Micah Shilanski (00:00)
Welcome to another amazing episode of the Plan Your Federal Retirement podcast. I’m your co-host, Micah Shilanski and man, we are wrapping up this year 2025 and a lot has happened this last 12 months in the federal employee space. Man, we went from the beginning of the year, of course, last year there was a presidential election, there’s a new administration coming in.

There’s the fork in the road. There was the deferred retirement. There’s all of these things that were happening. There was a massive tax law change in the middle of this. A lot of federal employees thought their benefits were going to be gone. We’re going to be cut. We’re going to be massively changed. And the end, was a big nothing, because nothing really changed negative in your benefits, which is fantastic. You have such a great benefit set. But with all of the changes, all of the things that come up, it really makes one thing really, really clear, is that you have to be

proactive in your retirement planning. Being the flea on the end of the tail at the end of the dog getting wept around all over the place is not a great place to be. But you being proactive in these things makes a massive difference. So I want to jump in and chat about that. And that’s why I have a great guest on our podcast today to go through this. None other than my father, Floyd Shilanski. Papa San, how’s it going?

Floyd Shilanski (01:13)
You know Micah, I appreciate you inviting me in. And it’s always interesting to think about next year, what’s going to happen, what’s going to change. And so many things I’ve done on podcasts is dealing with the social security benefits and the things that are changing there. So I’d love just to talk about the tax planning for all the Feds as we get ready to go into the 2000, I think, I to say 2025, 2026 timeframe.

Micah Shilanski (01:44)
Yeah, so let’s kind of talk about that. Let’s get our wrap up that we have on this year. Now, you have 11, 12 and a half months under your belt at this point when you’re listening to the podcast. one of the things to think about is there’s nothing I can do about the past, but there’s a lot I can do about the future. But I want to know what’s taking place. So sometimes people are like, well, hey, there’s nothing to do about the past, therefore it doesn’t matter even looking at it. I didn’t say that. I just said there’s not a lot I can do about the past. But I still need to find out what’s

happened this year. So what’s it been like? We’ve had a roller coaster inside of the markets. There’s been some good, there’s been some bad, there’s been some scary. We’ve had a roller coaster in tax laws, but what are we doing to make changes? So what are we working on our clients with right now that if you are not working with a financial professional who’s doing this, you need to find one who is. And if you’re doing this on own, then you absolutely need to be doing these things. But number one is cashflow. Where was your spending at for this year?

Right, and again, I don’t want a detailed budget report. I just want to know approximately how much month did you spend? Were you on track or off track? What changes need to take place in 2026? I also want to know tax wise, where are you at from a tax projection standpoint with this one big, beautiful bill act that’s passed? How is that going to affect your tax planning? Now, we did a lot of changes with clients. We talked about this on previous podcasts of things that we’re doing differently with clients the last six months of the year.

to take advantage of the one big, beautiful bill and some of those tax law changes. Well, being in December, you might’ve missed that, but that means maybe we could set it up for 2026. What other things should our listeners be looking at as a year-end recap pops?

Floyd Shilanski (03:19)
You know, they get ready to go into the next year, as you just mentioned, know, cashflow is just, just huge. Just making sure they’ve got that kind of under control. And then are they, how long they going to work? Are they going to continue working for the next 12 months or are they going to stage out and get ready to retire? And those are the things that I’m talking to people about today. A lot of clients that, Hey Floyd, know, 12-31, I’m done. What’s next? And I’m going, are you really done? Are we really going to work?

And there’s been a ping pong table back and forth. I’m not going to work. I am going to work. I’m not going to work. I am going to work. If you’re really done with the feds, plotting that exit strategy is important. And if you’re going to continue to work for the feds, how long are you going to stay all for 26 or are we going to phase that out over the next year? Each of these stages affect your cash flow and making sure that you are prepared, ready to exit if that’s what you’re going to do or work.

I’ve got one client, he’s a scientist and he’s been known that back and forth, back and forth, back and forth. And he’s finally said 1231, he is done. Now the question for me, the question I keep asking him, what does done mean to him? Because it’s to get back on the cashflow issue.

Micah Shilanski (04:31)
Yeah, you know, and I’m to push back on your pops a little bit on what you said is it’s not if you’re going to retire this next year, you need to exit plan. You need an exit plan period in descendants because at some point in time you’re going to exit by choice or by not. And here’s what I want to tell you. Working with clients and specializing in the federal space for down here 20 years is that my clients that know what their options are, my clients that take advantage of the benefits they have when a decision is forced upon them.

It’s a much easier decision for them to make and it is much easier for them to go through it. My clients that weren’t being as proactive as that, these are really tough things. So I don’t want you guys to make this a New Year’s resolution because those never get done, but I do want to kind of as a solid commitment go into this next year. What are things that we need to do? So let’s talk about 2026 and some changes. Number one, there’s increased contributions that you potentially can make into your retirement accounts. Remember as well, if you’re between that 60 and 63, there’s that

extra catch up you can put in your TSP account. Make sure you’re sucking that extra money away. Now, sometimes pops, people will ask me, does it really matter if I’m going to retire in the next five years or two years or whatever in a short time period? If I put an extra thousand dollars a month in the TSP or an extra thousand bucks a year in the TSP, does it really matter? It’s not really going to grow that much. And that’s a really good question. But I’m going to push back a little bit on our listeners thinking that and saying that’s the wrong way to look at it. Because when you put more money in the TSP,

right before retirement, my main thought isn’t, my gosh, the tax deduction. My main thought isn’t, great, it’s gonna grow by X percentage return. My main thought is, great, that’s less money for you to spend. I wanna get you closer to living on retirement dollars. That’s the secret to successful retirement. Live on retirement dollars sooner. And then make sure your financial plan can generate those retirement dollars is that close second.

So sometimes it’s increasing our retirement contributions because it forces us to live on a little bit less. And maybe that’s how much we’re going to have in retirement time.

Floyd Shilanski (06:27)
You know, like I agree 200 % with that one. So many times we see clients or we talk to clients and they say, well, you know, when I retire, I’m going to have 30 % less income. So what do I do? And for the 40 years, 50 years I’ve been doing this, I haven’t had one retiree that wants less. If they’re getting $10,000 a month, whether, you know, living today, they, they want $10,000 a month in retirement. So structuring that to know where those funds are going to come from, whether it’s the pension plan.

TSP drawdown or social security, how do we keep that maintain the same income as we go into retirement? Because you haven’t changed your spending. And I’m always amazed at people that tell me, you know, when I retire, I’m going to move, I’m going to relocate. It’s going to cost me less. I don’t know about you, but I haven’t seen that happen much at all. What I see clients do actually is spend more as they move into the retirement side.

Micah Shilanski (07:21)
That’s a lot more of a reality is spending more into retirement. That’s a hundred percent the case, especially because every day is a weekend. Like when do we spend more money? And when every day is a weekend, how do those things work? So these are important things that we need to be focused on. So you have your cashflow, have increasing retirement savings, tax projections. Like in December, this is something like I mentioned, we’re doing for our clients. We actually did it in October, November. I want to know how you’re sitting for this year. I don’t like unexpected surprises from the IRS and neither do my clients. So we’re gonna…

make sure we’re looking at that pretty heavily to make sure that we’re on track for taxes for this next year. ⁓ Pops, the other thing I want to do is really look at your benefit set and maybe put it in the calendar. know you kind of, you know, might be based on your list, you might have missed kind of that open season window when it had came out, but saying, hey, are you really happy with your current benefit set? Does it make sense to change your health insurance? I know very few federal employees do, but I really like those HSAs, those health savings accounts and stocking a little bit of extra money.

Maybe you didn’t make that change for this next year. Why don’t you put it your calendar right now for November of 2026? So look at making the change and then look at this year and say, hey, how, what was your medical bills look like? How much did you really spend? Where did you really go, et cetera? Maybe that HSA, a high deductible healthcare plan makes some sense for you.

Floyd Shilanski (08:35)
such a great conversation because so many people think the HSA, that’s all it is, is just for the savings account for what I’m going to spend for my healthcare. But it’s an added benefit that they can actually take with them when they retire. And they forget about that. And we can put up what another what another three or $4,000 a year into that HSA to make sure that they got extra money when they make this transition to retirement.

Micah Shilanski (09:00)
Well more than that, like $6,000 $8,000 and change inside of the account. So you can put a decent amount away depending on your age, depending on your family into these accounts, which is beautiful.

Floyd Shilanski (09:10)
And the beauty, if you’re healthy, that money you can just be rolled over. It doesn’t have to be actually spent on the healthcare side of it. So it’s an extra savings plan that we can put away for the future.

Micah Shilanski (09:20)
Yeah. Other things that I’m going to look at this year pops as we’re getting through clients is, especially as they get into January, is going to be looking at beneficiary reviews. This is another really good thing to do is just saying, Hey, are all of our accounts updated? We know the TSP. I don’t know of any recent things, but in the past they have lost beneficiaries. There was another bank I was working with the client. They had lost the beneficiary information that the client had on record. So every couple of years, I love to pull out a beneficiary report. That’s one of the things we’re going to be doing with our clients this coming year is

pulling all their beneficiaries, reviewing everything, saying, is everything accurate with what we’re seeing based on your investment accounts, your TSP, your bank accounts? Who’s getting the money? Now, really important when we do this is I don’t just pull beneficiaries and say, hey, you got three kids, each of them getting a third. I say, hey, you have $3 million in net worth, right, between your TSP, your house, your bank accounts, et cetera. That means little Timmy’s getting $1 million. Are you OK with him getting a million bucks?

And it’s so funny that because sometimes my clients are like, well, I’m fine with everyone getting a third. And I say, hey, Timmy’s going to get a million dollars. Like, whoa, whoa, whoa, whoa, whoa, Timmy shouldn’t get a million dollars. I’m like, well, that’s kind of a third, right? But we think in percentages, we don’t really translate that to dollars. So whenever we’re thinking beneficiaries, we need to put in a dollar amount and see if it’s the right amount for them.

Floyd Shilanski (10:32)
You know, Micah, when you think about also on the beneficiary side, it is looking at the when they’re going to receive that, right? And if the child like, you know, Timmy has a problem or Timmy, you’re worried about Timmy or do anything to structure things to minimize how soon he gets those funds, how that can be structured. And on the beneficiary side, on the social security side, looking at making sure we get the maximum benefits to the kids if they’re going to be structured to get those.

I mean, that’s very, very important. And I think sitting down with your advisor and going through the estate planning side of it, going through the beneficiary designation on the life insurance, on the TSP, on the retirement plans, just crucial that we do that early on Q1, especially Q1, Q2 of ⁓ every year.

Micah Shilanski (11:21)
100%. Yes, so important that we’re starting to look at these things. So there’s a lot of other things that we’re going to get into as we work with our clients this next year. Keeping on track for retirement, reviewing their beneficiaries, maybe talking a little bit about estate planning updates for this year. But the important part is having a plan. And that’s what we want to talk about this December is as we’re looking at this this next year, what plan do you need to have going forward and get it scheduled on the calendar? If work with a great advisor, they probably already have a value add schedule that they would when they want to meet with you, when they want to review certain things.

We like to review our entire financial plan every two years with clients, but what’s your system to do that? And don’t wait till next year to figure it out. This is the time that we need to be reviewing this.

Floyd Shilanski (12:00)
⁓ 100%. And it’s easy to kick that can down the road. It’s easy to think about, I get around to it. I’ll get around to it. And one of the beauty things about working with a good advisor is structuring things out for a one, two, three, four year plan as we go. So those Feds that are three years out, now’s the time to be making that transition, not only from the estate planning, but from the cashflow side, not only from the contribution side, from the tax side, analyzing what’s going to happen in the next one year, the next two years, the next three years.

because we’re always waiting to get around to it. Well, now’s the time to really get around to it as we go into this December timeframe. A lot of times you’ve got families coming together for the holidays. It’s great to have these conversations about retirement and relocating. Great to have these conversations about tax planning and estate planning because families are going to be together.

Micah Shilanski (12:49)
Well, Pops’ podcast is all about action items. We’ve talked about a lot of great things for people to do. And again, this is really focused on taking action on the key things that you need to do, which really at the end of the day and taking action on these key things is looking at what our plan for this next year is going to be getting out on the calendar, booking it on the calendar to make sure you get these things done.

Floyd Shilanski (13:10)
I agree 200 % and then you get on the planning side or taking action again. If you haven’t done the estate plan and if you haven’t talked to the kids, if you haven’t got those things in place and it’s Christmas time and people are coming together, what a phenomenal opportunity to say, hey, let’s have this conversation. How are we going to do the estate plan? Who’s going to get what? How they’re going to do that? What are the things that they need to be talking about as a family?

Micah Shilanski (13:35)
⁓ Yeah, 100%. Well, Pops, as always, always enjoy doing a podcast with you. Thank you so much for taking the time to all of our listeners. Till next time, happy planning. Happy Planning.