The Foreign Service Journal, December 2015

58 DECEMBER 2015 | THE FOREIGN SERVICE JOURNAL AFSA NEWS 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 promised. 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. afsa.org/video. n —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- CREATEDBY MARIAC.LIVINGSTON 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 with. 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