Page 28 - The Informed Fed--Hearn (edited 10.29.20)

• The length of your career
• TSP performance

• And many more beyond this small sampling.
Do you have a water cooler advisor? Have your benefit decisions
been influenced by the water cooler round table? We spoke about this
earlier so we will continue with a typical scenario that we often see. Harry
is our water cooler advisor. But who is Harry? Is he CSRS or FERS?
What license, certification or financial advisor education does Harry
really have? As important as these decisions are, shouldn’t these
discussions be better left for a qualified professional? Harry is well
meaning, but whether he realizes it or not, his advice can be very
confusing and, ultimately, a danger for the recipient of the advice. Unless
Harry is a financial advisor or an expert employee in the personnel
department, proceed with caution. Of course, we can’t blame Harry for
all of our financial pitfalls. Let’s just concentrate on your goals, objectives
and priorities while we continue to seek out a better understanding of
our federal employee benefits. Let’s examine the Three Phases of Life
and Retirement plans:

:
1) Accumulation Phase We accumulate the most assets in our
earning years. This is when we are working full-time, building our
nest egg, investing, putting money in our TSP and/or IRA
accounts and trying our best to reduce or eliminate debt.

2) Preservation Phase : As retirement draws near, we focus less on
accumulation and more on preservation taking fewer risks with
our nest egg and putting more in trusted bank CD’s, fixed/fixed
indexed annuities and other safe investments.

:
3) Distribution Phase After accumulation and protection, we
start thinking about distribution. How will we convert our
pensions, TSP, IRAs and other assets into lifetime income? What
phase are you in? What risks are you taking with your money?
Are you seeking out distribution friendly investments? We will
get into more detail regarding the subject of accumulation,

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