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THE FOREIGN SERVICE JOURNAL
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JULY-AUGUST 2013
21
AFSA Scholarship
AFSA.org/Scholar
AKA
StayAKA.com
Clements Worldwide
clements.com
Diplomatic Automobile
www.diplosales.com
Embassy Risk Management
Embassyrisk.com
The Hirshorn Company
hirshorn.com/afsa
McGrath
McGrathRealEstate.com
ProMax
promaxrealtors.com
Tetratech
Tetratech.com
WJD
wjdpm.com
can dramatically underperform bond
funds. For example, in 2008 the TSP’s C
fund fell 36.99 percent, while the TSP’s
G fund grew 3.75 percent. However,
over long periods of time, stock funds
outperform bond funds. For example,
between 2003 and 2012, the G fund
had an average annual return of 3.61
percent, while the C fund had an aver-
age annual return of 7.12 percent. Tus,
in selecting a TSP portfolio, employees
must decide how much risk they are
willing to take.
A key consideration is your time
horizon. If you will not start withdraw-
ing from your TSP account for many
years, or you hope to remain invested
in the TSP for several decades after
retirement, then you may want to take
more risk now in your TSP account
to increase the likelihood of generat-
ing gains over a period of decades that
outpace infation.
Unclear about Post-Retirement Life
Insurance Needs:
Twenty-one percent
of respondents had little or no under-
standing of how much life insurance
they would need after retirement.
Life insurance needs during and
after employment depend on how much
money you wish to leave for your survi-
vors (for example, to pay of a mortgage
or pay for children’s education). Basic
coverage under the Federal Employ-
ees Group Life Insurance program
The only way to reduce the tax bite on
pension and Social Security income is
to reduce income from other sources in
order to drop to a lower tax bracket.
is automatic unless you decline it or
elect additional optional coverage with
higher premiums.
To carry any level of FEGLI insurance
into retirement, you must have had that
same or higher coverage during your
last fve years of employment. Most
employees carry basic FEGLI coverage
(which pays approximately one year’s
base salary) into retirement. Tat cover-
age is automatically reduced after age
65 (unless you pay a higher premium
to avoid that) until it reaches 25 or 50
percent of its starting level (depending
on the option you pay for). Many private
insurance companies ofer their own
plans.
To Learn More
More information on these topics is
available at a variety of locations. HR/
RET’s Internet site, Te Retirement
Network (RNet) at
ww.RNet.state.gov,
ofers a wealth of information, including
a searchable database of 340 Frequently
Asked Questions on Foreign Service
retirement issues.
HR/RET’s homepage on the Depart-
ment of State’s intranet contains
detailed retirement planning informa-
tion, including copies of HR/RET-issued
telegrams. And FSI’s Career Transition
Center conducts a four-day Retirement
Planning Seminar (RV101) with in-
depth briefngs on retirement topics.
n