 15,000 service members, and we've executed $101 million of quality of life improvements since October 27 that includes new door locks in 10 barracks, affecting over 6,000 war fighters, new security systems in 13 barracks, which is peace of mind for another 1,500 plus service members. I'm getting monthly reports to confirm the work is actually getting accomplished.”
  (DoD to invest $400 million in immediate barracks repairs - Defense Secretary Pete Hegseth on X)
• The Marine Corps is encouraging qualified Marines to move into counterintelligence and human intelligence roles. The Corps’ Manpower and Reserve Affairs has identified these positions as a critical specialty. The service said the demand for Marines in counterintelligence and human intelligence roles will remain high for the foreseeable future. Officials say Marines selected for these roles will receive extensive training and have opportunities to support Joint Forces and interagency partners. Marines who make the switch could earn over $100,000 in bonuses.
  (Marine Corps ramps up effort to fill counterintelligence, human intelligence roles - MARADMIN message)
• The Defense Department wants to shake up how it works with value-added resellers. The Pentagon is considering placing a 5% cap on most fees charged by resellers starting with a specific special item number, or SIN, for IT products. A draft memo obtained by Federal News Network said this cap would only apply to IT products bought through GSA's schedule contract. The initial focus of this reseller cap would focus on SIN 33411, which is for the purchasing of new electronic equipment, including desktops, laptops and servers. DoD said it spent about $2 billion in fiscal 2024 through the GSA schedule on these technology products.
  (Draft memo details DoD's plans to cap most reseller fees - Federal News Network)

 

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The Office of Personnel Management is anticipating a wave of retirement applications, stemming from the increasing number of federal employees who have opted into the Voluntary Early Retirement Authority (VERA) and the deferred resignation program (DRP). In a justification statement for a recent contract award to modernize its human resources systems, OPM referred to an “expected doubling of the retirement application backlog.”

With so many currently heading for the exit, it’s a good time for federal employees to improve their understanding of the retirement process, including separating facts from common misconceptions.

Misconception: Retirement pay begins right away

Fact: A retiree’s agency doesn’t send their retirement packet to OPM until the date of their retirement. At that point, OPM begins processing the retirement packet. OPM does have a processing backlog; it can take up to 90 days for them to begin.

Retirees can expect their first, estimated annuity payment within two to three months. OPM refers to this as “interim” pay: Usually, it’s about 60-80% of what your actual annuity will be.

Misconception: TSP is all you need after retirement

Fact: Federal employees will have three main sources of income in retirement: their pension, Social Security and their Thrift Savings Plan account.

When planning their budget for retirement, they can easily calculate how much the first two will provide each month. Their TSP will need to bridge the gap between that amount and the monthly cost of the lifestyle they intend to live during retirement. That’s why there’s no easy answer to how much feds should have in their TSP accounts when they retire. It differs for every person.

In addition, the TSP offers different ways to withdraw: partial, full, installment or annuity. It’s recommended that any federal employee within the retirement horizon transfer some or all of their TSP balance into an IRA or Roth IRA in the private sector. As long as they transfer the funds an IRA or Roth IRA, there are no taxes, penalties or fees.

Misconception: Federal Employee Health Benefits (FEHB) go away at retirement, or become more expensive.

Fact: Under certain eligibility requirements, federal employees can continue their FEHB coverage into retirement. These requirements include enrollment in FEHB for at least five consecutive years leading up to, and having coverage on, the retirement date. It is important to note that qualified spouses, dependent children, and children with disabilities can be covered without meeting this five-year rule. Employees become classified as annuitants upon retiring, at which point the government will continue to cover about 72% of the FEHB premium.

In addition, retirees can also enroll in Medicare parts A and B, offering nearly comprehensive coverage, with Medicare as the primary payer and FEHB as secondary. To reduce costs, some retirees opt for a basic FEHB plan.

Misconception: Federal Employee Group Life Insurance (FEGLI) will remain the same price after retirement

Fact: Basic FEGLI insurance costs between $10-$30 per pay period. It’s very inexpensive while employed, but the price increases dramatically in retirement. How much it increases in price depends on the plan; there are four FEGLI options, including Basic, Option A, Option B and Option C. Federal employees often don’t know what plan they have, or how much they’re paying for it. Understanding their plan can help prospective retirees maximize their FEGLI benefits in retirement.

Misconception: Survivor’s benefits are automatic and free

Fact: Federal employees will need to make some decisions about survivor’s benefits on their retirement application. The pension is the main place where retirees need to consider their options along with their potential beneficiaries — these will primarily be spouses, except in a few special circumstances. Each of these options comes with a cost, in the form of a monthly percentage deducted from the overall pension. The options and percentages vary between the Federal Employees Retirement System and the Civil Service Retirement System.

Misconception: Spouses will automatically continue to be covered by FEHB into retirement

Fact: This is the biggest caveat about survivor’s benefits: If survivors were on the federal retiree’s health insurance plan, that health insurance will cease if there is no survivor’s benefit. Any amount of survivor’s benefit will continue the health insurance plan, so prospective retirees and their spouses should speak with a federal retirement consultant, and consider the holistic picture of their assets, the spouse’s income, their needs and budget, life insurance, and whether they have any additional financial obligations, like debt or a child in college.

The post Common misconceptions about federal retirement benefits first appeared on Federal News Network.

© Getty Images/JLco - Julia Amaral

Interview transcript

Eric White We’re talking about the new [Online Retirement Application (ORA)] system, or I guess, is it “Or-uh” system? I’ll let you … Correct my pronunciation for federal retirees. Obviously, that system is going to get used a lot over the next coming months, if what has been happening recently is any sign of what’s to come. Tell me about what’s going on with this system and what feds are saying — of the ones that have been using it — about it.

Thiago Glieger Yeah, Eric, this new system — so we call it O-R-A; I think that’s how most people are calling it, as you said — this is a brand new system. And honestly, it’s been confusing a lot of people … it’s replacing the old paperwork that a lot federal employees had to fill out — really the SF-3107 — as they were going to retire from their agencies. But I think the big problem here, Eric, is they’re finding that a lot of the HR departments are just simply overwhelmed … We had a lot of people [who] were leaving, we have bottlenecking of a lot people that are leaving on [the] [deferred resignation program (DRP)] as well, and so they just can’t provide the kind of support that they used to before. So a lot of these questions start to pile up. It’s a brand new system and there’s not enough people in place to help answer those questions. Retirement is already a pretty stressful process for people, right? So then on top of that, not having a clear process or information about a new system only adds to the anxiety … When it was first launched everyone hoped that OPM was going to say, this is going to be faster, it’s going to be smoother, it’s going to require less people. And OPM actually said the opposite. They said, at first, it might actually take longer … They are very hopeful that over time this is gonna be a good system but right now there [are] a lot of moving parts that have to come together for all of that efficiency to really start showing up. And as you guys have seen, Eric, there’s tens of thousands of federal employees retiring. We just had the first wave here on 9/30. We’re gonna have another wave here 12/31. And so it’s really, really tough for people to get answers to the system.

Eric White Yeah, sort of a “ready, fire, aim” approach that we love here in the USA. Walk us through what a federal employee should expect when they decide to retire under this new system. What are some of the major changes from the old system? Not that anybody retires more than once, hopefully, but you know, what exactly are they looking at from a landscape perspective?

Thiago Glieger Yeah, so what it used to be is that a lot of agencies would run the [Government Retirement and Benefits (GRB)] platform retirement estimator for federal employees retiring. And the GRB platform was effectively a repository of your federal service, and it would give you information on what retirement could look like, estimates of your pension, things like that. So then we run into problem number one: a lot agencies cut GRB. So now federal employees are saying, well, what does my retirement estimate look like? How many credible years do I have? That system is no longer there. So then agencies are not even able to provide that information. But presuming you’re still gonna move forward with the actual retirement process, [the] first step is you have to notify your HR office that you’re ready to retire. You can send them an email, generally, and say, I believe I’m eligible; I’d like to start the retirement process. And this is because the HR group has to initiate the ORA system in most cases. Every agency has a little bit of a different process, but this is what the majority of the groups are doing … You have to remember what’s different here is now HR is swamped. There’s tons of people retiring. There’s less of them around to be able to do this, which is causing some of the bottleneck. Once HR begins the ORA process, you’re given access to it. And again, this is gonna replace the SF-3107, which is the retirement form. And so now it’s actually easier because instead of filling out a government form, you’re just going through a system online and it’s asking you questions one by one. Everyone has filled out those kinds of forms before. So it’s actually pretty easy, as we’ve seen with some of our clients. And what it does is it takes your answers and pre-fills the form for you, which is a nice service. Once you submit that part, it’s really important that a federal employee stay alert because a lot of times, HR — they may kick it back if they need additional information — there’s something that’s missing, so you have to check to make sure you don’t need to do additional work on the ORA system for that. That’s when it moves to payroll. Once it moves to payroll, they finalize all of your hours, which can take a month to a month and a half just at payroll itself, before it goes to OPM. So if you think about it, we’re talking a month at payroll, [that] could be a month before HR actually gets around to being able to initiate the system for you. We’re At 2 months so far. Once it hits OPM, that’s when the official clock starts, as OPM likes to describe it. And there’s some uncharted waters here because OPM has not really handled, A, this new system before, and B, this many federal employees retiring all at the same time. So they release information — there is some congressional report that gets put out there that talks about how many applications are coming into the system and what is the average processing time month over month. We’ve been seeing that go up and up and up over the last three months. I expect it’s going to continue to get worse, right? So we’re talking three months at the agency level plus … whatever time OPM is going to need for themselves.

Eric White We’re talking with financial planner Thiago Glieger. So, other than those long timelines — well, we can call them unknown timelines, as you say — what are some of the other issues that federal employees are seeing so far with the system? It sounds like it is going through some growing pains, but are there any fundamental flaws with it that people are just not liking?

Thiago Glieger I think some of the challenging questions that the system asks them are things like, how much withholding do you want to do on your taxes? Or, what do you wanna do about life insurance? And before there was some guidance in the forms [about] how to be thinking about some of these things. The system is a little bit more streamlined and it just asks you the question. Well, if you haven’t gone through the process of creating a financial plan, how do you know how much insurance do you need? What kind of tax liability are you expected to have? So federal retirees are called upon to make these decisions in real time as they’re filling out the form and they don’t really have the information to be able to answer those questions. Okay, the other issue that we are running into, and this one hasn’t been too much, is that sometimes people don’t get the notification of additional action that they need. Sometimes it gets stuck in their spam email. So this is something that, again, it’s those bumps that they’re trying to pull together. There are a lot of systems in the background that have to coordinate with each other and, as any brand new system that gets launched, there’s always stuff that’s going to break. So I’m sure some of that’s gonna be a problem too.

Eric White Gotcha. All right. And so what can folks do if they are looking to retire? You’re a financial planner. I guess we’re talking to the right person. How can they financially prepare for any delays that might occur because … some of those dates don’t line up and you don’t want to be caught in-between paychecks, as they say, and without anything coming in? What sort of precautions can those looking to retire take?

Thiago Glieger Yeah, that’s a really good point, Eric. I think the first thing that federal retirees should remember is that you will get your annual leave lump sum. Okay, so that comes pretty quickly in our experience with clients, right after you leave. So you get your final paycheck and then shortly thereafter you get your lump sum, so depending on how many hours you have, you’re gonna get a big check that’s gonna help you to meet your expenses between when you leave and no longer have an income and when the pension actually fully starts. There [is] also, in most cases, an interim payment, where it’s a portion of your final pension; not the exact amount. But again, we don’t wanna count on that because there’s cases where people don’t get it. So the biggest thing is that, let’s say you’re planning to retire December 31st, now is the time to start boosting your cash reserves. So what do I mean by that? Cash in the bank is gonna be really important here. So … This might mean, and it sounds a little counterintuitive, but might mean maybe don’t put as much in the Thrift Savings Plan for the rest of the year, if you know you’re gonna retire, okay? Yes, you have access to the TSP if you are retiring within a certain age, the age is 55 for most people, but cash in the bank is that much easier to access … it’s already been taxed in most cases. So if you reduce your TSP contribution, that means your take-home pay goes up and you get to start accumulating that cash. I would also think about what kind of expenses maybe you have coming up, right? The general guide for people is we like around six months-worth of your monthly expenses in cash in the bank at all times. And because we might be looking at delays on your pension starting, you might wanna increase that a little bit more. So if you’ve got big renovations you were planning to do on the home, maybe postpone that for a little but until you get greater clarity around OPM’s timeline for the stuff. And the last one — and this one’s a little bit controversial as well, but it depends on how old you are — if you leave prior to the age of 55, which a lot of people have done this year, you technically don’t have access to the TSP funds un-penalized, unless you are law enforcement or special provisions, 1811s, things like that. So what you can look at is a potential TSP loan. You can get up to $50,000 and that comes without that 10% early withdrawal penalty, which is kind of nice because you can put that in your bank account, use it or don’t use it, but at least it creates extra cashflow for you. Of course, check with your financial professionals, make sure that this is something that is feasible within your plan, but that’s been a really solid one to help bridge people over.

Eric White Uncertainty is the word of the day for a lot of federal employees, particularly those that are retiring, even so. Any advice on handling that aspect of things? You’re already going through the anguish of entering into a new stage of your life, having all of this in the background of shutdowns and potential furloughs and things of that nature. What can you tell people that are going through this right now?

Thiago Glieger I would say for folks to rely on your planning. This is something that creates great peace of mind, just knowing what you’re gonna do in which scenario. So if this happens, if it takes longer, if the markets crash in the middle of your waiting for your pension, all of these things, if you can think ahead of what those potential problems may be and what you are gonna do if those things happen or what you gonna do in preparation to hedge some of those risks, that gives you great peace mind. We have to be careful about watching the economy and the news around the markets. The markets are very volatile and you always have different opinions and people talking about what the markets are gonna do next. We have to careful cause that creates a lot of anxiety for retirement. And I think too, the more information you have, the better. OPM has a really, really helpful retirement quick guide, which we can give you guys the link [to] … You can put it in the show notes. The OPM retirement quick guide is super helpful, [it] walks you through the process so you know what to expect. And in fact, there is one additional resource that is actually your benefits officer directory. This is something that OPM maintains pretty regularly and it’s the HR person in charge at your office. In case the process is just stuck and if you can’t get answers, you can get anywhere, this is a place you can look for to find out who’s in charge of your agency to get the answers you need.

The post When paychecks stop and tax season looms, what moves should federal employees make? first appeared on Federal News Network.

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For federal employees it means-

• Resumption of Contributions: The most significant change is that for active federal employees, Thrift Savings Plan (TSP) contributions, including the agency matching contributions (for FERS employees), resume with the return of paychecks. During a shutdown, these contributions are typically paused, which can affect long-term growth.
• Back Pay and Benefits: Furloughed employees receive retroactive pay for the missed period. This resolves immediate financial hardship and ensures that the “high-3 average pay” used to calculate future annuities is unaffected.
• Processing of Paperwork: Delays in processing retirement applications at the Office of Personnel Management (OPM) and individual agency HR departments should end. This is good news for those who retired or were planning to retire around the time of the shutdown, as it means their full annuity payments will be finalized sooner, and they will move from interim payments to full payments.
• Access to Services: Normal access to HR support, retirement counseling sessions, and other planning resources is restored.

For current federal retirees and the general public it means-

• Annuity and Social Security Payments: For individuals already retired and receiving a federal pension (Civil Service Retirement System or Federal Employees Retirement System) or Social Security benefits, payments generally continue uninterrupted even during a shutdown because they are funded differently. The government being back in action ensures these operations continue normally without any threat of future disruption.
• Market Stability: A resolved shutdown can reduce the political uncertainty that sometimes causes short-term volatility in the stock market, which can indirectly affect the balance of market-based retirement savings plans like the TSP’s C, S, and I funds.

A federal civil service career may not be a way to get rich. Yet after decades of performing meaningful and satisfying work, you can look forward to a financially secure and dignified retirement.

Since the late 1980s, federal retirement has consisted of three basic components. Feds who qualify for full retirement can expect their pension, known as their annuity or Basic Benefit, calculated by the Office of Personnel Management at the time of retirement. Civil service reform of that era added a Social Security benefit to compensate for the larger annuities of the earlier Civil Service Retirement System. You don’t have much control over the specific eventual payouts of these two components; they derive from standard calculations based on salary and time.

When it comes to the third component of retirement – your Thrift Savings Plan – actions throughout your career can greatly influence the account you retire with. Small adjustments in strategy early in a career can magnify to significant gains later on, thanks to the historically long-term gains of the stock market.

But it doesn’t happen automatically. In this article, I’ll outline important steps you can take to help ensure you’ll be able to afford those European river cruises after you’ve left your full-time career.

Put enough in

It sounds obvious: The more you contribute to the TSP, the more you’ll have later. Yet too many federal employees fail to take a basic step; namely, contributing enough to earn the maximum match the government makes to your TSP.

The government contributes 1% automatically to your TSP account each year. It will increase that contribution by 1% increments for each additional 1% you contribute, up to an additional 4%. That is, if you contribute 5% of your salary each pay period, the government will keep matching.

A couple of important details about matching contributions:

• For the first 3% of your salary you contribute, the government will match it 100%.
• If you contribute another 2% (for a total of 5%), the government will match half of that. In other words, if you contribute the full 5%, the government will add another 4%.
• You may contribute more than 5% (up to the maximum allowed), but government matching ceases beyond that.

Also keep in mind that your contribution to the TSP is vested the moment you make it. So is the government’s match – with the important exception of the automatic 1%. That’s subject to a 2-year or 3-year vesting period depending on your position. That means you’d have to forfeit the 1% should you leave government service before the vesting period.

Note that tax law puts a limit on yearly contributions to tax-deferred individual retirement accounts. This year it’s $23,500. To max out your TSP, simply divide that number by the number of pay periods to determine the per-period contribution.

It’s wise to spread out your contributions evenly over the year. That way, you’ll max out the government matching contribution.

And keep this in mind: If you are 50 or older, you can take advantage of a provision known as catch-up contributions. Check with TSP for your own eligibility and catch-up max, but this year FEBA estimates you’ll be able to catch up by as much as $7,500. Those between the ages of 60 and 63 can likely contribute up to $11,250 in catch-up savings.

Pay taxes now?

Most federal employees stick with traditional TSP contributions; those made with pre-tax dollars. This presumes that, once you retire, you’ll fall into a lower tax bracket and thus pay less taxes on withdrawals than you would have on the same income dollars when you were working.

For a myriad of reasons, that’s not always the case. For example, retired senior executives or those with highly technical jobs often find themselves working in industry at or past the age at which they must make required minimum distributions from their TSP accounts. That typically puts them in a higher tax bracket.

This is where the Roth option comes in. A Roth account consists of TSP contributions using after-tax dollars. You therefore don’t pay taxes on eventual withdrawals. (Roth IRAs get their name from former Sen. William

Roth, sponsor of the legislation that enabled this form of retirement savings account.)

TSP statistics show that of the more than 7 million accounts, only about a third are Roth. If you have only a traditional TSP, consider adding a Roth option as a strategy to give you more flexible tax approaches in the future. The TSP offers a way to convert some or all of your TSP to a Roth. Because such a transfer entails taxes now, only do this after consulting with a qualified tax expert who can work through your individual situation.

Timidity = loss

Many TSP participants feel safe by investing most of their dollars in the TSP’s G-Fund. Because it consists of government bonds, the G-Fund never shrinks, meaning you get a basically guaranteed positive return on your investments. But that growth is almost always below the rate of inflation.

The result? Over time your savings have ever less real buying power.

A related mistake is retreating to the G-Fund when the stock market goes through a period of gyration with big swings down and up. No one can time the market, so nervous investors often end up selling low, then buying high as they chase the inevitable upswings.

Over the course of a 25- or 30-year career, the difference between a pure G-Fund investment and a diversified one that includes stock funds can add up to hundreds of thousands of dollars. It can determine whether you join the ranks of those with at least $1 million in their TSP.

Alternative strategies include contributions aggressively to the C fund. True, the C, S, and I correlate, meaning they move in the same direction at the same time and carry relatively the same risk. But the C fund has a much larger long-term rate of return.

Keep in mind, TSP now automatically puts new hires into the appropriate L fund based on their date of birth. A L-Fund customized such that the “conservative” portion is all G fund and the “aggressive” portion all C-Fund has historically produced a higher return and with lower fees than the standard-issue L-Fund.

Other ways to enhance

Several other practices can help your TSP investment help you. These include:

• Staying on top of your intended beneficiaries, such as after divorce and you don’t want your ex to remain the beneficiary. The TSP lets you manage beneficiaries online.
• Letting the funds stay put unless you have a dire, potentially life-changing need to take a loan against your TSP investment. TSP loans can go as long as 5 years (15 years for real estate). They are not considered withdrawals if they are in good repayment standing. However if you default on the loan you will get a taxable disbursement and the 10% penalty if under 59 ½.
• Making careless withdrawals, such as a large lump sum the minute you hit 73. You’ll end up overpaying taxes.

Finally, consider whether to leave you funds in the TSP after you retire, versus rolling them over into a standard IRA. True the TSP has low fees and a good record of funds management. On the other hand, an IRA gives you access to a vastly larger universe of investment options. You also get more withdrawal flexibility with an IRA. The TSP only lets you make withdrawals proportionately over the funds you’re in. And, unlike the TSP, an IRA lets you make a tax-free qualified charitable donation, or OCD, once you reach the age of 70½.

Regardless of the many possible strategies you choose, contributing to your TSP to the maximum and managing it carefully will go a long way to ensuring you’ll achieve the retirement you hope for.

The post The government shutdown is over- What that means and best practices to maximize your Thrift Savings Plan first appeared on Federal News Network.

© Getty Images/Andrii Yalanskyi

Bitcoin Magazine

The Return Of The Tontine – A Natural Retirement Option For Bitcoiners?

When it comes to pensions and retirement, we have a clear pensions adequacy issue in much of the world given that the population is living longer and many individuals have inadequate savings for a comfortable retirement. Bitcoin fixes this – in part – by offering a form of savings which can’t be debased and should hold its value into the long term. Lowering our collective time preference as a society also wouldn’t hurt, as we’d prioritise our later years more than we do so at present.

It’s sometimes remarked though that Bitcoin doesn’t solve all the problems in the world, only half of them, and there is one huge aspect Bitcoin cannot help with in terms of retirement planning. Namely, none of us know how long we are going to live for, and if we live “too long” we face the risk of running out of money in old age. This is a problem which the pensions and insurance world defines as “longevity risk”.

I wrote an article for Bitcoin Magazine in 2022 on one solution, which can be viewed here. In short, it proposed a simple annuity product priced in Bitcoin and that would pay policyholders a Bitcoin income for life, allowing participants to pool their longevity risk in retirement.

Remarkably, there is now a product coming to market that allows bitcoiners to pool their longevity risk into a Bitcoin based trust and be paid an income for life, but with more transparency and likely a higher income than an annuity. Enter the Bitcoin Tontine by Tontine Trust.

Let’s run through the basics.

What is a Tontine and how does it work?

A Tontine is traditionally known as an investment linked to a living person that operates to pay them an income for as long as they live. Each participant pays into their own segregated trust. Each trust designates a Tontine Class as the beneficiary of their trust upon their death. The Tontine Class is comprised of a large number of others of similar age and sex. A varying income is then paid to each member out of their own account. When a member of the Tontine Class dies, the whole value leftover in their trust gets allocated proportionately into the individual trust accounts of all the remaining class members, thus helping to boost their retirement income over time. This process continues until the second last member dies.

The income paid is continuously updated, and is calculated to ensure an income for life for all participants based upon the following factors –

a) the members life expectancy which is largely based upon age / sex

b) the current value of their investment fund

c) the expected annual return on their fund

This method means the income could sometimes go down as well as up however it is this flexibility which in turn mathematically guarantees that members will never run out of income in retirement. The Tontine Trust cover the costs of running the tontine via a flat annual trustee fee of 1% levied on each trust account.

How does this differ to an Annuity?

An annuity guarantees a fixed income (or an income with defined increases, e.g. 3% per annum) for life at outset. If members live far longer than expected, it will fall on the insurer to absorb that cost (and conversely, they will profit if members die young). Due to this requirement, insurers have strict requirements to hold excess capital to cover all eventualities, and tend to price their annuities based on the return on fixed income government bonds. Their profits are opaque and are realised over many years.

By contrast the tontines offered by the Tontine Trust work in an extremely transparent and intuitive manner, and due to their nature can offer a range of trustee approved asset classes for the underlying investments. Moreover, members can change their investment strategy over time. Alongside a pure allocation to Bitcoin, they offer investment strategies for different risk appetites & circumstances, including a “Bold” fund (mix of Bitcoin and Gold), index funds, and money market funds.

The higher returns of underlying investments in combination with the mechanisms of a tontine should ensure that participants enjoy a higher income throughout retirement as a result, vs an annuity. The main trade-off is that income paid can fall as well as rise due to investment returns.

A comparison of Tontines and Fixed Annuities. Source: Tontine Trust Website

What are the downsides of Tontines?

In a Tontine the longevity of members will directly impact on the payouts to the rest of the group (rather than in an annuity, where how long members live for will impact on the profits of an insurer). Due to this, arguably the main risk for tontine fiduciaries is the potential for fraud, and relatives of members pretending they are still alive after their death (of course, insurers also bear this risk).

Tontine Trust has come up with a new technological way to combat the potential for fraud, patenting a new proof of life method whereby members demonstrate they are still alive via the Tontine Trust app to validate payments to them. In addition, as each member has their own segregated account, the Tontine Trust are able to follow a proof of reserves system, using blockchain to aid transparency and reflect all payments and charges in and out of members accounts.

It may be that a public relations campaign is required to educate the public on this new type of Tontine product. Tontines have a rich and varied history, dating back to the 17th century. Where covered in fiction, Tontines have often involved cloak and dagger tales of private Tontine arrangements, often whereby the last surviving member of a small group will inherit the lot. In reality, the modern day Tontine pools will operate at scale and with anonymity.

Grampa Simpson and Monty Burns – the last two survivors in a Tontine to wholly inherit stolen artwork in the Simpsons episode Raging Abe Simpson and His Grumbling Grandson in “The Curse of the Flying Hellfish” – see clip here

In addition, Tontines were restricted from sale in the United States on certain life insurance policies following the Armstrong investigation of 1905, as the terms of these policies led to certain forms of malpractice by many of the insurance companies of the time. There were some questionable terms for consumers with these products, such as a default on the policy for missing a single regular payment, and high commission rates payable to sales agents. These issues as summarised in the paper here were specific to the products and practices of the time, rather than a fundamental problem with a retirement Tontine as listed above.

How do Tontines sit with current regulation?

Tontines are very long term products managed in the best interests of members by fiduciaries and as such are similar to pensions and other trustee services. They don’t fall under insurance regimes, since the maintencance of a separate capital reserve isn’t needed to insulate against members living for a long time. Crucially, there have been recent developments in favour of Tontines yet again being launched as a product.

In 2022, the OECD (Organisation for Economic Co-operation and Development) published a legal instrument recommending that Defined Contribution pension plans (which are now the norm in most countries) ensure protection against longevity risk in retirement. This could be achieved by providing Lifetime income which “can be provided by annuities with guaranteed payments or by non-guaranteed arrangements where longevity risk is pooled among participants”. They note that the choice made will depend on the balance required between the cost of guarantees (i.e. annuities give a guarantee of an income, but may be worse value) and stability of retirement income (i.e. arrangements such as tontines may sometimes see income decrease over time from adverse investment returns).

Further to this, Donald Trump recently signed an executive order in August 2025 seeking to democratise access to alternative assets, which not only outlines access to include “holdings in actively managed investment vehicles that are investing in digital assets”, but also to “lifetime income investment strategies including longevity risk-sharing pools”. This essentially paves the way for Tontines as a retirement option, and for the underlying investment to be Bitcoin.

Arguably, this is the social security system of the future. National Tontines backed by Bitcoin could quickly become the most secure way for governments to ensure that their populations have an inflation proof income to take care of them in old age. The “pay as you go” model for state pensions as employed in many countries will continue to come under strain due to demographic shifts. Although a shift to a funded model is a large one, it then solves for inter generational fairness and comes at zero cost to the state.

Summary

17 years after the original Bitcoin whitepaper, we are about to see a natural retirement option launched for bitcoiners – a longevity risk sharing pool with the benefits of bitcoin returns and which enables bitcoiners to mathematically guarantee an income for life. This seems likely to pay a much higher income than an annuity can offer. A choice facing those seeking a lifetime retirement income will be from a) an annuity priced by returns on fixed income government debt, and b) a tontine powered by Bitcoin returns.

Over time, the market will decide.

This is a guest post by BitcoinActuary. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine. None of the content in this article should be construed as financial advice. The author owns shares in Tontine Trust.

This post The Return Of The Tontine – A Natural Retirement Option For Bitcoiners? first appeared on Bitcoin Magazine and is written by Bitcoinactuary.

• Transgender Air Force and Space Force servicemembers are suing the Trump administration for rescinding pensions that had been previously granted by the Air Force secretary. President Donald Trump issued an executive order in January that banned transgender people from serving in the military. In June, the Air Force approved retirement orders for the Airmen named in the lawsuit, but two months later the service reversed the course, informing airmen, each with at least 15 years of service, that they would be separated without retirement benefits under the ban. The lawsuit argues that revoking those retirement orders violates Air Force policies and procedures. Transgender servicemembers affected by this will lose an estimated $1 to 2 million over the course of their lifetimes, the lawsuit says. It will also strip them of lifetime access to TRICARE health coverage.
  (Transgender veterans sue Trump administration for denying retirement benefits - U.S. Court of Federal Claims)
• The bill to re-open the federal government would also extend a critical cybersecurity law. The continuing resolution passed by the Senate would extend the Cybersecurity Information Sharing Act of 2015 until the end of January. The law’s authorities expired on Oct. 1. Experts say CISA 2015 provides crucial liability and privacy protections that encourage companies to share data about cyber threats. Government officials say companies have continued to share information following the law’s expiration. But they say a longer-term lapse could derail public-private collaboration on cyber threats.
  (CR bill text - Senate Appropriations Committee )
• A bipartisan bill would require the Labor Department to keep track of AI-related layoffs happening across the federal workforce. The bill would also require the department to collect data on AI’s impact on jobs at major companies. Sens. Mark Warner (D-Va.) and Josh Hawley (R-Mo.) are leading the bill. They say the legislation would give the federal government a clearer picture of which jobs are impacted the most by AI and which new jobs are being created.
  (Hawley, Warner to introduce bipartisan legislation revealing number of jobs lost to AI - Sen. Josh Hawley (R-Mo.))
• A Senate-passed spending deal to end the government shutdown also sets staffing targets for the Department of Veterans Affairs. The spending bill gives the VA 90 days to provide the House and Senate appropriations committees with a staffing model that will ensure it can provide timely health care and benefits. The VA previously planned to eliminate more than 80-thousand positions, but scrapped plans for a department-wide reduction in force, and instead planned to eliminate 30,000 positions through attrition by the end of fiscal 2025. The spending bill specifically bars the VA from reducing staffing levels, hours of operation or services at the Veterans Crisis Line or any of its other suicide prevention programs.
  (Senate-passed spending deal sets VA staffing targets amid reorganization - Federal News Network )
• Violent threats against public servants have been escalating over the last decade. A new report from the Public Service Alliance and The Impact Project found that threats of doxxing, harassment and physical attacks have all been on the rise since 2013. The two non-profit groups recently released a “security map,” showing not only an increase in volume, but also an expansion of who is targeted.
  (New dataset on threats to public servants reveals over a decade of danger - Public Service Alliance and The Impact Project)
• Federal employees have a new opportunity to share more about their experiences in the workplace this year. The Partnership for Public Service has launched a new governmentwide survey for federal employees, in an effort to fill a major gap in workforce data. The initiative comes after the Trump administration canceled the 2025 Federal Employee Viewpoint Survey earlier this year. Current civilian federal employees can take the Partnership’s Public Service Viewpoint Survey between now and Dec. 19. The topline results will be released in early 2026.
  (Amid data gap, an alternative to FEVS emerges for federal employees - Federal News Network)
• After a banner recruiting year, the Coast Guard is identifying locations for a new training center. The service released a request for information on Monday to identify facilities that could lodge 1,200 new recruits. The Coast Guard is planning to add 15,000 personnel to its ranks in the coming years. It recruited more than 5,200 new service members last year — well above its annual target of 4,300 recruits. The deadline to respond to the Coast Guard’s training center RFI is Dec. 8.
  (Coast Guard solicits potential locations for additional training center - Coast Guard )
• Sen. Elizabeth Warren (D-Mass.) is putting pressure on a leading industry group to stop opposing bipartisan right-to-repair efforts that would allow service members to fix their own equipment. In a letter to the National Defense Industrial Association, Warren called the organization’s opposition to reform proposals in the House and Senate versions of the annual defense policy bill a “dangerous and misguided attempt to protect an unacceptable status quo of giant contractor profiteering.” NDIA argues that the provision would allow the Defense Department to provide parts, tools and information to any authorized third-party contractor, including a company’s direct competitors. The industry group said these efforts will “hamper innovation” and “deter companies from contracting with the DoD.” Warren said that “the opposite is true” and that the argument “appears to be a late-in-the game effort to confuse and scare members of Congress and muddy the terms of the debate.”
  (Senator accuses defense industry of blocking Congress’ right-to-repair reforms - Federal News Network)

 

The post Transgender servicemembers are suing the Trump administration for rescinding pensions first appeared on Federal News Network.

© Brianna Bivens/The Daily Times via AP

As a federal retiree, you finally have plenty of time to do the things you love—spend days with family and friends, travel, enjoy various activities. But if you’re living with or trying to manage a chronic condition, it may be harder to do the things you’d like that will help you to make the most of your retirement.

With a Kaiser Permanente Medicare Advantage Federal Employees Health Benefits (FEHB) health plan, you’ll have all the tools and support you need not only to manage your condition, but also to enjoy your well-deserved retirement.

A commitment to care excellence

Our doctors practice across 60+ specialties, so you’ll always get the specific support you need, whatever your condition. You’ll partner with your primary physician, specialists and care team to make the right decisions for your health—because who knows better than you what it’s like to live with a chronic illness or disease? Whatever your condition, your care team will decide how to best manage it—whether that’s through medication, lifestyle changes or another course of action.

Chronic care

If you have a chronic illness like diabetes or high blood pressure, your care team will work with you to manage your condition with frequent screening measures and advanced treatments. Remote monitoring, 24/7 phone advice, and routine video checkups¹ make it easy for you and your doctor to stay on top of your health. Pair those with disease management programs, wellness classes, and other measures, and you’ll be managing your condition in no time.

Cancer care

We customize cancer care for each patient, and you and your family will be active participants in all decisions about treatments, surgeries, and emotional support. After a diagnosis, your Kaiser Permanente cancer care team will evaluate your case and explore any new breakthrough treatments, clinical trials, or procedures for your specific type of cancer. Your physician will recommend options that best suit your needs.

Cardiac care

Our cardiac specialists use treatment methods and medications that are customized specifically for each individual’s heart condition and lifestyle. Our clinical trials and culture of innovation will give you access to cutting-edge treatments, like less invasive surgery, so you can get the care you need to stay healthy and active. Kaiser Permanente offers healthy lifestyle classes, such as nutrition, to help you better manage your condition and improve your heart health. We even offer same-day diagnosis and treatment with rapid access cardiac testing.

Mental health care

Even without the stress of a daily workday, you may need support for your mental wellness. At Kaiser Permanente, we’ll have you covered. We offer several options to get care for your mental health in a way that’s most comfortable and convenient for you. And no referral is necessary. You’ll also have access to a variety of mental wellness resources, including classes, support groups, and self-care apps Calm and Headspace, which are available to members at no additional cost.²

Now that you’ve got the time to live life to the fullest, you shouldn’t let a chronic condition slow you down. With a Kaiser Permanente Medicare Advantage FEHB health plan, you’ll have access to coordinated care, where your doctors work together to provide you with all you need to keep your condition in check. This means you can embrace your well-earned retirement—and thrive in your next chapter.

 

¹ When appropriate and available. If you travel out of state, phone appointments and video visits may not be available in select states due to licensing laws. Laws differ by state.

² App services may not be covered under your health plan benefits and may not be subject to the terms set forth in your Evidence of Coverage or other plan documents. These services may be discontinued at any time without notice.

The post Discover how a Kaiser Permanente Medicare Advantage FEHB plan helps support your chronic condition in retirement first appeared on Federal News Network.

© Getty Images/scyther5

Federal retirees—you have more than earned your benefits for the many years that you’ve dedicated to service. So why not make the most of them in retirement? Kaiser Permanente’s Medicare Advantage health plans, combined with your Federal Employees Health Benefits (FEHB), deliver the convenient, high-quality, affordable care that you need to keep you at your healthiest—and to stick to your budget.

Whichever Medicare health plan you choose, here are five ways that Kaiser Permanente can support your health and your life in retirement:

1. A coordinated system of care

Our doctors, pharmacists, diagnostics, medical facilities and health plan all work together to deliver convenient care that’s personalized for each member. And, as a member, your care team will help you manage your care by making appointments, finding specialists and more, so you’re never left on your own. This lets you spend your time on other things—like enjoying your retirement.

2. Top-rated care from highly skilled doctors

In the survey Best Health Insurance Companies of 2025 by Insure.com, Kaiser Permanente as a national enterprise is tied for #1 overall among 65 competitors.

Our region-wide pool of 1,800+ physicians is recruited from the top medical schools in the country, and many are recognized as Top Doctors¹ annually in local publications. They practice in 60+ specialties, including:

• Endocrinology
• Gastroenterology
• Ophthalmology and many more

3. A focus on preventive care

There’s no better time to focus on your overall well-being than in retirement. You deserve to live your golden years to the fullest, as healthy as you can be. Because frequent monitoring and early detection are key to better outcomes, as a Kaiser Permanente member you’ll get your blood pressure checked at every visit. Our members also get same-day results for mammograms, so they get to diagnosis and treatment faster. This commitment to prevention is the reason why:

• We lead the region in controlling 81% of members’ blood pressure.
• We lead the nation for members who get screened for colon cancer (80%), cervical cancer (91%), and breast cancer (85%).²

4. Easy access to care

Our members can see a doctor face-to-face at any of our 35+ medical facilities throughout the Mid-Atlantic region. Most offer primary and specialty care, lab, X-ray, and pharmacy together under one roof. We also offer access to hospitals, After Hours Care, and Urgent Care centers, including several Advanced Urgent Care centers open 24/7.

Our $0 virtual care options help members conveniently get medical attention 24/7. These include:

• Phone appointments
• Video visits
• E-visits³

Same day, on-demand visits to see a doctor by phone or video for a minor health concern are also available—no appointment needed. And any doctor our members see will have access to their digital health record to personalize their care.

5. Extra convenience and wellness benefits

• One no-cost hearing aid per ear every 36 months
• Nonemergency transportation to medical providers (up to 24 one-way rides per year)
• Membership in the One Pass® fitness program,⁴ where members can choose from a nationwide network of gyms and fitness centers or enjoy digital fitness classes from the comfort of home

What Kaiser Permanente Medicare Advantage plans are available to FEHB members?

Members can choose either a High Option or Standard Option plan, both with great benefits.

For Medicare Advantage 1, High and Standard Option plans offer:

• No copays for primary care, specialty care and Urgent Care visits (High Option), plus lower copays for outpatient surgery, inpatient hospital and most prescription drugs
• $50 over the counter (OTC) quarterly wellness benefit to order items such as cold remedies and pain relievers (High Option)

For Medicare Advantage 2, High and Standard Option plans deliver:

• Up to $2,400 reimbursement per year ($200 per month) for the Medicare Part B premium you pay
• Lower copays for primary and specialty care office visits, outpatient surgery, Urgent Care and most prescription drugs

Prosper members also get money-saving benefits:

• Lower copays for primary and specialty care office visits, outpatient surgery, inpatient hospital, Urgent Care and most prescription drugs
• No annual deductible

As a retiree, you deserve to live a hassle-free, healthy life. When you combine your FEHB coverage with a Kaiser Permanente Medicare Advantage plan, you’ll get seamless care, save money, and enjoy extra benefits that help keep you at your healthiest—and make your life easier.

This article is sponsored by Kaiser Permanente. Discover how our Medicare Advantage plans work seamlessly with FEHB to support your health and budget. Visit kp.org/fedsmedicare or call 1-877-547-4909 to learn more.

¹ The physicians who practice at Kaiser Permanente are recognized as Top Doctors in Arlington Magazine (2025), Bethesda magazine (2025), Northern Virginia Magazine (2025), Washingtonian magazine (2024), and Baltimore magazine (2024).

² The source for certain health plan measure rates and benchmark (averages and percentiles) data (“the Data”) is Quality Compass® 2024 and is used with the permission of the National Committee for Quality Assurance (“NCQA”). Any analysis, interpretation or conclusion based on the Data is solely that of the authors, and NCQA specifically disclaims responsibility for any such analysis, interpretation or conclusion. Quality Compass is a registered trademark of NCQA. The Data comprises audited performance rates and associated benchmarks for Healthcare Effectiveness Data and Information Set measures (“HEDIS®”) and HEDIS CAHPS® survey measure results. HEDIS measures and specifications were developed by and are owned by NCQA. HEDIS measures and specifications are not clinical guidelines and do not establish standards of medical care. NCQA makes no representations, warranties or endorsement about the quality of any organization or clinician who uses or reports performance measures, or any data or rates calculated using HEDIS measures and specifications, and NCQA has no liability to anyone who relies on such measures or specifications. NCQA holds a copyright in Quality Compass and the Data and may rescind or alter the Data at any time. The Data may not be modified by anyone other than NCQA. Anyone desiring to use or reproduce the Data without modification for an internal, noncommercial purpose may do so without obtaining approval from NCQA. All other uses, including a commercial use and/or external reproduction, distribution or publication, must be approved by NCQA and are subject to a license at the discretion of NCQA. ©2024 National Committee for Quality Assurance, all rights reserved. CAHPS is a registered trademark of the Agency for Healthcare Research and Quality (AHRQ).Official plan names per Quality Compass: “Kaiser Permanente Mid-Atlantic” = Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc.; “Aetna HMO/POS” = Aetna Health Inc. (Pennsylvania) – Maryland; “Anthem HMO/POS” = HealthKeepers, Inc.; “CareFirst HMO/POS” = CareFirst BlueChoice; “CareFirst PPO/EPO” = Group Hospitalization and Medical Services, Inc. (GHMSI); “Cigna MD” = Cigna Health and Life Insurance Company – Maryland; “Cigna VA/DC” = Cigna Health and Life Insurance Company – Virginia/District of Columbia; “MDIPA HMO/POS” = MD – Individual Practice Association, Inc.; “Optimum Choice HMO/POS” = Optimum Choice, Inc.; “UnitedHealthCare HMO/POS” = UnitedHealthcare of the Mid-Atlantic, Inc.

³ When appropriate and available. If you travel out of state, phone appointments and video visits may not be available in select states due to licensing laws. Laws differ by state.

⁴ One Pass® is a registered trademark of One Pass Solutions, Inc. in the U.S. and other jurisdictions and is a voluntary program. The One Pass program and amenities vary by plan, area, and location. The information provided under this program is for general informational purposes only and is not intended to be nor should be construed as medical advice. One Pass is not responsible for the services or information provided by third parties. Individuals should consult an appropriate health care professional before beginning any exercise program to determine what may be right for them. One Pass is not available with Kaiser Permanente Medicare Advantage DC (HMO-POS) or Kaiser Permanente Medicare Advantage Value 1 and Value 2 MD (HMO) plans. One Pass® is a registered trademark of Optum, Inc. in the U.S. and other jurisdictions and is a voluntary program.

The post 5 ways a Kaiser Permanente Medicare Advantage FEHB plan can make retirement easier—and healthier first appeared on Federal News Network.

© Getty Images/pada smith

Interview transcript: 

Eric White It’s important to have people like yourself on. This is another government shutdown. It seems as if they’re popping up now every two to three years. I’m sure we’ve talked to you in the past or in the last one. What are your thoughts surrounding this one and how can folks get through it?

Abe Grungold Well, unfortunately, during my federal career, I went through six federal shutdowns, one under Bush senior, two under Clinton, one under Obama, and two under the Trump administration. So, yes, it’s a very stressful time. And there are some things that federal employees can do. I have tried all of these tips, so I’m just not pulling them out of a book somewhere. The number one thing is if you can tap into any cash reserves that you have saved up, that is very important, or even cash in a federal savings bond that may have come your way in past years. So those are two good sources of income. The other thing is it is very important to eliminate all unnecessary spending. And what that means is you don’t buy that Starbucks coffee. You don’t have lunch with friends. You don’t have dinner with your friends. And if even necessary, you should eliminate some other expenses, like your streaming services. You may have more than one streaming service for entertainment, and it’s a good idea to shut those off. Another method for getting through this tough period, especially where you have bills, whether they’re medical bills, credit card bills, or utilities such as electricity, you should contact every company, credit card company, utility company, and just ask them if they could eliminate any interest payments or any late fees and try to be understanding that you are a federal employee going through a federal shutdown. Now, if you have some medical bills, you should try to work with the medical provider and get yourself on a payment plan. I have done that in the past.

Eric White I wanted to also focus in on when you’re cutting back on all of these non-essentials as you mentioned it, how far can those go, though? This shutdown, you went through a couple of long ones yourself. The longer that these go on, are you able to really stretch out all your dollars as much as you can? Do you take the steps incrementally or should you just do them all at once? What do you, what was, what worked for you?

Abe Grungold Well, as you know, that when the federal shutdown gets beyond a week, you really have to take evasive steps to try to handle all your finances. And after a week, you should be calling your credit card company, your mortgage company, utilities company, and let them know that this federal shutdown is going to affect you. And you’re going to have trouble making your monthly payments. Look, they understand this, and they should be somewhat sympathetic to help you out during this situation. So it is something that you need to tackle, certainly after the first week. And today, I believe, is the 21st day of the federal shutdown. So it’s three weeks have passed. And it’s something that you really have to chip away every day at figuring out how to save money, and it’s not easy. Even something that I had done was start cleaning out a closet and try selling some things in a yard sale. I would clean out my garage and sell things that I haven’t used and have a yard sale or sell them on eBay, Craig’s List to try to generate a few hundred dollars here and there. That will help you with your groceries and paying your fuel for your gas tank. You have to work at it really every day to figure ways out. Another good way to find some money is that gold today is selling for $4,300 an ounce. Go through your jewelry, maybe you have some broken pieces or old jewelry that you don’t use anymore or wear and try to cash those in as well. So there are a few things you can do and you really have to pay attention to constantly work at it.

Eric White We’re speaking with Abe Grungold here of AG Financial. All right, so let’s push the clock forward, hopefully not too far ahead, and let’s say the shutdown’s over. Who knows where the dust is going to settle with the RIFs that have been issued during this shutdown process. But say you’re not R/if-ed and you’re back in the office. Seeing RIFs thrown out in that manner may hang over your head a little bit while you’re working, especially if you are one of those furloughed employees deemed non-essential worrying that you could possibly be next at your agency. Is there anything you can do to have a plan in place just in case you do receive a RIF notice in the mail?

Abe Grungold Well, it’s funny that you mention the RIF. I’m now recalling back in the 90s during the Clinton administration, my office was a very small office. We had about 10 or 15 people, and there was a lot of talk about RIFing, closing the office, reduction in force, and moving the staff to the regional office, and I remember there was an office in Florida that was closed and employees had to move to the Atlanta office. But fortunately, my office in Boston did not close, but there was the threat of it closing. So what I had done was I started looking at some career opportunities outside of the federal government. I hate to say it, but I took the policeman’s exam and a coworker of mine, we started going through the process of becoming police officers. And it was just something that we could do to sort of give the control back to us. And we also, he and I also had a plan that if they were going to close the office, and we were going to have to relocate to New York City, he and I were going to be roommates. So we were going to get an apartment in New York and do whatever we have to do to keep our federal jobs. So you have to start thinking along these lines, what are your alternatives? And it’s not easy, but there are some things that you can try to do to sort of alleviate a lot of the stress of a RIF.

Eric White And also, while the government is shut down, and while I have you, let’s turn to those that are out of federal service, with the federal retirees not getting those costs of living adjustments anytime soon since don’t really have any data that is able to back up giving one. What are you telling folks who come to you speaking about, hey, what do I do if, if I’m starting to fall behind, even though my checks are still coming in?

Abe Grungold Well, cost of living adjustments are always a question mark and they’re not really approved until closer to the beginning of the year. There are moments where there are proposed cost of living adjustments and they are always lowered and once upon a time they were increased. So that is something that you really can’t count on. What you can count on is that during a federal furlough, you are going to receive your annuity from the government. You are going receive your TSP withdrawal if you’re making one from the government, and you are going to receive Social Security. So those are the three-legged stool that you are counting on as a federal retiree. That’s what I count on as a federal retiree. I know that those three things are coming in and the small cost of living adjustment just doesn’t seem to be a concern of mine because it’s just a question mark what that amount will be.

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Interview transcript: 

Eric White We’re talking about the new ORA system or I guess, is it ORA system? I’ll let you correct pronunciation my for federal retirees. Obviously, that system is going to get used a lot over the next coming months. If what has been happening recently is any sign of what’s to come, tell me about what’s going on with the system and what feds are saying, of the ones that have been using it have been saying about it.

Thiago Glieger Yeah, Eric, this new system, so we call it ORA. I think that’s how most people are calling it, as you said. So this is a brand new system. And honestly, it’s been confusing a lot of people, it’s replacing the old paperwork that a lot federal employees had to fill out, the SF-3107, as they were going to retire from their agencies. But I think the big problem here, Eric, is, they’re finding that a lot of the HR departments are just simply overwhelmed. We had a lot of people that were leaving, we have bottlenecking of a lot people that are leaving on DRP as well, and so they just can’t provide the kind of support that they used to before. So a lot of these questions start to pile up. It’s a brand new system and there’s not enough people in place to help answer those questions. Retirement is already a pretty stressful process for people. So then on top of that, not having a clear process or information about a new system only adds to the anxiety. And so when it was first launched, everyone hoped that OPM was going to say, this is going to be faster, it’s going to be smoother, it’s going to require less people, and OPM actually said the opposite. They said at first, it might actually take longer. They are very hopeful that over time this is going to be a good system, but right now there’s a lot of moving parts that have to come together for all of that efficiency to really start showing up. And as you guys have seen, Eric, there’s tens of thousands of federal employees retiring. We just had the first wave here on 9/30. We’re gonna have another wave here 12/31. And so it’s really, really tough for people to get answers to the system.

Eric White Yes, sort of a ready fire aim approach that we love here in the USA. Walk us through what a federal employee should expect when they decide to retire under this new system. What are some of the major changes from the old system? Not that anybody retires more than once hopefully, but what exactly are they looking at from a landscape perspective?

Thiago Glieger Yeah, so what it used to be is that a lot of agencies would run the GRB platform retirement estimator for federal employees retiring. And the GRB platform was effectively a repository of your federal service and it would give you information on what retirement could look like, estimates of your pension, things like that. So then we run into problem number one, a lot agencies cut GRB. So now federal employees are saying, well, what does my retirement estimate look like? How many credible years do I have? That system is no longer there. So then agencies are not even able to provide that information. But presuming you’re still going to move forward with the actual retirement process, first step is you have to notify your HR office that you’re ready to retire. You can send them an email generally and say, I believe I’m eligible, I’d like to start the retirement planning or the retirement process. And this is because the HR group has to initiate the ORA system in most cases. Every agency has a little bit of a different process, but this is what the majority of the groups are doing. You have to remember what’s different here is now HR is swamped. There’s tons of people retiring. There’s less of them around to be able to do this, which is causing some of the bottleneck. Once HR begins the ORA process, you’re given access to it. And again, this is going to replace the SF-3107, which is the retirement form. And so now it’s actually easier, because instead of filling out a government form, you’re just going through a system online and it’s asking you questions one by one. Everyone has filled out those kinds of forms before. So it’s actually pretty easy as we’ve seen with some of our clients. And what it does is it takes your answers and pre-fills the form for you, which is a nice service. Once you submit that part, it’s really important that a federal employee stay alert because a lot of times HR, they may kick it back if they need additional information, there’s something that’s missing. So you have to check to make sure you have it. You have to make to make you don’t need to do additional work on the ORA system for that. That’s when it moves to payroll. Once it moves to payroll, they finalize all of your hours, which can take a month to a month and a half just at payroll itself, before it goes to OPM. So if you think about it, we’re talking a month at payroll, could be a month before HR actually gets around to being able to initiate the system for you. At two months so far. Once it hits OPM, that’s when the official clock starts, as OPM likes to describe it. And there’s some uncharted waters here because OPM has not really handled A), this new system before and B), this many federal employees retiring all at the same time. So they release information, there’s some congressional report that gets put out there that talks about how many applications are coming into the system and what is the average processing time month over month. We’ve been seeing that go up and up and up over the last three months. I expect it’s going to continue to get worse. So we’re talking three months at the agency level, plus whatever time OPM is going to need for themselves.

Eric White We’re talking with financial planner Thiago Glieger. So other than those long timelines, well, we can call them unknown timelines, as you say, what are some of the other issues that federal employees are seeing so far with the system? It sounds like it is going through some growing pains, but are there any fundamental flaws with it that people are just not liking?

Thiago Glieger I think some of the challenging questions that the system asks them are things like, how much withholding do you want to do on your taxes? Or what do you want to do about life insurance? And before, there were some guidance in the forms and how to be thinking about some of these things, the system is a little bit more streamlined and it just asks you the question. Well, if you haven’t gone through the process of creating a financial plan, how do you know how much insurance do you need? What kind of tax liability are you expected to have? So federal retirees are called upon to make these decisions in real time as they’re filling out the form and they don’t really have the information to be able to answer those questions. The other issue that we are running into, and this one hasn’t been too much, is that sometimes people don’t get the notification of additional action that they need. Sometimes it gets stuck in their spam email. So this is something that again, it’s those bumps that they’re trying to pull together. There are a lot of systems in the background that have to coordinate with each other, and as any brand new system that gets launched, there’s always stuff that’s going to break, so I’m sure some of that’s going to be a problem too.

Eric White All right. And so what can folks do if they are looking to retire? You’re a financial planner, I guess we’re talking to the right person. How can they financially prepare for any delays that might occur because some of those dates don’t line up and you don’t want to be caught in between paychecks, as they say, and without anything coming in. What sort of precautions can those looking to retire take?

Thiago Glieger Yeah, that’s a really good point, Eric. I think the first thing that federal retirees should remember is that you will get your annual leave lump sum. So that comes pretty quickly, in our experience with clients, right after you leave. So you get your final paycheck, and then shortly thereafter, you get your lump sum. So depending on how many hours you have, you’re going to get a big check that’s going to help you to meet your expenses between when you leave and no longer have an income and when the pension actually fully starts. There are also, in most cases, an interim payment where it’s a portion of your final pension, not the exact amount. But again, we don’t want to count on that because there’s cases where people don’t get it. So the biggest thing is that, let’s say you’re planning to retire December 31st, now is the time to start boosting your cash reserves. So what do I mean by that? Cash in the bank is going to be really important here. So this might mean, and it sounds a little counterintuitive, but might mean maybe don’t put as much in the Thrift Savings Plan for the rest of the year if you know you’re going to retire. Yes, you have access to the TSP if you are retiring within a certain age, the age is 55 for most people, but cash in the bank is that much easier to access, it’s already been taxed in most cases. So if you reduce your TSP contribution, that means your take-home pay goes up and you get to start accumulating that cash. I would also think about what kind of expenses maybe you have coming up. The general guide for people is we like around six months worth of your monthly expenses in cash in the bank at all times. And because we might be looking at delays on your pension starting, you might want to increase that a little bit more. So if you’ve got big renovations you were planning to do on the home, maybe postpone that for a little bit until you get greater clarity around OPM’s timeline for the stuff. And the last one, and this one’s a little bit controversial as well, but it depends on how old you are. If you leave prior to the age of 55, which a lot of people have done this year, you technically don’t have access to the TSP funds un-penalized, unless you are law enforcement or special provisions, 1811s, things like that. So what you can look at is a potential TSP loan. You can get up to $50,000 and that comes without that 10% early withdrawal penalty. Which is kind of nice because you can put that in your bank account, use it or don’t use it, but at least it creates extra cashflow for you. Of course, check with your financial professionals, make sure that this is something that is feasible within your plan, but that’s been a really solid one to help bridge people over.

Eric White Uncertainty is the word of the day for a lot of federal employees, particularly those that are retiring, even. So, any advice on handling that aspect of things you’re already in, going through the anguish of entering into a new stage of your life, having all of this in the background of shutdowns and potential furloughs and things of that nature, what can you tell people that are going through this right now?

Thiago Glieger I would say for folks to rely on your planning. This is something that creates great peace of mind just knowing what you’re going to do in which scenario. So if this happens, if it takes longer, if the markets crash in the middle of your waiting for your pension, all of these things, if you can think ahead of what those potential problems may be and what you’re going to do if those things happen or what you’re going to do in preparation to hedge some of those risks, that gives you great peace of mind. We have to be careful about watching the economy and the news around the markets. The markets are very volatile and you always have different opinions and people talking about what the markets are going to do next. We have to be careful because that creates a lot of anxiety for retirement. And I think too, the more information you have, the better. OPM has a really, really helpful Retirement Quick Guide, which we can give you guys the link, and I’m sure you guys have this already. You can put it in the show notes. But the OPM Retirement Quick Guide is super helpful, it walks you through the process so you know what to expect. And in fact, there is one additional resource that is actually your benefits officer directory. This is something that OPM maintains pretty regularly and it’s the HR person in charge at your office. In case the process is just stuck and if you can’t get answers, you can’t get anywhere, this is a place you can look for to find out who’s in charge of your agency to get the answers you need.

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