Planning to retire, ever? Hold that thought!

Many can live comfortably on their federal annuity while giving their stock-indexed TSP funds time to recover. But for the majority of retirement eligible federal and postal workers, that’s not an option. At least not if they want to maintain a decent standard of living in retirement.

The reason? Many, if not most, of the feds eligible to retire are not under the CSRS program. They are under the very different Federal Employees Retirement System (FERS). Under the 3-legged retirement system, income from the TSP was projected to provide anywhere from one-third to as much as one-half of the income FERS retirees have. The other two sources were the civil service itself, which is much smaller than the CSRS annuity, and Social Security.

Hundreds of thousands of feds faced the same situation in 2008 when the market collapsed. Many moved into the safety of the treasury securities G-fund. Many also stopped investing in the stock-indexed C, S and I funds. While they missed out on the big returns of the record bull market many feel vindicated now that the “correction” of more than 30 percent so far has happened.

So should you stay or should you go? That’s what we’re going to talk about today with benefits expert Tammy Flanagan, my guest on our Your Turn radio show. Tammy has been there, done that, and has the answers to some questions you probably didn’t know you had.