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survey administered to 200
Foreign Service members at
the start of a recent Retire-
ment Planning Seminar at
the Foreign Service Institute highlighted
both strengths and weaknesses in their
retirement planning.
Strengths included the fact that most
of the respondents already had at least a
basic understanding of 10 key retire-
ment planning topics. But the survey
also identifed 12 shortfalls in pre-
retirement preparations and knowledge.
Tis article lists those shortfalls,
along with information to help you
bridge any similar gaps in your own
retirement planning. While this
guidance applies to Foreign Service
members from all fve foreign afairs
agencies, employees from outside the
Department of State will need to ask
their agency’s human resources ofce
about agency-specifc processing pro-
Four Gaps in Pre-
Retirement Actions
Are Not Contributing Enough to
Trift Savings Plan
: Ten percent of those
eligible said that they were not con-
tributing enough to their TSP account
to obtain the full government match.
In addition, 39 percent of the survey
respondents were not contributing the
maximum amount.
Te TSP is one of three pillars—along
with Social Security and a federal annu-
ity—of the retirement fnancial security
of employees hired after 1983. Foreign
Service Pension System employees
who are not contributing signifcant
amounts to their TSP are not building
up that crucial nest egg. Tey are also
missing out on an upfront tax deduction
resulting from the fact that TSP con-
tributions are excluded from taxation
when they are made and are only taxed
upon withdrawal years later. (Tis is not
true of the Roth TSP option, however.)
In addition, FSPS employees who
are not contributing at least 5 percent of
their salary to TSP are not receiving the
maximum agency matching contribu-
tions that could signifcantly boost their
fnancial security in retirement. Foreign
Service Retiree and Disability Sys-
tem employees may also make pretax
TSP contributions, but do not receive
matching government contributions.
Have Not Updated Benefciary Des-
Ten percent of respondents
said that they knew that their benef-
ciary designations were not current
for life insurance, lump-sum salary
payment, and/or TSP savings. Another
17 percent of respondents were unsure
if their benefciary designations were
Every year, there are cases of death
benefts not being paid to the immedi-
ate next-of-kin because the employee
or annuitant had not updated their
benefciary designations after marriage,
divorce or other relationship changes.
So please check your Electronic Ofcial
Personnel Folder to make sure that your
benefciary forms refect your current
Te forms are: retirement ben-
efts designation (DS-5002), Federal
Employees Government Life Insurance
(SF-2823) and unpaid compensation
(SF-1152). In addition, check the benef-
ciary listed on your annual TSP account
statement to make sure that your TSP
designation (TSP-3) refects your cur-
rent wishes.
Retirement Planning Shortfalls
John K. Naland is the director of the Ofce of Retirement at the Department of State. A 27-year
Foreign Service veteran, his overseas assignments include Colombia, Mexico and Iraq. He has
twice served as AFSA president and published more than 80 articles and columns in these
pages, including a previous FS Know-How column on this topic, “Assistance after Retirement”
(November 2012).
Here are some simple steps all FSOs
can take to protect and maximize their
retirement benefts.