Interview transcript

Terry Gerton As we’re looking forward to January, it’s a new year, new resolutions. One of those resolutions is often financial wellness as opposed to just health and wellness. So let’s talk about why this is such an important moment for federal employees to be thinking about resetting their financial picture.

Thiago Glieger Yeah, Terry, the new year always brings a fresh start and it’s a really good time to reset and look at the financial plan because there’s new limits for the tsp, there’s a new year that you get to plan for in terms of your expenses and budgets. So, there’s things we can look at like your investments and how you’re doing on savings and really make sure that you’re still on track for some of the other goals that you set yourself. So lots that we can talk about.

Terry Gerton Well, this last year certainly was turbulent and maybe caused some folks to reconsider their financial perspective. Let’s start with TSP. What are the new rules about TSP and what should employees be thinking about as they plan their TSP contributions?

Thiago Glieger So as we look to the first paycheck that feds are going to receive in 2026, it’s a good time to review that contribution because in this new year, the limit is going to get bumped a little bit. So we’re going to $24,500 for the employee contribution. And for anyone who’s over 50, you have the catch-up contribution, which now for next year is gonna be $8,000. Okay, so the big difference here, Terry, between this year and next year, is that now there’s a new rule in place that says if you earn over $150,000, that catch-up amount that you used to be able to put into traditional TSP and defer the taxes, now you’re going to have to put that into the Roth. Okay, so it does mean you’re gonna pay taxes on that money right now But you do get to enjoy that tax-free growth later for anyone who is a little bit older than 50, so between 60 and 63, it’s a weird range in there, you can actually do what we now call the super catch-up contribution. So it’s a very new rule as well, and that additional contribution, and it ranges depending on how old you are in that range, you can put as much as almost $36,000 into the TSP for next year. So that’s really good for anyone who, maybe the kids are out of the house at this point, you’re empty nesting and now you don’t have so much expenses, you can focus on saving for retirement more seriously. That’s a really good opportunity to revisit that.

Terry Gerton And does that super catch-up for us older folks also have to go into the Roth?

Thiago Glieger I believe the answer is yes, because it counts as a catch-up, and this new rule talks about the catch-up amount, having to go into this after-tax bucket, no longer being deducted as a pretax deduction.

Terry Gerton So thinking about how much you’re contributing is one facet of your TSP. Thinking about what you contribute to is the other. Certainly the stock markets had a pretty good run in 2025. How should people be thinking about their portfolio mix in the TSP coming into 2026?

Thiago Glieger That’s such a hard one, because we all want to be aggressive investors when the markets are doing well. We all want be conservative investors when the market’s are rocky. And I encourage federal employees to look at their investment decisions from within the context of a financial plan. Okay, so for example, when we think about volatility in the markets, that’s the growth that gives us long-term. But that same volatility, short-term, equals risk. And so for someone who is going to be looking at possibly retiring here in the next maybe few years, you really have to be careful with how much you have in the C, S and I funds because those can be very volatile. That’s the stock market. If the markets start declining, you might not have enough time to be able to recover from that market crash if you’re all of a sudden going to start using your TSP for retirement. So the F fund and G fund can be a good solution for this. I like the easy button In the TSP, Terry, the Lifecycle Funds. That really, you can pick the alignment with your retirement date, just know that it’s going to be a little more conservative for the long term, but it does help you not miss being too conservative.

Terry Gerton Does it make sense to have a mix across the funds so that you balance risk and reward?

Thiago Glieger Absolutely. I think that there’s always some part of the portfolio that has to be inflation fighting. We call that the silent retirement killer, right? Our money can never purchase as much as we really want it in the long term. So stocks give us that inflation fighting, but we need money in the short term like the G fund or the F fund that is safer and more diversified. And that’s where the life cycle can be very helpful. It does the preallocation for you. The closer you are to the date, the more conservative it’s going to be.

Terry Gerton I’m speaking with Thiago Glieger, certified financial planner with RMG Financial Advisors of Maryland. So Thiago, on top of TSP, it’s time to rethink budgets, always as you come into a new year, one of my least favorite financial tasks. This past year for federal employees certainly posed a lot of uncertainty and risk; shut down, multiply that. How should people be thinking about budgeting as they begin the new year?

Thiago Glieger Yeah, Terry, I, even as a financial planner, I don’t like budgeting either. I don’t think it’s something anyone really enjoys doing. And what has really been helpful for us is to use the word intentional spending instead that makes it feel like it’s a more positive component. And so when we think about how do we want to be intentional about our spending, we want look at, are we set up for a potential emergency? As you mentioned, this was a big year that really brought the, that detail to importance and brought it to light. How are we covering our short-term expenses if something happens? What do we call short-terms? An emergency savings anywhere between three to six months of all of your living expenses. Honestly, before anybody is going to be investing and putting more money in the TSP, you have to have that emergency savings set up. And so then you think about, okay, well, am I still spending reasonably throughout the year? What about a potential car maybe I have to buy or there’s a renovation I have do, or medical procedure I’ve been putting off. These are expenses you want to think about ahead of time so that you have the cash ready and waiting for you. Again, not invested in the markets because the more risk you take in the market, you can’t align their timing with your timing. So you want to use things like cash, CDs, or bonds.

Terry Gerton One of the big inflationary aspects of a typical family budget is healthcare premiums and federal employees saw growth there as well coming into 2026. What should they be thinking about with respect to healthcare?

Thiago Glieger Yeah, Terry, this is such a difficult conversation because it is so challenging to solve the health care issue that we have. And premiums just keep adjusting every year because of how fast the cost of health care inflation is. When we look at regular inflation, it’s between two and a half long term. Health care is almost twice that. So we have to be thinking about how are we going to take care of ourselves? And one of the greatest underutilized tools that federal employees have is the FSA account. You don’t need to be in a high-deductible medical plan to use an FSA. And an FSA Is essentially money you get to put into this account, you get deducted from your taxes that amount that you put in there. And then you get to use the money completely tax free on things that you would have spent money for medical expenses anyway, like band-aids or going to see your primary care physician or the dentist or anything like that. So I think the limit is about $3,000 for the year which is a pretty big chunk that now you get to save totally on taxes by using that tool.

Terry Gerton So Thiago, you kindly changed the word from budgeting to intentional spending. How should people be thinking about getting a really good handle on what they are spending? Is that looking at your credit card on a monthly basis or what practice do you recommend?

Thiago Glieger I have found, Terry, that looking at a month-to-month budgeting system can be kind of challenging. I find it hard to remember what I had expenses on last week. So for me, and for a lot of our clients, doing a weekly check-in with yourself tends to work really well because you can say, how did I do this week and how can I do better next week? We also like to break things down into what are our absolute needs versus our discretionary spending. So discretionary spending are things like hey, how many times are we gonna dine out this week or this month? And how many time do we want to go on vacation this year or take a trip here or there? So those things you have a lot more control over and that’s the part that if we can plan carefully ahead, we can make sure that we don’t overspend and then blow out our savings.

Terry Gerton We’ve covered a lot of ground in these few minutes. What is one thing you want listeners to keep at the top of their mind regarding financial planning as they come into 2026?

Thiago Glieger I would say that starting the year strong in financial planning is about being intentional. It really is never doing all of the things at once, rather just creating some key habits and putting those things in place day after day so that you can have that confident financial future and stability throughout the year.

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