Presented by Vince Bono: Founder of Federal Employee Advocates Carolyn Tobin: Editor of The Federal Employee Financial Blog. Carolyn Tobin can be reached at: Neither Vince, Carolyn or their respective companies, sell any product or services to federal employees. 1

 Our Fers & CSRS Online Retirement Calculator  Our Tax Grid that shows which States do and do not tax federal pensions and Social Security.  Vince Bono’s White Papers’ on the “Federal Employee 80% Rule” and “The Dow 13,000”.  Customized Pre-Retirement Strategy Report. 2

 Your Life Expectancy  When you will be eligible to retire  Will you be financially prepared to retire  When you can access your TSP money  Your financial options 3

Male 45: Years Female 45: Years Male 50: Years Female 50: Years Male 55: Years Female 55: Years Male 60: Years Female 60: Years Male 65: Years Female 65: Years Male 70: Years Female 70: Years Male 75: 9.83 Years Female 75: Years Your pension alone probably will not be enough for you to retire on, so you need other sources of income to last at least this many years beyond your retirement. 4

 CSRS: FERS:  Age 55 & 30 Years *MRA & 30 Years  Age 60 & 20 Years Age 60 & 20 Years  Age 62 & 5 Years Age 62 & 5 Years *MRA & 10 Years There’s a 5% per year reduction if you are under age 62 Ex: At age 57 your pension amount would be decreased by 25% ______________________________________________________________ *MRA is your “Minimum Retirement Age. 5

 The Voluntary Early Retirement Authority allows agencies that are undergoing substantial downsizing, transfer of function, or reorganization, to temporarily lower the age and service requirements.  Both CSRS and FERS  Age 50 with 20 years  Any age with 25 years 6

Most federal employees should be able to retire and still keep their same standard of living, if their retirement income is at least 80% of their gross pre-retirement income. ◦ For Sure you will no longer be paying payroll taxes. ◦ Hopefully your mortgage will be paid off. ◦ Hopefully your children have graduated college. ◦ Maybe you will “downsize”. 7

 CSRS or FERS-Defined Benefit Pension  Social Security-  Thrift Savings Plan-Similar to a 401K  Other Sources  IRAs  Annuities  Other accounts  Inheritance (My Favorite) 8

 Many CSRS employees will not be entitled to Social Security  40 credits needed for coverage  CSRS Offset employees will be eligible…But Your Social Security benefits may be reduced by The “Windfall Elimination Penalty”  Numerous Iterations-Go to OPM website and in the Search Box type in “WEP” 9

 CSRS FERS 20 Years: 36.25% 20 Years: 20% or 22% 25 Years: 46.25% 25 Years: 25% or 27.5 % 30 Years: 56.25% 30 Years: 30% or 33% 35 Years: 66.25% 35 Years: 35% or 38.5% 40 Years: 76.25% 40 Years: 40% or 44% 42 Years: 80.00% Will never reach 80% )<: 10

 Minimum Age to collect is 62 But....  There is an Earnings test until you reach your “Full Retirement Age”  The longer you wait (up until age 70), the higher your benefit will be.  If you Retire & start collecting at 62, your payments will be 25% less than if you Retired & Collected at your “Full Retirement Age”.  If you Retire & start collecting at age 70, your payments will be 32.5% more than if you Retired & Collected at “Full Retirement Age”. All FERS are eligible-Assumes the Full Retirement Age is 66 11

1) Go to Slide 9 to see what your Pension % is: If you are FERS at 30 Years = 30% or 33% + Social Security If you are CSRS at 30 Years = 56.25% + Social Security ) Social Security: If you’re a higher paid FERS Federal Employee: (+or-) 20% If you’re a Mid-Level paid FERS Federal Employee: (+or-) 25% If you’re a lower paid FERS Federal Employee: (+or-) 30% If you are CSRS that number could be 0% If you are CSRS-Offset (you might have “WEP” to consider) Add them up to see what you need to get to 80% 12

 When you leave federal service  Retirement  Quitting government service  At 59 ½ if still working ___________________________________________________  There may be early withdrawal penalties:  If you retire and withdraw the money before the year in which you turn 55  If you quit before retiring and withdraw the money before you reach 59 ½ 13

 Single payment  No more than two total  One is allowed at 59 ½ if still working  Series of monthly payments  Can change amount annually  Can’t stop  Can change to one final payment 14

Purchase a single premium immediate annuity You have no choice as to the company. This is risky because if you need money for an emergency, you have no access to it. __________________________________________________ Transfer or rollover with the company of your choice  Direct transfer avoids withholding 15

Nobody can deny that the TSP Funds over time have performed pretty well. But what happens if you want to retire within the next 10 years and another 2008 occurs. Then what? On January 1 st of 2008 many federal employees who planned on retiring that year are still working today because they had their TSP money invested in the C Fund, S Fund, L Funds or I Fund and suffered massive loses in their TSP value. Neither Vince Bono, Carolyn Tobin, Federal Employee Advocates, or Federal Employee Blog sell any form of investments, annuities or insurance products 16

 September 15: (4.42%)  September 17: (4.06%)  September 20: (4.85)  September 29: (6.98%)  October 7: (5.11%) October 9: (7.33%)  October 15: (7.87%)  October 22: (5.69%)  November 5: (5.05%)  December 1: (7.7%) 17

 Stockman: “It’s one of the scariest moments in our history, “No central bank has ever printed this much money this long, kept interest rates at zero, and fueled so much speculation... they’ve painted themselves in a corner, they’re playing it day by day, and they’re going to make a HUGE mistake!”  Dent: “The only way to correct this is to let this bubble burst”. “The next crash is going to be worse than the last one.” “They brought in the foxes — like Goldman Sachs — to look over the hen house!”  “Nobody is going to protect you, and nobody is going to stop this bubble from bursting because every single bubble in history has burst. And this is one of the biggest.”  Economy and Market Daily Opines: “Harry Dent is known worldwide for his uncanny boom and bust calls over the last 30 years, so one should pay careful attention to his new warnings that the stock market will collapse by 70%, real estate will plunge by 40%, and that unemployment will spike up to 15% (24.7% U6). 18

The C Fund Lost 36.99% The S Fund Lost 38.32% The I Fund Lost 42.43% If after taking those loses in 2008 you put your money in the G Fund in 2008, you are still nowhere close to just breaking even. In fact you are still years away from that! Fixed Indexed Annuities Lost Nothing! 19

A fixed Indexed Annuity allows you to participate in the upside of the stock market without any risk whatsoever to your Principal. The first annuity in the United States was “invented” by the Presbyterian Church in the early 1700s. Ben Franklin, utilized annuities to help fund the American Revolution and the rapid growth of both Philadelphia and Boston. Annuities are so popular that Ben Bernanke, the former head of the Federal Reserve, once disclosed that his major financial assets were vested in two annuities. 20

 BlackRock Institutional Trust Company, N.A. manages the C, S, & I Funds. “These Funds are invested in order to replicate the risk and return of their benchmark stock market index”.  They are not managed to Maximize Gains or Minimize Losses, which is why in 2008, those funds failed you. For example The C Fund's objective is to match the performance of the S&P 500. That’s why in 2008, it lost 37% of your money. 21

 The S Fund's objective is to match the performance of Small to Medium-Sized Companies that are in the “Dow Jones U.S. Completion TSM Index”. That’s why in 2008, it lost 38.32% of your money.  The I Fund's objective is to match the performance of the “Morgan Stanley Capital International EAFE Index”. That’s why in 2008, it lost 43.43% of your money. 22

Similar to your TSP, the performance of a Fixed Index Annuity is tied to a stock market index. The most common “Crediting Method” is the S&P 500, but most companies offer numerous other options for you to choose from, such as the Dow Jones Industrial Average and the NASDAQ, Unlike your TSP, if the chosen crediting method in your Fixed Indexed Annuity goes down, you don’t lose money. Best yet, all prior gains are Locked-In. So say in 2015 you earned 9% in your Fixed Indexed Annuity and in 2016 the stock market crashed, that 9% can never be lost nor can any other prior gain in that annuity be lost! 23

When your annuity contract expires, you can: 1. Take the money in one lump sum. 2. Receive a guaranteed Lifetime Income. 3. Do combination of both #1 and #2 4. Roll the money into another Annuity 24

 If you are in relatively good health, you are probably paying 50% to 70% more for FEGLI than you would be with a private company.  Your federal benefits do not include a disability insurance policy.  Your federal benefits do not include a Long Term Care insurance policy. 25