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Mid-career retirement planning.

For mid-career employees interested in retirement planning, the Foreign Service Institute's two-day seminar on the topic (RV105) offers a way for Civil Service and Foreign Service employees with 10 to 15 years left before retirement to learn about annuities, Thrift Savings Plan (TSP) contributions, federal health benefits, financial management, life after retirement and estate planning. They also learn to assess their tolerance for investment risk while developing post-retirement goals.

"The course was an eye opener," said Bix Aliu, an FSI instructor in the Public Diplomacy Training Division. "It shook us up a little, [by saying] here's where you are now; here's where you want to be, and how are you going to get there?"

"We encourage participants to explore every possible scenario," said Catherine McCormick, coordinator of the FSI Career Transition Center and the course organizer. She said attendees often want to know the steps to prepare for retirement, the reasonable retirement age, the right date to maximize retirement benefits and how to manage their TSP or pay college tuition during retirement. She said the course aims to give attendees an understanding of the process and a plan for action.

Research shows that the most successful retirees are those who put together reliable and flexible financial resources that will provide for their retirement lifestyles and emerging needs. This calls for retirement planning that starts at mid-career, when one can effectively estimate employment needs and family circumstances, understand benefit packages and create adequate contingency plans.

Retired government employees' financial security arises from a combination of the federal retirement annuity; Social Security, military or private sector pension benefits; TSP income; and income from an Individual Retirement Account (IRA) and other investments.

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The FSI seminar helps employees learn to calculate estimated income and projected expenses in retirement, review investment and savings options, and consult with experts regarding wills and trusts, powers of attorney and tax implications. Presenters explain the complexities of Civil Service and Foreign Service annuities and how to use EBIS (the Employee Benefits Information System, which is available via HR Online) and its high-three salary and annuity calculators. Attendees also learn about life insurance and health care benefits, including potential pitfalls when proper beneficiary designations are not made and declared at retirement.

"I think everybody is fearful that they won't have enough money in retirement. You hear stories about people who did not plan," said attendee Kathy Cox, a legal assistant at the Foreign Service Grievance Board. She said one thing she learned was to build an emergency fund to cover several months of expenses.

Another attendee, Jud Barnes, an office director in the Bureau of Intelligence and Research, said the financial planner's advice convinced him to be more aggressive with his TSP investments.

"I had a general sense that my conservative nature wasn't translating into the best earnings, but it helped greatly to hear the rationale for being more aggressive now," he said.

Barnes has made other financial changes and advised his son on how to handle his 401(k) plan when he enters the workforce after college.

For Ellen Dempsey, a Foreign Service health practitioner with the Office of Medical Services, "a big light bulb went off" when she realized she has time to make adjustment that will best to meet her needs. "Understanding how the annuity works has made me think twice about leaving the State Department before 65," she said. The seminar also emphasizes paying attention to health. Sudden illness or disability can eat away at hard-earned retirement savings. Planning for an unexpected change in health means exploring long-term care insurance. Employees can calculate the average cost of assisted living, home health care and nursing home care in a specific geographical area by using the Federal Long Term Care Insurance website, www.ltcfeds.com. Course participants learn that the younger they are when buying long-term care insurance, the more affordable it is, given that costs are spread over a longer period.

Employees' pre-retirement checklists vary, but they should not wait until retirement to make crucial decisions on their future. As attendee Kimberly Krhounek, deputy director for Central European Affairs in the Bureau of European and Eurasian Affairs, put it: "If I hadn't taken the class, I might have waited another five years to do some of these things."

This year, Mid-Career Retirement Seminars will be held May 2-3, June 13-14 and November 13-14. Next year, a January 16-17 seminar marks the first time the course will be offered in that month. Registration information is on FSI's website at www.state.gov/m, or by emailing FSICTC@state.gov.

RELATED ARTICLE: Retirement Readiness Tips

* Get familiar with EBIS, through HR online.

* Create and maintain an emergency cash fund equal to at least three months of your usual expenses.

* Make sure you know your retirement system (CSRS/FERS/FSPS/FSRDS), listed under "deductions" in your earning and leave statements.

* Investigate long-term care for your parents, you, your spouse or same-sex domestic partner at ltcfeds.com.

* Complile a list of important emergency information for family members, then let them know where it is.

* Create and regularly update legal documents for you and your spouse/partner, including a medical power of attorney, "living will," durable power of attorney and will or trust.

* Check your list of beneficiaries annually for your TSP, investments and life insurance, Official Personnel file (from your bureau HR specialist if created before 1999 and/or from HR Online if created since 1999), federal life insurance, accrued annual leave, unpaid compensation and retirement plan contributions.

* Check out online federal retirement resources such as:

- The State Department's "eSeminars" on financial planning, insurance, Social Security and Flexible Spending Accounts at HR Online/EBIS.

- A weekly retirement planning article at govexec.com.

- The National Institute of Transition Planning's list of radio shows, webinars and other programs on retirement planning at nitpinc.com.

- The National Association of Retired and Federal Employees at narfe.org.

By Sarah Genton, division director, Overseas Briefing Center
COPYRIGHT 2012 U.S. Department of State
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Author:Genton, Sarah
Publication:State Magazine
Date:Apr 1, 2012
Words:992
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