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#97 How to NOT Go Back to Work in Retirement, 3 Things You Need To Know

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Listen to the Full Episode:

Are you ready to retire without looking back?

Let’s discuss essential strategies for retirees to ensure they can enjoy a fulfilling retirement without the need to return to work. 

Understanding FERS benefits is only the starting point. But do you know how important it is to understand your financial planning? Should you apply for Social Security earlier or later? Are you aware of tax implications in retirement?

Learn how to be financially ready for retirement. Micah and Tammy cover estate planning, retirement income, investments, and tax planning. And, of course, how to manage cash flow during retirement.

Listen to the full episode to find your answers and get actionable insights and practical advice for successfully navigating the complexities of retirement planning.

What We Cover:

  • How to get financially ready for retirement 
    • – Creating a Financial Plan
      • Estate Planning,  Risk Management, Retirement Income, Investments, Tax Planning, Cash Flow
  • Understanding and making the best of your FERS Benefits
    • FERS,  COLA, Insurance
  • Getting Emotionally Ready

Action Items:

  1. Review your FEHB – put a date for Nov to review it
  2. William Bridgets – Stages – book on changes in life 
  3. Download  The 7 Classic Retirement Mistakes Federal Employees Make –

Resources for this Episode:

Ideas Worth Sharing:

If you just understand them, but you don't do anything about your benefits – it's not worth understanding. You got to understand your benefits and take action to get the most out of them. – Micah Shilanski Share on X

I always tell people you gotta be financially prepared, but you have to be mentally ready for this transition. – Tammy Flanagan Share on X

I think federal employees are very fortunate to have this type of a rounded retirement system that has two streams of lifetime income. – Tammy Flanagan Share on X

Enjoy the show? Use the Links Below to Subscribe:



Micah Shilanski 00:18
Welcome to the plan your federal retirement live podcast. I’m your co host Micah Shilanski.
Getting to say my name is Micah Shilanski, and live with me is Tammy Flanagan. Tammy, how’s
it going?

Tammy Flanagan 00:29
I’m doing great, Micah. Good to be here and I’m excited. We have a live show today. We always
love these live broadcasts where we get to interact with our listeners and answer questions and
provide hopefully some useful information for everyone today.

Micah Shilanski 00:43
I was thinking about this, Tammy, we’re kind of getting ready for it. I would definitely say
probably our favorite segment from wrong would be like a live in person walk through the seats
is always absolutely fantastic because that’s the one that we get to see people we get to
interact with them and we love it and then second up with that one is gonna be like the live
podcasts, webinars, etc. And then just the normal podcasts which are great because I love
jammin with you but the interaction with people that that’s fantastic.

Tammy Flanagan 01:08
I know that’s really what we’re here to do right interact with people to help them to answer
your questions. So we’re happy to do that. We’re excited to be here. I really am. I love I love
this. Like you said the live audience has so much energy and this is kind of that same feel so
we don’t have to travel anywhere.

Micah Shilanski 01:27
That is really nice.

Tammy Flanagan 01:28
We couldn’t be doing it otherwise. Right Micah?

Micah Shilanski 01:32
Every week flying to each other that would that be a lot of travel time so yeah, probably not.

Tammy Flanagan 01:37
We’ll be like Taylor Swift trying to get to the Super Bowl.

Micah Shilanski 01:40
There you go. There you go. So we wanted to kick this off a little bit early because our listeners
who provide a lot of great questions and we’re not going to be able to get to them all. So we’re
gonna have a plan for how to how to answer some questions after the pod as well. But Tammy,
we wanted to jump into this for just a few minutes and kind of go through some of the
questions first, is that okay,

Tammy Flanagan 01:58
Yeah, we excell at questions. Now let’s see if we can do the answers.

Micah Shilanski 02:05
Fair enough. All right. We have a question that’s come in from Julius and he says if I retired
from the federal government age 62, with a non reduced retirement entitlement, should I wait
to apply for Social Security since my full Social Security retirement age is 66. I was born in 62
and retirement, I will receive retirement check from the military. They’re getting it now and the
VA, they’re also receiving now and a FERS Social Security, TSP count in there and external
investments at Schwab and fidelity. And the equity and primary residences are his only debt.
So Tammy, what are your thoughts on that? This is really comes down to does it make sense to
turn on Social Security sooner or later?

Tammy Flanagan 02:45
Well, first of all, I have to say, you know, gone are the good old days of a single benefit
retirement I heard about six different streams of income with this person, so it’s I think it’s a
matter of just balancing everything, because you’re going to have certain things that turn on

matter of just balancing everything, because you’re going to have certain things that turn on
right away, like your first basic benefit that’s going to be coming, the military benefits, the VA
benefits, those are coming. So add those up, see where you are financially and then look at the
balancing act. Between claiming Social Security now, meaning you’ll take less out of your
investments versus delaying Social Security to get a bigger check later, but that might mean
you have to take more out of your investments now to live comfortably. So what do you think
about that, Micah?

Micah Shilanski 03:34
You’re spot on right the way I like to look at it is from your full retirement age to age 70. Right,
Social Security grows by guaranteed 8% a year. That’s a guaranteed 8% increase. That’s pretty
fantastic. Now it’s a little it’s still a good rate, but now interest rates have crept up a lot more
right. So it’s not as good as it used to be when interest rates were zero. And Social security was
8%. It made it even better now interest rates are five but social media still paying eight which is
pretty spectacular. So that’s how I like to wait with clients and then the other piece to throw in
there Social Security is a another stream of taxable income. So what effect is that going to
have on your taxes? Tammy with several of our clients, we like to delay social security because
we’re doing really big Roth conversions right now. And I don’t want that extra 25-30 grand of
taxable income coming in. It’s hitting with Medicare limits restricts how much we can do Roth
conversions, all those other things can come into play.

Tammy Flanagan 04:27
Yeah, one last thing on that one is that if you claim your Social Security benefit early, you’re
also claiming your spousal Survivor Benefit early too, because you’re going to have an impact
on your surviving spouse if you’re married. So be careful about that because you might not be
so concerned but what benefits are left behind when you’re gone? Especially if you’re married
to a spouse, and so delaying your Social Security can really do wonders for increasing that
spousal benefit.

Micah Shilanski 04:55
I love it. All right, Tammy. We have another one that came in from Jennifer and this is one you
said you wanted to answer. Deferred retirement, postal employee, I’m going to resign at 58
with 20 years of service, then apply for my pension at 60, I’m FERS and I’ve always been used
at FEHB will able to have FEHB into retirement and how?

Tammy Flanagan 05:16
Good question, very good question. This is what we call MRA plus 10. That means that she has
at her minimum retirement age is actually beyond. She said she’s 58 and she’s got 20 years of
service, so she can retire today and collect the immediate benefit. But I’m sure she doesn’t
want to do that because with only 20 years of service, not guardi. She’s going to have to take a
pretty significant penalty at age 58 of about 20%. So what she’s asking is, what if I delay or
postpone my application? So I’m gonna leave the Postal Service. There’s no doubt about that.
I’m leaving whether I take my immediate retirement or whether I postpone it but she says I’m

gonna postpone it till I’m 60 Because at 60 the service requirement for an unreduced benefit is
only 20 years. So all she has to do is wait that two years to collect that unreduced benefit. So
the question has to do with health insurance. What do I do between 58 and 60? You know, just
don’t get sick. Is that the answer?

Micah Shilanski 06:19
It’s good plan, like that don’t get sick.

Tammy Flanagan 06:23
Like a little risky. It’s probably riskier than the stock market. So, so what you may want to do is
either go on temporary coverage, which is kind of expensive because you’re paying the
employer and the employee share and that only lasts for 18 months. So what do you do for the
next six months? Or if you’re fortunate to be married to a spouse who has insurance you can
jump onto their selfless one or family plan if that’s an option for you. And then the other option
is get a job at Starbucks. I heard they offer health insurance there.

Micah Shilanski 06:54
Yeah. You know, those are all good things to team I’m gonna pull on that thread just a little bit.
One of the comments that you said was she’s going to be going a postpone retirement not a
deferred. So Jennifer, important language here. These are different things. So making sure your
postpone is really important.

Tammy Flanagan 07:08
I was just gonna say another thing you really, really, really, really important on these
postponed retirements because I’ve seen people get really burnt on this. Read that application
so carefully when it comes down to putting that date of commencement the commencement
date or that retirement, if it’s the month before you turn 60 versus a month after you turn 60
Whether it’s a month before you turn 62 or the month after, read that carefully based on the
way that you’re collecting that benefit. Whether you’re postponing it to avoid the reduction at
60 Like Jennifer is doing or whether you’re waiting all the way till 62 Because maybe you didn’t
have 20 years of service like she did. You’ve got to make that effective the first day of the
month that you turn 62 If you wait till the month after you forfeit your reinstatement of your

Micah Shilanski 07:57
Let’s just be really clear what Tammy said: if you wait till the month after – you lose your health
insurance statement, I hear that correctly?

Tammy Flanagan 08:44
That is called deffered retirement, that’s why you were so serious when you said deffered
versus posponed. Sounds the same in the English dictionary, but it’s not the same when it
comes to OPM. I think it’s not well written with explanation, so it’s very confusing. If I had to
read it 10 times and I still didn’t fully understand it till I saw it effective on some of these
retirement.If you have to call OPM call them 7 oclock in the morning ET, but call them and ask
them what date they put they out there so that you don’t lose out on that insurance, don’t do
that hoping for the best becouse it might be wrong.

Micah Shilanski 08:45
Yes, there’s no undo button on that one. Okay, one more quick question that came in from
Manny want to make sure answer that about the special retirement supplement and let’s jump
into the core of the content we have to be chatting about today. So Manny writes in says he’s
53 years young with 30 years of service his goal is to retire at his MRA which is 57. A lot a little
over 33 years of service, most likely by New Year’s December 31 2027. He says Will my SRS be
enough to help pay for my health insurance until I’m 62 years old? And could my rental income
have offset or affect my SRS? So the SRS is a special retirement supplement, right? That’s the
first supplement that comes in. So mainly the calculation on that don’t know what your income
is. So we can’t calculate off the top of my head what your benefit is going to be. The formula for
that is you take the years of service you have not uniform service, generally speaking only
civilian service divided by 40 times your age 60 to Social Security benefit. That’s going to get
you a really close swag to how much that pension is going to be a special retirement
supplement is going to be the other question you have is how is it going to be reduced? Is it
going to be reduced by my rental income? The special retirement supplement is just like taking
Social Security early where there’s an earnings limitation. I think the earnings limitation this
year I’m not looking at my cheat sheet is around $20,000 a year but have earned income.
Earned income means a job that you have rental income you earn it because you got to work
for that I understand that but it’s not considered earned income that will not affect it. Roth
conversions don’t affected retirement pensions don’t affect it. IRA distributions, TSP
distributions, none of those affect that special retirement supplement, which is fantastic.

Tammy Flanagan 10:25
Yep, that’s that’s an interesting one there because he’s only 53 and has almost 30 years of
service. Can you imagine when he’s 57? Yeah, hopefully he’s been saving in his thrift all those
years. That’s somebody who possibly can retire quite comfortably at a pretty young age.

Micah Shilanski 10:41
That’s pretty awesome. Well, Tammy, let’s jump into kind of the core of our podcast today,
which is how do you retire and not go back to work? Right? What are the three big things that
you need to know to make sure you can stay successfully retire and well, there’s a whole lot of
sub things to think about. There’s three kind of general points to go for go through and I would
say kind of the first one is you got to be financially ready.

Tammy Flanagan 11:07
Absolutely. Yeah. Because I’ve seen people do this, you know, they retire and they think, Hey, I
got all this time on my hands. We’ve been living in this old house all these years. Let’s sell it
and build a brand new big house. Right and realize there’s a lot of expenses that go along with
that. You know, I’ve had friends who planned on downsizing, but they actually they didn’t they
upsize or they went to a more expensive area to live near retirement communities can be quite
pricey. So you got to build that into your financial plan. Because some of those folks that I’m
talking about did go back to work, not because they were bored but because they needed the

Micah Shilanski 11:46
And so in our world, there’s kind of five areas of financial planning that you need to dive into
right you work with us you work with another financial professional five areas you’re really
really important. Estate planning, will trust health care directive, durable power of attorney
beneficiary designations, a lot of stuff in there, risk management, my fancy way of saying
insurance, life, health, disability, retirement income, how much is your pension going to be?
How much do you want to spend in retirement? Where’s that money going to come from?
Investments, so many people focus on investments too soon in the planning process. They
want to do it first. You don’t you need a plan to know where you’re gonna go before we start
breaking up the tool chest right. So we need to know these things first, and then very last is
going to be tax planning. Taxes is probably the largest expense you will have in retirement. You
guys have phenomenal insurance. So medical bills probably aren’t your largest expense is
going to be the IRS. It’s going to be taxes and we got to have a plan to reduce that and this can
be this can be a major issue for people Tammy. No, I haven’t seen taxes be the sole reason
someone has to go back to work, but I’ve absolutely seen taxes be the reason they couldn’t
spend what they wanted to spend in retirement because they didn’t have forward tax planning.

Tammy Flanagan 12:58
You’re not the only financial planner I’ve heard say this. I teach a lot of classes with a lot of
different planners, and they always emphasize the fact that the one thing that’s commonly
overlooked in retirement planning is tax planning. Because we forget about the fact that hey,
we’ve saved all this money, we’ve got all these wonderful benefits, but that’s all taxable
income. Right? And you know, we put it aside pre tax, we don’t want to pay more tax on it
when we take it out than whenever we say putting it in. So how do you do that? How do you
plan for tax efficiency and retirement?

Micah Shilanski 13:32
Well, one of the first things that I like to do again, taxes is the last thing that we focus on very
intentionally, right. While it’s really important, we got to know what your plan is. We got to
know what you want to do. We got to know what tools we have in the tool chest first before we
create our tax plan, but Tammy, a really big part of it is our 10 year retirement timeline. Now
some people are like I want a 50 year timeline, you know, the 50 years nobody pays attention
to the numbers. At the end of the day. It’s just too crazy. The next 10 years, where are you
going to be how much income do you want to have coming in cash flow is king right? How

much net income do you want to have coming in? And where is that coming from? What I want
to know is what is our fixed retirement? Okay, that’s going to be your pension that’s going to be
so secured. Now we can choose when security comes on or not. But your pension is fixed. It’s
going to be what it’s going to be and it’s going to be taxable. Okay great. What’s our variable
retirement income? And what’s that? That’s your TSP, that’s your investment accounts, etc.
These are ones that I can pull more levers with in order to help reduce your taxes. But step one
is what is that 10 year plan? How much do I want to have? And where’s that money coming
from for the next 10 years?

Tammy Flanagan 14:40
It’s kind of fair to say that if you’re living on your net income that you’re bringing home in your
paycheck, that’s probably a good starting point is to try to see if you’re going to be able to have
that same net income in retirement without depleting your savings too quickly. That might be
one of the first kind of temperature gauges to see if you’re really in the ready stage of

Micah Shilanski 15:02
I think that’s 100% the case. Now this all comes back to cash flow is king, right? Cash flow is
where that money is going to come from. How much are you net spending today? How much is
your net income going to be? Tammy, like the third question we ask in every single meeting we
have on our agenda is cash flow. How are you doing in checking and savings and what big
future expenses you have coming up? I don’t care if you’ve been a client for one day or 20
years, we’re asking that question because that’s how important this conversation is. Because it
really dictates so much. Is that fair to say?

Tammy Flanagan 15:34
Oh absolutely. I think so too. And I think part of that too, is getting kind of a handle on
managing the money that you are investing, because I see a lot of like foreigners who before
they even retire they moved everything to the G fund in their trip preparing to retire. They’re
only 55 years old. So right you know, how do you handle that?

Micah Shilanski 15:56
Well, that’s I get this question a lot, right? They’re like, Hey, Micah, you know, I’m getting ready
to retire. I can’t take any more risk. So I’m going to move everything out of the market and
stick it in the G fund because at least they can’t go down in value. Well, those are true
statements right is you’re worried about your wrist you’re worried about the markets moving up
and down because they will right there’s only two guarantees we make in the stock market.
Number one, the day you invest tomorrow the market will go down and number two, the day
you retire tomorrow the market will go down right? That’s it. Everything else is a little bit of a
risk. But Tammy, the risk needs to be measured in time. And when do we need to access this

and you know that that’s right, so from the TSP, and someone says, Look, I got a million dollars
in my tsp. I’m gonna retire tomorrow I’m going to stick to the G fund. That’s okay, are you going
to spend all of your TSP in the next three to five years?

Tammy Flanagan 16:44
Let’s hope not .

Micah Shilanski 16:45
Yeah, let’s hope not right. No, I wouldn’t do that. Okay, well, maybe we need a portion of your
TSP or portion of your investments inside of the G fund maybe cash or money markets, bonds,
CDs outside of the TSP, sure. But it’s probably not the entire thing because you’re retiring at 55.
You got another 40 years ahead of you that we have to plan for which is almost the same as
your entire working for your right.

Tammy Flanagan 17:07
Yep has now improved on this. Well, you’re not necessarily adding more money into it new
money, but you’re still wanting that balance to grow because it has to grow if you’re going to
start taking out more money.

Micah Shilanski 17:13
That’s right.

Tammy Flanagan 17:14
So there is no trick to that there’s a little bit of a method you have to employ

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Micah Shilanski 18:19
And Tammy, we talk about this in our seven classic mistakes that federal employees make
when they retire right. So I’m going to ask we put this together for all of our listeners are going
to ask our team to kind of push that out. We’ll also do it again at the end of the podcast. If you
haven’t gone through that go through that because these are seven things that Tammy and I
see federal employees make again and again and we want to help you avoid them.

Tammy Flanagan 18:39

Micah Shilanski 18:40
Well, that was all under just one category. By the way that was all just getting financially ready
to retire. Right.

Tammy Flanagan 18:45
Well, that’s a big part of it.

Micah Shilanski 18:47
Huge part huge part right. The second part is understanding and making the most out of your
FERS benefits and I think Tammy, that was really highlighted and just a couple of the questions
that we were answering at the top of this pod, which was really about hey, you got to know how
these things work. You have to be your own expert in these benefits to make sure you’re
getting the most out of.

Tammy Flanagan 19:07
That’s right. Yeah, you have your benefits there throughout your career. And sometimes we
don’t really pay attention to them too much until we’re ready to walk out the door when we
begin to realize, hey, we have a pension. I’ve met several people over the years who only
thought they had tsp they didn’t even know that there was a government pension piece of their
retirement. Yeah, that little bit of money that goes into FERS for people who were hired before
2013 It’s not much it’s 0.8%. Now those of you who might have been hired more recently, you
do notice that FERS contribution is it went up for those people hired later, but um, that’s paying
for a lifetime stream of income. It may not be enough to live on by itself. But you add that to
the social security piece and then to your savings and investments. You’ve got a pretty darn
nice retirement. I know a lot of people who are retiring comfortably on this three tiered system.

Micah Shilanski 20:03
It really is a good package, right especially I get to look at it from the outside in. I don’t have
health insurance through the federal government, FEHB I don’t have your guys’s pension so I
get to look on the outside with a little bit of envy on kind of how it’s set up. But we also got to
see the limitations of it so you can plan on it. So we’re not ragging on this, but it’s important to
see and I think Tammy, one of the limitations in the pension is going to be the cola or the diet
cola, right. Number one, it’s less Cola, and number two, it’s delayed. So how does that fit into
the system?

Tammy Flanagan 20:36
Well, I go back to the late Senator Stevens who was the father of FERS, we called him back in
the 80s I think back on as well. You know, Senator Stevens was really a friend of federal
employees like he was fighting for FERS to be comparable on every level with CSRS even
though it had to be coming from three different streams of income, but there were members of
Congress who weren’t so friendly to federal employees and they wanted things to be much
more streamlined, much more efficient, less generous, little less costly. So one of the things
that they had to compromise on was the COLA. But if you think back and you look at all the
things, how FERS works, I really think there’s several things about FERS that almost makes it
sound like Congress wanted us to work towards 62. One of them is the fact that the cost of
living adjustment doesn’t start until you’re 62 with the exception of disability retirements,
survivor benefits, and some of our special groups like law enforcement, firefighters, people who
have to retire at a younger age, they won’t get immediate COLAs. The other thing that I think
Congress was thinking about us work until 62 was that if you retire sooner than 62 that benefits
based on a 1% calculation factor. If you wait till one day after you turn 62 and retire, if you
have at least 20 years of service, you’re gonna get 1.1% That’s a 10% increase. Yeah. We have
to work an extra six months or a year. Hey, it’s worth it. I’ve talked many people walk the
legends sticking around that little extra time just to get that 10% bonus. And then the third
thing I think that kind of makes me think like FERS is really designed for someone to stay till 62
Is that it dovetails with Social Security. Now, yes, we have this special retirement supplement.
It’s kind of meant to take the place of Social Security, but it’s only based on your civilian
service. It doesn’t get a COLA. It’s kind of stagnant for those five years between 57 and 62 or a
Social Security’s based on your whole lifetime of finance covered wages, and it gets cost of
living adjustments every year and they’re not diet COLAs. So you know, for those people who
prior to age 62 really can’t afford to retire comfortably. Wait a couple of more years, you’ll see
a major difference between your retirement 57 And five years later what that’s going to look
like when you’re 62. Now there are some people who can certainly afford to retire younger,
they’ve done a fabulous job saving so I’m not saying everybody needs to wait. But I think for
some people it might pay to wait. It might really help them hedge against that risk of longevity.

Micah Shilanski 23:17
And this is where I see people get in trouble, Tammy, it’s because they start comparing their
retirement to Bob and Sue down the street. Right? And say, well, Sue is able to do this,
therefore, I should be able to do the same thing. Look, there’s a lot of other factors that go into
this besides your age and length of service. And you know, I was working with one client and
she was a little frustrated because another client because all of our clients knew each other. It’s
kind of put it that way, right. But another client was retiring sooner than she was able to and
she’s like, What the heck, we’ve both worked for the federal government for the same period of

time. It’s like okay, what your retirements are different one, you have different spending levels,
you know what you’re comfortable spending level, you know, number two, you have different
savings levels, right one person is willing to save more than the other person because they’re
spending less. And so you can’t look at somebody’s else’s scenario from the outside and say,
Oh, they got 30 years, I have 30 years we can both retire and be fine. These are different and
sometimes for our particular life cases, and this isn’t a good versus bad thing. It’s a Where are
you at? Where do you want to be? And how do we get you there? And I’m not interested in
comparing you to the stock market to bob and sue to Dave to whoever the federal employee,
you know, conventions are going on. You know, I want to see with you, where are you going for
your retirement, and how do you get there? So quit comparing yourself to things that don’t
matter. And really compare yourself to are you on track for your retirement? Yep. And

Tammy Flanagan 24:42
I think part of the challenge is understanding how to come up with a net income because we
can go to our agency and get a retirement estimate. But that estimate may not have
everything we need on it may not show that we have to pay a state income tax that may very
much underestimate the federal income tax. So you really have to think beyond just those tools
that we have to really put them all three together. Figure out what is my tax going to look like
in retirement. What do I pay for health insurance, life insurance and the fact that in retirement,
we pay those with after tax dollars, not technology. So we really got to understand what the net
is going to look like in retirement. We know what it looks like while we’re working because we
get a paycheck every two weeks. But now we’re going to start piecing together that net income
that we’re gonna happen retirement do it do it intentionally so that you really understand when
the insurance and the tax withholdings

Micah Shilanski 25:36
You know, Tammy, I want to pick on the insurance thing just a little bit because you and I we
get on our soapbox on this one. Most federal employees in my humble opinion Tammy I want
your word of this, you end to this just yet and you don’t want to be but in my opinion, are
overpaying for their health insurance because they’re in one plan. It is a good plan. I’m not
knocking the plan. Yeah, it’s a good plan. But there’s so many bells and whistles they’re paying
for that they don’t actually need and we can make a tweak to a lower level of insurance and I
can already feel people’s anxiety. Going up right like Ah, don’t touch my insurance. But we can
go to a lower level plan that has some less bells and whistles that you’re not using anyways,
and potentially save 1000s of dollars a year on health insurance. And so these are things we
really got to look at.

Tammy Flanagan 26:21
I can go one step further than that Micah, I can show you a plan that’s better than that
expensive plan. Because the reason why that expensive plan is so expensive is because of
who’s in it. Yes, it has a lot of older retirees in it who are in the hospital more often than young,
healthy employees. And it also has people in there who didn’t take Medicare when they turn 65.
So it’s really raising the price of some of those high option plans which were so popular 20
years ago. We have huge numbers of federal employees as well as retirees in those high option

plans that really don’t need to be in there. Their standard plans are actually very, very
adequate. Many cases they’re great so don’t go by the name or does high options standard
don’t think good and bad. Your standard can be perfect for your situation. It doesn’t necessarily
have to be that high expensive option would has all the old six people sick people in it. You
want to be in that plan that has a lot of young healthy people or if you are Medicare age and
you take Medicare Part A and B pick a plan that really caters to retirees who have Medicare A
and B because that way that plan is going to be the secondary payer to Medicare and it’s gonna
reduce their expenses tremendously and that that shows up in the premium.

Micah Shilanski 27:40
It really does. So it’s definitely something you have to do. Don’t worry, I’m gonna make this an
action item for you guys later, but put a date right now on your calendar in November to review
the plan. Just review it that’s all I’m asking. I’m not even saying making a change. Right but
review it and let’s look at this and see if there’s a better option. Alright Tammy, we kinda of
went through the first two already right. We talked about generally getting financially ready
having that financial plan we talked about the second one understanding and making the most
out of your FERS benefit yet I do both of those. If you just understand them, but you don’t do
anything about your benefits – it’s not worth understanding. You got to understand your
benefits and take action to get the most out of them. Then this third thing you have to be able
to mentally wrap your head around and when you don’t this is where we see people have
issues in retirement that are financially sound have made good decisions. But this third one can
cause them to go back to work. And as crazy as it sounds. It’s as simple as being emotionally
ready to retire.

Tammy Flanagan 28:39
Absolutely. Yeah, I think it’s a really important underestimated part of retirement planning. I
always tell people you gotta be financially prepared, but you have to be mentally ready for this
transition. Because it is a change. It’s a major life event when you go from a eight to 10 hour
work day, five days a week, 52 weeks out of the year to having the whole oyster in front of you
with your choice of when to get up in the morning. What you’re going to do with your day all
day. And for some people that’s so exciting. And for other people. It’s so scary. Yeah. So you
really have to give yourself some grace and realize that there is going to be a period of time
that you’re going to have to adjust and it may not work the first effort, but you’ve got to make
some type of plan in your head to visualize when you think that life after retirement is really
going to look like and understand that that first year maybe even two years is going to be your
honeymoon phase of retirement where you know you’re cleaning out the closets and you’re
sleeping in till 9am But that’s gonna wear off, especially if you’re a golfer or a fisherman or
something you want to go out and do all of that, you know, every day of the week that gets old
after a while. So once you settle into some type of routine, you might start to realize that’s not
the routine. You want it so you’re a little disenchanted. They go oh my goodness, this is what
retirement is, you know, I got all this time on my hands, right? So you may have to step back
and come up with a different plan, like redirect yourself someplace else. Don’t give up on it. It’s
gonna work out eventually you have to kind of adapt and accept that this is gonna be different
than what it was when we were working every day of the week. So I’m a big proponent on

making sure that you are mentally prepared as much as financially ready. And don’t let
anybody make you feel like you have to retire just because you’re eligible. Yeah, your those
days are long gone, let’s hope but I do hear that they happen on occasion. That’s pretty sad.

Micah Shilanski 29:00
You know, and that’s why Tammy and I, you know, aren’t retired, right? We like what we do and
we like doing these things so we emotionally can’t be ready for it. So we understand that that
challenge that’s going to be there. But the other part of it too is it’s okay to step into retirement
right everyone’s different. I got clients that it’s a light switch, they are done right they’re like
no, I got a plan I got other things I’m going to do and it’s it’s I’m waiting for the day that’s the
only reason I’m here is I need that day. They hit that day they’re off sailing and retirement.
Everything is fantastic because they know what they want to do. They’re excited about that
next chapter and I got people that are really committed to the mission still, right. And they’ve
been in there sure they meet all the eligibility requirements, but they’ve been in here. They like
what they’re doing. They’re making an impact and a difference and they’re not ready to go.
And if those people kind of get forced a little bit more into the retirement, and it happens all of
a sudden, that’s sometimes where we start to see other health issues come up other things
kind of come up in their life which make that a very difficult transition. So everyone’s different.
Know who you are. And husband and wife you can have different answers right?

Tammy Flanagan 31:41
And there’s it’s good to mention that too young think of your spouse Yeah, I’ll always remember
this story that I heard a long time ago and it was true. I think people still do this today. But the
husband was the one retiring. The wife was a stay at home housewife. And so she had the
domain of her home, right? Everything was in order, and she knew where everything was. So
when he retired to not disturb that order, because he knew that he didn’t want to get involved
with that. He when He finished the garage out there, but air conditioning in it. So in the
morning, he’d get up and have breakfast with his wife and then he’d go out in that garage, and
he’d be busy doing something all day long, but then he’d come back in for dinner but he gave
her her space. So if you’re encroaching on someone who’s already retired, give them some
some space as well. You know find something to do part of the day so you’re not 24/7 together
because that can get old with the person you love the most.

Micah Shilanski 32:36
Yeah, you can write what’s your activities together. What’s your activities separate those aren’t
bad thing for you still grow in that healthy, happy marriage. And it takes on a different shape as
you had already did when the kids left the house right? And it is different when you have
grandkids and those things you and I just did a podcast report will air a little bit later. But really
talking about that longevity plan, which is a really important piece to this as well when you’re
getting ready to retire about saying alright, how are we going to live in retirement? Where are
we going to live? When are we going to make some other big life decisions that are out there?
And really where I see my clients that are successful in retirement, they see these things
coming and they address them in advance. That’s the most important key to every single thing
we’re talking about. Step number one, get financially ready, see it in advance, right, what are

things I need to do, you’re not going to account for everything and you don’t have to but vast
majority have to have a plan. Number two, understanding you know and making the best of
your federal benefits. You’re seeing your retirement coming up. You’re knowing what those are
you’re planning in advance, or three getting emotionally ready. You’re seeing in advance again,
you’re thinking about these things. I’m going to be 65 What happens with Medicare, I’m going
to be 70 internal security and we 73 and have RMDs right? You’re seeing these dates in
advance and saying how am I going to deal with them? It makes it so much easier when that
time actually happens. And it’s a smoother transition.

Tammy Flanagan 33:56
It’s definitely doable. I think federal employees are very fortunate to have this type of a a
rounded retirement system that has two streams of lifetime income. And then this wonderful
incentive to save and federal employees have done a fabulous job has saved me I think we’re
pushing close to a trillion dollars in the TSP right now. It’s just not it’s I think I believe it’s the
world’s largest employer sponsored savings plan. So we have done a really fabulous job of
getting employees to think about this ahead of time and plan for that retirement. So now’s the
time that many of you are probably visualizing what that life is going to look like.

Micah Shilanski 34:34
Awesome. Well, Tammy, this podcast is all about taking action. For those of you that have put
some comments in man, really appreciate that. Keep those questions coming. We’re going to
transition to some action items, but we’re going to come up with a plan to make sure that we
are addressing those questions that come up to me I’ll kick it off and I’m gonna say the number
one action already told our listeners what it is put a date on your calendar before you do
anything else in November to review your health insurance plan. That’s the next Open Season
that’s going to come up saying review it, that’s all I’m asking, and then I’m gonna say a little
another Ask pick another option. Don’t do it. You don’t have to do the other option, but you can
alternative option that’s there. So don’t have to look at all of them. You can narrow it down. I’m
sure Tammy and I are going to have podcasts and webinars at that time talking about the
different options, right so you’re gonna have tons of resources, but at least explore it.

Tammy Flanagan 35:20
I think if you are fearful or a little bit hesitant or anxious about retirement, do some research on
it. There’s a wonderful book by William Bridges called transitions in it goes over the stages of
retirement planning and how in really wrapping your mind around what this is going to look
like. What’s it gonna feel like, you know, join some groups of people that are retired and start to
see how they’re spending their days. They don’t come around just have to give it time.

Micah Shilanski 35:47
I love it. Third action item of course is share this out come on. You know I was going to ask for
that. We love it when you share it. We love the great comments and feedback that we get. We’re always striving for improvements. So what do you guys want to see that’s gonna make

your retirement more impactful? Our goal is to have another 1 million federal employees with
their retirement. We can only do that with your help. So thank you guys so much. We always
enjoy doing these. Tammy, thanks so much for joining me. Thanks.

Tammy Flanagan 36:14
It’s been great.

Micah Shilanski 36:15
All right till next time, happy planning!

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