Micah Shilanski (00:00) 

Welcome to the Plan Your Federal Retirement Podcast. I’m your co host, Micah Shilanski and with me, and I’m super excited she’s back, it’s been a way too long of a sabbatical, but we have Tammy, the amazing Tammy Flanagan, I should say.   

Tammy Flanagan (00:13) 

Hey Micah, it’s so great to be back with you and I’m excited to get back and start talking about some of these things that people need to hear as they plan for their future, plan for their retirement. I think it’s gonna be fun.   

Micah Shilanski (00:25) 

Yeah, it’s gonna be great. and like usual, Tammy and I were kind of talking about, you know, you know, pre-pod about saying, all right, what should we be talking about going through seven mistakes? And Tammy is like, all right, you do one, I do one. Well, we have way more than seven. so we’re just gonna call this kind of the top mistakes we see people make, not only in planning retirement, but when they’re actively retired as well. Cause it could also depend on like when you retire, right? Do you retire at your MRA at 57, maybe sooner? Do you retire at 65 or 70? Right.   

So these are things that you could mistakes you can make while you’re planning retirement and mistakes you can make while you’re in retirement. And this is something that we should always keep in mind. Retirement’s not a done thing. It’s not like, okay, great, I planned it. I signed my retirement papers, which I turned them in. There’s no other decisions to make. There’s a lot of things that are gonna be coming at you. And if we see them coming in advance, it makes making the right decisions so much easier.   

Tammy Flanagan (01:16) 

Sure does. Yeah. So it helps to find out ways to avoid the mistakes, right? Or to to find the what you should do, not what you should not do. So that’s what we’re gonna try to make these negatives into positives.   

Micah Shilanski (01:28) 

I love it. All right, Tammy, did you want to kick this off? What’s one of the this isn’t any particular order by the way? These are all just kind of the the the big ones that we see, but what’s one of the top mistakes you see federal employees making?   

Tammy Flanagan (01:39) 

Well, I’m gonna take one that’s coming up pretty soon, and that’s the open season for health care. And also, as we talked about before we got started, there’s some information coming out about OPM wanting to know if we have too many different health plans to choose from. And I think we do in a way, because I find that people tend not to ever change their health plan. They have the same one they had the day they were hired, and it’s the same one they have the day they qualify for Medicare. So I think people are just afraid to change health plans, but sometimes   

Even though the health plan might still be the same, you’re not the same. You were 25 years old, now you might be 45 or 50, or maybe you’re going to be 65 and getting Medicare. And there’s different types of health plans that work better with different stages of your life and different stages of your career. So I do think people need to take a look and make sure not only did their health plan change, or what do they need now at this stage in their life?   

Micah Shilanski (02:34) 

Yeah, and think a lot of the fear is Tammy, if I change my health plan, then I’ll lose all my benefits. Like at the end of the day, like that’s what they’re worried about is they’re gonna have a medical claim and they’re not gonna have things covered.  

Tammy Flanagan (02:45) 

Yep. Or they’ll always say, well, my doctor takes this plan, so I can’t switch. I’m like, well, your doctor probably takes four or five different plans, but you just always always have used that one. But there’s a lot of big name brand networks. You know, there’s United Healthcare, there’s Aetna, there’s Cigna, and there’s Blue Cross. You know, they’ve got lots of different choices to choose from. And all of those are going to be accepted in the majority of places where you go.  

Micah Shilanski (03:09) 

Yeah, and almost all of these plans across the board, right? You gotta look into it, but almost all of these plants across the board are gonna cover any of the major things that are gonna happen. So I I’ve never had, and this is of course just my experience, but I’ve never had a client move a health plan, have something traumatic happen, and it’s like, my gosh, cancer is not covered, heart surgery’s not covered, like I broke a leg, it’s not covered. None of that stuff has ever come up. But what we have found a lot with looking at this Tammy is that they’re generally overpaying.   

their insurance because they’re paying for benefits they don’t need yet or they don’t need any more. And so let’s take a younger employee, you know, single, doesn’t have kids, maybe married but no kids yet and whatnot, you’re super healthy, you’re not worried about these things. Boy, why do we have a low deductible healthcare plan? Right? Like why are we paying for this? Okay, well my guy, I don’t got a lot of money in the bank account. If something happens, I need to pay for it. Okay, I get that. But maybe we need to look at that high deductible account. Maybe we need to change your plan up a little bit where you’re not paying so much for that blue cross blue shield plan.   

Tammy Flanagan (04:08) 

That’s right. And it with a even with a high deductible plan, all your preventative care is still covered at no deductible. So if all you’re doing is getting checkups and routine care, you’re not going to spend much money at all. And any money you do have in that HSA or health savings account can stay there. You don’t have to spend it. It’s going to grow and you’ll have it there for the future when you do need more health care.   

Micah Shilanski (04:31) 

Yeah, 100%. Right. And so looking at your healthcare plan, I’m a huge advocate of high deductible plans. Of course, I’m not going tell everybody to go get that because everyone’s in a different situation. I will tell everyone, take a look at it. If you’re under 65, really take a look at these high deductible healthcare plans. We have helped clients stuff a ton of money into the HSAs, those health savings accounts, which is different than with the health spending accounts, right? That that are out there.   

These are things that you’re saving your money for. And it’s going to be your money as long as it’s for a qualified medical expense in the future. But that money can grow for you 100% tax-free. So I know personally I max fund those every year. I a lot of clients that do that as well. We’re putting money in there because eventually we’re going to have a Medicare claim or medical claim. And maybe it’s just I’m 65 and I need to pay my Medicare premiums. Great. I that,   

Tammy Flanagan (05:16) 

Could use my HSA for   

Micah Shilanski (05:18) 

but now it’s coming out a hundred percent tax-free versus pre-tax.   

Tammy Flanagan (05:22) 

Yeah, absolutely. I’m a big fan as well and I talk about them all the time. But another thing I’ve heard said before we leave the topic of health insurance is that I heard it today on on Facebook. I saw somebody say, well, you gotta take the plan that’s more expensive because you get what you pay for. And I’m like, not exactly. I said sometimes that plan is more expensive because of the people who are in it.   

You know, for take for instance Blue Cross standard option. That’s like the gold standard, right? A lot of people have Blue Cross standard, but it’s gotten so expensive because you look at those retirees who left the government in the 80s that might still be around and in their 90s, and they didn’t take Medicare in many cases. So Blue Cross is paying all of their skilled nursing care. They’re paying all of their prescription drugs and everything. So they have a high experience because of who’s in that plan.   

So you might want to look at other plans that cost a lot less and still cover the same things and maybe more and maybe have less out of pocket expenses. So it’s not always like my dad used to say, you get what you pay for. Sometimes you don’t have to pay as much and you get more.   

Micah Shilanski (06:30) 

Yeah, I mean it works multiple ways, right? I mean, don’t go with the cheapest plan just because, you know, you don’t want to pay for anything. Go for the plan that’s right for you. And yes, that’s overwhelming. There’s a lot of different plans, right? So I what I always tell clients is like, don’t go evaluate all the plans. Here’s a couple to look at. That’s it. Just go look at these couple, right? And generally I’m pushing more to, you know, if they’re closer to 65, hey, what works a little better with Medicare. They’re, you know, under that and pretty good health. I’m looking more high deductible plans with them.  

Just compare one or two. That’s it. But Tammy, if if we make a change, right, we’ll re spent this whole podcast just talking about this. We have so many other mistakes to talk about. So last thing question on this. If they make a change, I think the fear is that I’m gonna make a change to this new healthcare program and now I’m stuck in this program and I could never go back.   

Tammy Flanagan (07:16) 

Well, as we know, every year, the second Monday of November to the second Monday of December, there’s an open season. And you can switch back. You can switch to something totally different. You can do that every year. For a while there, I was I was trying them all out. My poor family had to deal with going from Blue Cross to G E H A to Aetna. And I just wanted to know what they look like. I wanted to make sure they all were good plans, you know, ’cause I do help people understand what their health insurance is like. So I want to make sure I’ve tried it too. So I   

I’ve I’ve given them all a shot. I really haven’t found the only thing I will warn people about, because I’ve seen this even more lately, is the catastrophic caps are going up. There’s a few plans that have a twenty thousand in network cap and a forty thousand out of network cap. And you gotta watch that. Wow.  

Micah Shilanski (08:01) 

Yeah. So again, this doesn’t make these plans bad. Know how they work, right? That that’s the big thing. Okay. Okay. Second   

Tammy Flanagan (08:08) 

Same button.   

Micah Shilanski (08:09) 

mistake that that I see quite often in here, and and I will give a little bit of a case study this one as well, is not accurately tax planning in retirement. Right. Now this could come in so many different flavors when when we talk about taxes. but but it took a client just the other day and I said, Hey, the   

The new client they hired us, they were early 60s, they were preparing for retirement. one was already tired, the other one was about a year away. And I just kind of their default plan, how they had planned to take money out of their TSP, their IRAs, do all these things, et cetera. And we had kind of done out a 10-year tax projection for them. then I said, Great, that’s your baseline. What if we started making some tweaks in how you were taking money out and started thinking about Medicare at 65, Irma at 65, RMDs at 73, all these other things.   

And Tammy, the long story short is we’re gonna save them over $110,000 in taxes by changing how they’re doing distributions. It’s not like I got this magic tax-free bucket that I was able to pull out and be like, look at this magic tax-free bucket with all this money, right? I just took what they had and but be able to craft how they were using what they had, you get this massive tax savings over time. I don’t know about you, but I think $100,000 less in taxes is a great plan to start off with.   

Tammy Flanagan (09:23) 

I’d say, well, the government might not agree with you. They want all that money cover the deficit. But no, absolutely. Nobody wants to pay more taxes than they have to. And that’s a recurring theme. I’ve heard not only you, Micah, I’ve heard financial planners everywhere I go say that’s the one thing employees neglect to do. And probably because they don’t know how to do it is to prepare for taxes in retirement. Cause the income you have in retirement is still taxable.   

whether it’s taking money out of your traditional thrift or whether collecting social security. And you’re gonna have a lot of income if you’ve planned well. I’ve had and I know you have met plenty of clients who have more income in retirement than they had while they were working. Your government employees are pretty good savers. They’re just not good spenders.   

Micah Shilanski (10:07) 

Now good to, yeah, we got work on that sometimes in retirement, which is a fun thing. Yeah. But like this next week, I’m actually going to a tax conference and I’ll I’ll be teaching for a few hundred advisors about how to implement these tax planning strategies. So we’re we’re seeing more advisors pick this up. We’re seeing it kind of, you know, go more and more throughout the federal community, which is great. But the biggest thing is you can’t just assume just because this is how it worked while you were working, it’s the same in retirement.   

Whether we’re talking social security, your TSP, your Medicare, your health insurance, like any of those things, you’re now in a different stage of life and we have to look at it differently.   

Tammy Flanagan (10:41) 

Yeah, back in the day, like I had an uncle who retired under the old civil service system. And it was one one benefit. There was no TSP. He never paid into social security. And I asked him one time, I said, Uncle Steve, what did you do to plan for retirement? Did you hire an advisor? Did you come to classes like I teach? He just looked at me. He’s like, What are talking about? He says, I turned 55 and I put my papers in and I’ve been retired ever since. What did what was there to do? That’s all he needed to do. But today we have three different   

very important benefits and you can turn them on at three different times and you can leverage them with tax planning. You can leverage them with when to claim that social security benefit. Yeah. It’s a wonderful thing to have that flexibility, but it does take a little planning for sure.   

Micah Shilanski (11:26) 

I love it. All right. So mistake my number two is taxes and and those lack of assumptions that we make there. Tammy, what’s mistake number three?   

Tammy Flanagan (11:33) 

Well, I think sometimes and not everybody does this, but I do get questions about leaving a survivor benefit for a spouse. Sometimes people will say, Well, we both have a government career, we both make about the same amount of money, so we don’t need to leave each other a survivor benefit. And I always tell people, I said, make some columns on a sheet of paper and make two columns while you’re both living and put your   

Income, let’s say you don’t take a survivor benefit. So put your full FERS annuity there, put two social security checks there, you know, put any other income, maybe military retirement, and look at the total you’re gonna have every month. Try to do it monthly. And then cross one of you out and see what the surviving spouse is gonna have. Well, they’re gonna lose one of those FERS checks and they’re gonna lose one of those social security checks. And if they needed long-term care, you might have spent down your assets. So be careful about assuming.   

That just because we both have retirement benefits that we don’t need to take care of the other spouse when there’s one of us. I think that lends itself to some tax planning too, right? 

Micah Shilanski (12:38) 

Yes, yes. so what when we’re married finally joint, right? We and then also we go to single, our taxes are gonna go up under single rates versus married, right? Our standard deduction virtually gets cut in half. Our tax rates are gonna go up. So I want to do, I want to tame you. I love what you’re saying. Create those two columns. And then what I would add to that is especially if we look at this and say, the survivor could live on X dollar amount. Awesome. Live on it today. So just I want you to put that, live on that for the next six months and tell me how it goes. Well, Micah, it’s different. What’s different?   

The food bills really four times as much because you’re here. The electricity bills so much more. Like, what, like, what is really different that both of you are there? Now, sometimes I got one client who’s a big birder and spends a lot of money on burning every year. And we’re like, hey, when he dies, that’s going away. Okay, fine. We can carve that out of the budget. But there’s a lot of other money. Like, what’s gonna happen with the rest of that money that you guys are used to spending every single month? So, Tammy, it’s a great idea. You both got to agree on it. You both got to live on it and say, Can I live?   

Comfortably on this number.   

Tammy Flanagan (13:39) 

Yeah, it’s it’s a tough one because it is a big reduction to your retirement. But what a lot of people don’t understand is that that reduction to provide a survivor benefit is money you don’t pay tax on. And if your spouse predeceases you, not only can you get the survivor benefit from them, but you can restore your full annuity. So you’re getting two benefits from that. You’re getting your 10% back, plus you’re getting 50% of your spouse’s benefits. So life is going to be a lot more comfortable if you either do that.  

Or do something else to plan for that in that inevitable occasion. You know, it’s not often that we both go down on a plane crash, one of us is gonna die first. You know. I’ve I have a friend who’s she’s on the 10 year plan. I says, What do you mean you’re on the 10 year plan? She goes, I’m 70 now, I only have 10 years left. I’m like, Don’t think like that. I said,   

Micah Shilanski (14:28) 

No.  

Tammy Flanagan (14:30) 

You might have thirty years left, you’re gonna be shot. 

Micah Shilanski (14:33) 

Yeah. Yeah. we just don’t know, right? And this kind of leads into to the next aspect of it with the survivor benefits. I’m I’m just gonna you you mentioned this a little bit to me, but I think it’s worth calling out as its own separate mistake, is social security claiming strategies. Yes. Is so often we look at them just as if it affects you, right? And it doesn’t. That if directly affects your survivor benefits that you’re gonna leave. Now, if you’re not worried about survivor benefits because you’re single or there’s enough other money to make sure your spouse is taken care of, well, awesome. But there’s still that window that’s there.  

And I think when we look at it and say, I’m gonna be dead by the time I’m 82, therefore there’s no break-even. I don’t think that’s a very educated way to look at it. Right. Or if we start looking at our family history and say, my family was dead by 65, there’s no way I’m gonna live that long. Well, I got dozens of clients that have said that and they’re well past 65. Right. So these are things we don’t know. We gotta solve for number one when we’re building like this retirement plan. I’m always solving for the cash flow first, right? 

What’s the number what’s the number that you need to have to make sure your life is comfortable? And then number two, how do I take the least amount of risk possible to maintain that cash flow? Whether the market goes down, somebody dies prematurely, like all these other things that happen. But Social Security is one of these levers that we get a pull that could help reduce that risk.  

Tammy Flanagan (15:50) 

Yeah, I I always hear people say, well, when do you break even? Well, like, does it really matter when you break even? I think it’s more important that when I’m 90, if I live that long, that I’m still living financially independent. So if I can maximize that social security check, that’s gonna go a long way towards allowing me to pay my own bills and not have to move in with my kids, right? Nobody wants to have to do that. You wanna stay independent.   

Yeah, I see a lot of I’m in Florida, so I see a lot of ninety year olds still golfing and still traveling and living life. You know, nine ninety’s not what it used to be when our grandparents were were ninety.   

Micah Shilanski (16:26) 

Hundred percent the case. And so it’s in on that break even, I push back on the same thing. I always look at it a couple different ways. One is do you need the cash flow? If you don’t, why are we turning it on? Right. But it’s gonna every year we defer it, it’s gonna grow by a guaranteed amount. Now, once we hit our full retirement age, let’s just say that’s you know 67. Every year after that, it grows by a guaranteed eight percent a year. Okay, well, the Fed’s just raised rates, but would you please show me the bank account that’s guaranteeing eight percent right now? Because I I can’t find it. Tammy, do you have those down in Florida?   

Tammy Flanagan (16:55) 

No, unfortunately we don’t.   

Micah Shilanski (16:57) 

Okay. So we don’t have those, right? But we have that in that social security account. then we hear, well, Micah, they’re gonna run out of money. News flash, they already run out of money. Like there’s there’s no bank account there that has social security funds with a few trillion bucks in it. It’s an IOU, that’s all that it is. I don’t think we’re really gonna default on that. Of course, this is Micah’s opinion, but we’re gonna find a way to solve it. So you don’t need to solve the nation’s issue right now. You need to solve your retirement issue.   

Tammy Flanagan (17:21) 

Since I lived through the last major downfall of Social Security in the Reagan, I will tell you that people back then, what happened was my parents were just retiring in 1983. That’s when we had the last major amendments to Social Security that changed a lot of things for you and I. Yes, ma’am. Not for my parents, because anybody who was 46 years old or older that year, Congress gave them a pass. They they still got the same social security that they were promised.  

you know, 10 years before, they weren’t affected whatsoever. So I’m hoping this Congress or whichever one is going to make some adjustments looks back on that history and and tries to do the same thing to protect those people who are already in the process of counting on that money. So I think we hopefully we’ll see something like that again. And I think what it’s gonna be is our kids are going to be the ones paying for for the problems we’ve created in in my generation, the baby boomers, because there’s so many of us. But but   

They have time to plan for it, you know, and salaries are a lot different today than they were when I started working. So I think kids have better opportunities, I think, to to make some money. And both spouses tend to be working in some cases today. So if you need that extra money, sometimes it can be there.   

Micah Shilanski (18:35) 

You and Sam, it’s easy, I think, for somebody to say, hey, well, that Reagan administration, Tammy, 1983 was that 43 years ago, something like that, right? It was a long time ago. Like, like that doesn’t really apply today. And I’m gonna push back on it and say, like, look at the FERS, right? We went from FERS benefits to FERS ray to FERS FRA right? And that was 2012. Yep.   

Tammy Flanagan (18:54) 

Well, third time.   

Micah Shilanski (18:57) 

And so we already have recent history of that where the federal government wanted to change the FERS benefits.   

for everybody and all the federal employees rightfully said, Hey, you promised me these freaking benefits. What do you mean you’re changing them? And they said, Great news, you’re gonna get the same. All new employees are gonna get another benefit. And it passed overnight, right? Because who’s gonna object to that? You get your benefits. There’s a new deal for the new people. So I don’t know, Tammy, I am not running for office. so this is not a political spitch, but but yes, that a hundred percent what I would vote for would be the grandfather claw.   

Tammy Flanagan (19:26) 

And you hit the nail on the head because I think Congress is afraid of touching something that affects every single American, which is social security. Absolutely if you protect it for your core voters and you understand that the kids out there don’t think much about social security. They’re not even counting on it to tell you the truth. When I when I ask, you know, 22-year-olds, then I think you’re gonna make everybody at least understand the problem and understand there has to be a solution for it. And there are. In fact, there’s probably a hundred and fifty.  

different solutions. And I think what we’ll see is a number of those being implemented in Saul Ways. 

Micah Shilanski (20:01) 

Yep. Yep. All right. boy, I don’t know, was that my or yours? I forget. Okay.   

Tammy Flanagan (20:06) 

that was yours, I think. Yeah,   

because you yeah, you brought up social security. All right. So here’s a simple one, but it’s one that I do hear people misunderstand and don’t really fully understand the value of basic FEGLI. Now I know option B of Fegley can get really expensive and there’s other alternatives to option B. Option B is the multiples of your salary where a lot of folks are carrying five times their salary. If you’re young and healthy, you might want to look at a private policy.   

But that basic FEGLI, that’s the one that floats with your salary. Every time you get a pay increase, the amount of that basic fegley goes up. And it’s always valued at your salary, rounded up to the next thousand plus two thousand. So when you retire, a lot of people want to drop it. They want to cancel it. They say, I don’t need this anymore. My kids are grown or I’m single or, you know, for whatever reason, I don’t need it. I said, you might not need it to serve as life insurance per se, but did you know it has a living benefit?   

I just talked to somebody a couple of weeks ago. Unfortunately, she was diagnosed with a very serious, potentially terminal illness. And she’s on leave without pay and she doesn’t know what to do. I said, Did you know that you can become your own beneficiary of some tax-free money from Fegley? I said, It’s gonna be more to you than it would be to your beneficiary in the fact that you’re gonna be on leave without pay. Where else are you gonna get the money? You don’t wanna take it to the TSP. So she was really  

Grateful to learn that she had a source of money that would carry her through about a year of salary, right? So she wouldn’t have to take retirement right away. Hopefully she’ll recover. Because even if you recover, you don’t have to give the money back. It’s just money that’s no longer there. But that’s one thing. And then the other benefit of Fegley is when you retire. That basic FEGLI, you pay for it at the same rate you pay for it as an employee. But in retirement, once you hit age 65, you can stop paying for it.  

And yet it’s gonna retain twenty five percent of its value for as long as you live. That final amount is generally what your family’s gonna use to pay your final expenses. So it really does come in handy and it usually comes to them within two weeks. So it’s more of course things they get. Yep.  

Micah Shilanski (22:16) 

As long as the death certificate, right, that’s sometimes you only hold up is getting the death certified death certificate. But once you get  

Tammy Flanagan (22:21) 

That is pretty   

Micah Shilanski (22:24) 

Yeah, yeah, I get a bunch of them. so Tammy, with that, I was tell tell if I’m looking at this wrong, but I always tell people on again the the Figley, the basic benefit, not any of the multiples, right? Choose that if you choose that 75% reduction. It’s not so much that it’s free. You’ve already paid for your  

Tammy Flanagan (22:39) 

Well that’s right.   

Micah Shilanski (22:40) 

entire career paying for it. So even if you’re 60 and you gotta keep paying until 65, right. And then at sixty-five it goes down two percent per month, so only twenty five percent remains. That’s  

That’s still a lot of money that’s going to be there that you’ve already invested. So why not keep that option available?   

Tammy Flanagan (22:58) 

Exactly. I I just think there’s some misunderstanding there because we just think of it in terms of a death benefit. But it can be a lot more than that.   

Micah Shilanski (23:06) 

Yeah, it is. And this is looking at it from as much as we can, a dispassionate point of view, right? And in its life, it’s your life, right? life insurance is is emotional as much as is we try to look at it dispassionately. But it’s a math game. If you’re light beamed off this planet, what position do you need to put your family in? Right. In order to maintain their current standard of living. And we kind of back into do you need life insurance or not? Tammy, I love your thought. Is well, if you’re healthy and young, boy, if you’re just healthy, period, like almost regardless of age.   

Private life insurance is generally dramatically cheaper than Figley. Maybe sub 30, it might be push, but then you can get level policies that the pre price doesn’t go up. Once you start kind of hitting 35 plus, it’s almost a no-brainer. Private life insurance is dramatically less expensive than the Figley cost is.  

Tammy Flanagan (23:49) 

Right. And the reason for that is because Fegley covers everybody in the government. You don’t have to pass underwriting. When you’re hired, you can pick five multiples of your salary, even though you have high blood pressure, heart disease, and diabetes. They don’t care. They’re not going to ask you how’s your health? Or you get married or you have a child. Increase your FEGLI. No one asks you any questions about your health. Those private plans can keep their rates low because they don’t take it people that have preexisting conditions or they charge you a whole lot more. 

So if you’re in great health, by all means shop around. If you’re in poor health, Fegley is the best deal in town.  

Micah Shilanski (24:24) 

That’s always the great thing. We always always forget about that change a life event with the Figley, right? You got to keep in mind anytime there’s that life event, there’s the marriage, the divorce, the the kids, et cetera, those things happen. We need to take a pause and reevaluate our benefits and say what things automatically opened up. Like maybe you just didn’t want to pay for Figley, you know, when you first came on and you just had the basic benefit. Okay, well, now you have a kid, and now we have a window that you can open that up with no underwriting. That is a great benefit.  

Tammy Flanagan (24:54) 

That’s only while you’re working. Retirees can’t increase their feg. Even if they get married, it’s not gonna not gonna work. And and another thing I think some people don’t understand with feg le, especially people who are reservists and who get called up to active duty, that’s a life event that they can increase their feg le before they go overseas.  

Micah Shilanski (25:12) 

I didn’t think about that. That’s a great.  

Tammy Flanagan (25:14) 

I hadn’t thought about it either. I came across it in the Fegley Handbook. I’m like, yeah, I forgot about  

Micah Shilanski (25:19) 

Yes, 

it would be. Yeah. But keep in mind if one of the things I always tell people, like if we have an opportunity of a life event and we need to increase our FEGLI just do it. Don’t waste time shopping it because our our open window is is pretty limited. So increase your FEGLI league.  

Tammy Flanagan (25:36) 

Anytime.  

Anytime.  

Micah Shilanski (25:38) 

So limited getting in, easy to get out. Is that fair? 

Tammy Flanagan (25:41) 

Very fair. Yep. And who knows if there’s ever going to be another open season. The last one we had was ten years ago. Two  

Micah Shilanski (25:47) 

Yeah, sounds right. Yeah. 

Tammy Flanagan (25:49) 

thousand sixteen. Yep. So that was my little mistake.  

Micah Shilanski (25:59) 

Could be a big one. Could be a big one. Another one, this is always a challenging topic. It’s probably the most challenging, you know. We have our five-step process of success when we’re doing financial planning, estate planning, risk management, retirement income, investments, and taxes. And risk management is my fancy way saying insurance. And inside of there, we talk about long-term care planning. This is a tough one, but I gotta say, this is a mistake that we we ignore. We don’t want to talk about it. It’s difficult decisions. like when do we? 

Stop driving. When do we put those rules on ourselves? Right. when do we want to move to an Asian place home? When do we have like a continuing care community that’s going to be there? How is our home set up? Like these are things we need to talk about almost right away when you’re building a financial plan and kind of set some milestones out there as we go out through life that says, Hey, if these things happen, what are my plans and what am I going to do? Then we could have a conversation after that as is how are we going to afford those? How are we going to? 

pay for those, right? Maybe insurance makes sense. I do most of my clients don’t get long-term care insurance. It’s just crazy expensive they don’t want to pay for it. So okay, if we don’t do the insurance, awesome. What are the other options that we have to pay for these things? 

Tammy Flanagan (27:05) 

Yep. Yeah. And I think too, you know, buying it early is always a great idea because, you know, if you are going to buy insurance, it’s always cheaper to buy it when you’re in good health and you’ve got a lot of time left before you might need the care. But the other thing to keep in mind, and something that really hits home for people to understand the whole thing about long-term care is if they have parents who need it. Because all along you’re not even thinking about this and you don’t even want to think about your parents needing it, but all of a sudden dad had a stroke. 

Her mom’s getting really forgetful and she’s, you know, really having trouble finding her way to the grocery store. And it all of a sudden hits you that she can’t be left alone. Her dad needs constant care. You know, he can’t dress himself anymore independently. And then you start to face the facts of what long-term care really looks like. It’s not a not a pleasant thought and it’s not something that comes easy to any caregiver. It’s a 24-7 job. And you’re gonna need help. You know, as much as you love your spouse or 

Your parents, you can’t do it all by yourself.  

Micah Shilanski (28:06) 

Burn yourself out. You you dig your own grave. It’s it’s so much. And in and we’re dealing with one right now with a client. Cause one of things whenever a client comes on, I always try to ask them about their parents’ estate planning as well. Right. And that’s sometimes really hard. Like some parents don’t want to give it like my dad, he’s a financial planner. Have I seen his estate documents? No. He’s like, You damn kids don’t need to know what my your mother and I got going on. Right. But it’s one of those things that we get a little emotional about, but  

We need to share this with those people that are in charge because I’m dealing with one right now, but man, if I had known about this, we would have done things completely different. And it’s gonna end up costing a ton of money because their estate planning was done incorrectly. They had an estate planning attorney. They they hired someone to do the documents. And I’m sure the estate planning attorney did exactly what they were asked to do, but it doesn’t fulfill the goal of what they wanted. And so these are just tough things that you got to walk through. But the sooner you do it, the easier it is.  

Tammy Flanagan (29:02) 

It sure is. Yep. And there are there are solutions. It doesn’t have to be insurance, but you do want to think about what if. That’s a big what if. You know, a lot of times in mid-career planning, I I say we’re going to cover all the what-ifs today. You know, what if I stay long enough to retire? What if I become disabled? What if I die? And what if I should need long-term care down the road? How do we solve those what if problems?  

Micah Shilanski (29:24) 

Good questions. Well, Tammy, as usual, back to our normal podcast. We get through maybe half the content, maybe a little bit less of what we would love to talk about, but there’s just so much here to really go through. And so the important part is you’re looking at these mistakes. Here’s where I’m going to say these mistakes really bite people. Tammy, push back on me if you have a different idea. It’s when you hear this and you’re like, that doesn’t apply to me. And it’s not what you don’t know that’s the problem. It’s what you think you know that just ain’t so.   

That’s when I see this cause such big problems.   

Tammy Flanagan (29:57) 

Yeah. And this is something that as life goes on, you want to keep revisiting it because what your thoughts are today, five years from now, your life could be totally different. You know, you’re married now, maybe you’ll have a divorce. Who knows? Or maybe you’ll become widowed, or maybe you’ll get married. And that’s going to change the course of your life when those things happen. Things are decisions are going to have to be made. So I think it’s important to look at these things on a  

ongoing basis, if nothing else, at least every five years. You know, I know when we set up a family trust, it’s a good time to, you know, look at that again five years from now. Now we have three grandchildren. Five years ago we only had one. So, you know, there’s things that change as life goes on. 

Micah Shilanski (30:39) 

Absolutely. Well, this podcast is all about helping another million federal employees with their retirement. So help us out. Share this with another federal employee. Send this information out so they’re getting good advice. They can see the different things that are out there to help make better decisions. Tammy, as always, it’s so great having you on the podcast.  

Tammy Flanagan (30:55) 

We’ll do it again. Nice seeing you, Micah 

Micah Shilanski (30:58) 

Till next time, happy planning.