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

2. 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 Paper on the “Federal Employee 80% Retirement Rule”
Vince Bono’s White Paper on your Federal Employee Health Benefits (FEHB).
Vince Bono’s White Paper on Fixed Indexed Annuities 2

3. When you will be eligible to retire
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

4. Male 45: 32.16 Years Female 45: 36.31 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

5. 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%
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*MRA is your “Minimum Retirement Age. 5

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”. 6

7. CSRS or FERS-Defined Benefit Pension Social Security-
Thrift Savings Plan-Similar to a 401K
Other Sources
IRAs
Annuities
Other accounts 7

8. 42 Years: 80.00% Will never reach 80% )<:
CSRS FERS
20 Years: 36.25% Years: 20% or 22%
25 Years: 46.25% Years: 25% or 27.5 %
30 Years: 56.25% Years: 30% or 33%
35 Years: 66.25% Years: 35% or 38.5%
40 Years: 76.25% Years: 40% or 44%
42 Years: 80.00% Will never reach 80% )<: 8

9. FERS Employees CSRS Employees
A) If you are 62 years of age and have 20 or more years of service:
1.1% X the number of years of federal service X Your High Three
If you don’t meet both criteria in A) the 1.1% drops down to 1.0%
CSRS Employees
1.5% of your High Three for your first 5 years of federal service
1.75% of your High Three for your next 5 years of federal service
2.0% of your High Three for every year of federal service thereafter 9

10. 1.1% X 20=22% X $100,000 = $22,000 Annual Pension
FERS federal employee with 20 years federal service and age 62 at retirement with a High Three of $100,000:
1.1% X 20=22% X $100,000 = $22,000 Annual Pension
If that federal employee retired at age 61 instead of age 62:
1.0% X 20=20% X $100,000 = $20,000 Annual Pension
If that 62 year old federal employee retired with 19 years:
1.0% X 19=19% X $100,000 = $19,000 Annual Pension 10

11. $7500 + $8750 + $20,000 = Annual Pension of $36,250
CSRS Federal Employee age 62 with 20 years of Federal Service at Retirement and a High Three of $100,000
1.5% X $100,000 = $1500 X five =$7,500
1.75% X $100,000 = $1750 X five = $8,750.00
2.00 % X $100,000 = $2000 X ten = $20,000
$ $ $20,000 = Annual Pension of $36,250 11

12. Begins at your Minimum Retirement Age
Does not include CSRS or Special Category
Take you Social Security Estimate for age 62 and Divide that by 40,then Multiply that number by 30.
If your SS Estimate at age 62 is $12,000 a year, and you your # of years of FERS Service is 25:
$12,000 Divided by 40=$300 X 25=$7500 a year.
This number is subject to the SS Earnings Test at $15, 720 12

13. All FERS are eligible-Assumes the Full Retirement Age is 66
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 13

14. 1) Go to Slide 8 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
2) 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% 14

15. When you leave federal service
Retirement
Quitting government service
At 59 ½ if still working
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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 15

16. Series of monthly payments
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 16

17. 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.
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Transfer or rollover with the company of your choice
Direct transfer avoids withholding 17

18. 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 occurs. Then what?
On January 1st 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 18 18

19. October 7: -508.39 (5.11%) October 9: -678.91 (7.33%)
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%) 19

20. the stock market will collapse by 70% real estate will plunge by 40%
Harvard Economist 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%
unemployment will spike up to 15% (24.7% using the broad-based U6 Index). 20

21. 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! 21 21

22. 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. 22

23. That’s why in 2008, it lost 37% of your money.
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. 23

24. That’s why in 2008, it lost 38.32% of your money.
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. 24

25. 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! 25

26. When your annuity contract expires, you can:
Take the money in one lump sum.
Receive a guaranteed Lifetime Income.
Do combination of both #1 and #2
Roll the money into another Annuity 26

27. Your federal benefits do not include a disability insurance policy.
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. 27