Page 26 - The Informed Fed--Hearn (edited 10.29.20)

service and spending habits. In 1984, the federal government introduced
FERS (Federal Employee Retirement System). In this system, many of
the benefits stayed the same. However, the pension annuity was
completely overhauled. A typical 30-year career employee who was hired
under FERS would receive about 20% less through his/her annuity. The
20% cut would need to be made up through the TSP investing and Social
Security.
Before we move on, here is a suggestion; stay away from water cooler
advice. You know the conversation. It happens during a break time or
over lunch. You get into a short conversation with a well-meaning co-
worker who seems to have all the answers. They are not shy to voice
their opinion and their statements at times seem educated and spot on.
We can tell you that we have witnessed numerous negative situations
concerning benefit understanding that were caused by this “well
meaning” co-worker. We are not experts when it comes to diagnosing a
problem with our vehicles. We leave that to the professionals; you know,
those that are certified to disassemble a fuel injection system. If we gave
advice on car repair, our friends would not be happy with the fact that
they took our advice as the car sputters and spurts down the highway!
For some reason there are those that think they are a financial expert
because they listened to a few rants from the media produced “experts”
on TV or radio. Many bad benefit and financial decisions are based upon
what others are saying or doing. Most of what others are doing is based
on what others said. Here is the problem with the “others”. If you rely
upon advice from the “others”, what you will often find is an old-timer
Civil Service employee giving their opinions about what fund allocation
is the best for TSP.
They may tell you how much life insurance coverage is best, etc.
Every situation has its own unique set of circumstances full of variables.
Here are some examples where variables can become a problem when
you take advice from “others”. Taking general advice from “others”
causes problems; it’s as simple as that. There are no general situations.

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