Brian Swerdlow: Why federal employees need specially-trained financial advisors if they want more from their benefits.

By Brian Swerdlow

As a federal employee, you have a fantastic portfolio of benefits, including healthcare, life insurance, and the Thrift Savings Plan. This robust benefits package may be a primary reason you decided to work for the public sector in the first place.

However, when navigating the intricacies of your benefits, you may often find yourself overwhelmed and puzzled by the complexity you encounter. For this reason, federal employees need to make strategic financial planning a priority, perhaps even more so than employees in the private sector.

It would be best to look for a retirement and income planner with more than a superficial knowledge of federal benefits, someone who can spot potential pitfalls and gaps and direct you to the correct products to solve those issues. While most financial advisors are competent, capable individuals, many do not have the necessary advanced training to guide federal employees.

You need to align yourself with the following:

An advisor with advanced, comprehensive knowledge of the benefits available to federal employees. Programs such as the Federal Retirement System (FERS), the Thrift Savings Plan (TSP), and the Federal Employees Health Benefits Program (FEHB) will significantly impact your financial future. Failing to tap into the potential of these programs could make your life after government service most stressful and less fulfilling. An advisor not well-versed in every aspect of federal employee retirement planning may miss certain nuances, deadlines, or coverage gaps specific to federal programs. This lack of advanced training, in turn, may hurt your retirement plans.

A creative planner who will direct you in maximizing every available income stream. Doubtless, you have heard stories of so-called “TSP millionaires.” Becoming a member of this elite group of people is rare and is almost always the result of careful, consistent planning. Your government benefits advisor must be willing to tell you the truth about your financial situation, point out weaknesses, and suggest ways you can bolster your income. Your advisor may suggest creating income streams outside your benefits package that you control, perhaps funded by life insurance or annuity products. They may also find ways you can save money to support other types of investments or reduce fees and administrative costs.

A financial guide who understands that health insurance choices are crucial. The federal benefits professional you select doesn’t necessarily have to be a health insurance specialist. However, they must have at least an intermediate understanding of the health insurance choices available to federal workers. Health insurance can be confusing, even to advisors. There are multiple plans available, each with its pros and cons.

If your federal benefits advisor is not a specialist in health insurance options, they should at least be able to refer you to a specialist in that area. Working with multiple advisors is sometimes necessary to ensure that no aspect of your retirement falls through the cracks. As a trained federal benefits expert, I am always happy to partner with other advisors to provide my clients with the best retirement blueprint that aligns well with their goals, needs, and values.

A federal employee benefits specialist who can help you navigate other benefit options. Federal employees are eligible for a range of specialized benefits, including the Federal Long-Term Care Insurance Program (FLTCIP), Federal Group Life Insurance (FEGLI), and the Federal Flexible Spending Account Program (FSAFEDS).

While these programs are available to most federal workers, they may not be the right choice for everyone. Often, private plans can provide the same or better benefits at a reduced cost.

Your advisor should be there for you when your life changes. The best advisors for government employees are people who are there for you when you need them most. The best federal advisors answer their phones and check their inboxes regularly because they know that life transitions sometimes trigger dramatic changes in federal benefits.

You must address life events such as divorce, marriage, disability, death of a spouse or other beneficiary, or birth of a child or grandchild promptly. Otherwise, there could be adverse consequences for your financial plan. The best federal benefits advisors respond quickly to their clients and take action to ensure your plan moves forward, no matter how your life changes.

Summing it up:

Federal employees enjoy some of the most robust benefits available in the United States. But, “setting and forgetting” a retirement plan, even a government-backed one, is not wise if you want a more secure and prosperous financial future. Instead, government employees need to strategically plan their retirements and make every dollar of savings do the work of three or four dollars. They also need to choose health care insurance that makes sense for their unique situation and look for potential coverage gaps that could cause issues later. Partnering with a highly-trained government benefits specialist is an essential step toward ensuring that you don’t make mistakes with your benefits that cost you time and money. Even if you already have a financial planner, I am always happy to review your portfolio (at no charge) and help you improve and strengthen it. I also have a webinar available on-demand that you might find helpful.