One measure of a career is the financial remuneration and whether your money and health needs are taken care of. One federal retiree analyzed the question of whether he was right to switch from the private sector to federal. Joining the Federal Drive with Tom Temin with the details, Abe Grungold, owner of AG Financial Services.

Interview transcript:

Tom Temin  One measure of a career is the financial renumeration and whether your money and health needs are taken care of. My next guest, a federal retiree analyzed the question of whether he was right to switch from the private sector to federal. Here with what he found, Abe Grungold, owner of AG Financial Services. You took a long look back at a long career, Abe. Just give us what you are doing here.

Abe Grungold  Tom, this was a question that has always plagued me my entire federal career. Did I make the right choice from leaving my senior position at a hospital and transitioning to the government? Because I took a $12,000 pay cut, which was about 35% of my previous salary, to work for the government. And I always wondered, did I make the right choice?

Tom Temin  Well, let me ask you this, though, what was the motivation in the first place to go to the government?

Abe Grungold  Well, the hospital was going through a lot of financial problems. They had merged with another hospital and I saw the beginning of the decline of this hospital, and I didn’t see a future with the hospital. I was afraid I was going to get laid off one day.

Tom Temin  Sure.

Abe Grungold  So, that’s why I sought something else a little bit more secure. And, it’s funny. In 1985, I started with the government, and a very close friend of mine also started at the hospital in 1985. I recently had dinner with her, and we discussed our salary, our benefits, and her future retirement. She’s going to retire in three years. And it was just wonderful, comparing my federal salary and benefits and retirement, comparing to hers, and I learned quite a bit.

Tom Temin  Now, we know from previous interviews that you are a multimillionaire in the TSP. And you are not three years from retirement, but about three years into retirement, enjoying the pickleball life and so on. So, tell us about what some of the findings were, compared to your friend.

Abe Grungold  Yes, so we hit upon five major areas: salary, health insurance, the TSP or her 401K, the retirement monthly annuity, and life insurance. So, what I found out from salary is that in the hospital, they did not provide very many COLAs. Over the past 40 years. I remember receiving a COLA once in the seven years that I was there. Now, with the government, I basically received a COLA every year with the government. I think during my last 40 years, there were two or maybe three occasions where the government did not provide a COLA. So even though I started my federal career at a lower hourly rate, I accelerated through promotions, and my salary was much higher than my friend’s present salary, who was also a manager, but I think that was largely due to the COLAs.

Tom Temin  The cost of living adjustments, by the way, for those that don’t yet know what a COLA is. So, you ended up ahead in the long run on salary, then.

Abe Grungold  Yes, yes. I ended up with a $75 per hour last salary that I had three years ago, and her present salary is $55, with a maximum she can achieve of $65 per hour. And I was already at the maximum when I retired with the government. But I think that difference in salary was certainly due to all the COLAs that I had received during my federal career. And, with respect to health insurance, the government provides a large variety of health insurance plans to pick from. The hospital where my friend works, they basically only have two or three choices. And variety is really the spice of life and health insurance. You want to pick a health insurance plan that really tailors to your needs, and that is very important. But the most critical part of the health insurance benefit is, I carry my health insurance into retirement. My friend will not have that opportunity to take their health insurance into retirement. That is a big, big benefit that I received.

Tom Temin  Yes, in some ways, it’s one of the biggest ones. And it’s really pretty much that situation for the rest of the private sector as well as your friend. We’re speaking with Abe Grungold, retired federal employee, and now owner of AG Financial Services. And then there’s the TSP, and the ability to save in a 401K, in which the government and private are a little bit more equal in most circumstances.

Abe Grungold  Yes, my friend had a variety of different deferred compensation plans to pick from: a 401K, a Roth IRA, and a 403B. And I remember participating in the 403B when I was at the hospital. But with the government and the TSP, I have always received a 5% matching to my TSP every year of federal service. My friend has never received any matching from her employer to her tax deferred plan. And that is probably the most important benefit that a federal employee can obtain, in addition to their health insurance. So, that is where I really grew tremendously with my 401K. I certainly didn’t ask my friend what her balance was, but the key is that she never received any match.

Tom Temin  There’s so many variables, such as your tolerance for aggressive investing for much of those years. And you had a pretty good tolerance for that.

Abe Grungold  Yes. I mean, I was a roller coaster rider, and I was always aggressive with my TSP and the merry-go-round riders are the ones who are solely in the G fund. There’s nothing wrong with those investors, but if you want to be a TSP millionaire, you’ve got to ride the roller coaster. And that was a big difference I found in our discussion was the employer matching.

Tom Temin  And then the other factor is, if you had a steadily higher increase in pay, then the more you contribute to social security, which means that at the end of a career, your social security benefit is greater.

Abe Grungold  Yes. I mean, certainly my social security benefit would be higher. I didn’t even ask my friend about that, because I knew that was already going to be true. So, we didn’t even hit upon that question. But what I did ask her was about her retirement annuity that she would receive from the hospital after 39 years, or she’ll have over 40 years when she retires. Now, I didn’t have her formula for her retirement annuity. But we did discuss what the amount is, and mine was more than twice what she would be receiving. She’s going to receive $1,800 per month, and I received at retirement $4,500 per month as my annuity. Now, that is probably also largely due that I have a higher salary. And I also received COLAs for my retirement annuity. She did not know if she’s going to receive any COLAs and I don’t think she will, because they usually buy those from an insurance company.

Tom Temin  You’re a FERS.

Abe Grungold  I was always a FERS employee. And certainly, your retirement annuity is very important. It’s one of the three-legged parts to your stool, and your three-legged stool is your annuity, your TSP and also your FEHB plan that you can take into into retirement. And the last thing that we discussed was life insurance. Life insurance is something that she was always able to obtain at the hospital and I could obtain it through the government. But the key difference is that she cannot take her life insurance into retirement. That benefit will end when she ends her employment. With the government, you could take your life insurance into retirement, and the government provides a basic $10,000 free portion to your life insurance, I believe when you hit age 65. But you could still carry any amount of life insurance into retirement as a federal employee. That is also a significant benefit.

Tom Temin  Well, it certainly helps your spouse take you to your eternal reward in style\, should that need arise.

Abe Grungold  Actually, Tom, I terminated all my life insurance when I left federal service. I just didn’t see a point of needing any, and that was just a personal decision. Every employee needs to evaluate their life insurance needs. And for us, we terminated ours. But, basically, what I learned, Tom, is that overall, I absolutely made the right decision with my federal career in all five of these categories. My federal career excelled in all these categories with salary, benefits, retirement, and certainly social security as well. And there were many other little benefits that we talked about. But certainly these were the five most important.

Tom Temin  All right, so the federal slot machine comes up with a row of cherries, but I have to ask you one existential question. Did you like the work? Was it good to work for the government and you didn’t go crazy waiting until the end?

Abe Grungold  I loved all four federal agencies that I worked for. It provided me with a feeling that I was doing good. Each position was a little bit different. But I was always sort of in the investigative side of government and trying to, you know, correct problems, and catching criminals, etc. And I found that work to be very fulfilling. I mean, I certainly enjoyed working at the hospital. But my federal career far exceeded my needs, in that self actualization on the Maslow hierarchy of needs. Yes, it certainly fulfilled that. All right, Abe ‘Moneybags’ Grungold is a federal retiree and owner of AG Financial Services. Thank you for that detailed analysis.  Thank you, Tom. It really was important to be finding out and now I’m so happy that I did.

Tom Temin  That’s right. Well, you know, living well is the best revenge, they say. We’ll post this interview at federalnewsnetwork.com/federaldrive. Hear the Federal Drive on your schedule, subscribe wherever you get your podcasts.

The post One way to figure if you made the right federal career choice first appeared on Federal News Network.

Financial planning is not something you set and forget. It requires periodic review and changes to maximize results and those changes often depend on the stage of your career.

So how should you tackle that planning? We will talk to experts at OPM, federal unions and more — who are also at various stages of their own careers — to find out!

Federal Drive Host Tom Temin will lead this lively panel discussion as part of WAEPA’s Annual Member Meeting. Our panel of experts will share tips, tactics and best practices that can help you maximize your own financial results — whether it’s your first year in the federal government or your 20th.

Plus, one CPE credit will be earned after you attend the full webinar.

Here are just a few of the topics slated for discussion:

• How to set financial and other life goals as a fed
• When to make financial changes tied to the stage of your government career
• How to maximize return on your TSP contributions
• Where to find tools to help guide your financial planning

WAEPA CEO M. Shane Canfield will open the event and share a brief overview of the association’s 2024 state of the association. Be sure to register now for this must-attend virtual event!

Accreditation: Training certificate for 1 CPE

Federal News Radio, part of the Federal News Network, is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

The post Financial Wellness Across Your Federal Career first appeared on Federal News Network.

A modern-day retirement can last a long time, almost as long as a working career for those who make it into their 90s. That means retirement planning has to follow a few basics by what our next guest calls a bucketed approach to investments. Thiago Glieger is a principal with RMG Advisors of Rockville, Maryland, and he joined the Federal Drive with Tom Temin earlier to talk more about those basics.

Interview transcript: 

Tom Temin
The statistics show that more and more people of good health and reasonable income, are in fact making it into their 90s.

Thiago Glieger
That’s right. There’s data out there from the Society of Actuaries Social Security Administration, a lot of different researchers. They’re talking about close to a 70% chance of couples who are in the good health, right, non-smokers, taking care of themselves, living into their 90s. It’s really not until we get to 95 that we start to see probabilities going down. And as the decades have gone, through the years, we see people’s average lifespan starts to increase. And so, more and more we have to start thinking about, you know, am I really going out at 80 to 83? Like everybody says, or am I going to make it to 90, in which case, I probably need to plan for a little longer. Because if you screw up and live too long, what are you going to do then?

Tom Temin
Of course, one basic approach would be to work longer, so that you have the same number of years at the other end.

Thiago Glieger
That’s right, although, you know, becoming a barista at 93 could be a little challenging, or, you know, whatever it is that someone might want to do.

Tom Temin
Right. But I mean, the standard 65 retirement, I mean, there’s still lots of people that retire at 62, 63, 64, 65. But a lot of people 71, 72, 73, 74 you see nowadays.

Thiago Glieger
You do. We have clients who are well into their 70s and they’re still working, because they love what they do. They’ve got a specialized skill set that is very marketable after they’ve left federal service. And it’s a way that they can continue to feel like they’re being fulfilled, and hey, they earn some extra income on the side.

Tom Temin
All right, but for everyone else, there is that possibility of a really long retirement tail in your life. So, talk about bucketed investments, what’s a good strategy for rethinking the longevity that you’ll have?

Thiago Glieger
Yeah, I think one way to really help protect against this kind of risk of living too long is having this bucketed approach, as you mentioned, to your investment planning. It involves having different parts of your wealth segmented into varying buckets, and each one is going to have a different job. So, for example, you might have a bucket that’s addressing the next five years of your spending, because maybe you decided you’re going to do more traveling over the next couple of years. So, you’ve got your income for that travel set up in a particular way. And then 10 years from now, you also need income, because maybe you’re slowing down travel, but you’re going to start a college education fund for some of your grandchildren. And so, you’re starting to address these different needs both now and in the future, adjusted for inflation. And what that allows you to do is you’ve got parts of your money growing for your future, continuing to fight inflation, and replacing some of that spending that you’re doing, which is going to help increase the longevity of your money. But at the same time, you also have other parts that are addressing, hey, I need money right now. And I can’t invest in really growth-oriented investments, because that’s going to create too much volatility. I might lose the money in the short term, and I need to use it. So, by segmenting your money in this way, you get to achieve multiple objectives at the same time.

Tom Temin
But then you also have to know what the returns are for various instruments that you’re going to put into the buckets or that the buckets will be put into.

Thiago Glieger
That’s right. And, you know, I’ll have federal employees say to me, hey, why don’t we just sell when the economy looks bad? And then buy again, when things look good again. You know, and I always joke with them. Listen, if you can find somebody who can do that with repeated success, let me know, because I’d love to hire them. And so, we have a good sense for how certain asset classes can behave over time. So, things like the S&P 500, which is the TSP C fund, we know how overtime those things tend to behave. And it’s different than how a small cap fund or a mid cap fund would behave, or bonds or anything else. But we rarely know what the markets are going to do next year. And frankly, anyone telling you otherwise is, at best, making an educated guess. And so, the key to remember, and this is this is the most important part, people need to remember that they should build portfolios based off of needs, over which the concept of timing has influence but not interference. And that’s what’s going to give you the best chance of achieving your objectives. We can’t know what the market is doing next year, but we know that 10 years from now, the S&P is probably going to be higher than where it is today. So, we know that the S&P is a long-term investment. And when we think about short-term needs, what kinds of investments are going to best suit that? There’s money markets, cash, things like bonds, right? These are things you should talk to your planners about.

Tom Temin
You point to something that’s kind of a recent reemergence, and that is money markets and CDs, which I remember from the 80s. Some of them paid really high double-digit pay offs for a year or two years, then they disappeared when inflation disappeared. Now that inflation is back, maybe not double-digit instruments, but there are things that pay, holy cow, 3%, 4%, 5%. That’s a new phenomenon for a lot of millennials and Generation Z-ers.

Thiago Glieger
That’s right, especially for people who have some cash aside that they’re leaving in the bank, for you to get $500 on every $10,000 that you have sitting in cash in the bank. That’s a really high amount compared to what it’s been in the last several years. And, so, if you’re sitting on 20, 30, 40, 50, $60,000, of cash, you can be using instruments like money markets. And if you use US Treasury money markets, you’ve got the full faith and credit of the US government behind them. Money markets are daily liquid, you can access the money the very next day. And this is a great way to be able to kind of keep your money working for you. Instead of just cash in the bank in your checking account, which is really losing purchasing power every day that it sits there.

Tom Temin
We are speaking with Thiago Glieger, a principal with RMG Advisors in Rockville, Maryland. And a lot of people as they age worry about the catastrophic health event that might tax what is available from their health care plan, even Medicare, let’s face it, has pretty strict limits on what you can get out of it. And, so, people worry about outrunning those resources. What are some ways to think about avoiding that?

Thiago Glieger
I think a lot of people tend to not plan to have hundreds of 1000s of dollars into their 90s. Because they’re thinking, hey, I’m not going to live well into the hundreds, I don’t need a million dollars by the time I’m 90. I could have drawn my assets down. But then to your point, what happens if there’s a health scare, what if there’s a healthcare event, or what we call a long term care event, where you have additional needs for two to three years, which is the average amount, and it could range to thousands of dollars a month. We’ve had clients that have had to spend $10,000 a month for that additional support. So, you have to address the risk in a couple of ways. Either you’re self-insuring, which is you’re holding some of that money aside earlier in life, and investing it for your future so that you’ve got a sum later waiting for you. Or you can pass on some of that risk to something like an insurance carrier. So, the use of long term care insurance can be very helpful. I really liked the federal long term care insurance program. Unfortunately, it’s not open to new applicants still. But anybody who’s in there, I think it makes a lot of sense for people to really consider continuing to pay those premiums. Because if we look at the cost of health care, over time, it rises faster than regular inflation. So, our cheeseburgers are rising at one rate and the cost to take care of ourselves for eating those cheeseburgers is usually twice as fast and growing costs. And that’s a challenge, because how do we grow our money fast enough, right?

Tom Temin
Or just keep eating lots of cheeseburgers and make it to 90 and have some good years, and then forget the last five bad years because you’ll be gone? Just kidding.

Thiago Glieger
That’s exactly what they want.

Tom Temin
Yeah, just if you would maybe talk about the idea of the fixed index annuities and the value or choice of those.

Thiago Glieger
Federal employees are often looking at fixed indexed annuities to be able to still participate in market growth, while having an insurance wrapper around it through the form of an annuity to protect them against market volatility. So, a lot of ways this is pitched to them, as they’ll say, well, you can still get growth in the markets, but protect your principal from any decline in your in your portfolio or your TSP values. That can be very attractive for people who are very skittish or risk-averse in investing in equities or stock, which is what’s going to grow your portfolio over time. The one caveat that I have to put out there with these things is that often there’s a lot of strings attached, right? Sometimes you’ll hear that there are no fees, and no fees doesn’t necessarily mean that there are no costs. There are restrictions to how much you can earn, there’s restrictions to how much you can take out. There’s all kinds of things that again, if you are paying for a guarantee, they’re saying you’re not going to lose principle, then how are you paying for that? You’re paying for that in some kind of way. But that can be an instrument that at least allows somebody who’s so scared of the markets to put their money to work a little bit so that they’re at least earning something. Because if you hang out in the G fund for all of your retirement, you’re going to have problems come 15, 20 years into retirement.

Eric White
Thiago Glieger is a principal with RMG Advisors of Rockville, Maryland. We’ll post this interview at federalnewsnetwork.com/federaldrive. Hear the Federal Drive on demand. Subscribe wherever you get your podcasts.

The post Memo to Gen Z about retirement: Life is longer than you think first appeared on Federal News Network.

• Participants in the Thrift Savings Plan will see some new features available on the TSP mobile app. Users now have the option to use facial recognition or a fingerprint to log into their accounts from their phones. Once logged into the app, TSP participants can access a summary of their retirement accounts, along with other investment information. The TSP app was first launched in 2022 as part of a major update to the TSP’s platforms.
  (TSP mobile app update - Thrift Savings Plan)
• The Nuclear Regulatory Commission will update its separation policies after several employees left the agency without returning their laptops. In a new audit, the NRC inspector general found multiple instances in 2023 where departing staff held onto their work computers. The IG found the NRC did not have a policy for ensuring the return of items under a $2,500 threshold. The NRC agreed with recommendations to update its policies and complete an inventory of agency-issued laptops, desktops and tablets.
  (Evaluation of the U.S. Nuclear Regulatory Commission's Information Technology Asset Management - NRC IG )
• The Defense Information Systems Agency’s intelligence director is laying the foundation for the agency’s brand new intel shop. The new intelligence unit will initially comprise about 30 people, which is small compared to other J2 units. Army Col. Richard Leach, DISA’s intelligence director, said he wants to start with a more agile team and scale it in the future. Onboarding all 30 people and fully operationalizing the intel shop will take at least two years. Last year, DISA introduced the J-code system, creating the first-ever intelligence unit at the agency.
  (DISA working to fully operationalize its new intel shop - Federal News Network)
• The Army is getting more serious about the transition to IP version 6. Leo Garciga, the Army's chief information officer, set a series of deadlines for all of the service's new and existing IT-related networks and systems. Garciga said starting in fiscal 2025, all new information systems must be IPv6 enabled before they are approved for operational use. For existing systems, they must transition to IPv6 or operate in both IPv4 and IPv6 environments by the end of 2025. Finally, any system that cannot be transitioned to IPv6 must have a plan to be replaced or retired by the end of 2025. Garciga said he will issue a separate policy focused on operational technology and its migration to IPv6 in the future.
  (Chief Information Officer Guidance for the Army’s Transition to Internet Protocol Version 6 - Department of the Army)
• The Defense Information Systems Agency is developing a system that will allow cyber analysts to search data across multiple data sources from a single interface. This will provide analysts with a federated search capability where they can search for data wherever it exists within the agency without having to log into various databases. Creating a federated search capability is part of the agency’s efforts to get rid of data silos and connect its security tools as the agency is working to achieve a target level of zero trust by 2027.
  (DISA wants to automate 75% of cyber activities, but it’s nowhere near the goal - Federal News Network)
• Federal employees and citizens with disabilities will see changes to the areas in front of and around federal buildings in the coming years. As part of adopting new accessibility standards for real property design and construction, the General Services Administration will shorten travel distances from on-street parking to building entrances, will increase the sidewalk sizes, and will reduce the incline around passenger loading zones. GSA issued a final rule under the Federal Management Regulation outlining the changes to ensure areas around federal buildings are readily accessible to and usable by persons with disabilities. The rule applies to all new construction, alteration and renovation projects.
  (Federal Management Regulation; Accessibility Standard for Pedestrian Facilities in the Public Right-of-Way - Federal Register)
• Federal workforce diversity is still lagging in higher levels of the General Schedule. People of color make up about 40% of the federal workforce overall, according to 2023 data. But at the same time, they take up just about a quarter of career positions in the Senior Executive Service. The SES is also disproportionately male. Just about a third of career SES members are women. Data from the Partnership for Public Service shows that there is a slight trend toward more racial diversity in the SES, rising by 1% in the last year.
  (Federal workforce diversity still lagging in more senior roles - Federal News Network)
• U.S. Citizenship and Immigration Services continues to grapple with staffing challenges. In a new report, the USCIS ombudsman found the agency has about 21,000 employees — 3,000 positions less than its fully authorized workforce. The ombudsman said USCIS is struggling to fill positions after a lengthy hiring freeze was lifted in 2021. Still, the agency was able to cut the immigration backlog for the first time in a decade last year. USCIS handled about 40,500 requests for various immigration benefits each business day in 2023.
  (USCIS Ombudsman 2024 report - Department of Homeland Security)
• A public-sector advocacy group is suing the Office of Personnel Management over a nearly seven-year delay in implementing a law passed by Congress. The Administrative Leave Act allows agencies to put federal employees on paid administrative leave for a maximum of 90 days while they investigate alleged wrongdoing. The group Public Employees for Environmental Responsibility says federal employees have spent years on paid administrative leave, and seen their careers suffer. OPM introduced proposed guidance for the legislation in 2017, but has yet to finalize it. PEER filed its lawsuit to compel OPM to finalize its guidance.
  (Lawsuit urges OPM to end 7-year delay to keep feds off indefinite paid administrative leave - Federal News Network )
• The IRS expects it will recover billions of dollars in taxes owed — just as soon as it sorts through a backlog of more than 30,000 whistleblower claims. The IRS paid nearly $89 million dollars to more than 120 whistleblowers in fiscal 2023. That’s about a quarter of the $338 million those whistleblowers helped the IRS recover. But it’s no quick payday. Whistleblowers wait, on average, between 10 and 11 years before receiving a financial award for their disclosure. The IRS only pays whistleblower awards once taxpayers under investigation have exhausted all of their appeal rights. The IRS Whistleblower Office has helped recover nearly $7 billion in taxes owed since 2007. Whistleblowers have gotten more than $1 billion of that money.
  (IRS recoups billions from whistleblower claims. Tipsters can wait a decade for their cut - Federal News Network )

The post TSP mobile app gets update, new features first appeared on Federal News Network.

The rest of the TSP funds saw a decline in returns for the month of June, but remained in the positive. The Common Stock Index C Fund posted the highest return of  3.58%.

The I fund posted the lowest return and saw a huge drop from 4.86% in May to -1.62% last month, while the S fund fell from 3.36% last month to -0.10% in June.

The C fund continues to post the highest year-to-date return at 15.28%, and a 11.08% return over the last 12 months.

All Lifecycle funds posted positive returns in June.  The L 2055, L 2060 and L 2065 all posted a 1.25% return, with year-to-date-returns of 10% and 13.60%, respectively,  for the last 12 months.

The post Two TSP funds post negative returns in June first appeared on Federal News Network.

We’ve created a primer of all the must-know info.

• Discover the ideal time to retire
• Learn 5 must-dos as the big day nears
• Prep for critical late-life financial planning
• Get the lowdown on Medicare Advantage

Plus, we’ve included a special update on the new Postal Service Health Benefits (PSHB) program.

Download our exclusive Retirement Guide, brought to you by GEHA!

The post Federal News Network Retirement Guide first appeared on Federal News Network.

• Younger Thrift Savings Plan participants will soon see a new investment option in the TSP. The Federal Retirement Thrift Investment Board is launching the "L 2070" lifecycle fund at the end of July. The retirement investment fund is meant for TSP participants who will retire during or after 2068. Once the new fund is created, it'll bring the total up to 11 different L funds that are available through the TSP. The TSP's L funds generally track target-date retirement funds.
  (New Lifecycle Fund coming soon - Thrift Savings Plan)
• The 2024 Feds Feed Families campaign is officially underway. The annual food drive gives federal employees the opportunity to donate to, or volunteer for, local food banks. The program is run by the Department of Agriculture and began back in 2009. Since its inception, federal employees have collectively donated more than 99 million pounds of food. This year's Feds Feed Families campaign launched last week and will run until September 30.
  (2024 Summer Campaign - Feds Feed Families)
• The National Institute of Standards and Technology is getting feedback on its draft plan for advancing federal tech standards. NIST will accept comments on the draft roadmap for setting standards on critical and emerging technology through July 12. The roadmap is intended to broaden standards participation, grow a standards-savvy workforce, and ensure inclusivity and integrity in developing tech standards. NIST is charged with taking a lead role in championing U.S. standards in areas like artificial intelligence.
  (NIST seeks public input on draft roadmap for USG national standards strategy for CET - National Institute of Standards and Technology)
• The State Department has a new AI hub. Secretary of State Antony Blinken says AI.State includes training and other materials to help employees harness new AI tools. The State Department has rolled out several new capabilities, including a chat bot and a media analysis tool. During an event Friday, Blinken and other officials said State Department employees are encouraged to experiment, “I'd encourage everyone to test it out, to try it out, to explore it, to try to learn from it. And also lend your own ideas and input because this is something that will continue to be iterative and a work in progress,” Blinken said.
  (With new AI tools available, State Department encourages experimentation - Federal News Network)
• The Defense Information Systems Agency wants to automate 75% of its cyber capabilities. Brian Hermann, DISA's director of cybersecurity and analytics, says that while there is no set timeline to achieve the goal, the agency is currently not where it needs to be. Because of a large number of data silos, the agency is currently working on streamlining its data to get closer to the goal. The agency is also implementing a federated search capability, which will allow their team to search data wherever it exists.
  (DISA wants to automate 75% of cyber activities - AFCEA International)
• The Defense Information Systems Agency’s Hosting and Compute Center continues to expand its cloud capabilities to the military services and mission partners outside the continental U.S. The Center is working with the agency’s Program Executive Office transport and cloud service providers to find out where they are planning to expand their cloud services to and how they connect back to U.S. data centers and cloud facilities. The goal is to provide low latency to the service branches as they move from tactical to operational to strategic levels of capability. DISA unveiled its plans to expand its cloud capabilities to the military services and missions partners overseas last year.
  (DISA continues its push to provide OCONUS cloud services - AFCEA International)
• The long-awaited Alliant 3 solicitation has hit the streets. The General Services Administration met its first goal with the next version of the Alliant 3 governmentwide acquisition contract for IT services: Get the RFP on the street in the third quarter of 2024. That happened Friday. Now, the work begins to stay on track. Industry has until October 28 to submit bids for the multiple award contract. In the meantime, GSA will be accepting questions about the solicitation through July 26 and plans to offer answers by August 23. GSA outlined at least 45 IT services covered under Alliant 3, ranging from 3D printing to energy sustainability management to quantum computing.
  (GSA released RFP for Alliant 3 IT services GWAC - SAM.gov)
• The departments of Transportation and Housing and Urban Development are the latest agencies seeking more funding to address ongoing emergencies. The Biden administration submitted a new request to Congress for almost $4 billion on Friday to address two big challenges. First, the White House is asking for $3.1 billion for Transportation’s Emergency Relief Program. This money would help cover increased needs for repairing and rebuilding highways and roads that have been damaged in disasters and other emergencies across the country, including the cost of rebuilding the Francis Scott Key Bridge in Baltimore. The administration is asking for $700 million for HUD's Community Development Block Grant Disaster Recovery program. The additional funding is for victims of the Maui fires in Hawaii as well as other disasters such as hurricanes in Florida and Georgia and flooding in Vermont.
  (White House seeks additional funding for DOT, HUD - White House)

Correction: The audio version of this article says the Alliant 3 contract has a ceiling of $75 billion over 10 years. There is actually no ceiling for the contract.

The post New TSP option for younger federal employees first appeared on Federal News Network.

When to start, and what you need

Justin Pierce and James Campbell, both fiduciaries and Federal Retirement Consultants℠ with the Federal Employee Benefit Advisors, said the best time to start seriously thinking about it is roughly five years from retirement. That’s also the best time, they noted, to contact a Federal Retirement Consultant℠.

“I would say, the sooner, the better,” Campbell said. “For sure, once you’re getting within five years of retirement is a great time to start to talk with one of us, or definitely once you get 59.5 and older. Even if you think you’re going to work maybe until 70, there are some strategies that we can start to help you with to maximize your retirement.”

Estimated annuity statement: Aside from that, the first thing a federal employee planning to retire will need to do is request their estimated annuity statement. This document takes into account years of service, projected salary during your three highest-paid years, and an estimate of what you would get from your annuity if you retired on a certain date. This doesn’t lock you into specifics, nor will it draw negative attention from agency leadership; it’s purely informational, a best-guess look at what you can expect from federal retirement.

This document can be requested multiple times, either from the Government Retirement and Benefits (GRB) platform, or directly from human resources. The final time you request it should be about six months before your retirement date, as much of the information transfers directly over to retirement forms.

SF50: The next form to request, also about six months before your retirement date, is the SF50: Notice of Personnel Action. This will be a record of the entirety of your career, from your start date in federal service and what grade you started at, through pay raises, step increases and locality adjustments — everything needed to calculate your retirement and annuity.

Federal employees planning for retirement can also get this form from GRB or HR.

“It’s not a bad idea to [review the SF50] when you’re six months out, just to see that everything is correct, because OPM does make mistakes. They’re human too. So if you can correct it sooner, then it’s a little bit easier than having to go back,” Pierce said.

SF 3807 and SF 2801: These are the actual federal retirement forms that will be submitted to the agency. SF 3807 is for Federal Employee Retirement System (FERS) employees, is about 15 pages long, and requires feds to make big, permanent decisions about some key retirement benefits. SF 2801 is somewhat longer, and for Civil Service Retirement System (CSRS) employees, but is otherwise comparable.

These are the forms that will pull data directly from the estimated annuity statement. But Pierce and Campbell cautioned that these are very difficult documents to get right the first time; paperwork errors are the most common cause of retirement process delays. Consultants like FEBA’s can help ensure that these documents are filled out correctly and completely.

SF 2818: Prospective retirees will also need to complete their Federal Employee Group Life Insurance (FEGLI) retirement form (SF 2818), which will determine how they take their life insurance into retirement. The Office of Personnel Management encourages retirees to confirm their beneficiaries and review survivor benefit options at this time as well.

What comes next?

All of this paperwork, Pierce and Campbell said, should be submitted to the agency as early as allowed, usually 90 days before retirement. This gives the agency as much time as possible to process it, because there will be delays, Campbell said. Then on the date of your retirement, that packet goes from your agency to OPM. OPM does have a processing backlog; it can take up to 90 days for them to begin processing your retirement packet.

Retirees can expect their first, estimated annuity payment within two to three months. OPM refers to this as “interim” pay: Usually, it’s about 60-70% of what your actual annuity will be. More is held back than is actually required for projected taxes and benefits payments while the exact calculations are happening. Once those calculations are finished, the total amount underpaid will be paid back.

That’s why it’s important to save up a lump sum ahead of retirement to cover those first few months between the last paycheck and the first full annuity payment. Many federal employees will save up annual leave time, which is paid out in one lump sum at the end of your employment, to help get over the hump. Others rely on the Thrift Savings Plan accounts, but it’s important to remember that it will be two to four weeks before TSP recognizes you’ve retired; during that time, there will be a blackout period where you won’t be able to withdraw money. So if TSP figures into your early retirement plans, it’s important to withdraw what you need before actually retiring.

But the main thing prospective retirees need to remember to make this process as quick and painless as possible is to fill out the paperwork correctly.

“One of the biggest things that’s going to cause you delays in your retirement processing is incorrect or incomplete paperwork,” Campbell said. “This happens all the time, and this is what really slows down the process.”

The post Planning for federal retirement? Here’s how, and when, to get your documents in order first appeared on Federal News Network.

Social Security taxes start automatically the day you start working. But when the time comes you have got to file an application to get your benefits. When to file? Well, it’s not that simple. You need a “strategy.” To look at some of those important considerations,  the Federal Drive with Tom Temin  talked with federal retirement expert Tammy Flanagan.

Interview Transcript: 

Tammy Flanagan
Tom. I’m glad to be back. And this is a very important topic. A lot of people ask about claiming, and a lot of people have opinions. Pretty strong opinion sometimes about whether it’s better to take it right at 62, or whether it’s a delay. So I’m happy we’re talking about this today.

Tom Temin
Because one of the considerations that you can’t know is when you’re going to depart this earth.

Tammy Flanagan
That would be helpful as far as this decision goes. But I don’t think we really want to go there, do we?

Tom Temin
No. Because if you start at 62, and you’re dead at 68, then if you thought of waiting till 70, you get nothing?

Tammy Flanagan
Well, you won’t need the money, will you?

Tom Temin
So what are the big factors, then?

Tammy Flanagan
Funny we’re talking about this, because yesterday I received in the mail a letter from Social Security, reminding me that I’m going to be reaching my full retirement age next month. And your full retirement age is somewhere between 65 and 67. And at that point, it’s all based on your year of birth. So the young folks who were born in 1960 or later, that’s age 67, I’m a little bit behind that. But anyway, so when you reach that full retirement age, that’s when you’re entitled to your unreduced Social Security benefit, your full benefit. So when you decide to claim that benefit at age 62, which is your first eligibility to claim it, it’s a 30% reduction, or close to it for someone like me who’s older. So we really do have to give some thought to whether or not it makes sense to take it early, or to wait to our full age or some other points all the way up to age 70. So we all have this same eight-year-window. And the theory for some people is, I’m gonna get it while the getting’s good. Because if I’m retired, and who knows what’s going to happen to the future of Social Security, I might as well take it. And that’s fine, you can do that. I don’t think social security is going anywhere. And I think for those of us who are either near or at the age, we can claim it, it would be unlikely for Congress to make big changes, because that would create a riot in my opinion. So I don’t think that’s a big fear that’s well founded, but some people feel that way.

I think the more important questions to ask is, number one, do you need the money right now? For instance, someone like me who’s at a later age, still working, and my husband’s still living, and he has a retirement and I have savings. And we’re not really needing that Social Security check right now. And my theory in my situation is that I’m going to delay it if I can till age 70. Because as long as we’re both still living and comfortable financially, I’d rather have that much bigger check. In case I do live a long time. It’s ok, if we all die at age 81, it really doesn’t matter when you claim it. But what if you live to 91, or even 101, you don’t want to run out of money. And this is one of those checks that comes as long as you live. And if you get that bigger check, the cost of living adjustments is going to be based on a bigger amount. So that’s my theory.

Tom Temin
And then there’s the idea that because they tax Social Security, which you paid for with a tax, but that’s another topic. That if you take it while you’re still having healthy other streams, like from full time work, you’re going to pay a higher tax rate.

Tammy Flanagan
That’s absolutely true. So why create more taxable income when there’s an advantage to leaving it where it is. But we always have the other situation where people retire at younger ages, they might stop working completely when they’re in their 50s or early 60s. And without claiming Social Security, they probably don’t have enough money to really live comfortably. And so if you’ve saved enough in your savings, and you have government pension, in the case of our audience, there’s nothing wrong with claiming it when you retire. So I don’t want anyone to ever feel guilty that they took it early. Because that’s what retirement is, it’s the source of those three streams of income. So there’s something to be said for that as well.

Tom Temin
And by the way, what is the processing time these days? If you make your application to Social Security, how long does it take till that first check comes?

Tammy Flanagan
Well, it’s nothing like your first civil service or first retirement check, because Social Security is all electronic. So if I went on Social Security’s website today, I could file for my benefit right there online, it’ll probably take me about 30 minutes. And I should have my first check by next month. So it’s really not a big process. The disability benefits are a little more time consuming, because they have to be reviewed and medical documentation has to be considered. But if you’re applying for Medicare or Social Security retirement, it’s a pretty painless process.

Tom Temin
And briefly, what are the considerations for spouses? Say one half of the couple has consistently earn more, and therefore will have a bigger social security payout. That is the one that goes to the spouse if the higher earning one dies first?

Tammy Flanagan
Yeah. Well, first of all, a lot of people don’t realize this, especially if you’re younger, and you haven’t thought much about this. But while both spouses are living, there could be a benefit paid on the higher incomes work record to the spouse who’s still alive. So we have what’s called spousal benefits, which we don’t have under the Federal Retirement System. So in other words, let’s say you had a spouse who worked very little outside the home, doesn’t have much if any social security of their own, they can claim benefits based on their spouse’s work record. And they can collect up to 50% of that while both of you are still living. So a lot of spouses are still entitled to those benefits. We think of those more like back in the station wagon days when dad took the car to work, and mom stayed home with the kids. But we still have a lot of stay at home parents today and people who don’t work outside the home for whatever reason. So that’s still in play.

Tom Temin
So that means 50% of the higher income person’s social security is more than the regular amount for the one who earned less.

Tammy Flanagan
That’s correct. So for instance, let’s say, I’m the higher wage earner and my benefit is $2,000 a month that my full retirement age. And my spouse, let’s say only has earned a benefit of 600 a month? Well, they’re gonna get half of that 2,000, because that’s more than their own 600. So yeah, the higher benefit would be payable in that case. And again, that also depends on what age you claim it, because there’s reductions. But as a widow or a surviving spouse, it becomes a different story, because in that case, you can claim that widows benefit at any age if you have young children, or as early as age 60, even if there are no children that are dependent on you. So in some cases, if your spouse dies early, you can claim that widows benefit and delay your own earned benefit to pick up those extra credits. So that’s one case where you can choose between the two, if you haven’t claimed the first one in advance. So that’s another option there. But widows can take over that deceased spouses benefit at any age, as long as they’re 60 or above.

Tom Temin
We’re speaking with Tammy Flanagan, she’s a principal with retirefederal.com, and a longtime expert in these matters. And at the same time, you’re thinking about Social Security as a Fed, as you touched on a moment ago, there is your main federal annuity, Your FERS annuity that you would have to apply for. And as you imply that just doesn’t come the week you retire, by any stretch of the imagination, does it?

Tammy Flanagan
No. It’s a whole process when you apply for your federal retirement benefits, sometimes we call it your government pension. But whether it’s FERS or CSRS, that benefit is going to be processed from your agency, through the HR office onto payroll onto OPM. And even you have a role in that whole process, because it’s your responsibility to file the application, to make sure it’s filled out completely, make sure you’ve included all the documents that it’s asking you to include. And then handed into HR at least 30 days more likely 60,90, even 120 days ahead of your date of retirement. Because your HR office has work to do. They have to put together this literal package of papers that they’re going to put in a FedEx envelope, and mail that to OPM as soon as you retire. Usually, within the first two weeks of your life after retirement that goes to OPM. Payroll has to wait until they pay out your last paycheck to send that payroll information. And they do send it electronically from payroll. But that also hits OPM within that first month after you retire. So once it gets to OPM, it goes to a mail room because it’s a package of papers. So they have to put two hole punch and put it in a cardboard folder and do a little triage to see if there’s maybe a health benefit change on the top of that stack or maybe this is a disability, it has to go to a different office to look over the medical documentation. Or maybe this is someone who it’s questionable whether or not they’re eligible to retire. So somebody has to make sure that they’ve met the age and service requirements to even collect the benefits. So there’s a lot of work that gets done along the way before it even gets to that final processing stage where they start to cut the checks and pay you on a monthly basis.

Tom Temin
And if you had many different assignments at different agencies or in and out of government, does that complicate it and make it slower?

Tammy Flanagan
It can. I’m working with a guy right now who worked for three different agencies. One of them was up on Capitol Hill, and they don’t do official personnel folders with the normal documentation. They have a transcript of service. And OPM wasn’t given him credit for that because they didn’t have that transcript from up on Capitol Hill. So that delayed his, believe it or not, he’s still waiting after two years. There was a couple of other things that got in the way of his. So they won’t finalize that claim until they have everything they need to really give you the accurate benefit.

Tom Temin
Well, here’s your retirement cake. And we’ll see in two years maybe with a check, great.

Tammy Flanagan
That’s not the majority, by the way, so don’t worry if you’re planning to retire.

Tom Temin
What’s your experience with contacting OPM, if you have a question during this period?

Tammy Flanagan
Yeah, well, first of all, wait until you get your civil service active number, they call it a CSA number. Because without that number, you’re not going to get to talk to anybody. If you’re in that Limbo stage, where you’ve just left the agency, call back to your HR office, they can probably help you with any questions you have until OPM takes over. But if you are going to call OPM as a retiree, I suggest by all means, call early. If you’re on the East Coast, it’s a little easier, because 7:40am is 7:40am. But if you’re out in California, that’s like get up at 4am to make that phone call, may or may not be practical for you. But the earlier the better. Because those customer service lines get very busy later in the day, especially on a day like Friday afternoon or Monday morning. So be strategic. And when you’re calling in, you’ll have less frustration, hopefully.

Tom Temin
Really then retirement planning is one thing, but actually starting the process, you should give yourself six months. Shouldn’t you?

Tammy Flanagan
I’d say start at least a year ahead of time. And if you can, if it’s available to you, take a pre retirement planning class at least five years before you plan to retire. It’s not too early, because there’s things that have to be in place for five years in order to carry your health benefits your life insurance. Those things have other requirements to keep those as a retirement benefit.

The post Why you need a strategy when it’s time to claim Social Security benefits first appeared on Federal News Network.

Federal employees thinking about retirement –and if you’re not, you should be — tend to concentrate on what they can save. When you actually retire, it pays to think about what you spend, or if you want to spend and maximize your Thrift Savings Plan. Federal News Network’s Drew Friedman got more insight when she talked to federal retiree and financial consultant Abe Grungold on the Federal Drive with Tom Temin.

Interview Transcript: 

Abe Grungold  If you’re an active federal employee, it is critical to maximize to your TSP, so you can have the best retirement possible. And if you’re a federal retiree, it’s important to monitor your expenses, and you may have to live on a budget. So, there are ways to save money for both of these categories of employees. And the first one that you mentioned, is life insurance. So, life insurance, if you’re a federal employee, can be very expensive. And the government offers several life insurance programs that are easily obtained. And then you can acquire life insurance outside of the government. But what you really have to ask yourself, whether you’re an active federal employee, or you’re a retiree. How much life insurance do you really need? You need as much life insurance as you have long term debt. You need to cover that. So, if you’re a young federal employee, you may not have any debt early in your career. And when you’re a federal retiree, you may not have any debt at that stage of your life. So, you need to evaluate how much life insurance do you really need, and you need to shop around.

Drew Friedman  Beyond that, there’s other kinds of day-to-day expenses. I know a big one that you have pointed out before is eating out. So how much can federal retirees be spending in that.

Abe Grungold  Whether you’re an active federal employee, or whether you’re a retiree. I know that as an active federal employee, we used to eat out every day, which was a big part of our workday was eating out, breakfast and lunch. And as a federal retiree it becomes also a big part of your day, breakfast, lunch, dinner, and getting together with friends. So as a retiree, in today’s dollars, I found myself spending $100 for breakfast a week, $100 for lunch a week. And if I go out three times a week for dinner, I’m spending another $300. That’s $500 a week, you really need to watch that very carefully. And you could save yourself quite a bit of money on the breakfast and the lunch just by eating at home. And if you go out with friends just kind of research what restaurants are out there where you could try to save some money. And today, the younger generation does a lot of takeout. They do these takeout meals from restaurants. And everyone loves restaurants and eating out. And they do the takeout several times a day. You need to monitor that expense very carefully.

Drew Friedman  Yeah, that’s something that can definitely add up, especially if you’re not paying close attention to it. Another big one that I would imagine changes for a lot of people over a lifetime, and as you get older, the cost of medicine or medication. Do you have any recommendations for how people can try to budget for that better?

Abe Grungold  Yes, medicine is a very expensive thing, both for young federal employees and especially for retirees. You should research the FEHB health plans this coming open season and look to see which ones offer a drug benefit to that health plan. That’s very critical. And I took advantage of that as a federal employee. Now that I’m a federal retiree, I take more advantage to that benefit, because, unfortunately, as you get older you may need medications from time to time. Another good way is to shop around the various pharmacies like CVS, Walgreens, Costco, and price out your medication to those pharmacies, and you’d be surprised that a lot of them offer them at different prices. So, this is a very important thing and also consider generic brands. You can save yourself a tremendous amount of money with generic brands.

Drew Friedman  Couldn’t opening maybe a flexible spending account or a health savings account also help with some of those costs?

Abe Grungold  Absolutely. I certainly took advantage of my flexible spending account, because you are contributing pretax dollars. And you can get reimbursed for any type of a medical needs such as medicine, doctors, offices, etc. But you really need to budget how much health care expenses do you think you’re going to need for that year, nobody can really project that unless you’re going to have a surgery or something. Because you certainly do not want to lose or leave behind any benefits in that plan for that year. They can expire after the year in some time after that.

Drew Friedman  I want to move on to something that’s maybe a little more fun for people to think about is traveling. And I know that’s something that can change a lot, especially in retirement, you have more time. And it’s very tempting to go on all these trips. So, what are some recommendations you have for how to budget best for traveling?

Abe Grungold  While traveling even for a young federal employee, I traveled to 39 States while I was a federal employee, and I tried to take advantage of where I was to try to extend that trip if I could. But traveling on different websites provide different types of pricing. And also, different days of the week are critical for airlines. And you need to research that out. Think about flights, hotels, rental cars, you’d be surprised if you check out various different websites, like Expedia. If you’re a Costco member, check out the Costco website. You will be amazed at the difference in pricing for various types of travel. And as a young federal employee or now that I’m a retiree, I want to travel. I’ve always loved traveling. So, you need to be careful with your spending on traveling.

Drew Friedman  I definitely will be taking that advice to heart, I enjoy traveling a lot myself. Thanks, Abe. And last one on your list, you talked about five different areas of spending. So, we’re now the last one. And this is about communication. Can you explain a little bit more what you mean by that?

Abe Grungold  Yes, certainly if you have a spouse, or a life partner or you’re in a relationship where you’re living with someone, you need to communicate with that person regarding expenditures.

The post Working or retired, don’t overlook either side of the spending-saving equation first appeared on Federal News Network.

TSP investors seem to be getting more aggressive, judging by the mix of funds they’re investing in. The safe but slow-growing G-fund is no longer the favorite. With analysis of what’s going on, the Federal Drive with Tom Temin talk with certified financial planner Arthur Stein of Arthur Stein Financial.

Interview Transcript: 

Tom Temin
Can you overdo the TSP savings to the detriment of other things you should be doing towards retirement?

Art Stein
Yes, Tom. And that’s the key point. I would never say to someone, you’re putting too much money in the TSP, if they’re taking care of their other financial needs. And their other financial needs are frequently though, for a lot of people, either ignored or not given sufficient priority. And that’s things like life insurance, and long property, auto and homeowners insurance, health insurance, maybe. And just, for instance, one time I met a federal employee who was in his 30s, he had three kids at home, his wife had left the workforce to take care of the kids, and he had life insurance equal to one year salary. And I just said to him, you need more life insurance. And he said, Well, we can’t really afford it. And I had to say, you always want to put at least 5% contribution into the TSP, because you get that great match by the government. But I said, if you need to reduce your TSP contribution down to say, 5%, in order to buy the life insurance that you need to protect your family, you should do it. And it absolutely make sense.

People tend to hate insurance companies, I understand that, they’re not our friend, it’s a business. But life insurance is important. Unfortunately, not many people die while they’re still working, although it’s not an unusual event. But for the people that do, if they don’t have a sufficient amount of life insurance, it can be disastrous, if they have a family, even just in the example I gave, if the employee spouse had died, it could be a year before his wife, in this case, was able to go back to work. Either emotionally, the kids would be devastated. And then she’s not going to make as much as she should, because she’s been out of the workforce and might be hard to find a job. It just would be a financial mess. Same thing with disability insurance, of course the feds have a great free disability insurance coverage, but it’s not great disability insurance coverage. It’s free, so that’s nice, but it pays 60% of their high three, the first year they were disabled and couldn’t work. But after that, it would only pay 40% of their high three, and the maximum inflation adjustment is 2%. So lots of insurance companies offer disability covers. It supplements the federal coverage and gets their coverage up to about 80%. That might be worthwhile. And then another situation that I see so many people do not adequate. [Employee Retirement Income Security Act of 1974 (ERISA)] is not adequately covered is with auto and homeowners insurance, and it’s their liability coverage. So we’re not talking about the auto insurance that you have to repair your car if you’re in an accident. What’s really more important is the liability coverage. Like suppose it’s a nice day, you got the windows down a bee flies and you get flustered, maybe it stings, you go through a light, you hit somebody turns out, she’s a plastic surgeon, it’s clearly your fault. She’s making 500,000 a year, and maybe the accent is severe enough she can never work. Well, she’s going to sue you, and could easily win millions of dollars in lost income. And your insurance company’s gonna say, Hey, we’re definitely going to cover you, you’ve got like 250,000 in liability coverage, we pay that you pay the rest? Well in my example, hypothetical, $1.7 million in additional settlement, people would be wiped out. And the good news about this is, this is a risk that’s very cheap to cover. You can get what’s called umbrella liability insurance, it’s going to raise your total liability coverage for auto accidents and accidents in your house to a million or more. And it is so cheap. You can get a million dollars in coverage for about five, $600 a year. You can get $5 million in coverage for 9 million. You’re not likely to need it. But if you do, it would be a lifesaver.

Tom Temin
Yeah, that’s getting into the weekly Starbucks expenditure that you could forego to do that. You may not even have to reduce your TSP payment. If you could just reduce your Starbuck payment.

Art Stein
And people may think why they don’t see that as a big risk. But think about people have young kids, and they’re having friends over and they’re running around, and maybe their little six year old friend falls down the stairs, or maybe the little six year old friend is pushed down the stairs because there is roughhousing going on. If that person could never walk again from a back injury, and again, millions of dollars in a settlement. So I would definitely recommend that everybody asks their insurance agent about umbrella coverage, and just spend that small amount of money for a large amount of coverage.

Tom Temin
We are speaking with Art Stein Certified Financial Planner with Arthur Stein financial. So that’s outside of your TSP insurance. And that takes many forms that you have to cover. What about the idea of also saving outside of your retirement and the tax benefits or whatever of that Roth or regular TSP, and just having rainy day savings for other purposes, such that you don’t have to raid that TSP, if you need a loan to yourself?

Art Stein
Absolutely. Tom, for our clients, we always recommend that they have an emergency fund, minimum three months of expenses. Many of our clients have six to 12 months of expenses. Once you get up to 12 months of expenses, especially for federal employees and retirees, that is a sufficient emergency fund. And remember, an emergency is not necessarily a bad thing. Could be a child getting married, and you want to pay for a nice wedding or a big family trip. One of the things you can then use the emergency fund for is not having to sell investments to pay for that big expenditure that you want to pay for. And maybe it’s like 2022, when the stock and bond markets were both down, and therefore all the TSP funds except the G fund were down. And that would have been a bad time to sell investments to pay for something. If you have a good emergency fund, you can use that.

Tom Temin
Alright, and the other elements to think about insurance, that rainy day fund. Automobile expenses can be crazy if you let them.

Art Stein
Absolutely, and everything’s more expensive now. Automobile insurance has gone up a lot, because the cost of repairing autos has gone up a lot. My wife had to replace a bumper on her car. And I didn’t think it would be that big a deal. But it turns out the bumpers got a lot of electronics, now in these days. And even just replacing a side mirror is expensive, again, because of the electronics. And of course, we’re now seeing that homeowners insurance. And this varies across the country. But homeowner insurance costs have gone way up, in general, and especially in areas along the east coast and the Southeast where they’re subject to what I call global warming. A lot of people don’t like to use that term, but I think it’s clearly happening. And it’s driving up the cost of homeowners insurance. And some people then decide to go cheap on their homeowners insurance and not get flood insurance, even though they’re in Florida. Not get wind insurance when they’re in Florida, because it’s become very expensive. Well, the reason it’s very expensive is because the risk is very high. And insurance companies are actually quite competitive with each other. And if the insurance costs are going up, it’s not because they’re gouging their customers, it’s much more likely to be because the number of claims has gone way up. And the cost of those claims has gone way up. People tend to judge insurance based upon premium. And that’s a mistake. It’s a cost benefit analysis. Someone offering you the lowest premium often is able to do that in insurance because they’ve lowered the benefits. And you may not even see that or it might not be easy to determine, don’t fall for that. You need to fully insure your house, you want to have a lot more liability insurance, and most people do, millions of dollars. And depending upon your situation, life insurance can be really important. A single person probably doesn’t need life insurance, someone who has dependents, children, they need a lot of life insurance.

Tom Temin
And with respect to that house insurance, then the word you want to look for, I guess is a replacement cost.

Art Stein
Guarantee replacement costs. There are various types of you get into a whole series of definitions, and you want your homeowners insurance to guarantee you that they will pay you the cost of rebuilding your house no matter what it costs, and they’re not going to be able to come back to you and say, well, we’ve amortized the age of the house and reduce the value or we only guaranteed we would pay you X amount, now because a lot of people in your neighborhood need coverage that’s gone way up. You want full replacement cost. For a lot of people, you don’t need a lot of coverage there. I’m not saying you don’t need several 100,000, but that’s not the expensive part of the insurance. And actually when I just renewed my insurance, I switched carriers. My one complaint with the new company is they had a minimum for all the stuff inside the house, which was way more than what I needed.

Tom Temin
Or you could go out and buy more stuff just so it’ll be covered.

Art Stein
I bought more stuff so that I could stick.

Tom Temin
We all need more stuff in our lives, we don’t have enough stuff in our houses. And finally, it’s probably worth pointing out that if you do have a housing loss or house loss, you don’t get that check the next morning, nor do you get that new house the next morning. So you’ve had a little late expenses while all this plays out.

Art Stein
Which is another variable and homeowners coverage, is how long will they pay you living expenses if you have to leave the house. And as you say, Tom, it could be a year, two years, before you’re able to move back. And so you want those living expenses covered.

The post Why retirement investment is a three-legged stool first appeared on Federal News Network.

• The Social Security Administration is working quickly to try to dispel a false rumor about a payment increase on Social Security checks. As a result of a fake news article, SSA employees were inundated with phone calls earlier this month from beneficiaries who mistakenly thought they would be getting a $600 payment increase. SSA's phone lines received more than 463,000 calls in one day as a result of the rumor. SSA Commissioner Martin O'Malley has confirmed that the benefit increase is false. There will not be another cost-of-living adjustment for Social Security beneficiaries until January 2025.
  (Dispelling false rumor of $600 Social Security payment increase - SSA Commissioner Martin O'Malley)
• Agencies have a new tool to make acquisition research a little easier: The Procurement Co-Pilot tool. Contracting officers and program managers now have access to a host of data sources where they can review the prices paid on common products or find vendors across all categories and sizes that currently work with the government. GSA and the Office of Federal Procurement Policy launched the portal only for federal employees through the Acquisition Gateway. The Procurement Co-Pilot is one of several new data-driven tools that are a part of the administration's Better Contracting Initiative.
  (Procurement Co-Pilot tool officially open for business - GSA)
• Lawmakers are pressing the Coast Guard for more details about how it handled sexual assault cases. Last year, the Senate Homeland Security and Governmental Affairs Committee requested all documents related to Operation Fouled Anchor, the Coast Guard’s internal investigation of sexual assault cases at the Coast Guard Academy. Lawmakers said the records provided to Congress are highly redacted and include a large number of duplicates. Coast Guard Commandant Adm. Linda Fagan said she is working in good faith with the committee. The House Committee on Oversight and Accountability is conducting its own investigation into the Guard’s handling of sexual assault cases.
  (Coast Guard ‘stonewalls’ Senate’s investigation of service’s sexual assault cases - Federal News Network)
• The Federal Deposit Insurance Corporation is dealing with low employee morale, following reports of a toxic workplace environment. An independent report substantiates cases of stalking, harassment and homophobia at the FDIC, based on more than 500 complaints from employees. Jonathan McKernan, co-chair of a special committee FDIC created to oversee the report, said FDIC employees face significant headwinds to do their jobs. “Longer term, the state of affairs at the FDIC, if not fixed are going to be a real problem for retention and recruitment of new staff and that will be fatal to our ability to achieve our mission if we can't fix that," McKernan said.
  (‘Morale is bad’ across FDIC workforce after reports of toxic workplace culture - Federal News Network)
• A new bill looks to address a discrepancy in how Transportation Security Administration employees are compensated. The TSA Commuting Fairness Act would require the agency to study the feasibility of using cell phone data to allow employees to clock in when they reach the airport parking lot. Many TSA employees report not being compensated for the up-to-45 minute commute between the parking lot and airport checkpoints. The bill, introduced by Rep. Tim Kennedy (D-N.Y.), was passed by the House Homeland Security Committee yesterday.
  (Lawmakers advance DHS bills to ban Chinese batteries, help TSAers with commute - Federal News Network)
• Beyond looking to make spending cuts, House Republicans are eyeing several policy riders in next year’s spending bills. One policy rider tacked onto fiscal 2025 spending legislation aims to block environmental investments in the Thrift Savings Plan. The TSP board has already said that type of change would mean they would have to end the mutual fund window altogether. Another policy rider would add more reporting requirements on federal telework and office space. The GOP-led appropriations committee released its report language for several appropriations bills Wednesday afternoon. House appropriators plan to mark up those government spending bills later today.
  (Policy riders to watch as House appropriators mark up 2025 spending bills - Federal News Network)
• A record 53,000 women veterans enrolled in health care at the Department of Veterans Affairs over the past year. That is a 20% increase compared to the previous year. VA said those enrollments are driven by the PACT Act, which expands health care eligibility for service members exposed to toxic substances during their military service. Texas, Florida and California saw the most new enrollments. Women veterans are the VA’s fastest growing patient population.
  (More than 50,000 women veterans enrolled in VA health care over past 365 days, marking the largest enrollment year ever for women veterans - Department of Veterans Affairs )
• The Small Business Administration is keeping in place a COVID-19 moratorium on requiring companies in the 8(a) program to have an established office in a particular location before being awarded a construction contract. SBA said the suspension of the Bona Fide Place of Business requirement will remain in place through September 30, 2025. The reason for the extension, SBA said, is due to workforce shortages, cultural shifts in the workplace and trends favoring remote-work opportunities. SBA said these factors are making it increasingly difficult for small businesses to recruit and retain office-based employees.
  (SBA adds 15 months to 8(a) bona fide place of business moratorium - SBA)
• U.S. Space Command and U.S. Indo-Pacific Command, along with allies and partners, are in the middle of a 10-day multinational exercise in the northwestern Pacific Ocean area called, "Valiant Shield." The exercise allows the military services and partner nations to prepare to rapidly respond to crises, from humanitarian and disaster-related to armed conflict. With the involvement of U.S. SPACECOM and U.S. Transportation Command, the exercise has expanded the multi-domain collaboration needed for large-scale operations. Running through June 18, this is the 10th Valiant Shield exercise.
  (SPACECOM, US Transportation Command participate in multinational exercise - U.S. Indo-Pacific Command USINDOPACOM)
• Phone scams are on the rise and now the Cybersecurity and Infrastructure Security Agency says organizations should watch out for phone calls from scammers purporting to be CISA employees. CISA said its staff will never call and request cash, cryptocurrency or gift cards. If you believe you may have been the target of a CISA scammer, the agency said to take note of the number, hang up immediately and notify either CISA or law enforcement.
  ( Phone scammers impersonating CISA employees - CISA)

The post Rumors targeting Social Security recipients cause inundation of SSA phone lines first appeared on Federal News Network.

OPM received 6,751 new retirement claims in May, a decrease of  150 from April. OPM processed 8,793 claims, 1,146 more claims than the previous month.

Initial retirement claims in May completed in less than 60 days took on average 37 days to process, a two day decrease from April, while initial cases that were processed in more than 60 days on average took 119 days, an increase of 15 days, from the previous month.

The monthly average processing time decreased from 61 days in April to 60 days in May, a continued decrease from January’s average of 66 days.

May now holds the record for the fewest number of retirement claims filed in a month for 2024.

The post OPM retirement claims backlog at lowest level since May 2016 first appeared on Federal News Network.

For many people, thinking about retirement, is axiomatic. Pay off that mortgage on the house. It might be wise to think through this strategy a little more carefully. For why, the Federal Drive with Tom Temin spoke with private wealth advisor Thiago Glieger of RMG Advisors.

Interview Transcript: 

Thiago Glieger Yeah. I think it’s one of those things that with most retirement planning, with most financial planning, what seems to be good for one family isn’t always the best thing for another family. And it’s kind of against the grain, because in medicine we think about, there’s a certain symptom that’s met with a specific treatment or medication or whatever. But in financial planning, we start to recognize it doesn’t quite work that way. So you have to be careful and look at your own circumstance very objectively. But what doesn’t help is the fact that all these pundits are often talking about, you can’t have any debt to your name. Liability is bad, bad, bad, bad. You need to pay off your mortgage before you head into retirement. And so people start to have this ingrained idea that they can’t retire until they do so, or going into retirement with a mortgage is a really bad thing.

Tom Temin But a mortgage has characteristics, and homeownership have characteristics that are different from other kinds of debt. And that’s the crux.

Thiago Glieger Yeah. I very loosely categorize debt into two different categories, one being good debt and then bad debt. Bad debt is that little plastic card everyone has and overuses. If you’re carrying debt on that, that’s not good. Good debt, you can use leverage to have your money grow it for your retirement, continue to allow it to support you, but you also get to have something like a house and live in it. And that house gets to appreciate in value. There are some tax properties that may be beneficial for you about having a mortgage. So it can be done correctly.

Tom Temin Because yes, the mortgage interest is deductible still under federal tax law. And so if you lose that you could have a greater tax liability from whatever income you have when you do retire.

Thiago Glieger That’s right. And I think a lot of people kind of forgot about the deductibility of the mortgage interest because standard deduction amounts have been so high. So unless they’re itemizing, they may not be getting that benefit. But I have to remind people that in two years, the law is set to go back to the original rule, where again, deductions will go down. And unless they change the law, that could be a very beneficial benefit for people again.

Tom Temin And people sometimes think, well, I’ll pay off the house, realize the appreciation. And there’s a pretty hefty capital gains avoidance that you have. Most normal people with normal houses will be under that limit and then buy a condo and then still have space I want and live rent free. Well, not so fast there either.

Thiago Glieger Right. And you always have to think about what are you trading? Or that liquidity. That paying off the full mortgage or just paying cash for another property and just having no mortgage at all, like something for a condo, for instance, you’re trading that liquid capital for illiquidity in real estate, as well as some reduced expenses, because then you don’t have that mortgage. But if you think about also what is the composition of a mortgage, it’s not entirely just the loan and the interest payment that you have. There’s really four parts to it. We call that Principal Interest Taxes and Insurance (PITI). So in even in your case when you’re describing a condo, somebody may not have a mortgage payment but you’re going to have HOA fees, you’re going to have condominium fees, you’re going to have the taxes in the insurance that you still owe each month.

Tom Temin Right. And sometimes a condo will come to you and say, guess what, we need a new roof. It’s $2 million, but we only have $500,000 in escrow for the roof. So everybody gets assessed up to up $10,000 out of nowhere to make sure the place doesn’t fall apart.

Thiago Glieger And that number is not out of the ordinary. I had a client just a few months ago come to us for $15,000 out of nowhere because, again, it was that situation where they needed to replace everything throughout the whole building. And it was a huge assessment.

Tom Temin Right. And especially in the age after the collapse of that condo in Florida, nobody wants to take a chance with a condo building if it’s more than two-storey high.

Thiago Glieger That’s right.

Tom Temin We’re speaking with Thiago Glieger, wealth advisor with RMG Advisors of Rockville, Maryland. So let’s presume then, that someone nevertheless wants to pay off their mortgage. What’s a good strategy for doing it? Where do you get the money to do it?

Thiago Glieger There’s a couple of questions I would want people to see themselves asking. And really the first is, if I do this, what are going to be the tax implications? If I’m going to take a large lump sum payment from my retirement accounts, that’s taxable like salary, just like ordinary income. And so the additional question here is beyond just the tax cost, how much potential future growth did you also cost yourself by not having this money anymore? Does this create any kind of risk in later retirement, because it’s a huge chunk of money that you’re not paying. So then other people may look at non retirement accounts like individual accounts, brokerage, joint, trusts. That comes with capital gains. So you have more control, and it is less taxes in ordinary income. And then sometimes people will say, well, you know what, this is what we have the Roth for. The Roth is totally tax free. It’s for surprise bills like this or something we can use, and we don’t have to worry about the tax. I don’t like people using the Roth for something like this, because the Roth is where you get all of your tax free growth. I’d like to see people using the Roth as kind of their growth vehicle for the future, so taking it and dumping it into a house may not be the best thing, but that’s usually the three options that people have.

Tom Temin Or you could win the lottery, I suppose. And then it doesn’t matter what happens. But if you do, then retain your house and the mortgage payments. If you can afford them, the question is if you can afford them before you retire, can you afford them after you retire that PITI payment? And that’s really the analysis you have to do, because it might be that you can totally handle it.

Thiago Glieger That’s right, exactly. And that’s the point here is I think a lot of people think they just can’t have a mortgage payment because their FERS and Social Security is not making up all of the income that they have from their salary. So they think, oh, well, our income is going down, so we must reduce our expenses. And that may not necessarily be true. If you’ve been a good saver throughout your career, then you might be sitting on a substantial chunk of change that you can use to continue to grow and invest for yourself. It continues to generate cash flow so you can keep making those mortgage payments, because you’re still generating a retirement paycheck at this point, it’s just not coming from the government.

Tom Temin I guess people might have the idea, well, we can partially pay it off with a chunk of the Roth or a chunk of the rainy day savings we have. But on the other hand, if you do that, you don’t really change your PITI payment, because the bank, the way they’ve rigged the mortgage system, pay all this interest until you pay off the principal.

Thiago Glieger And that’s why people really look to do a full payment, because you’re only free and clear of those interest payments. Once you clear that liability completely. And again, the challenge in doing these lump sum payments is that it affects something called your adjusted gross income. And not only do you pay higher taxes, potentially in that first year, you may have pushed yourself into a higher tax bracket for your first pension. So now there’s a bigger bite coming out of your annuity as well. This can also impact capital gains taxes. It could impact your Medicare Part B premiums. There’s a whole lot of other elements of a retirement plan that this one single move can have an impact negatively on. So you really have to be careful.

Tom Temin Most of the calculators online, where you plug in numbers to calculate whether you can retire or not or what your costs will be. There’s a lot they leave out, and one of the things they don’t have is tax. Because tax varies so widely by location, state you’re in municipality you’re in. This property taxes vary and then state taxes etc., etc.. Are there any sources of information to model what your taxes might look like? If I stay in my house, I pay this, that and the other for mortgage. Now here’s my income. That type of tax analysis.

Thiago Glieger Yeah. And the challenge Tom is needing to know a little bit about how the tax structure works. And I always encourage people, if you want to do some of this work, you can actually just go to the IRS website and look up the tax brackets and say, okay, if I generate this much in ordinary income, what is considered my marginal tax bracket, that’s the rate at which my next dollar is going to be taxed at. And this helps me to figure out if I take a lump sum from my TSP. That’s what my tax picture is going to look like. And then thinking about, all right, well, if I do this for next year, is that a year that’s going to be better for me because maybe I’m not working. Or do I want to do it this year because I have extra cash flow to be able to still contribute to the TSP, even on taking money out. So there’s some modeling that can be done. But you’re right, depending on how you file your taxes, depending on how you’re generating your income and retirement, which accounts you’re pulling the money from if you’re no longer earning a salary at this point, that’s all going to impact what that bottom line is for each individual family.

Tom Temin Yes, because you have to figure in your Social Security payments in there because that’s taxable since 1980. They’ve been taxing Social Security income, which kind of sounds absurd since you paid 6% tax on your income for your whole working life. And so did your employer or employers. And yet, it’s taxable.

Thiago Glieger Yeah, it’s tax on tax. And a lot of people don’t recognize that. They think Social Security is not taxed. But a good chunk of it is likely going to be taxed because you’ve got a first pension that essentially puts you in that you’ve already started with taxable income, which means your Social Security will be too.

Tom Temin All right. So bottom line then do some real analysis before you worry about paying off the mortgage on your house.

Thiago Glieger I really think it’s good to do some sort of financial modeling on this, because if you take out a huge swath of your money and now it belongs in a real estate property instead of your portfolio, what does that do to the longevity of your retirement plan. Do you still have sufficient liquid assets to be able to support your lifestyle for the rest of your life? And also understanding that there is some emotional component to this as well, if you are financially benefiting from keeping the mortgage, but it’s keeping you up, because you’re just stressed constantly, that’s not a successful retirement plan. And so I think taking an approach of understanding, I’ve shared with you the Venn diagram of what makes financial sense, of what really makes you happy. And retirement planning lives in the middle, because sometimes you have to do something that isn’t the squeezing the last drop of money out of the system, but it makes you incredibly happy and you’re fulfilled, and you’re happy to pass on a mortgage free property to your kids. That’s meaningful in a lot of different ways, too.

Tom Temin And if you do hang on to the house and you’ve got a mortgage and you’re in a reasonably sellable area, that’s always a God forbid option. You can always sell the house at some point and then realize that capital gains because it solves some other unanticipated problem. It may produce these new tax problems, but it solves whatever that came away that you never anticipated.

Thiago Glieger Right, exactly. You can create lines of credit against the house. You can sell the house, move to something smaller. And a lot of people will do that, especially as they phase their retirement because the house is too big. Maybe it doesn’t have everything they need to age in place, and so they find themselves moving somewhere else.

The post Why it pays to think twice about paying off that mortgage before retirement first appeared on Federal News Network.

Where should you retire? What state or city can have big consequences for finances and satisfaction. People retiring from military service have extra considerations, such as access to Veterans Affairs services or post-retirement job prospects. For some of the best and worst places to retire, the Federal Drive with Tom Temin talked with Wallet Hub analyst Cassandra Happe.

Interview Transcript:  

Tom Temin And you’ve done a study of the 50 states. Just maybe a quick rundown on what your criteria were in looking at the 50 states.

Cassandra Happe For this particular study. We looked at the 50 states and the District of Columbia, and we compared them across a total of 28 different metrics. Those metrics can be grouped into three key categories, which are economic environment, quality of life, and health care. So, we used a wide variety of metrics to try to get a very holistic picture of what it’s like to be a military retiree in each of these states.  

Tom Temin And military retiree, of course, you know, ranges from four-star flag officer to someone that might be toiling away for 20 years and reaches lieutenant colonel or below. So, the prospects are very different for when you’re coming out, depending on rank.  

Cassandra Happe Absolutely. And it can be difficult to really get into those little nuance things in a study such as this, since we looked at it from such a broad perspective. But we did try to take into consideration that individuals are going to have different experience levels when they come out of the military. So, we tried to look at it from a broad perspective, as far as what opportunities are there and how those opportunities might align with a military retirees’ prospects.  

Tom Temin Sure. And well, let’s get to it then. What is the number one state in wallet hub’s estimation?  

Cassandra Happe So the best state for military retirees is South Carolina. And they did really well when it came to the quality-of-life metrics we looked at. They ranked third overall in that particular dimension. But they did struggle just a little bit when it came to the health care dimension. They came in ninth overall in that particular dimension. So it is still in the top ten as far as the 50 states in the district go. But that’s where they could really improve when it comes to health care specifically. We looked more at the VA health system and how many hospitals are in the area, and also the quality of those hospitals and the treatments that they provide.  

Tom Temin And number two is Florida. Tell us more about the nuances there.  

Cassandra Happe So Florida again stood out with that quality of life. They ranked fourth overall in that particular dimension and plaudits, traditionally known for being a retiree friendly state in general. But they do struggle again with that health care dimension. They came in 18th overall in that dimension, and they did struggle a little bit with the economic environment as well, coming in 11th overall in that particular dimension.  

Tom Temin Yeah. So, you really have to balance your own personal needs versus these general metrics. Sounds like.  

Cassandra Happe Absolutely. And that’s why we group them into these key dimensions. Because depending upon your situation, you might want to focus more on moving somewhere with a great health care system. Or you might be more concerned about your economic future. So, it’s really important to look at the nuances that go into this study.  

Tom Temin And Oregon great facilities. Popular state was ranked 51.  

Cassandra Happe Yes. They really struggled with that quality-of-life dimension. They came in 51st overall in that dimension. And they also struggled with that economic environment dimension coming in 45th overall for that. But as you mentioned health care, they came in 35th overall. So, towards the middle of the pack, which is pretty good.  

Tom Temin We’re speaking with WalletHub analyst Cassandra Happe, and I wanted to ask you also about the District of Columbia, which came in pretty poorly at number 48. And I think their highest-ranking criterion at 32 was the one for economic environment rank, the district. You know, that’s where VA headquarters are.  

Cassandra Happe Yeah, it really came down to that quality-of-life dimension that we looked at. They came in 50th overall in that particular dimension. And that comes down to metrics such as the percentage of homeless veterans in the district and housing affordability in that particular district is really where they could improve to make it more welcoming for military retirees.  

Tom Temin And where do taxes and tax rates rank? Would that be part of the economic environment consideration?  

Cassandra Happe We didn’t look at taxes as far as whether the state taxes them. Military pensions either if they tax both retired pay and survivor plan benefits, or if they only receive a partial exemption in the state, or if they don’t have any exemption for that state taxation that fell into that economic environment category. So, for instance, the District of Columbia got a half point instead of a full point for that particular metric, because they have a partial exemption for some state taxation when it comes to military pensions.  

Tom Temin And one interesting characteristic of the rankings, 1 to 50, is that they don’t exactly fall along red or blue lines.  

Cassandra Happe And I think that’s a good point to make, is that it doesn’t seem to be necessarily that red states or blue states are really making an impact. It is very localized and has a lot to do with just the nuance. Things that go into each of these states.  

Tom Temin And contiguous states, you know, have vastly different rankings. I mean, Maryland and Virginia, I think are four and three, because that’s kind of like one big blob. But then you look at New Mexico, which was next to last at 50th, right next to Texas, which is a middling 28.  

Cassandra Happe Yeah, that is pretty fascinating to see. A lot of times when we do these studies where we’re ranking the different states, you’ll see more regional trends going on. But it does seem to have a lot to do with just the state itself and what investments they are making in that environment for military retirees.  

Tom Temin And with respect to the ranking. How would they map, say, to just retirees in general, are the better states for military retirees, the better states for just every other retiree?  

Cassandra Happe That really does depend on what you’re really looking at in this study, because we did try to focus on metrics that were more specific to military retirees, like veteran owned businesses and Defense Department contracts, which may not play a role for nonmilitary retirees as much. So I would say, if you’re looking at this study from a general perspective, as a nonmilitary retiree, focusing on the quality of life rankings would be my recommendation, because those metrics are a little more universal compared to a lot of the metrics we looked at for the economic environment and health care, which were very much focused on the military side of things.  

Tom Temin And your study doesn’t go to this depth, but within a given state, there’s a lot of variation depending on the metropolitan area or rural area, if that’s your choice that you’re into.  

Cassandra Happe Absolutely. That is a really good thing to keep in mind with this particular study, since we looked at it from a state level, is there are some more localized factors to keep in mind. As you mentioned, the rural versus urban environments may allow for more or less access to different health care options or different opportunities for retirees.  

Eric White WalletHub analyst Cassandra Happe, speaking there with Federal Drive host Tom Temin.

The post Difficult location choices for military retirees first appeared on Federal News Network.