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people with annual adjusted

gross incomes of more than

$100,000 to convert funds

from their tax-deferred indi-

vidual retirement accounts

(IRA) to tax-free Roth IRAs,

as long as they pay upfront

taxes. While this option is not

for everyone, paying tax now

to allow tax-free accumula-

tion in a Roth IRA in perpetu-

ity can maximize the size of

one’s after-tax nest egg.

Beagle then described

a bleak outlook for Social

Security. By 2025, the

number of workers paying

for one retiree’s benefits will

decrease from three to two,

owing to aging baby boomers

and a decreasing U.S. birth

rate. And because people are

living an average of 16 years

longer than the previous

generation, he warned of

the possibility of a substan-

tial increase in taxes and

decrease in benefits. He also

cautioned that future federal

revenue shortfalls mean that

retirees could potentially

receive lower Social Security

benefits than they have been


According to Beagle,

Social Security’s uncertain

future should prompt every-

one to take every opportu-

Retirement Planning • Continued from page 57

nity to shore up the other

two sources of retirement

income: pensions and per-

sonal savings. For instance,

federal employees’ failure to

contribute at least 5 percent

of their incomes to TSP

has resulted in the Office of

Personnel Management hav-

ing to return more than $1

billion in unused, matching

TSP funds to the government

each year.

He also addressed how to

manage common financial

risks, including volatile mar-

kets, inflation and accessibil-

ity by dividing one’s accu-

mulated wealth into different

“baskets,” and subsequently

diversifying investment

within each.

Speakers took audience

questions for more than an

hour. A wine reception imme-

diately followed the presenta-

tion to allow representatives

from both companies to

mingle with attendees.

To view a video of the full

presentation, go to: www.


—Shannon Mizzi,

Editorial Assistant

What Does the Foreign Service Do?

The American Foreign

Service Association held

its annual Governing Board

retreat on Oct. 6.

During the gathering, par-

ticipants had a brainstorm-


ing session on how best to

describe what it is that the

Foreign Service does. That is,

what sets it apart from other

institutions, and why should

the American people care?

This photo captures a few

of the words that Governing

Board members came up


AFSA President Ambas-

sador Barbara Stephenson

gives her readout of the

takeaways from the retreat

in her President’s Column on page 7. n

—Maria C. Livingston,

Associate Editor