Don't be Fooled in Federal Retirement Classes
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- Опубликовано: 19 июн 2024
- If you've ever gone to your agency's retirement seminars, then maybe you've encountered this situation. If federal employees aren't careful, this can be a dangerous move and cost you your financial independence. How can you know if a financial professional is just trying to sell you something? Thiago Glieger, fiduciary advisor and financial planner to federal employees discusses what feds need to know when going to these classes to make sure they don't make a costly mistake.
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0:13 Setting the stage
0:52 Different kinds of financial pros
1:45 Representing many firms
3:11 Avoiding mistakes
3:56 Proper example
4:53 Other ways to avoid mistakes
5:58 Understanding the details
8:24 Misleading details of indexed annuities
12:00 Other features and additional thoughts
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#TSP #fersretirement #federalemployees 
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We went to a free Federal retirement seminar because my husband works for the government. There was a representative there that said we could have a free one-on-one consultation. He gave us a free report but then suggested that instead of us electing the 50% spousal benefit, that we buy insurance with it. We didn't go with his suggestion but I wonder how many spouses were talked into it and now don't have a spousal benefit. 😐
This is a HUGE one, thanks for bringing this up. I'm going to pin your comment because this happens often. This is called the "Pension Max" strategy offered by insurance sales agents. They suggest that you don't pay for survivor benefit pension (SBP) so you "max out" your pension, then use the extra money to buy insurance instead. While sometimes the numbers can actually make sense, if the fed dies the surviving spouse LOSES FEHB. Furthermore, if they're 77 years old at the time, for example, that's TWELVE years after when they should have started Medicare, which means they have an ANNUAL 120% PENALTY. That's not a typo; 10% annual penalty for every year beyond 65...permanently! -TG
@@TheFedCorner wow, I didn't even think about that. I was worried that if we didn't elect the 50 per cent spousal benefit, and then for some reason we weren't able to pay the insurance policy and it lapsed, I would be left with nothing.
This is soooo true. The free report offered at the end is the hook.
Not all who offer this are bad, but it's the fed's job to make sure they're well informed when making decisions!
I think that I went through this a few years ago. They guy actually came to my house. Supposedly he was associated with the post office. He tried to get me into some kind of program that I didn't understand and told him nope. I was going to think about it . The stuff that he talked about was the three stool retirement and then he went into seliing me insurance stuff, I believe it was accidental or long term. He didn't look too happy when I told him I wasn't going to make any snap decisions 😂. Yeah, that was a waste of time honestly. I've learned a lot more stuff from content creators like you and others right here in YT. Thanks! DON'T SIGN ANYTHING UNTIL YOU FULLY UNDERSTAND WHAT YOU ARE GETTING INTO. specially when it has to do with something so important like your TSP
Thanks for sharing. Fortunately, even if you sign paperwork, sending your TSP is a manual process that's not done with third party paperwork.
Oh yes the free consultations that my colleagues have been talking about with the latest retirement seminars. Thanks for making this video. I think you covered it pretty well.
Thanks for the feedback! Glad you enjoyed it.
Thank you for confirming my eventual reaction to getting pitched a deferred indexed annuity representing about a third of my TSP anticipated balance on retirement. This was from a reputable local retirement management firm that seemed to be sponsoring (it seemed) another national federal retirement seminar company. I knew nothing about such annuities, but studied up on how this one worked. At first this still sounded like a reasonable approach, but the more I learned, the more suspicious I became of likely long-term anemic returns which are disguised by offering large up-front bonuses to your contribution balance giving the illusion of substantial returns in the early years.
Like you said, these products have a place in a retirement plan to establish guaranteed income, but Feds already have FERS and SS which in addition are inflation indexed. Even annuity companies would discourage you from putting more that half of your nest egg into an annuity. I would guess most career Feds are already getting about half of their retirement from their pension. A passive 60/40 or 70/30 broad market equity/bond portfolio is probably a much better choice and doesn't require paying someone some healthy AUM fee.
That's right, they're incredibly conservative investment vehicles, and can surely be appropriate for some people who don't already have TWO annuities (feds, military, state workers, etc). I can confirm that FERS and SS can make up about half of a retirees income. This depends on lifestyle of course. Lastly, just make sure you don't confuse investment expenses with an advisory fee -- two different things! Thanks for tuning in!
Agree... Attended several multi-day retirement classes (procured a few myself)...very good, informative, facts and only facts. Pro job. And have attended 1-2 hr webinars...sales pitches. Beware indeed.
Thanks for tuning in!
I think annuities are great when they cover your basic expenses. If you really mess up your retirement savings. those annuities will (can) keep you out of basic poverty. But they do have their price tags. With my FED pension, my wife's little teacher pension and SS (starting later in life) will more than cover just the basics. I kept getting those free retirement course notices, I was wondering if they were just a sales pitch. There were some at work that were straightforward just retirement information.
That's right. The only challenges is that seldom do private annuities maintain their purchasing power. Most do not have an inflation adjustor. This means you can expect a third less purchasing power after only a decade of 3% inflation. What happens after two or three decades? Regarding the seminars, I think it's important for feds to go. You can gain a lot of good information from them regarding the facts about FERS, however it's important to keep in mind that if they're full-time seminar presenters, then they're NOT full time advisors, and you should consider what getting ADVICE from someone doing that means. The "advice" is unfortunately often a sales pitch.
I almost fell for that very type of annuity, in fact I rolled a big part of my TSP to it pending my signing. The "retirement advocate" called it an index fund IRA. He never used the word "annuity". I first saw the that word on the package they sent to look over and sign. I had a financial planner I know look it over and he told me the exactly what you said. "You don't need this and it comes at a high price", so I rejected it and requested return of my money. The company took two months to send my money back to the TSP. Lesson learned for sure. The good thing is, the money was back in the TSP just as the C fund started rising the end of last year.
Thanks for sharing your experience. The products are not terrible, they can be great for some people, and not everyone selling them are bad or misleading. But sometimes sales practices aren't the most transparent and that's why it's important to have the foundation of knowledge!
We find your videos very informative. Can you do a video on long term care insurance and when retirees should purchase LTC insurance vs "self-insuring."
Glad you found them valuable. Certainly, we'll add this to Thiago's list for the future!
Free retirement consultation…. LOL. Great video!
Glad you enjoyed!
What's the word on the street with the Pro Fed's presentation? Here in San Antonio they are hosted by a local financial consulting firm called Compass Financial. Has anyone else had any good or bad experiences with wither of these companies?
Pro Feds is a great educational program. I haven't used them myself but they're very knowledgeable in terms of presenting the benefits. The key to know is that financial professionals can hire them to do presentations (as you described) and then be in a position to hold follow-up meetings with feds. There should be a clear distinction made that they are two separate entities. That's when it's important to understand what kind of relationship you may be getting into with that financial professional. Hope this helps.
What about spreads and dividends?
Who do I contact for the free retirement consultation?! Asking for a friend.
Any insurance company! ;) I kid. If you want to bounce some ideas off our team, check out our website.
@@TheFedCorner haha! Thanks. And I'm all set for now. Maybe when I'm older and may have the need for it.
Where can we find fiduciary financial advisors? I've looked and looked and the only one I've found required $500k min to accept a portfolio...
Try looking for solo-advisors. Many smaller, one/two-person practices may operate on a different arrangement, but you're right, most firms set up to perform advanced planning have minimum costs in working with them that only makes sense for circumstances of higher wealth.
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It is not that hard to find income for state government retirees. Transparent California publishes those pensions. You can add social security to arrive at approximate income