In this episode, Val offers guidance to help you make sure all your financial bases are covered as a federal employee.
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4.12.24: Audio automatically transcribed by Sonix
4.12.24: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Speaker1:
Welcome back to the federal retirement show. I'm your host, Val Majewski with American Benefits Exchange. I really appreciate you joining me for today's episode. And I got to say, I've gotten feedback, talked to a number of you who are dedicated viewers of the federal retirement Show. Thank you for your loyalty. Thank you for checking out all the content that we're giving and providing. But this is what it's about. It's about providing accurate, honest information, giving some insight into different things that you may or may not have thought of and and trying to give you the information that you need, you want to see. Obviously, if you're watching, then great. It is content that is valuable to you and things that you can utilize when you're looking at your benefits and retirement situation. Now, today we're going to revisit a topic that we did before, and it's called covering your bases and covering all of your bases. And in, uh, lieu of the fact that, you know, Major League Baseball is in full swing, we had Opening Day, uh, about two weeks ago. I like to bring back the baseball analogy of covering all your bases. Many of you may or may not know my history. My previous profession before working with federal employees full time was in professional baseball. I played ten years professionally with, uh, a number of organizations. It's a passion of mine. It's I watch way too much baseball. I talk about baseball too much.
Speaker1:
I coach my sons baseball. I love it. It's it's my favorite sport. And this is, in my opinion, the best time of year when opening day comes around and spring training is over. And now real baseball games exist. The sights, the sounds, the smells, all of that. So if you love baseball too, hey, you can reach out. We can chat baseball. But today we're going to use a baseball analogy of covering all your bases when it comes to comprehensively covering your benefits and retirement situation. So let's dive into today's content and talk about covering all your bases. So what do we mean by this? What are some of the things that we talk about when it comes to being comprehensive, covering all the bases? It just means we're going to make sure that we are addressing and taking care of all the concerns that you have as a federal employee. There's there are some things out there, right? Some areas where you could just focus on one thing, um, you can just talk about, I just want to take care of my life insurance. So I don't want to. I just want to take care of my retirement income. I want to just take care of my TSP. I just want to make sure my family's secured. And without being comprehensive, though, you can leave some things unattended and they can go awry for you, right? You may not be properly set up or taken care of.
Speaker1:
Um, your future may not be as secure as you think, because we're not looking at everything with a holistic mindset, taking a big picture view of your situation. And that's what we do here. So for any of you who have spoken to us, talk to any of our reps across the country, you know that we do a full benefits and retirement review, go over your entire situation, ask you a number of questions, and allow you to ask us questions so we can take care of all of your needs. We don't go away after that. Also, it's not a one and done deal. If you have questions along the way, new things pop up and we sincerely mean this when we say use us like your personal HR department. You can ask us any questions. Make sure that we can talk about any topics that you want to discuss, because we want to make sure you are properly prepared today, you know, set up in the best position possible going forward. And then we take a look into the future so that you know that you are going to be set up the way you want to when you finally retire, when you walk out of that door. You've heard me say this before, but when we talk about comprehensive planning, these are not all of the areas of concern for federal employees. You may add a few other things to this list, but this is a pretty decent list of areas of concern or topics that people want to talk about on a regular basis.
Speaker1:
Number one, saving enough for retirement. Yeah, this is a long game for you. This isn't just a a short, you know, something you can cram for, uh, session when it comes to planning for retirement. You've heard one of our guests, uh, Miss Brandi Pearson, talk about your planning from retirement or for retirement from day one of your employment. So take advantage of all those days. It is a long game for you. You've got to play all the innings, so to speak, and make sure you're contributing along the way and providing as much as you can for your future. So that's a concern. Am I doing enough? Am I saving enough? Am I preparing well enough for retirement? Am I concerned about taxes down the road? Why is this a concern? Because which way do you think taxes are going? I've asked this before on the show, and the majority of people will tell me they're going up. A few people might say that they're going to stay the same in the future. I have not had anybody give me their opinion that they think taxes are going to be going down in the future. So if we think and we believe that taxes are going to at least stay the same or go up, why would I want to create a bigger tax liability for myself down the road? So preparing for taxes down the road, taxes in retirement is a concern of federal employees.
Speaker1:
What about your federal employee group, life insurance, and other life insurance coverage that you have outside the government? That could be a concern just to make sure that you're in the best position possible if you're not aware, right? Thankfully, option B, as we've discussed on previous episodes, drastically increases as you get older, this can become cost prohibitive, it can be too expensive, and you'll end up canceling it at some point. So we want to make sure that you are not only providing the coverage that you want through Phegley, and maybe even outside life insurance that you have, but doing that at the least cost as possible. What would that do? If we're saving you money, providing the most effective, most efficient way to pay for that, then you're going to make sure that you have enough money that's going back into your pocket, money that you can put towards retirement. It's more effective, right? What do you do when you go shopping for gas? You're driving in your car like, oh, this is a few cents less, or this is a few cents more. Which station are you more likely to stop at? Probably the one with the lower price. I mean, that's just general, right? Some people just say, hey, I'm going to go for the lower price.
Speaker1:
I'm going to save a few extra pennies in my pocket here that I'm not spending. If I go to this other station in this other location, well, it's the same thing. It's the same similar gas, right? Similar octane, but similar coverage. But what if we just did it at a cheaper price, saving you money over time? That can be a lot more effective providing for your spouse and family. There's a number of decisions that you're going to make, um, along the course of the way. So life insurance leads into that. You want to make sure if something did happen to you and we we don't want that to happen, but you want to plan for the what if if something happened, my family's going to be taken care of in retirement. Once you get to that part, do you want to take the survivor benefit and. Provide for your family, or do you want to continue to do that outside the government with private life insurance? That's a decision to make. Make sure you're comprehensively taking care of on that side. And then you've heard us discuss this before. This has been a big concern. With interest rates getting higher and higher. Uh, is eliminating debt, getting rid of the interest that you're paying or paying less interest? An interest doesn't do us any good, right? Interest is something that makes someone else profit in general.
Speaker1:
So you borrow money from a bank, from a finance department, at an auto dealership, from a mortgage company. You're paying them interest. What does that interest do for you? Nothing. That's money that you can light on fire. Throw in the trash. It doesn't do you any good. It makes profit for the lender, for the bank or the finance department for whoever is lending you the money. So if we can pay less interest over time, if we can eliminate debt in a fraction of the time, how much money will that save you? Not only will it free up the interest we talked about, it'll free up those payments that were going towards debt service that could then go into your pocket, go into your bank account, go towards your retirement. So these are areas of concern that I run into on a daily, weekly, monthly basis. Talking to federal employees, talking to our reps that are out there that are helping federal employees. And they see all these concerns as well. So how do we combat that? Well, we want to be comprehensive. As I said, we want to make sure that we're looking at all areas. How do you know that this problem exists or multiple problems exist? Because there have been times also where I've talked to federal employees and they did not realize they had an issue. They did not realize there was a problem, they didn't realize the costs that were involved or the the change in the cost or the amount of interest they were actually paying.
Speaker1:
Now, if you look at, I'll just say this as an example, um, your mortgage, for example, you're, you're paying 2.5% seems like a very, very low percentage. And that is for mortgage rates. But if you look at the actual payment you're making, it's not just 2.5% of interest that is going in each payment. Take a look at that. I encourage you to go check out your mortgage payment, your principal and interest. How much is actually going to principal? How much is going to interest? Figure out the percentage and tell me it's only 2.5%, or even it's only 10%, right? If you had a 10% mortgage, which is high, but tell me it's only 10%, it's going to be a lot more than that. So looking at everything comprehensively, holistically, we can see. Now, how do you tell if this problem exists? Well, you've got to get a full benefits and retirement review done. You've got to talk to somebody that's an expert, whether it's one of our reps across the country or somebody else that's an expert. I encourage you seek out an expert. Now you how do you do that with us? You can fill out the form on our website, Federal Retirement Show.com fill out the form. And somebody, if it's not myself personally, will be reaching out to do a full benefits and retirement review for you and answer all of your questions.
Speaker1:
Now explore everything. Right. We're going to dive in. We're going to do a surface level. And then we're going to dive in and drill down and ask a few more questions when we do the review. But if you have questions, write them down. Make sure we answer them. Make sure you get them answered. So that way you know what the right direction is going forward. So it's not just about getting a review done. Surface level. Certainly we could do a 30,000 foot view and look at everything, but we want to drill down, dive deep. If you have other questions, concerns, things in your situation that are different than the person that you work next to. We want to get you the resolution. We want to get you the solutions so that we can fix your problems. Now, if you get the clean bill of health right, it's like going to the doctor and doctor's like, hey, there's nothing wrong with you. Uh, keep doing what you're doing. Thumbs up. That would be a great thing to get to. It's a extra confidence knowing that what you're already doing is keeping you on track and heading in the right direction. Then have that review year after year with your representative, with your federal benefits expert, that way, you can make sure and ensure that you are on the same track. You haven't gotten off the path a little bit.
Speaker1:
You don't need to be redirected. So I said earlier, we don't go away after the initial review. Even if you get a thumbs up, clean bill of health, you're good to go. Your situation is perfectly set up. Review that year after year. Make sure you are still on track because things will happen. You might take on new debt, you might have gotten a pay raise. You might have an increase in cost of your benefits. There might be something new in your life that you need to take care of. It's important to go same way you go to the doctor year after year. For an annual physical, you need to get an annual physical, an annual checkup of your benefits and retirement situation. Read my book. I will put that on there. Um, I wrote a book. If you're not familiar, it's called There's No Excuse Your Guide to Maximizing Your Federal Employee Benefits. It reads like I talk. So if you have not seen me in these episodes, watch a few more. So if you like the way I talk and present the information, the book reads just like that. Try to keep it as simple as possible so you can understand your benefits and retirement. Not only what it is, but how it works, how things change over time. What are your options, and what are some ways in which you can improve your situation while you're working and entering or nearing retirement? Okay, get answers to your questions.
Speaker1:
That goes back to what I said earlier. If you're going to be talking to a federal employee expert, federal benefits expert, you're scheduling a review document. Questions. Make sure you write down and ask questions along the way that pop up, because we want to make sure again that we're giving you everything we can, only we can't mind read, unfortunately. You know, we're we're good in a lot of things. Mind reading is not one of them. So if you have questions, write them down. Make sure you ask them, get the answers you're looking for, and I will tell you, we are not going to claim to know every single thing. There are some still very, very unique situations that I've run into that I've got to verify what the answer is, but we will get you the answer. The the best thing I can tell you without lying to you. Right? And just giving you some information just to answer your question and say, hey, this is a very unique situation. This is something that I have not seen in a while or had never seen before, because there are still things I've never seen before in my 12 years of working with federal employees. I will though, find you the answer, even though I don't have it for you now, I will get you the answer that you need that'll help solve your problem, or give you the insight that you need to make a better decision.
Speaker1:
So get your questions answered. So covering our bases right. This is the baseball analogy. This is what we're looking at. This is where we want to make sure that we're we're doing all that we can, but we want to make sure that we're providing for you protection on all areas, right? Protection on all areas. And you're covering yourself both in the short term, mid-term and long term when it comes to your benefits and retirement situation. And a lot of this revolves around, uh, same way you're going to protect your home, right? Your auto, you're going to get those coverages, those things in place. Because what you want to make sure in case something happens, the insurance companies got you. There are ways that you can cover all of your stuff. Right. Uh, that I mentioned earlier, life's concerns. You can cover the retirement planning concern, the tax concern, the life insurance concern, the spouse and family concern, as well as the debt concern. You can cover that both in the short term, mid-term and long term. Now, in the in the short term. Right. And you want to make sure that you've got something that is permanent in place, okay. That's going to be there actually short and long, but something that is permanent in place and, and can also, uh, build some, some value for you, some equity, some, some cash, if you will, if you set up a plan properly.
Speaker1:
And that's multiple uses, if you set up some sort of permanent plan that will not only protect you if something happened to you, if you died, it will protect you in case you have emergencies. In this short term scenario, we're going to second base in our illustration. Uh, in case you have emergencies, you get diagnosed with something. You need some protection in place in case there's a heart attack, stroke, cancer, a kidney disease. There's some kind of long term care scenario. You can't take care of yourself. You've got not only, uh, things that are building for retirement, but of that you can use some benefit to pay for emergencies or things that are coming up in the short term, in the short term and mid-term. Also, we're going to try to help you eliminate your debt, or we're going to use the value that you're building to pay off debt, get rid of debt, eliminate debt, and a fraction of the time, which is then not only, uh, eliminate those payments that are coming out, but also reduce the amount of interest you're going to pay over time. So we provide permanent protection. We can also provide temporary protection on top of that, which can give you a lot more coverage. We're talking about some life insurance and things there, but there are multiple functions of plans like that.
Speaker1:
There are also long term permanent protection that can be done when it comes to accumulating, you know, for retirement. So it doesn't have to be in just one one type of plan. We're going to put funds aside that are going to be designed to utilize down the road for retirement, that can be tax advantaged also. So tax advantage means come out tax free in the end. So money that you're building, interest that you're earning, you're letting that grow and grow and grow for retirement. You can have that come out on a tax free basis down the road. That's been a concern for people when it comes to what are my taxes going to be so we can help eliminate that tax concern or tax risk by putting you in a place where you're going to not have any taxes owed down the road, as long as your plan is designed properly. And we mentioned about the debt getting rid of debt for. Frees up the cash flow. Uh, pay less in interest. Okay, then in the end, you're building that retirement plan that, uh, is not subject to risk. You're taking the risk off the table. It's not subject to the taxes down the road. And you're complementing what you already have set up through the government. Now, if you're a first employee, most of you listening and watching this are going to be Fers employees. You have a three part plan.
Speaker1:
You've heard about us talk this way before. It's three part plan. You have your first pension, Social Security and your TSP. Those are the three retirement income sources provided to you by the government. You can create for yourself a fourth income stream, a fourth plan, maybe 4 or 5, six, whatever. You can have multiple. Beyond that, you don't have to rely on just those main three. And those three can be pretty solid for you, but you can definitely 100% protect yourself. Make sure and ensure you're going to have a great retirement by providing a fourth, fifth, maybe even another one, but at least a fourth, so that you have another income stream you can rely on, and an income stream that is, uh, safe from market risk, safe from tax risk, and can provide a number of other protections for you to help out your family, your spouse, in case something happened. Cover your first some emergencies in case something happens medically or physically. Um, eliminate that debt that we're talking about getting rid of, uh, all of the debt, not just a little bit of it, all of the debt. And a fraction of the time just designed to plan for a federal employee came out. Wonderful. Came out. Awesome. Going to, uh, take off years and years off of their debt payment, saving tens of thousands of interest along the way, freeing up that cash flow once the debt is paid off in a fraction of the time.
Speaker1:
Okay, not ideal for everybody, but could be, you know, in your situation as well. If you're dealing with and suffering from or feel like you're, you're buried under, uh, an avalanche of debt. So in the end, once all that's paid off, now, what are we doing? We're building and accumulating and preparing as well as possible for retirement. So that way now you've got your pension, Social Security, TSP, and a fourth and maybe more income streams that you can tap into if needed to make sure that you are maximizing your retirement income and if not having greater income in retirement than you did while you're working. Pretty awesome stuff. But this is part of your comprehensive planning. All those concerns that I mentioned earlier can be taken care of with a plan or two. Plan or two. When I did this recording previously, in a previous episode, we talked about killing multiple birds with one stone, not just two birds with one stone. We can kill multiple birds with one stone. But in in keeping up with the baseball analogy, you want to make sure you've got all of your bases covered. If you've got all your bases covered in my sense, if bases are loaded and I've got my power hitter at the plate, we're in a dangerous situation. We are prepared and ready to do some damage. You can be prepared and ready to do some damage when it comes to in a positive way.
Speaker1:
It's when it comes to your benefits and retirement situation. Take control, master that. Don't let it control you or take over you in your situation. You can control it and put yourself in a very aggressive, very dangerous situation. And that way you know that you are prepared as well as possible for your future. I talked about the book earlier, reading the book, uh, taking care of the concerns, number one. But reading the book knowledge is key, right? An investment in knowledge pays the the best returns. That's Benjamin Franklin. But when we talk about this, read the book. There's no excuse. How do you get yourself a copy? You can certainly purchase it on Amazon. Um, go on there. It's not a a Pulitzer Prize winning I apologize. I'm working on it, but, um, you can order it on Amazon. Or if you schedule and complete a benefits analysis, we will get you a complimentary copy of the book. So reach out to us again. Federal retirement Show.com fill out the form, have a benefits review by either myself or one of our reps nationwide will give you a complimentary copy of the book. Make sure to ask for it as well. Some people just want the review and they they don't want the book. If you want the book, ask for it. We'll send you a copy of it. We have additional resources as well.
Speaker1:
You could ask the, uh, the representative, the federal benefits expert. Or copies of these as well. We have them digitally. Information specifically about Fegley survivor benefits TSP. If you're interested in any or all of this, you're welcome to it. There's another brochure called the Top ten Mistakes Made by Federal Employees, and hopefully how to avoid those. I'm not the only mistakes, but top ten. You've heard me talk about this on our AB resources episode. But the other thing too is just getting that benefits review done. We've got a couple of reports we want to put in your hand customized reports using our proprietary software that we've created over the years to just analyze and look deeper into your situation. So with that, I really do appreciate your time. I appreciate your your dedication to this show and learning more about your benefits and retirement situation. I appreciate the feedback that I've been getting about the content. We're going to keep putting this out. Uh, as long as you're watching, as long as you're listening, as long as you're getting value from it. We feel like we are doing our job and we're we're giving, uh, accurate, honest information here on the federal retirement show. But again, go to our website, reach out Federal retirement Show.com. We'd love to help guide you through, give you all the information that you're looking for. Answer your questions. Thank you for joining me today and look forward to seeing you on a future episode.
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