The Foreign Service Journal, October 2008

F oreign Service employees count themselves fortunate: their retire- ment benefits are good and, formost, retirement promises to be comfortable financially. Given this expectation, some employees and their spouses put off plan- ning for retirement and finding out what lies ahead for them until the actual crunch comes. Then some wish they had done things differently, or simply fail to realize that they could have provided for a more comfortable retirement. Retirees often tell me that no one had informed themabout a rule that reduced the annuities they had expected to get, or that they were unsure whether they had provided for survivor annuities for their spouses or ask how to deal with some other unexpected problem. While I am always sympathetic, and realize that retirement regulations are complicated, I usually must advise them that they have to take primary responsibility for acquir- ing necessary information and making appropriate retirement decisions. This is true as circumstances change throughout their careers, but even more so as retire- ment approaches. Being prepared for retirement requires keeping complete and accurate payroll, personnel and service computation date records; obtaining service credit for other federal employment; and determining which retirement systemmakes themost sense financially. It also means ensuring that potential family changes like death, divorce or remarriage are reflected in a timelyway inhealth coverage and survivor benefits; and assessing what financial, life insurance and long-term care insurance needs will be for the retiree as well as for a surviving spouse. The department provides considerable information for employees and their spouses. RNet, an online resource at www.rnet.state.gov/index.cfm?pg=mn , provides a retirement planning guide, comprehensive retirement information, retirement forms and a very useful ques- tion-and-answer forum. The Foreign Service Institute’s TransitionCenter offers a mid-career retirement planning course for employees, in addition to the retire- ment planning seminar and job search program for employees at retirement. Choosing the best date to retire can make a difference in the annuity level an employee will receive. At least one year before retirement, employees should ask theRetirementOffice tomake annuity cal- culations for them based on three differ- ent dates. They should also consult with their retirement counselors in HR/RET about specific issues affecting their retire- ment and time limits formaking changes (particularly upon remarriage) well before retirement. It may also be wise to talk to a financial adviser about financial planning and tax considerations involved with lump-sumpayments and state taxation of federal annuities, Thrift Savings Plan funds and Social Security benefits. While the State Department does provide resources and counseling, it does not—as we learned to our sorrow in the recent spate of annuity overpayment cases —relieve employees or retirees of the con- sequences of errors made by the depart- ment. It is up to all of us to be vigilant, even though this may be difficult when dealingwithobscure and complicated legal areas such as the Foreign Service Retirement and Disability SystemOffset. AFSA also provides a wealth of retire- ment resources and assistance tomembers. We publish guidance about retirement issues and benefits in the Foreign Service Journal and AFSA Newsletter, and by e- mail and online at www.afsa.org/retiree/. And each year AFSA’s LaborManagement Specialist James Yorke and I provide retire- ment-related assistance to hundreds of AFSAmembers. Also see AFSA’s “Retire- ment Planning 101” in the September 2007 FSJ , online at www.afsa.org/fsj/sept 07/fsknowhow.pdf . Increasingly important, AFSA also works to keep its members informed about threats to federal retirement bene- fits. This year, Congress adopted a non- binding budget resolution that did not cut retirement benefits. It did not, however, addressmostmajor entitlement spending decisions. These decisions will be left up to the next president and Congress. Given the need to rein in federal spending, they are likely to work together closely to reform entitlements quickly. Changes in the fed- eral retirement systems, the Federal Employees Health Benefit Program, Medicare, Social Security and the Thrift Savings Plan could affect current and future retiree benefits. With all this in mind, plan ahead and become well informed about your retire- ment future. AFSAwill provide guidance and assistance to help youunderstand and deal with your particular retirement issues, andwill keep awatchful eye on leg- islative threats to those entitlements. But the more attention you pay to your own needs in advance of retirement, the easi- er it will be for us to help you. o OC T OB E R 2 0 0 8 / F OR E I GN S E R V I C E J OU R N A L 65 A F S A N E W S FOCUS ON RETIREMENT PLANNING Slouching Toward Retirement? BY BONNIE BROWN, RETIREE COORDINATOR Increasingly important, AFSA works to keep its members informed about threats to federal retirement benefits.