Your Turn with Mike Causey

Despite the life-altering impact of COVID-19, international tensions and unprecedented political divisions in the country, the stock market keeps on going up and up. The experts give us lots of after-the-fact explanations. But, how often are they right? For many long-term investors — like folks in the Thrift Savings Plan — the question is simple. What, if anything, should I be doing with my portfolio? More stocks or sell high and seek the “safety” of the Treasury securities G fund while the going is good? In some, maybe many cases, the answer to the what-should-I-do question is simple. Nothing. And certainly don’t act out of greed, fear, a feeling or what your favorite cable guru says. The reality is that nobody knows the real answer. Not the wise guy in your carpool, not your tarot card reader and not even your financial planner. Nobody. To help walk us through it, we’ve got Arthur Stein, a financial planner, as our guest today on Your Turn. He was an economist with Congress and most of his clients are active or retired feds. Several are TSP millionaires.

With a 4.9% cost of living adjustment (COLA) set for Federal Employees Retirement System (FERS) retirees, and a 2.7% pay raise on track for January, many working feds and retirees have got to be breathing a sigh of relief. This is a real take-it-to-the-bank silver lining during a time of worldwide pandemic when so much has changed. It will make trips to the store and gas station less painful. The problem, as always, for working folks and retirees is what's next? There are also lots of things to consider, including picking the best health plan for you and yours to get you through 2022. So I called in the cavalry in the form of Tammy Flanagan. She’s a well-known, popular federal benefits expert. And she is our a guest on our Your Turn. Tammy was a fed for many years and now does consulting with feds and retirees.

With good pay, maybe a house, insurance, a retirement plan, and a Thrift Savings Plan, many feds are better off than they thought. And they may need to readjust their thinking about things like do-I-have-an-estate and if so, what’s the plan. Download a will off the internet and forget about it. Or do nothing and let the courts – eventually — decide. Meantime your surviving spouse and children may be at each other’s throats because they know what you really intended! So we asked D.C. area attorney Tom O’Rourke to join us today on our Your Turn radio show.

Have your career plans changed some, a lot or completely since the COVID pandemic? Has the retirement tsunami, first predicted in the 1990s, actually started? What if another recession is just around the corner? Lots of work-related questions for lots of people. If ordered to return to the office full or even part time, will you do it or retire? Many surveys show that up to 40% of people who have been working from home don’t want to come back to the office. Ever! The same studies show many people can’t wait to get back to the office, to interact with coworkers and work with the discipline of the office. Lots of questions — and we may have some or all of the answers. That’s because my guest today on Your Turn is benefits expert Tammy Flanagan. She is going to talk about the impact of a big COLA in 2022, the likely federal pay raise and what retirees who are 65-plus should be doing to prep for the federal health insurance open season. It begins Nov. 8 and will run through Dec. 13. The good news is that all of the plans are good-to-excellent. And people can change every year regardless of health, preexisting conditions, age, etc.

During the Great Recession of 2008-2009, the S&P 500 index lost 50% of its value. The C fund of the federal Thrift Savings Plan tracks the S&P 500. The Great Recession (which was a brief 17 months as recessions go) followed the boom years of 2002 through 2007. What goes up also goes down. At least so far. All of which is why federal investors, who have grown more sophisticated over the years, need to be careful. How they behave prudently or panic during a downturn can determine how much they will have in their retirement nest egg when they leave government. The number of TSP millionaires has gone over 95,000 at last count. Most of them are long-time investors who continued to buy shares in the TSP’s three stock index funds (C, S and I) during the recession, even as millions of other investors fled to the “safety” of the treasury securities G fund. So what’s an investor do? Plan ahead and don’t panic is what most of the pros say. But knowing what you should do during the next stock market crash and doing it are two very different things. Financial planner Arthur Stein has a number of clients who are TSP millionaires. Most aren’t but hope to be. He says that feds are now investing more in the C fund than the low-yield G fund. And that’s a good thing. Up to a point! Which is what we will be talking about on today's episode of Your Turn.

Even if you’re young and have only been with Uncle Sam for a short time, odds are you already have an estate. If you have been around for awhile, it may be a sizable one. Maybe worth millions because of property, insurance and your growing Thrift Savings Plan. That’s the good news. The not so good news is that you may have an adult child with a drug or drinking problem. Maybe your son or daughter is married to a loser who doesn’t deserve to have control over money you may leave behind. How about an ex-spouse? Or two? Or more? How’s that gonna work out when you are no longer in control or here? Whatever the reason, whether your life is a bed of roses or a getting-worse-nightmare, there are things you can do now to insure what you leave will go to who you want. And when. And in what portion or portions. Tom O’Rourke is a Washington area attorney who specialized in tax and estate law. Many of his clients are current or former feds. Several are TSP millionaires. Others are on track to become one soon — fingers crossed! He’s also a former IRS lawyer. Been there, done that! Tom is going to be my guest today on Your Turn

Financial planner Arthur Stein believes that millions of active and retired feds — anyone with money in the treasury securities G fund, or F (bond) fund — are not investors in the true sense. They are, in a sense, putting (or parking) their money in funds that don’t move like the stock market. People in the C fund, S fund and I fund, however, are investing in stocks (large, small cap and an international stock index). And while the C fund, S fund and I funds do go up and down — sometimes big time — over the long haul they have outperformed the treasury and bond funds. By a lot. Not that there’s anything wrong with that! Or is there? So what’s the difference between a true investor and a parker? We’re gonna find out today. Art Stein will be my guest on our Your Turn.

Do you know the difference between a will and a trust? And what different types of trusts do? Are you up on tax law changes involving estates? Are you familiar with the relatively new SECURE Act, which probably covers your estate? And what’s an estate anyhow? Having a plan — leaving clear-cut instructions — is critical. Equally important is having a list explaining your wishes and preparations in the hands of someone — your estate attorney — you can trust. So what’s in the ultimate list? The last one (with occasional updates) you need to make? We checked in with Tom O’Rourke. He’s a tax/estate attorney in the DC area, and a regular guest on our Your Turn. He’s a former IRS attorney, and most of his clients are current or former feds. Today’s show is about planning, understanding and managing your estate. And what should be in that all-important list.

Investors in the TSPs stock index funds (C, S and I) have done very, very well for a long time. The market has had its ups and downs (but mostly ups) since the end of the Great Recession in mid-2009. Most people didn’t see that one coming and few knew how or when it would end. Until after the fact, when investing your retirement nest egg is not real helpful. The market hit an all time high in June. Since then it has been up and down as investors wait to see what (if anything) the Federal Reserve will do, and what the newest COVID mutation will do to our mostly unvaccinated fellow earthlings. In places like Africa. Or India. Or, closer to home, in Missouri and LA County. Most of the TSP’s 98,000 plus millionaires hit the 7-digit mark by investing for the long haul (an average of 29-plus years), and investing largely in the C, S and I funds. And by staying in stocks and continuing to buy during bad patches, like the Great Recession. For a full picture of the TSP’s makeup as of June 30, click here. But as they say, there’s always something. Which is why we called on financial planner Arthur Stein to co-host today’s Your Turn radio show.

It is possible to work for Uncle Sam long enough to get and qualify for benefits and an annuity, but still leave government earlier. Benefits expert Tammy Flanagan thinks that may be about to happen.

It is possible to work for Uncle Sam long enough to get and qualify for benefits and an annuity, but still leave government earlier. Benefits expert Tammy Flanagan thinks that may be about to happen.

Changing estate tax rules and laws need to be understood, and if necessarily, dealt with, if you want your estate handled the way it should be handled. And that means being aware of what Congress and the White House have in mind to make major changes in estate tax laws. Changes that could leave your family with a much bigger tax debt in the future. The proposals are almost always labeled as “reforms”, a key to you to cover your assets. For an update on estates and estate tax law current and proposed, I asked Tom O’Rourke who was our guest on Your Turn today.

Oversight of the TSP is 20/20. Its participants include members the House, Senate and occupants of the White House — as well as members or staff of the Supreme Court, FBI agents, IRS auditors, astronauts, SEC attorneys and CIA agents. Many prominent investors and financial experts have said they would L-O-V-E to be able to participate in a low-fee fund with such a generous employer match. And yet when it comes time to retire, some 22% of participants take all of their money out of the TSP within one year of leaving the government and invest in an outside account. How come? Many say they get more flexibility outside of the TSP. Others say they want more investment choices. Or more active management advice from professionals. So we asked a pro — Arthur Stein. He’s a well-known financial planner in the D.C. area and his clientele includes many active and retired feds. Including some members of the self-made Millionaires Club. He’ll be my guest today on Your Turn.

Turns out there is not a lot one can do to avoid some of the perils of adulthood. In the case of the IRS audit, the numbers are on our side. Relatively few people get audited. But when they do, WHAM! But there are things you can be doing now, and in the future, to avoid the ordeal. And that’s the subject of today’s Your Turn show, with guest Tom O’Rourke. He’s an estate and tax attorney — and was a long-time lawyer with the IRS.

Turns out there is not a lot one can do to avoid some of the perils of adulthood. In the case of the IRS audit, the numbers are on our side. Relatively few people get audited. But when they do, WHAM! But there are things you can be doing now, and in the future, to avoid the ordeal. And that’s the subject of today’s Your Turn show, with guest Tom O’Rourke. He’s an estate and tax attorney — and was a long-time lawyer with the IRS.