If your long-time significant other says, “You can’t afford to pass up free money,” chances are you’d roll your eyes. What does he/she know?
If your know-it-all, lifetime-pain sibling says the same thing your reaction is “Duh!” Right? He/she hasn’t had an original thought since 1974.
But if financial planner Suze Orman said the same thing, you would listen up and probably heed her advice. So do it, because she did!
In a recent visit to D.C., the best-selling financial planner and TV host taped a show for WETA. That’s our hometown Public Broadcasting Station. Her audience was a typical Washington PBS crowd: Well informed, well spoken, grateful for advice. Many were federal workers (or retirees). I recognized two people in the audience as people I knew. One from the government, one from the media.
Because she was in a government town, Orman didn’t bat an eye when a questioner in the audience mentioned her TSP. In Omaha or Little Rock that might mean something else. But in a government town — like D.C., or Ogden, Utah; Huntsville, Ala.; or Warren, Mich., TSP stands for Thrift Savings Plan. The $400 billion federal 401(k) plan for civilian and military personnel.
Most TSP investors (those under the Federal Employees Retirement System) are eligible for a total 5 percent match from Uncle Sam. You put in 5 percent and your agency matches you dollar for dollar on the first 3 percent and 50 cents on the dollar for the remainder.
That’s what Orman meant by free money. Tax deferred free money.
She also said that in many cases feds would be smart to put some of their TSP money into a Roth IRA. Unlike regular TSP contributions, which are funded with pre-tax money, the Roth is funded with after-tax dollars. So, when you withdraw the money — all of it — your contributions plus earnings, are tax-free. For life.
So what about the TSP? The regular and Roth options — what’s in it for you? Today at 10 a.m., on our Your Turn radio program we’ll be talking with Arthur Stein. He’s a financial advisor, who helps active and retired feds manage their investments and prep for retirement. He’ll also discuss proposals to change the investment mix in the Lifecycle funds, and the possibility of an “emerging markets” fund and an “international small cap” fund
Later on in the show we’ll talk with Federal Times writers Nicole Blake Johnson and Andy Medici, about a possible major downsizing in the Postal Service, the White House security clearance review and new cybersecurity standards in acquisition.
In 2010, the most sophisticated supercomputer still performed about 83 times slower than a typical cat’s brain. So, we still have at least a few years before we need to be concerned about the computer overlords.
How much time do feds spend on union-related business? Two Republican members of the House want to know how many hours federal employees are spending on union-related business while on the job. Reps. Dennis Ross (R-Fla.) and Phil Gingrey (R-Ga.) wrote to Office of Personnel Management Director Katherine Archuleta urging the agency to release updated data on employees’ use of “official time.” The most recent year for which data is available is from 2011.
Under sequestration, IRS workforce declined by 6k Under the squeeze of sequestration, the size of the Internal Revenue Service’s workforce contracted by nearly 6,000 employees by the end of last year, according to new IRS data. At the end of fiscal 2013, the IRS workforce stood at 83,613 employees — the fewest number in more than decade. That’s also 5,938 fewer employees than the agency had on board at the end of fiscal 2012.