The Foreign Service Journal, April 2020

70 APRIL 2020 | THE FOREIGN SERVICE JOURNAL Foreign Service Pre-Retirement Checklist • Beneficiary designations: Ensure they are up-to-date: DS-5002 (FS retirement benefit), SF-1152 (unpaid compensation), SF-2823 (FEGLI), and TSP-3 (TSP). Reference: ALDAC 19 State 35376 of April 9, 2019 “Retirement Planning One Year Out” • Retirement planning seminars: Take RV105 (2-day, mid-career), RV101 (4-day, late career), RV103 (1-day, finances/estates), RV104 (1-day, annuity/TSP/Social Security/Medicare). Reference: FSI intranet • Understand your benefits: Pension, annuity supplement, Social Security, TSP, FEHB. References: ALDAC 19 State 35376 of April 9, 2019 “Retirement Planning One Year Out”; FSI seminars, Employee Retirement Portal online seminars (State), HR/RET counselor • FEHB health and FEGLI life insurance: Maintain coverage during last five years of service. Reference: ALDAC 15 State 35130 of April 1, 2015 “Retirement Planning Five Years Out” • Retirement eligibility: Confirm your retirement Service Computation Date. Reference: ALDAC 17 State 100146 of Sept 30, 2017 “Retirement Planning and EBIS” • Prior service (if applicable): Buy back military/other service; deposits/ redeposits. Reference: ALDAC 15 State 44466 of April 20, 2015 “Retirement Credit for Prior Service” • Divorce decree (if applicable): Have divorce documentation reviewed. References: ALDAC 14 State 126786 of Oct 28, 2014 “Divorce and FS Retirement Benefits”; ALDAC 19 State 35376 of April 9, 2019 “Retirement Planning One Year Out” • TSP: Ensure your portfolio meets your long-term needs and risk tolerance. References: www.tsp.gov under “Planning & Tools”, ERP online seminars (State) • Long-term care insurance: Consider getting it. References: www.ltcfeds. com, FSI retirement planning seminars • Social Security: Understand pros and cons of various starting ages between 62 and 70. References: www.ssa.gov , FSI retirement planning seminars, ERP online seminars (State) • Medicare Part B: Understand pros and cons of getting it at age 65. Reference: “AFSA Presents: The Coordination of FEHB and Medicare 2018” on YouTube • Survivor benefits: Understand options and deadlines. Reference: FSI retirement planning seminars • FEGLI: Understand post-retirement options and costs. Reference: FSI retirement planning seminars, ERP online seminars (State) • AFSA: Review retiree resources on AFSA website; sign up for AFSA retiree membership. References: www.afsa.org/retirement-services and www.afsa.org/retired-membership —John K. Naland retirement benefits. While it seems unlikely that they would cut the pensions of current retirees or of employees near- ing retirement, Congress could reduce the government’s share of health insur- ance premiums. Or they could increase income tax rates, thereby reducing our net income after pension, Social Security and TSP payments. So, at retirement, please maintain your AFSA membership to support the association’s efforts to protect your hard-earned Foreign Service retirement benefits from potential future cuts. If reality does interfere with your retirement plans, you may need to adjust. For example, deciding not to retire at your first eligibility will increase your annu- ity by raising the multiplication factor for years of service and the “high three” average salary. Post-retirement employ- ment is an option exercised by many FS retirees, including as a Re-Employed Annuitant (REA, formally known as WAE). Other options are to invest more of your take-home pay in the stock market, rental property or an Individual Retire- ment Account. Feathering Your Nest As you plan your future finances, there are several things to keep in mind to best position yourself for retirement: Risk vs. Reward. How you manage your TSP savings will have a major effect on your retirement finances. Because many current employees will need to draw on their TSP savings 30, 40 or even 50 years from now, most experts recom- mend investing in funds with relatively high average rates of return (the C, S, I and the long-range L funds) to increase the chances that your TSP savings will be around as long as you are. Conversely, keeping all your money in bond funds (the G and F funds) may not generate RETIREMENT SUPPLEMENT