Most Feds to pay 10.6% FEHB rate hike in 2016

FEHB OPM Health Care Rates 2014

Happy Open Season, everyone!

OPM announced its Federal Employee Health Benefit (FEHB) rate hikes for 2016 FEHB Open Season.

OPM states that the average rate hike is 6.4 percent, which does not sound that bad.

…But the real news is not quite this good- Since none of the ‘averages’ are participation-weighted (that is, they pay no attention to what FEHB plans Feds actually select), the averages provided by OPM, GovExec, and FedTimes are essentially useless.

I’ll give you the only statistic that matters here, the one that applies to 40 percent of Feds. (Continue reading…) →

Are TSP Fund Allocations for New Feds really 'Risky'?


Feds – Don’t be alarmed.  If you’re a new hire or are opting for TSP ‘L’ Fund allocation based on your age, your TSP asset allocation has not become more ‘Risky’.

Last week’s article at GovExec misses the mark, and while the follow-up article at GovExec about TSP L Fund allocation is closer to the truth it still does not paint the whole picture.

Here’s what you really need to know about ‘risk’ when it comes to investing in TSP:

(Continue reading…) →

TSP to Ditch Draconian Withdrawal Rules

Thrift Savings Plan Guidance for Federal Furlough

Great News!

It’s going to take a while, but the Thrift Savings Plan has approval to move forward with slacking the noose of rules around TSP Withdrawals. (Continue reading…) →

New Military Retirement is a Pyramid Scheme

New Military Retirement System is a Pyramid Scheme

Pentagon Brass, Congress,  Military Service lobbying agencies, and the supposed ‘watchdog’ press are all lauding the proposed ‘New’ Military Retirement System that blends the Thrift Savings Plan in with a slightly-reduced ‘cliff-vested’ pension at the completion of a 20-year military career.

Um, have any of you actually read this proposal and done the math?

Since this post might get read by high-ranking officials, I’ll dumb it down for you right now and give you the ‘Bottom Line Up  Front’ (BLUF) before doing a deep-dive in to the details.

Point #1 – Is this a good deal for Junior Enlisted?  No.   The ‘Hybrid’ retirement proposal gives them an IRA rollover check for a whopping $6704 at the end of a typical 5-Year first Enlistment Contract.

Point #2 – Is this a better deal for a 20-year Enlisted Career?  No.  A Career Soldier/Airman/Sailor/Marine has a shortfall of almost $4k/year in annual income at 20 years of service.

Point #3- Is this a better deal for a 20-year Officer Career?  No.  A 20-year Officer Career retirement check falls short by $3k per year.  (However, if the TSP returns more than 11% per year OR officers save more than 5 percent per year in salary deferrals then the ‘New’ Retirement System is a better deal for Officers).

Assumptions for above: 1) Salary inflation rate of 2% per year, 2) TSP rate of return is 6% per year (or 3 times the current G Fund rate), and, 3) Soldier TSP salary deferrals are enough to ‘max out’ Uncle Sam’s ‘TSP Match’.

What to conclude? Here’s my $.02:

(Continue reading…) →