Understanding Your Federal Retirement with Timothy McCleskey, Jr.: Audio automatically transcribed by Sonix

Understanding Your Federal Retirement with Timothy McCleskey, Jr.: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Well, everybody, welcome back to the federal retirement show. I'm your host, Val Majewski with American Benefits Exchange, and if you've been following us watching our previous episodes, we've been going over a lot of benefits information, talking about the top 10 mistakes that we see federal employees make and how to hopefully avoid them. Today, we're going to bring on a guest. I shared my time today with Mr. Tim McCleskey. Tim is out of Nashville, Tennessee. He is one of our regional representatives with American Benefits. Exchange has a very long history of helping out federal employees and a lot of different ways. So I'm glad and excited to bring on a proud new Papa Tim McCluskey. Tim, thanks for joining me on the federal retirement show.

Speaker2:
Hey, Val, thanks for having me. Great to be here this morning.

Speaker1:
Well, Tim, there's a lot of things that we're going to discuss, and I know we can talk probably for hours, but I want to get a little bit of background information because obviously the folks tuning in aren't familiar with you and who you are. So tell us or tell me just a little bit about your history working in this industry, working with federal employees. How long have you been doing it, et cetera, as much as you want to share? I'm looking forward to following up some questions with you. So go ahead. Take it away.

Speaker2:
Perfect. Perfect. Well, you know, I've worked in this industry for 22 years. I can't believe it's 22 years. I'm telling my age. But in the Fed market, more specifically, a little more than 13 years and initially I started working with postal employees and Bureau of Prison employees and helping them understand the benefits they presently have and how they can prepare for retirement. And then I matriculated into working with the VA, IRS, Social Security employees. So just a great great pie of federal employees that I work with over the last 13 years. What's interesting, though, is how important it's become to a lot of people. Since this pandemic, life can really cause things to change for you. And what I've noticed is the mindset that people have is am I really prepared? Am I really ready? So I've tried to really focus on how to ensure that people are truly prepared. And the way I do that is by making sure I ask questions they didn't even know they needed to ask. That's that's been one of those most important things I've tried to focus on.

Speaker1:
And what drew you right to working with federal employees? Because obviously, you know, it's not a typical market like, Hey, I'm going to just wake up one day and decide to help federal employees. But once once you've got a taste of helping somebody, you said starting with postal, what was that attraction? What was that affinity that really sucked in and said, Hey, I have to help these people, you know, they need some assistance? What really was the the key turning point for you to get all in with federal employees?

Speaker2:
Well, you know what? I have a foundation with the Fed market and really from my own household. My father was a civil engineer with the Corps of Engineers. He worked for 44 years out of the federal building, and he would always talk about, you know, you have to plan, you have to make sure you're ready. And he would talk about the for one go to Thrift Savings Plan, which I didn't know what any of this was. And you know, when you're young, it goes in one ear and out the other until life begins to happen. And then once I got a small taste, I begin to understand what he was talking about. And gratefully, my father was really, really well prepared. But I noticed a complete opposite for a vast majority of the people I begin to see and spend time with. So I would actually go back and ask him questions, and I would take that information. What he taught me and what I learned from ABCs and say, OK, here's what I can use to really hopefully help some people make good choices as they prepare for retirement.

Speaker1:
And I think that we see a lot, and I'm sure you can comment on this too, is just the lack of information. It was surprising to me when I first got in and started helping federal employees. Was the lack of information right? The scarcity of it, the fact that, you know, some some people are highly paid, maybe like like your father corps of engineers, you think they've got a very specific job, a very technical job, and they should know all of this stuff already because they're smart individuals. But that's not always the case. This information is not readily available and openly shared with federal employees when they first get hired or over the course of their working career. Would you agree or disagree with that?

Speaker2:
No, I would agree. And what I had to learn is people know their job. They're taught to know their job, but they get paid for. They're not paid to know what their benefits are. They're just expected to figure it out and the information is out there. But when you don't know where to go to get it, that becomes a different kind of challenge. So many people tend to wait and hope that they get the information as they get closer and closer to retirement, but it becomes more frightening as you get closer and you're really unsure how prepared you are.

Speaker1:
And that? That brings us to some of those areas where we see the biggest lack of information, right in areas where federal employees can, can have some missteps, make some mistakes and we have been talking in previous episodes about what my opinion is, is that in my opinion, what the top 10 mistakes are that I see federal employees make over my 10 years plus working with federal employees. But in your opinion, Tim, what is one of the biggest mistakes or one of the biggest shortfalls that you see federal employees make when it comes to their benefits and retirement information?

Speaker2:
I think one of the greatest challenges I see is there's an assumption that because one is a federal employee and they know they're going to have a pension, the assumption is everything's just going to be OK. And that's one of the greatest, greatest challenges I run into is the shock of when I'm able to show somebody what their retirement income is going to be. Along with Social Security, and that's still not enough income. It's a shock, and I have to give them a moment to recognize, OK, I've given you this information, but I'm sorry we still haven't taken your taxes out yet, and you'd be surprised how many federal employees weren't even aware they had to pay taxes in retirement. So there's this notion that there's just going to be this money available because they're federal employees, but not recognizing what amount that's actually going to be or the lack thereof.

Speaker1:
Sure. And that's a I call that one a false sense of security, right? You think you work for the government? You put your 30 years in. You get your gold watch and the government's going to take care of me, right? A government job is awesome. And they do. They have. They do have great benefits. They do have a great opportunity. But it's up to them to maximize right and take advantage of that opportunity. And it's not always shown to them. They don't have the correct pathway because to your point, as you mentioned earlier, they get hired, they get trained to do the job, not to work their way through their career, to retire properly. So that's where I've been. I'm thankful that we have an opportunity to help people. I'm not loving the fact that the government doesn't give them enough information, but it provides an opportunity for folks like us to come in and educate and train them in the right direction. Would you

Speaker2:
Agree? I would agree 100 percent, and I'm grateful that when we share the information and the beauty behind it is when we actually share their information and notice the key word, their information. Sure, we're not using hypotheticals. We actually take someone's lives. And if you're not familiar with that, it's their own leaving earnings statement their own paycheck, and we're able to snapshot where somebody is projected to be at retirement now. So whether you're going to retire in the next twenty five years, 10 years or five months, we're able to share with you. Here's the road you're on based on your own numbers, and only you can determine if you're going to be happy with those numbers and if you're not. Let's look at some solutions and opportunities to make sure you're going to be going down the path of comfort as you approach retirement.

Speaker1:
And that's one I did. I did steal this from you, Tim, so I'm going to give you credit for it. But that's one of the slides that I put into the presentations that I give that I loved that you gave to federal employees and I saw you give a presentation. You had a slide of a doctor on the screen and you said, Look, I'm not a doctor and I'm the same way. I don't have a PhD or an MD behind my name. But but like a doctor? Why do you go to the doctor? You go to get information. Hey, what's wrong? And you may not even know something's wrong. You may just be going for an annual checkup, and all of a sudden you find out something's. There's an issue, but like a doctor, we come in and we want to inform. We want to provide information. And then if we find an issue, right, if a doctor finds something wrong now, they're going to diagnose that issue and hopefully then prescribe something, provide a solution that's going to remedy it. It's going to make them better, put them in a better situation tomorrow.

Speaker1:
Hopefully, once they start doing this, then they are today. And you know, I give you the credit for it because I talk every single time. Now that I give a presentation, I put up that slide and I say, Look, I'm not trying to tell you all that I'm a doctor. I'm not a PhD in federal benefits, even though I consider myself pretty closer to the expert level. It's an opportunity for us to inform, diagnose and then assist or provide some kind of solution or prescription. And I love that. I love that it's that simple, right? That's what we're coming in to do is to remedy a situation that they may not even know exists, and we just got to bring all that information to the forefront. Now what do you use when you give a presentation, right? When you go over a federal employees benefits and retirement information? Do you use a certain? Software, do you have a set a booklet that you use something like that to walk a federal employee through their situation?

Speaker2:
Yeah. So initially, you know, as I stated, we use their specific information and that comes from their labs and from that list. What I do is I ask questions from their paycheck. I do it for two reasons one, to gather information, but to to see if they even know what I'm talking about. So you'd be surprised how many times I would ask people about different acronyms in the deduction section and then that deduction section. You know, you're paying money, you're giving money away. They're deducting it from your paycheck. So you want to know where it's going. But oftentimes, you know, 60 to 65 percent of the people don't know what certain acronyms mean. So I want them to recognize the importance of me asking for their understanding. And it gives me an opportunity to explain not only what it is, but where that money is going and how it's affecting them. I put that information in a workbook. And the reason I use this workbook is because when I send it to them, it has their numbers and they can actually go in and read and see how I arrived at certain calculations manually. So as people get raises or promotions, they're able then to make those adjustments and now they're learning the information I have and it's not just somebody giving it to them.

Speaker1:
And that's a good point, too, that you mentioned about even just as simple as the less by looking at the pay stub. This isn't something that a typical federal employee was educated on and and look for for those listening, we are not saying it's any federal employees fault. They just weren't provided this information. It is not the federal employees fault. They got hired and they got to work right away. They got trained on their job and all of this was not properly provided. So it just wasn't something that they were trained on. It's not information that they were given. So we have to start at the basic part of just even reading the pay stub properly. You know, that's then it goes from there and progresses, like you said.

Speaker2:
Yeah, absolutely. That's absolutely right. And one of the things I think I enjoy by doing that, even though it takes maybe a few extra minutes when you ask somebody, Do you know what this means? What this means? No. Why am I paying this amount of money? I'm glad you asked. Because what happens is these numbers change as you get promotions and as you get raises and you want to know why. You know, it's always interesting when people look at their bottom line. That's what people focus on on the paycheck. What am I bringing home? And if that number drops, the first thing we tend to look at is people is OK. Then I work the right amount of hours, my overtime. Nobody's looking in the deduction section, right? And you know, the health coverage may have gone up, their failure may have gone up. And if you don't know what family means, that's why we do these meetings to help you understand vaguely as your federal employee group life insurance. And it goes up every five years and you don't feel it at first. But when you get closer to retirement, that's when that price jumps. But you got to know it on the front end, so you don't feel like later. Oh my gosh, I got to get insurance. I can't afford this. But now you're 60 or fifty.

Speaker1:
And that is a big thing. I say the same thing talking to federal employees. You know, it's we look at the bottom line or we don't even look at the pay stub to begin with. It's just what went into the bank account. You know, we look at the direct deposit because you don't get that that check that you have to go to the bank and actually put in. It just gets direct deposited. And some folks don't even look at their leave and earnings statement on a regular basis to see if those deductions have changed and make comparisons. Hey, what? What was the difference in this one? You know, did I see a cost go up or did something get reduced or whatever it might be? So just to be aware, like you're saying, yeah, same with with TSP. I'll switch gears real quick and this is another area hot topic that we talk about a lot, but it's logging into tsp gov. Knowing where all your money's going, what funds you're invested in, what all the funds mean, and not just maybe listening to the person that's sitting next to you or in the office next to you, or that you work side by side with. It's really doing some homework because that's a big part of your retirement. You see that too, is your issues with people getting into Typekit gov or or not understanding all the aspects of TSP.

Speaker2:
Yeah, I think it's a myriad of those things, you know, people will have challenges getting in. And here again, there's an assumption that as long as I'm contributing, I'm OK, but not knowing where the funds are going and always preface the fact that I'm not going to tell you where to put the money, but I want you to understand what each fund means over time and over the last year so you can make the best decision for yourself. And it's funny. You mention when people talk about their colleagues, I do. Have a slight when I do webinars, and I expressed the fact that you can't make a retirement decision based on the person that sits in the cubicle next to you. Don't do that. You can't make a financial decision based on the person you go to lunch with because your life is not theirs. So you want to just gather information and you decide what's going to make the most sense. But yes, that's another challenge that people tend to run into is that lack of information and then fear of not being able to understand what they're told. So people tend to just kind of turned a blind back or put their head in the sand, you know, for lack of a better term.

Speaker1:
So for the federal employees listening to this, you know, our job is really to empower you, right to give you all the knowledge that you need to have that you may not know you needed to know so that you can make the best decisions for you and your family and your specific situation. Because like, like Tim just said, I mean, everybody is different. The person that sits next to you at work, they may have different retirement goals. They may want to retire at a different age. They may have a totally different lifestyle with expenses and obligations and all of these things, you cannot compare your retirement situation to somebody else's. Now, generally speaking, they may be providing you information. Hey, you need to check out about the first supplement or you need to check on this retirement requirement. But when it comes to specifics and numbers, Tim just said your situation is totally different than the person. So that's why you need to get an individual review done. An individual analysis with somebody like Tim so that you can understand exactly where you stand and there's no guesswork, right? And you know, Hey, Tim, I know we're going to talk about this in just a second. I want to talk about debt and your book, but when it comes to the numbers, you can say, OK, well, if these numbers aren't making sense, I still have time. I can make a change and I can do something about it. And we're not here to bring bad news, right, Tim? We're not here to say, Hey, how do these numbers look and have them be all disappointed? But if you don't like the numbers, we can still change that, right? It's not over. It's not that it's not the end of the road just yet. We still have time.

Speaker2:
That's exactly right. And that's kind of one of the things I look at. I would never forget doing a workshop at a Social Security office, and one lady said, Oh my gosh, this news is so bad. I said, no, here's the great thing you're still working, so there's still opportunity to make adjustments and changes. And a lot of times when people think they're in a bad way, they're really not as bad as they thought. It's just they didn't know what direction they needed to go. And so our job is to provide that information and show them a roadmap to the light at the end of the tunnel so they can feel better going into work, working with people and dealing with the vicissitudes of life, knowing they have a point.

Speaker1:
And on the other side, I've met people in a similar fashion that have said, Hey, I wish I would have met you 10 years ago or 20 years ago. And unfortunately, we didn't. We didn't meet. But I'd be like, The good news is we met today and you're not retiring tomorrow, and you can still make some changes. I say it's never too early and it's never too late because I'm sure you get people at the meetings too. They're like, well, retirements forever away, you know, I don't need to do this, you know? Let's talk about it down the road. And there's the other people that have said, Well, you know, I'm retiring in just a few years, so I'm a lost cause. There's nothing you can do for me. Have you heard similar stories?

Speaker2:
I hear it all the time. In fact, I got an email just last week from somebody that said, Hey, I'm not going to retire for probably twenty two years. I mean, why do I need to do this? And I'm like, That's a great question. I said, The advantage for you is you have time on your side. So it's what you do in those twenty two years that will determine if you're going to be ready to retire at that time. And that person was like, OK, great. Let's let's let's talk, but is helping people to understand. People aren't saying no, that they don't, that they can't do anything. They just don't know where to go and what to do. So I think what we're doing is giving them an opportunity to to have some direction with the right kind of information for their specific situation. And at that point, they can make the best informed decision for their own life.

Speaker1:
And that's great advice. Tim and I appreciate everything that you've shared on the on the plus side, right on what what are we going to have and what it's all said and done running the numbers? How can we save more for retirement and make sure that these folks, these federal employees that we talk to or that are looking for information that they're set up, right? But on the flip side of it, I want to get into the opposite, which is we're talking about everything that goes in and it's going to come out in retirement. But let's talk about the deductions again. And on the same token of hey, taxes, health insurance fairly. Let's talk about debt, you know, debt that comes out of your paycheck, that that is, you know, a detriment to retirement savings, things like that. You wrote a book. And I want you to talk about that you're passionate about getting people out of debt, you're your focus with this book on helping people get out of debt and quickly and then get on the positive side so they can prepare properly for retirement. So tell me a little bit about the book itself. Why you wrote the book? Just give me a general overview.

Speaker2:
So about eight years ago, I noticed a pattern with specific federal employees who just didn't feel like they were going to be able to retire with comfort. And it wasn't the fact that their income was going to decrease. Everybody's kind of aware that they're not going to have the same income. The challenge is people were retiring with the same debt. So imagine having an income at one hundred percent and then it drops to 60 percent, but you still got one hundred percent of the debt. That's a challenge. And if you don't have a solution prior to separation or retiring, then that can be frightening. So what I ended up doing was coming up with an opportunity to formulate a plan to help people understand how they behave with money. Nobody needs to be told or likes to be told you need to budget or you need to stop doing this or doing that. But it's so different once you are made aware of how your behavior is either helping or hindering your preparation for retirement. So I wrote a book called The Volcanic Eruption of Debt Erupting Debt with money you already have. See, as a federal employee, you're busy many times. You don't have the opportunity to get a part time job or to work overtime because you've got responsibilities with family and other things, but you still want to eliminate your debt. So I teach something called the four legs about the leg of awareness where I give an exercise, and all you're doing is becoming aware of how you spend money, the leg of freedom to show how you're freely giving money away.

Speaker2:
The leg of retirement to show how you can use resources contributing to your retirement plan can help eliminate debt and the leg of savings just four legs like on a chair. And once you take those four legs and notice that you have more than enough money to eliminate debt and twenty to twenty five percent of the time and increase your TSP, then that's a wonderful opportunity. In fact, I have so many stories in my book from federal employees, and I remind you I changed the names and the locations to protect the innocent. But these are real stories of people that I've helped to eliminate debt, including the their mortgages, credit card debt, student loan debt in three, four and five years. I'm working with a lady now. She's 60, she wants to retire at 70, and I showed her how to. She can pay off a three hundred and twenty one thousand dollars house by age sixty eight. She was so excited she was calling me every other day. Ok, what do we do now? What do we do now? Because she knows there's an opportunity for it to be real for her. And how do we do it? Her own numbers from her own lips and doing the exercises? And that's the joy in it. I'm not taking hypotheticals. I'm taking the information that people are giving me about themselves and helping them to see. You can do it with what you already have.

Speaker1:
It's an awesome, awesome concept and just taking a problem. Like you said earlier, we use the example of a doctor. We've taken an issue taking a problem and coming up with a solution specific to the folks you're working with, right? I mean this not just for federal employees, really, for anybody, but specifically what you've seen with federal employees, folks working in the federal market, all different agencies all over the country. You know, they can utilize this information to, we use the word, maximize or optimize their benefits and retirement, right? Why not? Why not maximize people love that word? But it's true you can take what the government gives you and use it to the best of your ability within all the rules, within everything that they give you. Why wouldn't you do that right? It would just be so much better if you can eliminate that quicker. And save more for retirement. Why wouldn't you do it? So why would you think, Tim, that people don't do this? Is there a is there a doubt? Is there a fear in taking that first step? I mean, it sounds awesome, but I'm sure there are people that are still hesitant. What have you seen is a a hindrance to people doing this?

Speaker2:
I think one of the greater hindrances is change. People fear the idea of change, and they attached change with something that's negative. And that's one of the things I looked at in the book on my website fed up. It's financially educated with unlimited potential, and it's educating people about their own opportunities to eliminate debt and put more of those resources into not only TSP. Taking care of the debt saving money. So when they retire, they can actually have those those first few months when they may not be getting that full pension paycheck. And if you're not aware of that, that's a real issue. So they can have that cash flow. It's little things like that. And once we were able to show that piece by piece by piece, then people get on board because it's not me trying to convince them it's their own information. That's the beauty behind it. If somebody says what's really the trick, what's the gimmick? Well, if there's anything close to that, it's helping people to see that they already have everything necessary to be successful in retirement. It's just helping them to to see what that information is.

Speaker1:
All the tools are there. It's just making sure you put the pieces together in the right spot and the right order to build something your retirement. That's sturdy, that's got a solid foundation. I know what it is, but I want you to tell everybody listening the name of your website and how, if they're interested, they can get a copy of your book.

Speaker2:
Yeah, they can go to fed up. Like somebody who's just fed up with that. So that's why it has that name up, group, fed-up group and just go through and look at the pictures and read the stories and listen to the video and it'll get and you'll notice all of these people on their federal employees. Everybody on there is a federal employee because that's where I've gotten all of this information to be able to help and serve people in a way to help them know what they can be capable of doing with their own information. That's the beauty behind it.

Speaker1:
Well, awesome. Well, Tim, I appreciate you sharing your experience and everyone and working with federal employees. You know your insight into some of the issues that they deal with. And I know again, we can talk for hours about this. I appreciate you sharing again about your, your website and the the book. I think it's extremely helpful for any federal employee that's looking to maximize retirement, maximize their benefits, eliminate debt, retire comfortably in their way under their terms. So Tim, I appreciate what you're doing. You know, we've worked together for for a number of years, got an amazing working relationship. Awesome friendship. I appreciate your time coming on the show today, really? Thank you.

Speaker2:
Absolutely. And I appreciate the opportunity again. You know, I was born and raised in a federal environment. Never knew I'd be doing this kind of work, but I think I was given the right kind of foundation to be able to serve and help many people. And I'm grateful for it.

Speaker1:
Well, Tim, again, thank you for your time and thank you to those that tuned in to this episode of the federal retirement show. Again, I am Val Majeski with American Benefits Exchange and really look forward to seeing you on a future installment.

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