October 2015

Deposits & Re-Deposits – Are they worth it?

Question: Is it worth it to pay for my “deposit” or “re-deposit” time? Answer: By paying for these forms of creditable service your retirement pension will include more years of service (there’s an additional benefit that will affect your leave accrual, but that is not going to be addressed here).  More years of service will yield you a higher pension benefit, so essentially buying creditable service is spending money to buy a larger pension.  Is it worth it? Sometimes. We’ll need to compare the price of that creditable service to the increased pension benefit that it entitles you to.  I will provide some examples below, but be sure you line up your numbers correctly. Different types of service that you may need to pay for, the cost and the benefits: Deposit Service:  This is service time when you were not contributing into the retirement system.  You may have been a summer... View More

October 2015

TSP Report – October 2015

Facts: PMI continued its decline that began in late 2014, falling to 50.2, which indicates little-to-no expansion. at this rate, it will fall below the 50 point threshold in October, which would indicate contraction for the first time since 2012. The S&P 500 was still reeling following on the heels of a dismal August, with the C Fund (S&P 500) down 2.47% and still hanging around correction territory (down 10% from the record high).  Unemployment remained flat at 5.1%. The indicator yet again failed to drop in consecutive months, and has not done so since late 2014. GDP growth for the 2nd Quarter 2015 was revised up again, this time to 3.9%. That solidifies the 5th consecutive quarter of growth, with three of those quarters showing close to 4% growth. Assessment: Economic indicators this month continued to trend towards contraction. While some indicators still suggest continuing growth, most indicators are strongly signaling that economic... View More

September 2015

Do you need FEGLI?

Question: Do you need to take FEGLI, or are you sufficiently insured between your assets, survivor benefits and social security? Answer: There are 3 core life insurance considerations that will shape the answer to the above question. Do you need life insurance at all? How much Life insurance coverage should you have? What is the appropriate life insurance vehicle: FEGLI Survivor Benefits (based on Federal service and Social Security) Term Life insurance Whole life insurance Self-insurance I find that clients who don’t have these questions clearly answered are losing money in their life insurances.  The following steps (and articles) should help you through the life insurance thinking process: Do you need life insurance at all?  First of all, you must determine if you have a life insurance need at all.  The people who need life insurance are those whose death would leave behind an uncomfortable financial situation for their survivors.  (What... View More

September 2015

How should you invest your TSP?

Question:  How should you invest your Thrift Savings Plan (TSP)? Answer: Two things need to be analyzed in order to correctly answer this question: The Investor The investments The Investor This part of the answer has good news and bad news.  I’ll start with the bad news:  I know many people wish I could just say one fund or one portfolio that is a one-size-fits-all solution.  I can’t.  I mean, I can if every TSP investor had the same exact goals for their TSP, with the same exact time horizon, and the same exact beginning balance and the same exact ability to contribute the same exact dollar amount and assume the same exact risk.  But, we all know that each TSP investor is just different from the next.  So that’s the bad news.  Now for the good news: You can (and should) have a TSP investment goal. With a clear... View More

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