Federal Employee Retirement Planning
Federal Financial Solutions is an agency division of the Federation of Federal Employee Benefit Advocates (FFEBA.) FFEBA has been a leader in, and has served tens of thousands of personnel in the federal market across all divisions of the United States federal government and United States military.
When it comes to retirement planning for all levels of federal employees, FFEBA has earned a reputation for providing the most comprehensive resources available for federal agencies in the nation. We are committed to educating federal employees about their benefits from the CSRS and FERS retirement systems and all of their other federal benefits, to include, but not limited to, federal employee group life insurance (FEGLI,) serviceman’s group life insurance (SGLI,) veterans group life insurance (VGLI,) minimum retirement age (MRA,) thrift savings plan (TSP,) federal employee health benefits (FEHB,) et al.
Federal Financial Solutions is a registered sub-vendor of FFEBA and has been providing workshops, seminars, educational booths at trade shows for retirees for over 32 years. Our highly trained and multi-layer credentialed agents donate their time by conducting these no-cost, no-obligation workshops that adhere to the strict standards dictated by the Office of Personnel Management (OPM.)
To ensure that federal employees have access to knowledgeable and highly ethical fiduciary advisors across the nation, our agents are provided extensive training in all of the areas that affect the federal employee, including the FERS/CSRS retirement systems, Social Security and TSP. These are the three legs of the retirement planning stool for all federal employees and each one should be understood in order to prepare properly for retirement.
In a nutshell, the federal government does a horrible job of educating and training their employees about their benefits and that is why we exist. All agents with FFS must undergo rigorous training and sit for an exam that some many say rivals the BAR exam. OPM sets the guidelines for the training and each agent must be certified regardless of tenure or experience in the financial planning world.
Each agent must undergo an extensive FBI background check and receive their federal retirement consultant (FRC) designation. This designation is professionally listed with FINRA and signifies that our agents have achieved the highest level of knowledge in federal benefits and have sworn to uphold the standards of a fiduciary. It is only then that an agent may enter into the apprentice program and speak with federal employees about their benefits.
The process for a federal employee doesn’t have to be complicated. The scary part is that the Office of Personnel Management does NOTHING to help you. But that is where we come in. Keep in mind that the office of Personnel Management does not, and neither has any part of the government, have financial advisors for you to talk to. It is too arduous for them to hold this internally; so they vendor it out to people like FFEBA, who are specialized and work all day, every day with Federal Employees.
There are really three legs to the retirement planning stool for federal employees; along with one additional area of concern:
The first leg of the stool is something that you know as CSRS or FERS. This depends on your length of service; as the CSRS system is much older and has been around forever. The FERS system has only been around since January 1, 1987. Some people who were in the old system had the option to stay in that system and some people were automatically put into the new system, around this date. If you were hired after January 1, 1987; you were automatically enrolled in the new FERS system. Either way, you have to establish your service connection date (SCD,) which is the date that you entered Federal Service. Some people had prior military service and have chosen to “buy back” that military service time to extend their total Federal Service time. You must qualify for retirement eligibility by service and age requirements. Sometimes this is referred to as your Minimum Retirement Age (MRA.)
The second leg of the stool is referred to as you FERS supplement, which will pay from the age of your MRA or the date of your actual retirement, if after that date; until age 62; when is when you become first eligible for Social Security, WHETHER YOU START SOCIAL SECURITY OR NOT! It will NOT pay past the date of your 62nd birthday, regardless of your decision on when to turn on your social security benefits. With that being said: the social security OR FERS Supplement is where you will find that second “leg” of the retirement planning stool. Also keep in mind that you may not receive your FERS supplement for up to TWELVE (12) months after you are eligible, simply because of the OPM processing times.
The third leg of that retirement stool for the Federal employee is that great savings vehicle that we call TSP. We will discuss MUCH more in detail about the TSP in the next section; but do keep in mind that the TSP is TRANSPORTABLE and may be moved into your own Individual Retirement Account (IRA,) outside of the government. It has been our experience over these many years that TSP is a GREAT accumulation vehicle while you are working; offering different fund choices and lifestyle funds as well as your automatic 5% government match! However, we have found that the TSP is a HORRIBLE distribution vehicle! There are many outside companies in the private sector that offer continuing accumulation OR they may turn your IRA into a lifetime additional pension plan for you. These are plans that guarantee to pay you regardless if your account runs out of money as you age. Think of it like your FERS or CSRS accounts. The only differences are the following:
1. If you have money remaining in these accounts: that money will go to your beneficiary from the TSP.
2. If you have a spousal benefit on the FERS or CSRS, they will continue to get paid after your death.