Federal and Postal Employees

Are you approaching, recently, or currently retired status? Anyone within five years of retirement should take the time to meet with a Federal Benefits Consultant to begin not only planning your retirement but clearly understanding and updating benefit status, costs, necessity, and value. Younger Federal Employees should also understand the cost vs. value of each federal benefit as early as possible.

Optimizing Your Benefits

Retirement and financial planning are important parts of your career. Your schedule is limited during work hours to dedicate time to learn about your federal benefits, review your finances, choices, and options. When it is time to make these choices, mathematical reviews should be the key process taken before going forward.

Delaying this exercise, relying on work colleagues, management or even your well-meaning friends/family to guide you may not be your best options to make financial and retirement decisions. Many of your decisions are irrevocable so proper information/education is necessary. For those individuals who wish to maximize their federal benefits as early as possible, this is the time to act.

Here are some things to consider when looking to maximize your benefits:

  • Are you optimizing your retirement benefits? This could cost you thousands of dollars. Incorrect selections not only could cost you thousands of dollars but also your spouse’s eligibility for health insurance benefits. You have every right to maximize all your benefits.
  • How you manage your TSP during your working years and up to retirement age is important. Are you aware of the market risk, volatility and the impacts of taxes and fees on your money? How you allocate among funds can impact your retirement depending on risk and upside of the market. Can you financially tolerate market risk on your money over time based on your age and years to retirement? How often do you review your statements? What about providing/creating principal protection for some or part of your retirement savings?
  • If you are over the age of 59 1/2, you are eligible to address alternative retirement options for your TSP while still employed. Look at ways to add principal protection and risk managed solutions for your TSP.
  • Your Annuity Pension Selection is another important topic to discuss. What is the best way to maximize that income and understand how best to accomplish this goal?
  • FEGLI costs rise significantly as you age. Are you aware of the rising costs of your Federal Employee Group Life Insurance and how that will impact you when you retire, especially from ages 44-70 (2000% higher)? Making better choices earlier in your career can save you thousands. Various alternative options are available, including a guaranteed term offering until age 100!
  • What is the maximum you should be spending in retirement to protect your investments properly?
  • Federal Employees lack disability protection, having to use their sick and vacation leave and even dipping into their TSP to cover lost wages during an unforeseen short-term issue, such as pregnancy, an accident, or sickness. You now have a disability offering specifically designed for Federal Employees.
  • Long-term care costs have risen significantly with Federal Employee Long-Term Care. Review this offering to find alternative benefits to serve your long-term care needs.
  • Social Security is part of your retirement. How soon should one commence receiving a benefit? Find out how, when and why to help maximize your Social Security benefits. Do you understand spousal and widow’s benefits and how they may be effectively managed?

As an Investment Advisor Representative and Federal Benefits Consultant, we will prepare a complimentary, confidential, and customized Federal Employee Retirement Benefits Report with a review of the spouse’s/partner’s financial position.

Joe & Julia Valenzuela are Federal Benefits Consultants. Joe has his U.S. GSA (Government Services Administration) CAGE (Commercial and Government Agency) Code accreditation. This allows him to host federal workshops and events on federal property.

IMPORTANT: Federal Employees now have the benefit of adding a risk management tool to their Thrift Savings Plan. The TSP Optimizer is a simple, online tool designed to assist employees with the management of their Thrift Savings Plan. By helping the employee to properly allocate his/her account, the system uses their risk tolerance and long-term goals to generate a personalized portfolio and will recommend changes to manage their investment strategy based on market fluctuations. Call the Valenzuela Financial office to discuss.

Federal Benefits Summary and Financial Analysis

Be prepared for your retirement before you reach your retirement eligibility. Meet with Joe Valenzuela privately and have your federal benefits and family financial analysis prepared for you as a complimentary service.

The Federal Benefits Summary/Gap Report will address each of these benefits and help you maximize them for your individual situation:

Pension Benefits

What will your pension benefits be at your Minimum Retirement Age (MRA)? How much will it benefit you to work beyond that age? Know your numbers.

How much can you provide for your spouse as a beneficiary of your pension and what is the cost?

How do you ensure your spouse will have health insurance into retirement? How much does it cost after retirement?

What is the cost of FEGLI during your working years and as you get older? Will it change when you retire? Are there other options for you to address with regards to FEGLI?

Are you maximizing the benefits of your TSP? What funds are you owning and why? How do you manage risk with your TSP? Are you aware of age-eligible benefits before you retire? Do NOT ignore your TSP or simply place your account into the G-fund because you do not want to lose money during recession periods. This is one of your three retirement benefits, so understand how to better manage it.

What is the best age to commence receiving your Social Security? For married couples, should both turn on Social Security benefits at full retirement age? Should one turn on Social Security early, i.e. age 62? We can provide a customized Social Security report addressing various scenarios regarding how to maximize these benefits.

Younger federal employees can address cost vs. benefit on the expected federal pension. Understanding the long-term costs for paying for survivor benefits in retirement years, along with the benefit received should be reviewed.

Combining/including spousal income and employer benefits as part of the financial analysis is key! Your spouse’s employer benefits may include health insurance, retirement plan, pension plan, life insurance, etc. These benefits are reviewed and addressed to maximize the family’s financial position.

Preparing a budgetary/expense/obligations/debt balance sheet is the first step. To properly maximize both the federal employee and spouse’s benefit, a detailed review and financial data gathering of the family’s obligations must be prepared. This becomes the family’s balance sheet. Total income from benefits, salary, investments, and savings must be balanced with the family’s expenses/budget. Without this total review, the family’s financial planning is incomplete.

Know what to expect from Federal retirement offerings

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