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.

National elections often have economic effects. This year’s presidential election is proving a bit more volatile than we’ve seen in recent years. With what that might mean for investment returns, the Federal Drive with Tom Temin turns to certified financial planner Art Stein of Arthur Stein Financial.

Interview transcript: 

Tom Temin  This is a question you’re getting these days, huh, Art?

Art Stein  Oh, so many people ask me about the election and and what it will mean for investment returns going forward after the election. And, you know, there’s a real split. The Democrats are, you know, panicked that if President Trump wins again, that’ll be bad, and Republican clients are worried about, you know, if President Biden or some other Democrat wins, that that’ll be a disaster. And, so, you know, there have been a lot of studies on this. I look at it every four years, because people do bring it up, although not quite with the level of concern that I feel like I’m hearing now. And, basically, you know, there’s just no discernible relationship that you can come up with. And people have split the statistics a lot of different ways, Tom, but, one, investment markets do not tend to do better with either Republicans or Democrats. There’s just no statistically significant difference, and that’s partly because there just haven’t been that many presidential elections by the standards of statistical significance. The other thing is, in my opinion, that looking at what happened before World War Two, it’s just not so relevant to what’s happened since World War Two, because now the Federal Reserve is much more powerful, much more interventionist. And, you know, there’s a lot more transparency in the investment markets, a lot of things are different. But, just as an example, if we rank investment returns per year for each of the presidents since World War Two, by far the best was President Clinton. I mean, the Dow Jones averaged 16% a year. Then, we’ve got five Republicans and one Democrat who are in the 10 to 11% range per year. That’s Ford, Eisenhower, Trump, Reagan, and George H.W. Bush, and then President Biden, where its averaged 11% a year, three presidents where the market actually lost during their term, President Nixon and George W. Bush and Jimmy Carter. Market, Dow Jones all had a negative rate of return during their presidency. So, there’s just not much there to hang your hat on. One of the things a lot of this is from a firm called Bespoke Investment Group, and they really did a deep dive this time around. They looked at what would happen if you only invested when Republicans were in office, or you only invest when Democrats held the presidency. And if you just looked at it like that, then you’d be much better off only investing when the Democrats were in office. You’d have about twice as much money as only investing when Republicans were in office. But if you just stayed invested, no matter which party held the White House, you would have 30 times as much money over the period they looked at.

Tom Temin  Right, and anyway, the Republicans say if they’re doing well, it’s because of their policies. And the Democrats say if we’re doing well, it’s because of our policies. And if things happen, good or bad, sometimes they’ll blame it on the previous administration of a different party, or the party out of power will claim it’s what we did that’s helping this next guy in power, who’s of a different party. So, it’s all this gamesmanship. I guess, ultimately, what this says is that the economy itself in the investment markets are resilient, depending on what policies the administration might pose.

Art Stein  Absolutely. And, you know, the fact of the matter is, in today’s world, the Federal Reserve Board has a lot more influence over the economy than the White House and Congress. And you may think that’s a good or a bad thing, but I think that’s what’s going on. And you know, and they looked at a couple of other things. One thing that I liked was whether stock market returns 12 months before an election where there was a sitting president running an incumbent president running, did incumbent presidents, were they more likely to be elected? So, they looked at every time going back to 1900, where that was the case. And 52% of the time, if this stock market was positive before the election, the incumbent won. Well, 52% is a coin flip, you know, so what good is that? And they’re only they looked at, you know, suppose the Dow Jones decline before the election, well then the incumbent lost only 13% of the time, and the rest of it was just didn’t fit anybody’s theory.

Tom Temin  And anyway, you’re talking about percentages of small samples. I mean, there’s twenty presidents.

Art Stein  Very small samples. And you know, the extraneous things going on are so important. Wars, revolutions, COVID. I mean, it’s just, there isn’t a relationship, except that there’s a very strong relationship to just staying invested and not worrying about who gets elected president and letting that take care of it. And you know, for listeners, I’m posting a blog, and then today or tomorrow, with a lot of these charts in it, and statistics, you know, if people want to look at that, take their own look at it.

Tom Temin  We’re speaking with Art Stein of Arthur Stein Financial near us in Bethesda, Maryland. And, therefore, I’m guessing that the best advice then at this point is just leave your TSP alone, maybe make some adjustments in the funds if you feel like that. But don’t pull out because you’re afraid of Trump, don’t pull out because you’re afraid of Biden. Don’t double down for the same reason.

Art Stein  Yeah, exactly. I mean, you TSP investors need to choose an appropriate allocation between the stock funds and the bond funds. And if it’s appropriate, then they should just stick with it. And time in the market is a much better strategy than timing the market, the money that TSP investors have in the stock funds should be for long term needs, not for money they need to take out the next year or two. But for the money that, you know, someone retiring at 65 is going to need money 10, 20, 30 years in the future. And that’s where the stock funds are very likely to, you know, outperform.

Tom Temin  And I guess sometimes events can cause gyrations in the stock market. I don’t know what happened. I don’t remember when Kennedy was assassinated, President Kennedy back in 1963, or whether you know, the markets jittered in the last few days after the near assassination of candidate Trump, but those tend to be like knocking a top. It’s going to go to its natural momentum after the little shock is over.

Art Stein  Most of those, you know, there was a dip in the market after Kennedy was assassinated. And then it recovered and just kept going up. And, you know, the big event in our lifetime was 2008 when we had that massive crash in the real estate markets. I mean, that definitely had an effect. But that was an economic effect, not a political event. And things like Brexit. I don’t know if you remember, years ago. That was supposed to have a huge effect on the markets. Didn’t. You know, all these things just, and even you know, when President Trump was elected in 2016, the general feeling on Wall Street was that that would cause a market crash. Not everybody said that. But really the stuff I read was, that’s going to be a major crash if he’s elected. And what really happened was that the market had been going down until three days before the election, three trading days, then it started going up. And clearly no one knew that Trump was going to win. And it just kept going up after he got elected. I mean, so if you read anything from that, it’s just the stock market does better when there’s no election going on. And there’s a certain, there might even be a reason for that. Because, you know, they tend to say the stock market doesn’t do well with uncertainty.

Tom Temin  All right. Well, if you’re uncertain, then stick with what you’ve got going. Stay the course and you’ll probably be better off in the long run. Fair to say?

Art Stein  Fair to say, Tom.

Tom Temin  Certified financial planner Art Stein, proprietor of Arthur Stein Financial. As always, thanks so much.

Art Stein  Thank you, Tom.

Tom Temin  We’ll post this interview with federalnewsnetwork.com/federaldrive. Subscribe to the Federal Drive wherever you get your podcasts.

The post How the election could affect your Thrift Savings Plan returns 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.

• 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.

• 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.

• Satisfaction with the Thrift Savings Plan is at an all-time high, as 93% of TSP participants said they are satisfied with the program, according to the Federal Retirement Thrift Investment Board. It is a record high since the TSP moved its recordkeeping contract over to Accenture Federal Services. It is also a significant improvement since a tumultuous launch of a new TSP online platform back in 2022. The participant satisfaction scores are based on surveys conducted by Accenture.
  (June 2024 participant activity report - Federal Retirement Thrift Investment Board)
• The Defense Department is trying to right the ship on the next-generation background investigation system. The Defense Counterintelligence and Security Agency has an 18-month roadmap to get the National Background Investigation Services program back on track. The software program is years behind schedule and more than $600 million over budget. DCSA Director David Cattler told the House Oversight Committee that he will build a culture of accountability around the NBIS program.“Simply and directly: the delay in fielding NBIS is unacceptable to everyone,” Cattler said during yesterday’s hearing.
  (DCSA has a new roadmap for delayed background investigation IT system - Federal News Network)
• The Defense Information Systems Agency has identified an opportunity to get out from under an ever growing mound of technical debt. DISA asked for $2 billion for operations and maintenance of technology systems in fiscal 2025. Lt. Gen. Robert Skinner, the director of DISA, said the agency has a lot of motivation to get off legacy network protocols called TDM to reduce that O&M budget. “Two things are happening. Commercial industry is driving us to get off it quicker because what they are telling us is either they will shut it off because they don’t have the capacity or capability to do it, or you will be paying 300, 400, 500% more than what you are paying today,” Skinner said.
  (DISA Highlights AI and Analytics for DoD Cybersecurity - AFCEA International)
• A new National Guard initiative uses artificial intelligence to predict wildfire hotspots. The initiative called Project Theia is the latest example of how the National Guard is turning to emerging technology to improve its natural disaster responses. The new system standardizes data from a wide range of military air and ground assets and creates a common operating picture. The tool allows the Guard to have a clear depiction of disaster areas and to better track fires. Kenneth McNeill, the National Guard Bureau’s chief information officer, said they want to expand the capability.
  (National Guard uses AI to track wildfires - AFCEA)
• The defense appropriations bill House members are voting on this week would crack the door ever-so-slightly more open to an experimental budget authority that lets DoD spend money on software development, without worrying about “colors” of money. The bill would let U.S. Cyber Command add part of its Cyber Operations Technology Support spending to DoD’s Software and Digital Technology Pilot programs, sometimes called BA-8. Since the first pilots were approved in 2020, Defense officials have argued the approach is a boon to modern software development, since program offices don’t have to split their funding between R&D, operations and procurement accounts that are often irrelevant to software. Congress has been unwilling to expand the program more broadly until DoD shows clear evidence that the new model produces better results than the traditional one.
  (H.R. 8774 - U.S. House of Representatives )
• A two-year program to close the early career technology talent gap in government is graduating its first set of students. The U.S. Digital Corps is placing software engineers, product managers, data scientists, designers and cybersecurity experts in career positions across 15 agencies. The General Services Administration, which runs the program, brought in 40 early career technologists in June 2022 as part of this inaugural class. The Digital Corps kicked off its second cohort last July and is preparing for its third cohort of fellows in August, which will see an increase of fellows, including 50 artificial intelligence and AI-enabling fellows hired in support of the AI Talent Surge.
  (Early career technologists graduate into career positions at 15 agencies - GSA)
• A top House lawmaker will soon introduce legislation to build a stronger pipeline of cyber talent. Homeland Security Committee Chairman Mark Green (R-Tenn.) said addressing the national cyber workforce shortage is his top priority this year. During a hearing on the workforce gap Wednesday, lawmakers called for federal agencies to bolster their support for cybersecurity training and education. The CyberSeek Initiative estimates that there are nearly 500,000 open cyber jobs nationwide.
  (Opening statement: cyber workforce needed ‘to defend the digital infrastructure we depend upon daily’ - House Homeland Security Committee)
• Agencies are expected to start internal planning now, ahead of the upcoming 2024 Combined Federal Campaign. The annual campaign collects donations from federal employees to contribute to charities nationally and around the world. This year’s CFC isn’t underway just yet, but the Office of Personnel Management is asking agencies ahead of time to appoint emerging leaders on staff to run their donation drives internally. Agencies should make their selections no later than July 31. The 2024 campaign will begin later this fall.
  (The CFC needs your leadership and teamwork - Office of Personnel Management)
• The Air Force’s inaugural cohort of warrant officers in IT and cyber career fields is set to graduate this fall. The service wants to expand the program into what Air Force officials call “street to seat,” which will allow the service to bring civilians into these specialized roles quicker. Similarly, the Space Force is also looking at direct commissioning capability from industry, specifically for cyber-related positions, which will provide greater flexibility in hiring. The Air Force announced its plan to bring back warrant officers earlier this year as part of the service’s sweeping plan to “reoptimize for great power competition.”
  (Air Force, Space Force building cyber talent pipeline - AFCEA)

The post Satisfaction with TSP at all-time high, Accenture survey shows 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.

But beyond hammering out agency budgets for next year, the GOP-led House Appropriations Committee has tacked on several policy riders that could impact federal employees and retirees in other ways as well.

One policy rider included in the committee’s report language, for instance, would bar any investments through the Thrift Savings Plan that are based on environmental, social or governance (ESG) criteria.

House Republicans also tried last budget cycle to include the “No ESG in the TSP” policy rider in the spending legislation, but it ultimately did not end up in the final appropriations package.

The launch of the voluntary TSP mutual fund window in June 2022 brought more than 5,000 new mutual fund options to TSP participants who choose to enroll in the window and pay a fee for the service. But the Federal Retirement Thrift Investment Board has said if an anti-ESG policy is enacted, it would bring the TSP’s new mutual fund window to an early demise.

Keeping track of 5,000 mutual funds would become too burdensome and open FRTIB to potential legal exposure, the board has said.

“There is no practical, cost-efficient way to monitor each of the roughly 5,000 individual mutual funds’ holdings,” FRTIB Director of External Affairs Kim Weaver said in 2023.

FRTIB has publicly opposed the provisions that aim to bar ESG investments. Weaver has also said there would be ripple effects from the provision, if it’s enacted. It would cost the TSP additional money to wind down the mutual fund window, and TSP participants may be exposed to potential financial losses if they had to transfer their investments back to the main TSP funds.

Appropriations committee members plan to mark up the financial services and general government 2025 spending bill, as well as several others, on Thursday afternoon. Here are some of the other policy riders federal employees should pay attention to:

Telework, office space in 2025 spending bill

In the report language, committee members also noted previous and upcoming requirements for the Office of Management and Budget and the General Services Administration to report to Congress on federal telework and office space.

In the 2024 enacted appropriations package, lawmakers included a now-approaching deadline for OMB to share all agencies’ work environment plans with Congress. Those plans, which stem from the initial return-to-office memo in April 2023, detail agencies’ recent telework policy changes.

OMB’s deadline to submit all agencies’ return-to-office plans to Congress is coming up in late June.

“The committee looks forward to receiving the report from OMB on governmentwide telework,” House appropriators wrote in the committee’s report. “The committee [also] expects agencies under the jurisdiction of the subcommittee to reduce their office footprint if their average office space utilization rate is less than 60%, based on a benchmark of 150 usable square feet per person.”

At the same time, the committee said GSA has not yet provided its required report on how agencies can reduce office space requirements based on lessons learned from using telework during the COVID–19 pandemic.

The federal footprint has been steadily declining, but agencies still holding onto excess and underutilized office space is a main reason the Government Accountability Office has kept federal real property management on its High-Risk List for over 20 years.

In the 2024 spending package, Congress called on all agencies with an office space utilization rate of less than 60% to submit a description of their current efforts to reduce their physical footprint, the total office space costs, the average utilization rate and the estimated cost of underutilized space.

If enacted, the 2025 spending bill from House appropriators would also give GSA and OMB a new 180-day deadline to offer further data and recommendations on how to best consolidate federal office space, while disposing of unneeded federal real estate.

Continuing a few longstanding provisions

In addition to the slate of new policy riders, House appropriators are also looking to maintain numerous provisions that have been around for years, and in some cases decades. Many of those provisions have become practically standard in spending bills each fiscal year.

For example, one continued provision requires agencies to pay OPM a fee for processing retirement claims for employees who separate early from federal service.

Another would continue to direct agency employees to use official time — or time spent working on union-related activities while on the job — in “an honest effort to perform official duties,” the committee report language said.

Additionally, a provision often referred to as the Hyde amendment would maintain the current ban on any government funding from going toward abortions through the Federal Employees Health Benefits (FEHB) program.

IRS pilot, FBI headquarters and more

The full appropriations committee also maintained several provisions from the subcommittee’s initial 2025 spending and policy proposals earlier this month.

Notably, the committee plans to implement steep spending cuts for the IRS, and aims to completely defund IRS’ free Direct File platform.

The lawmakers are also looking to decline a $3.5 billion request for construction on the new FBI headquarters building during 2025. The appropriations bill would also withhold all current funds allocated for the GSA construction project.

Democratic committee members, unsurprisingly, have come out in strong opposition to the spending cuts and many of the policy riders. Some lawmakers said they’re concerned about the ability of several relatively small agencies to handle large budget cuts. Rep. Steny Hoyer (D-Md.) warned last week that the House GOP bill would force agencies to implement staff reductions to make ends meet.

The post Policy riders to watch as House appropriators mark up 2025 spending bills first appeared on Federal News Network.

The Common Stock Index C Fund posted the highest return for May with 4.96% returns, followed closely by the International Stock Index Investment I Fund which posted 4.86% return.

The Government Securities G Fund posted the lowest return at 0.41%, up from 0.35% last month.

All funds are in positive year to date territory except for the Fixed Income F Fund which posted -1.56%.  The Common Stock Index C Fund also posted the highest return for the last 12 months with 28.15%. The Small-Cap Stock Index S Fund posted the second highest 12-month return with 24.55%.

All Life Cycle funds posted positive returns. The L 2055, L 2060 and L 2065 all posted 4.67% return in May and 24.21% return for the last 12 months.

The post TSP funds make a healthy jump in May first appeared on Federal News Network.

We’re not going to bore you with the nuts & bolts of how your Thrift Savings Plan works.  We do things a little differently here at Federal Employee Benefit Advisors (FEBA).  We’re going to show you how you can maximize every bit of the TSP as possible.  There are several strategies you can employ, some immediately, to put yourself into a better investment position; ultimately leaving you more confidently prepared & ready for your retirement.  Here is what you will learn as you read through this article:

• TSP basic overview (Very brief, not too wordy, we promise)
• Unmasking the C, S, I, F, G Funds
• Enhancing the Lifecycle Funds
• Maximizing TSP with withdrawal/transfer options

TSP basic overview

TSP came into being in 1986 with the G Fund added on April 1^st 1987…no foolin’!  The C & F funds were added shortly thereafter in January 1988.  To round out the fund portfolio the I & S funds were added in May of 2001.  There are also Lifecycle Funds which are a blend of all 5 funds designed to strategically reallocate to target your desired retirement year.  Currently, there is a traditional pre-tax withholding account and a Roth after tax withholding account which was added in 2012.  A 5% matching contribution is available to all FERS employees.  The matching portion is added into the traditional pre-tax withholding account even if all contributions are directed to the Roth account.  There is also a mutual fund window available.  It is expensive and limiting; only about 1% of all TSP monies exist within this window.  TSP is managed by Blackrock Capital Advisers and is facilitated by the Federal Retirement Thrift Investment Board.

Unmasking the C, S, I, F, G Funds

C, S, I Funds

Although you have 5 fund options to pick from, in reality you only have 3 choices to invest in.  Here’s why we say that.  The C, S, & I Funds are your stock index funds.  The C common stock index fund, S small capitalization stock index fund, I international stock index fund are all one asset class: Stocks/Equities.  They are the same thing.  Even though there are 3 different indexes they are correlated assets.  Correlation means that they are moving in the same direction almost all the time.  So, when the stock market is up, the C, S, I Funds are up.  And when the stock market is down, the C, S, I Funds are down.  They almost always move in the same direction together.  Unlike individual stocks, which can move in opposite directions, indexes generally do not as they are a large group of individual stocks.  They might earn a little more or less than the other, but they are moving in the same direction.

If we know that we have 3 options/funds to invest in within the same asset class, then we want to find the BEST-in-class fund.  There is a clear winner amongst the C, S & I Funds.  Only one of these funds we advise our clients to invest in.  One of these funds has greatly out-performed the other two, and has done so with considerably less risk.  In our professional opinion, the only stock fund worth putting your hard-earned money into is the C Fund.  Here is why.  The data never lies:

• In 2008 the I Fund lost -42%…the C Fund only lost -36%
• In March of 2020 (due to Covid) the S Fund lost -21%…the C Fund only lost -12%
• In 2022 the S Fund lost -26%…the C Fund only lost -18%

These are but just a few examples of the C Fund not losing nearly as much as the two riskier funds.  Yes, the S & I have the potential to have a higher single rate of return then the C; and in fact, this has happened in the past, but what we are trying to help you understand is that not having as big of losses as the other two allows the C Fund to outperform the I & S Funds over time. This is because the C Fund is a more conservative stock index Fund; it comprises around 500 big US companies.   Let’s look at the historical return data to help cement this concept:

• Since inception (1988), the C Fund has averaged 10.88% as of 4/30/24
• Since inception (2001), the S Fund has averaged 8.87% as of 4/30/24
• Since inception (2001), the I Fund has averaged 5.09% as of 4/30/24

Something we always ask our federal employee clients is this: “Would you rather average 10.88%, 8.87%, or 5.09% taking roughly the same amount of risk?”  So, we will ask you the same question.  We now have decades of data on the C, S, I.  We know they are the same asset class, so why not invest in the BEST-in-class?

F Fund

The F Fund is the fixed income index fund.  It is a blend of over 11,000 bonds and notes.  In our professional opinion, the F fund is not a great option. Even the Lifecycle funds agree, there is no significant allocation to the F fund in any of the 10 current L funds.  Before we show you why the F Fund is not an ideal investment, let us first explain why it was originally added.  For the longest time, bonds tended to be considered the “gold standard of conservative investing.”  This is because bonds tend to be non-correlated with the stock market.  In other words, when the stocks go down, bonds are supposed to rise slightly; maybe 2%-5% on average.  This is a great hedge on the more aggressive stock market.  The problem with the F Fund is that is a huge basket of many different types of bonds.  Therefore, it behaves differently than owning a bond outright.

The F Fund has not been performing well over the last 10-15 years.  Here is what we mean:

• Over the last 10 years the F Fund has averaged 1.39% as of April 30, 2024.

Even worse, the F Fund was heavily correlated with the stocks in 2022.

• The F Fund was down -12.83%. Comparatively speaking, the C Fund was down -18.13%

Here is what we ask all of our federal employee clients: “Do you really want to risk experiencing double digit loss to potentially gain 1.39%?”

G Fund

The G Fund is the government securities investment fund.  The G Fund earns interest set by law at the weighted average yield on outstanding US Treasury securities with four or more years to maturity.  In other words, it doesn’t make much money: the 10-year return to-date is 2.36%.  This creates a very big problem for federal employees who are in the retirement horizon of their career.  The G Fund is truly the only safe investment fund the TSP main core funds have to offer.  It guarantees no losses, which is very important, but it does not keep up with inflation most years historically.  This creates an investment dichotomy, as one hand, the G fund protects the investor from dangerous market downturns, but on the other hand the value of their G Fund balance reduces as they suffer from inflationary loss each year.  Ex: Inflation = 5% & G Fund return is 2.36% means that the balance of the G fund suffers –2.64% inflationary loss.

The other problem the G Fund presents the federal retiree is that it oftentimes creates income loss.  As a federal retiree begins to withdrawal money from their G Fund in retirement, we often see folks suffering from income loss.  The national average retirement income withdrawal rate out of 401k/IRA type retirement accounts is about 5%.  Therefore, as the federal retiree withdraws 5% out of a G Fund balance only earning 2.36% then that person suffers -2.64% in income loss.  The balance reduces because the interest rate is less than the withdrawal rate.  So, in the end, both income loss and/or inflationary loss creates a negative situation in the G Fund balance and has the potential to greatly reduce retirement income over time.

Lifecycle Funds

The Lifecycle Funds, or L Funds, are target date funds.  Their main goal of the L Funds is to allow for automatic reallocation of assets from the more-risky stock funds (C, S, I) into the more conservative funds (F, G) as an employee reaches retirement age.  They allow the federal employee to “set it & forget it,” so that each year as they near retirement, the L Fund of choice will automatically reallocate to the desired conservative to risk ratio.  Investment philosophy recommends a conservate to aggressive risk tolerance ratio of 60%-80% conservative and 20%-40% aggressive once one reaches the retirement horizon in life.  Anyone within 5 years of retirement or over the age of 59.5 is considered to be in the retirement horizon.

The idea of the L Funds is a sound one.  The problem with the L Funds is that they allocate a certain percentage to all 5 of the individual funds.  And as we’ve already explained above, we know the C Fund is substantially better than the S & I Funds.  Historically speaking, the C earns more than double the rate of the return the I, and about 2% more than the S fund.  So why then would we want exposure in two riskier stock funds that have proven over two decades to underperform the C Fund?

The other problem with the L Funds is the exposure you have in underwhelming F Fund.  TSP considers the F Fund a conservative income fund, therefore, they place some of your money in the F Fund within the chassis of your desired L Fund.  Let us remind you: the F fund is averaging only 1.39% over the last 10 years, and worse yet, the F Fund lost -12.83% in 2022; which was heavily correlated with the double-digit losses of the C, S, I Funds.  No thank you.  We believe you can make your own L Fund & potentially greatly outperform any of the L Funds available for you to choose from.

Customized and optimized L Fund

How to make a customized & optimized L Fund: First off, only use the C & G Funds.  These are the only two funds which are worth it.  Secondly, keep it simple:.  You don’t need to worry about adjusting your C/G asset allocation ratios every single year.  Follow this simple risk tolerance chart of our recommended re-allocation strategy*:

Maximizing withdrawal/transfer options

Before the TSP Modernization Act of 2019, Federal Employees were only allowed to make one In-Service Withdrawal out of their TSP during their entire career.  Wisely, the Federal Thrift Retirement Investment Board urged the members of Congress to pass the bill which now allows unlimited withdrawals from a federal employee’s TSP while they are still in service (up to 4 times per 12 months).  Anyone over the age of 59.5 has the privilege & power to take their retirement account into their own hands and transfer a portion or all of their TSP into an outside account in the private sector.  As long as the funds are being transferred into an IRA or a Roth IRA then there won’t be any taxes, penalties, or fees for the transfer.

That said, this is one of the most under-utilized opportunities federal employees miss out on.  TSP is a savings plan.  It is designed to allow younger employees to save money in inexpensive funds for the sole purpose of building a healthy balance for when they reach the retirement horizon.  The TSP is not a great place to keep all your money when you reach the retirement horizon.  The main reason is because of the simple fact that someday soon, the federal employee in the retirement horizon will need to begin taking income from their balance.  We have already explained why taking income from the G Fund is not ideal.  And it is NEVER recommended to take income out of an account/Fund which is down; especially when that fund could easily be down double digits in a single year (C, S, I, F).

TSP maximization

We highly recommend any federal employee who is of the age of 59.5+ or retired to strongly consider a savvy investment strategy we call: TSP Maximization. Which is simply: transferring some/all of their TSP balance & placing the funds into an IRA/Roth IRA in the private sector.  There are considerably better retirement account options waiting for you in the private sector.  You have the opportunity to take control of your TSP & maximize it this way.  Now, this does not affect your current TSP account and you will still be able to contribute into the TSP each paycheck and continue getting the government matching contribution.  It simply takes some/all of the balance and moves it out of TSP.

There are hundreds of options for you to consider in the private sector, so instead of overwhelming you in this article with the details on all of them, we have gone through the pain-staking measure of identifying what we believe to be the Top 2 private sector investment options to consider with TSP Maximization.  Each month we facilitate a live 1-hour nationwide webinar titled: TSP Maximization.  Not only will we break these two different IRA/Roth IRA investment options in detail, we will also go into greater detail with other ways you can maximize TSP no matter what age you are or where you are at in your career.  Additionally, we will follow the education with a 30- minute Live Q&A where we will answer your questions in real time.

Below you will find a link to our TSP Maximization webinar registration page so you can find a day & time that works for your schedule.  As a small preview, one of the IRA/Roth IRA options we will cover in detail guarantees no losses due to market volatility, has averaged over 8% over the last 10 years, offers a 10% cash match/bonus, and is low fee.* ,**  Lastly, we are not affiliated, endorsed nor hired by the federal government.

*Disclaimer: This article is not intended to be personal investment advice. These are general concepts and historical data. We cannot make any personal investment recommendations without understanding your personal financial situation, goals, and risk tolerance.

**Available in most states. Average annual return based on last 10 calendar year historical market data. Exact fees and limitations will be disclosed based on company and state availability.

The post How to maximize your TSP first appeared on Federal News Network.

The Thrift Savings Plan might be the easiest way to accumulate wealth ever devised. Still, people find ways to mess it up, or not get the most out of it. Joining the Federal Drive with Tom Temin with five of the most common TSP mistakes, retired federal manager Abe Grungold of AG Financial Services.

Interview Transcript: 

Abe Grungold Tom, I always analyze my TSP from day one, and I always tried to make sure how to avoid any type of a financial error that would cost me money down the road. But what I have learned from my business and from listening to, other coworkers and clients, is that there are five common mistakes that TSP participants should avoid. And let me run down through the five.

Tom Temin Yeah, the first one I really like and that is, you know, not being in with both feet.

Abe Grungold Certainly the participants who are not contributing the 5% to the TSP are simply giving away free money that they could be receiving with the 5% match from the government. If you’re only contributing 4%, you’re going to get a 4% match. If you’re contributing 5%, you get the full 5% match. And that is free money that the government is giving you.

Tom Temin Plus, there’s the compounding effect.

Abe Grungold You lose the compounding effect of all those contributions that you could be receiving year after year, and that could be going through a 20-to-25-year retirement. And that really is a bonus that the government gives you every year to invest in your retirement.

Tom Temin Yeah. So, it’s really important to develop that 5% savings habit early on, even early in your career when you think you can’t afford stuff. Maybe one less brunch a month?

Abe Grungold Absolutely. I always made sure that I contributed 5% in, especially in the early part of my federal career. I was contributing 10% so I could be ahead of the gig. But unfortunately, there are some federal employees that cannot afford the contribution because they live in expensive cities such as New York City and San Francisco. But if you could contribute that 5%, you must do it to get the 5% match.

Tom Temin Okay. And then, where you get information can be a mistake or an advantage.

Abe Grungold Yes. Unfortunately, a lot of people go to these media, locations such as TikTok, YouTube and Facebook groups to get their financial information. And basically, what you’re doing is you’re getting information from unreliable sources, basically strangers. It’s okay if you’re looking for a restaurant or a movie to watch on Netflix, but you don’t want to receive financial advice from a stranger in a Facebook forum. You don’t know who this person is. You don’t even know if they’re a federal employee. So why are you taking the risk of getting financial information from this person? Just a big mistake by doing it right?

Tom Temin If anything, you should get advice from an actual fiduciary that you can see in person and shake hands with and check the credentials of.

Abe Grungold Certainly a financial, advisor is a good source, but just look to your own office. There has to be a well-seasoned employee in your office, or a federal retiree that you know who was successful with their TSP. Speak to that person. Ask for the mentor in your office and see if they had contributed 25 years to their TSP and ask the for advice. And that is really the person you should be speaking to.

Tom Temin Many years ago, I worked for a man who had a child with severe and lifetime care needs. And so, his investment strategy as a family, you know, he had two other kids and was driven by the need to leave sufficient legacy such that that young man would be taken care of for the rest of the child’s life after the dad was gone. And so, he was one of the savviest investors I ever knew. And, you know, it’s a different economy then. Different stocks were good. But his advice was, you know, solid.

Abe Grungold Unfortunately, Tom, when I started with the government. There was no TSP, there was no one to ask and you had to really figure it out on your own. But today, with so many employees who are active TSP millionaires who are still working, try to find that person in your organization, pick their brain, and certainly don’t rely on strangers in a Facebook forum to get that information.

Tom Temin We’re speaking with Abe Grun gold, a retired federal manager and owner of AG Financial Services. And then timing or bad timing?

Abe Grungold Yes. You know, I hear this from a lot of clients who subscribe to these monthly investment magazines, and they’re trying to time the market. No one can time the market if you’re able to figure that out. It’s somewhat pure luck. You have the financial wizards like Warren Buffett and many of his friends that do not try to time that market. They buy and they hold for the long term. And if you try to time the market, you’re going to lose gains by making a mistake. No one can predict the ups and downs of the market by for a 20-to-25-year career and consistently invest over time. And you will be successful just by, you know, listening to television and the economics is just not going to give you that guidance.

Tom Temin No. And the TSP funds themselves abstract the need for timing and shifting among stocks for you. That’s the reason you buy those kinds of funds.

Abe Grungold The TSP has a 35-year history Tom, just simply look at the last 10 or 20 years and see which funds perform well. That really should be your guide. You should not be trying to predict what I call the roller coaster of the market, the ups and downs. Just buy and hold and keep buying and time is on your side. It will prove to be your friend.

Tom Temin And you are advising people not to buy a shiny object with your TSP balance.

Abe Grungold Yes, you certainly do not want to buy an annuity, which is offered as a withdrawal option on the TSP. People that, are buying annuities with their TSP balance, they lose the flexibility of their TSP worth, and they lose potential income because if there is no beneficiary, that money is going to simply go to the insurance company. If you want to receive an annuity with your TSP, simply do a monthly withdrawal on your own and divide that by 30, year payments, and you will receive your own annuity that you can set up yourself. But buying an annuity is simply a mistake. And the only person that really should be buying an annuity is someone that has no heirs that they’re going to leave any money to, and they don’t want to leave it to a charity or a legacy. So really, that is the only person that would qualify for an annuity purchase.

Tom Temin Okay. And then the last idea that you’re promulgating is on the borrowing side of things.

Abe Grungold During my federal career, I had four TSP loans. During my federal career, I read many articles that taking out a TSP loan is a mistake. It’s not a mistake as long as you do not treat your TSP like an ATM machine, you need to make a loan from your TSP when you really need to make a loan, and you need to pay that low back in full. If you do not, you’re losing potential retirement income. And what’s worse is when you do not pay that loan back, it becomes a distribution to you. It becomes a tax liability. So, you must pay that low back. And again, I had four TSP loans during my federal career. Never hurt me in the growth of my TSP balance in retirement.

Tom Temin And you probably didn’t buy an expensive pickup truck on a 72-month payback period either.

Abe Grungold I actually did buy two vehicles and I bought two homes using four separate TSP loans. But I made those decisions very carefully, very wisely. And I accelerated my payments back to the TSP so that money could get back in there as soon as possible to grow even further. And remember, when you’re making your TSP load, you’re pay yourself back the interest. That is the most important key feature of the TSP loan.

The post Five ways to really louse up your Thrift Savings Plan account first appeared on Federal News Network.

An Army financial counselor will spend years in prison after his conviction on defrauding Gold Star Families. If nothing else, the story should alert members of the military and their families to use care in picking a financial adviser in the first place. The Federal Drive Host Tom Temin spoke with someone who has witnessed this sort of bad advice, and he has some tips for avoiding it: Thiago Glieger of RMG Advisors.

Interview Transcript: 

Tom Temin There’s some really bad advice that happens out there, isn’t there?

Thiago Glieger Yeah, there’s a lot of really bad actors that are very interested in enriching themselves at the cost of other people. Which is a really unfortunate part of the industry. And it can be seen in a lot of industries, but particularly in the field of finance, given its complexities. And so oftentimes, people are not exactly certain about what’s happening with their accounts, such as was the case in this scenario where people were not really sure about what was happening, what was occurring, what kind of fees were being charged on the account. And ultimately, they paid the price.

Tom Temin Yes. Well, in that case, they were actually defrauded out of some of their principal as opposed to just paying fees for bad advice. So at some point you can get that advice, but it’s not necessarily criminal and theft. In this case it devolved over to fraud. Are there signs that people can watch for possible fraudulent activity?

Thiago Glieger Yeah, I think the big thing that you want to stay on top of is making sure that you’re looking at account statements. I’m a big proponent of not following every single day, because if you’re watching the markets, that could make you very nervous, but you don’t want to neglect looking at what’s happening in the account. There should be the place or the custodian that the money is there is going to be reporting dollars that are coming in, dollars that are coming out. In this case, I understand there were fraudulent signatures that were a part of it as well. And so money was leaving the account. And if you’re staying on top of those accounts statements, you’ll be able to see, hey, wait a minute, where is this distribution going? Did I authorize this? Does it look right to me?

Tom Temin Especially if it’s a TSP account or an equivalent, an IRA account. Then there would be normally, until you retire, no disbursements at all.

Thiago Glieger That’s right. Unless you’re the one that’s initiating a distribution directly with the TSP, there should be no distributions coming out of there. So if you’re working with a financial planner or an advisor or someone who is positioning themselves as a financial counselor and they’re presenting you with forms, or they’re talking through how to make a distribution, moving money from the TSP, you really need to understand exactly what’s happening there. Where is it going? Why is it being done? How is that going to help you in the long run? Questions like that.

Tom Temin And then of course, this particular person who is just convicted, whatever his name was, was just a piker compared to the greatest Ponzi thief of our time, which was Bernard Madoff. And the issue there was the returns were so good and so consistent that he was hiding in plain sight. And so if you see the market fluctuating and you keep rising, I guess nowadays, in the latter days after Madoff, that itself is a sign.

Thiago Glieger That’s right.

Tom Temin Too good to be true.

Thiago Glieger That’s exactly right. Advisors are not miracle workers. When we create portfolios for clients, we are participating in the markets for clients. And so if the markets are going up, clients should be going up. If the markets are going down, you should be going down with that. There are a lot of products out there that pitch guarantees. A lot of federal employees are often pitched, these products where they will say, well, you protect your principal, the money can’t go down, ever. And those are usually built around insurance policies. So that’s how there is some protection there. But again, that too good to be true should always be in your mind. If something is seemingly like it’s going to protect you constantly asking those deeper questions, how does this work? If you’re not fully comfortable or you don’t fully understand how the investment product works, I always like to start asking more questions and make sure clients understand.

Tom Temin And sometimes the assumptions might be rosy, even though it’s a legitimate investment. About a year ago, I was somehow on a mailing list for people that operate wells, oil wells, and I did some research and they seemed like a legitimate company going back some time. I looked at third party sources and not just their website. I also looked at the map of where they said these sites will be. And yes, it’s a huge area of the country where some drilling is going on, but there assumptions on crude oil prices seem to be pretty good. And plus they wanted a substantial investment in a piece of this and so forth. And our advisor said, well, just buy some oil stocks if you want to do that rather than try to be a well person. So that kind of exotic thing also, it’s something to maybe, take a second look at.

Thiago Glieger Yeah. The commercials invest in Belize that maybe you’ve seen on TV and those kinds of things. Those are they’re called direct participation programs where you go in essentially as a limited partner. So you sign this agreement saying you’re going to contribute X number of dollars, and there can be some interesting tax benefits from that kind of stuff, write offs and things like that. But I would venture as far as to say for most federal employees that I have seen, it’s really not the most advantageous thing because it’s so hyper specialized. And again, thinking about an investment as a tool, you got a Home Depot, you go to Lowe’s, you’re grabbing a tool for a project. Investments are the same thing. What kind of tool is best going to be available in useful for you to support whatever you’re trying to accomplish, whether it’s retirement, college funding, buying a house, whatever it is.

Tom Temin We’re speaking with Thiago Glieger, a private wealth advisor at RMG Advisors of Rockville, Maryland. And there’s ads on TVs for firms that are fiduciaries. And that’s considered, I guess, the gold standard, someone who has no alliance to a particular fund or set of investments. But is that always the way to go? Our fiduciary is really the gold standard. Or can you do well with someone connected to an operation that makes a profit off investments?

Thiago Glieger Yeah, I think that when it comes to your personal financial future, you have to understand whether somebody is giving you advice toward that end or if somebody is offering you a specific product. And so if you go when you buy a car or you buy a life insurance, you buy a house, those are very transactional types of businesses and that can be totally fine. Somebody is selling you a policy. They’re not necessarily operating in a fiduciary capacity, and that’s okay. But if somebody is giving you advice about your financial future and really these very large transactions that are happening, I feel that somebody should be a fiduciary because, legally, somebody that is a fiduciary is one who has to act on behalf of somebody else and is legally bound to act in their best interest. And so, I think beyond that legal obligation, I think it’s also an ethical one. In this case, there was a tremendous breach of ethics from this counselor when he was making recommendations to people to do things in their accounts that was really more beneficial for him, in the terms of commission and all kinds of other things, rather than what’s going to help that family.

Tom Temin So what are some of the questions you should ask then, of anyone trying to sell you something, or fiduciary or otherwise?

Thiago Glieger I think the first question is always asking them, are you operating under a fiduciary duty? Is that in an agreement somewhere? Because if they are, there has to be a legal statement that’s written that they signed saying they are acting in a fiduciary capacity to you. I think there’s also questions surrounding whether or not they can help you beyond just the investments. I think someone who is is operating in a fiduciary capacity is talking to you about things like taxes and health care and things that matter to you, like your family. And how do you want to spend your time? Those are signs that someone is interested in your well-being, not just necessarily interested in getting you the best or hottest investment.

Tom Temin One of those areas is as you approach retirement, there’s a lots of complicated decisions with deadlines connected to it, especially if you’re going to be anywhere near Medicare, which is a Byzantine system. Someone should be able to help you with questions like that, for example.

Thiago Glieger Yeah, and Medicare planning, Social Security planning. There’s over 500 different iterations of filing for Social Security, and sometimes even the information online is very overwhelming. And so doing the planning, looking at different options, whether one scenario was better for you if you’re married, should one of you file first and then the second? Wait until 70. Should you both wait till 70? All kinds of other things that are well beyond just what are you invested in?

Tom Temin And the other issue is tax policy or your reaction how you deal with tax policy. So can a fiduciary, are they necessarily tax experts? Or can they know enough to make sure that you don’t make a mistake and pay taxes you shouldn’t have to.

Thiago Glieger Yeah. There’s a pretty fine line between tax planning and tax advice. The IRS wants to make sure that somebody who is not registered as an accountant is not giving somebody tax advice. But I would go as far as to say tax planning is a big part of a financial planning process. When you’re retired especially, it’s the first time that you are in control of generating your income. If you have a first pension as federal employees do obviously that’s taxed. You don’t have too much control over that. Big part of Social Security is also taxed. But everything else, all of your savings, how you choose to make withdrawals, what you’re invested in, the kinds of things you’re doing during the year with your assets. Those are all things that are influencing your taxes and making sure that you’re making use of Roth. I know we’ve talked about that before, so that you don’t have huge RMDs down the line. Those are all very important questions in planning considerations that can add a lot of value to somebody that doesn’t necessarily pay an advisory commission. And so if they’re interested in those conversations with you, it’s I don’t want to generalize, but they’re probably interested in your well-being, not necessarily just trying to earn a buck off of you.

Tom Temin In some ways your TSP account is like artificial intelligence. The experts say part of the issue is the data you put into it. But an important way to get good results is what you ask of it. If you ask the wrong question, you’ll get crazy results. By the same token, you’re withdrawal strategy should be something you consider as carefully as your input to it strategy.

Thiago Glieger That’s right. I recently was talking to a family who, they were looking at a large tax bill that they were going to need to deal with, and they thought the best circumstance was to make a TSP distribution. And at the time, they were a little bit more limited in terms of their options. But as a result, a huge TSP distribution also came with its own tax problem for the following year. And so really coming up with strategies, what is the best way to deal with this? Rather than how do I just pay the tax bill? It’s thinking about other things that are all interweave together.

Tom Temin And by the way, what about those tax help firms that advertise on the radio so much? Sometimes you hear them and they have actors saying, I didn’t pay my taxes for 11 years. I was in trouble. My response is, well you should go to jail. The rest of us paid for the last 11 years. Are those firms tend to be worthy of what it is they’re trying to sell you.

Thiago Glieger I think those firms are mostly targeting people who are in tax trouble. People who maybe didn’t file their tax returns, they forgot to do it. They didn’t want to do it, whatever the case is. They’re more so looking at working with the IRS and keeping you out of jail, because at this point, it’s a crime. And so they are not really looking at reducing your tax liability on a regular tax planning basis. They’re working backwards to make sure that you don’t end up in prison for a really long time, for owing all those back taxes.

Tom Temin Because they imply that they can make the tax bill go away. But I don’t think too many people can do that.

Thiago Glieger Yeah, there is some degree of negotiating that they can do and working with the IRS on your behalf and having conversations, sending letters back and forth, much what an accountant would be able to do for you too. But you can’t just vaporize your tax liability. That’s something that’s going to be around.

Tom Temin They’ll vaporize you. And then I guess the final question is, what is the right number of calls, meetings that you can demand of a fiduciary? You don’t want to call them daily, but you also don’t want to wait once a year to check in.

Thiago Glieger Yeah. With our clients. Especially in the first year of working with people, I like to see people anywhere between 6 to 10 times in the first year. There’s just so much, especially when you’re first retiring. There’s so much to look at. Beyond that, I really encourage folks to check in with their advisors a couple of times a year. I think that’s a really healthy number every six months or so, just to get on each other’s calendars, but also have communication open through email, open communication of quick questions that come along. Anything with a dollar sign attached to it should be fair game for someone who’s looking out for your best interest. Whether you’re going to file an insurance claim because there’s a hole in your roof. Is that a problem for you down the line? Because you may be uninsurable for XYZ reason. And so those are conversations that I think are important to have. And you shouldn’t feel ashamed or bothered of asking your advisor a question. They’ll tell you if it’s out of bounds or something that they’re not comfortable giving you an answer for, but raise the question. That’s what they’re there for, there are your advisors.

Tom Temin And probably it’s good to remember by the same token, most things in life do have a dollar sign attached to them, but they’re not psychiatrists.

Thiago Glieger Yeah. That’s right. I think there’s a Nobel Prize that has been won in behavioral economics, which is really just the study of why we make decisions around money. And some advisory firms do take a more therapeutic approach with folks. But you’re right. I think you’ll get a sense for what they’re comfortable with.

The post How to avoid bad advice or outright fraud when finding financial advice first appeared on Federal News Network.

With negative returns for the rest of the funds, the year-to-date for the fixed income index investment F fund shrunk to 5.22%, while the G fund remained at 4.65% for the last 12 months.

The common stock index C fund still posted the highest year-to-date return at 6.03%, and a 10.88% return over the last 12 months.

All Lifecycle funds also posted negative returns. The L 2055, L 2060 and L 2065 all posted a -4.06% return, with year-to-date returns of 4%, and 12.50% returns for the last 12 months.

The post TSP funds post mostly negative returns in April first appeared on Federal News Network.