Retirement Financial Education eLetter
Welcome to the first edition of the Office of Personnel Management (OPM) Retirement Financial Education eLetter. The
eLetter will be posted bi-monthly at www.opm.gov/benefits . Each issue will contain information about retirement financial
education you can use and can pass on to others. Don’t think retirement financial education is only for long time employees
or those close to retirement. It’s for everyone. Retirees have some significant challenges to face so waiting until just before
retirement to start planning is often “too little, too late.”
The Federal Employees’ Retirement System (FERS), and the availability of the Thrift Savings Plan (TSP) for both FERS
and Civil Service Retirement System (CSRS) employees, changed the planning horizon. Employees should begin making
decisions about their retirement goals as soon as they start their Federal careers—and that’s what this eLetter is designed
to do. It will help you not only set your own retirement goals and develop a plan to achieve them but it will help you as a
benefits officer to help employees plan for their retirement and achieve their goals.
OPM’s Federal Retirement Financial Literacy and Education Strategy
OPM has developed a retirement financial literacy and education strategy for Federal employees. Our objective is to
provide employees with a framework for analysis and decision-making so that they can achieve their retirement goals. The
strategy is designed to educate Federal employees on the need for retirement savings and investment; how to plan for
retirement; and, how to calculate the retirement investment needed to meet their goals. You can read the complete
retirement financial literacy and education strategy at http://www.opm.gov/benefits/literacy_education.asp.
The strategy leverages the existing resources of agency benefits officers to broaden their focus in helping employees plan for
retirement. The plan outlines the roles OPM, employing agencies, and employees must play to achieve these goals.
Employing agencies have the primary responsibility for the delivery of retirement financial education to their employees and
for supporting financial literacy. OPM’s primary responsibilities are to provide leadership and serve as a capacity builder, a
coordinator, and a catalyst for action.
The strategy requires each agency to develop a retirement financial education plan for their employees. Agencies must
ensure that their financial education activities are informational and educational in nature and that they do not provide
specific financial investment advice. The programs must target employees at a minimum of three career points: new
employee, mid-career, and pre-retirement. We’ll provide more information on developing a retirement financial education
plan in an upcoming Benefits Administration Letter and future issues of the Retirement Financial Education eLetter.
The best retirement financial literacy and education program will not be effective if employees do not take advantage of
opportunities provided. Employees must make a commitment to learn and take the actions needed to achieve their
retirement goals. A successful program depends on employees using the tools and other resources that their agencies
provide.
We’re taking a broad holistic approach to retirement financial education. Our approach combines information and training
on the Federal benefits programs with information employees need to know in order to set and achieve their retirement
goals. Retirement readiness is more than just calculating how much money is needed. Our Retirement Readiness: NOW
model combines the basic information about the benefits provided by the Government, as an employer, and the broader
financial education needs of employees. Rather than being a “near retirement” event, the strategy considers retirement
financial literacy and education as a career-long process. The model incorporates the broad range of information
employees need to help them make informed retirement planning decisions. It also recognizes that these needs change as a
person moves through his or her career.
We call our model Retirement Readiness: NOW. It has a total balanced approach to planning that covers:
• Networking & Engagement – finding enjoyable challenges, and connecting with other people.
• Overall Health – understanding the aging process and staying as healthy as you can for however long you live.
• Wealth– preparing financially to have sufficient income to support your own standard of living in retirement.
Retirement readiness is also dynamic. The activities and planning you need to do, such as the mix of your TSP funds and
planning where you’ll live in retirement, change as you move through life stages.
One tool OPM is developing is the Retirement Readiness Profile that will allow you to evaluate how well you’re doing in
planning for future years. The Retirement Readiness Profile is “age based” and will provide information about your state of
readiness on the Networking & Engagement, Overall Health, and Wealth. The tool will refer you to resources that can help
you stay on track toward retirement readiness. The Retirement Readiness Profile will also provide benefits officers with a
means to evaluate the effectiveness of their employee education in regard to benefits and retirement planning, and help them
structure future educational efforts.
Future issues of the Retirement Financial Education eLetter will feature more information about the Retirement Readiness:
NOW model. We’ll also have more news about the Retirement Readiness Profile and tools you can use to increase your
retirement readiness and help your employees increase their retirement readiness.
Benefits News
Get moving for health! Join the HealthierFeds Physical Activity Challenge
It's Easy
Participants register at http://healthierfeds.presidentschallenge.org and get moving! The final day to log activity is April 1,
2007, but the physical activity doesn't stop then.
It's Fun
Participate in over 100 activities (walking, swimming, canoeing, cross country skiing) for at least 30 minutes a day (60
minutes for children ages 6-17), 5 days a week for a period of 6 weeks and log that activity on-line.
It's for You
Current employees and retirees of the Executive, Legislative, and Judicial branches and their family members are all invited
to sign up.
It's Important
By establishing a regular habit of physical activity among participants, The Challenge will help create a foundation for
long-term behavior change. The facts show that increasing physical activity can improve health and overall well-being.
Improvements in employee health help lower health care costs and insurance premiums and improve productivity, which is
why the agency or department with the highest percentage of employees completing The Challenge will be recognized for
its efforts.
TSP Catch-UP? Do I use it on my hamburger?
“Catch-up contributions” are supplemental tax-deferred employee contributions that employees age 50 or older can make
to the Thrift Saving Plan (TSP) beyond the maximum amount they can contribute through regular contributions.
Speaking of TSP, remember there are no longer any percentage limits on employee contributions to the TSP. TSP
contributions are limited only by the restrictions imposed by the annual limit set by the Internal Revenue Code. See the
Fact Sheet "Annual Limit on Elective Deferrals" for more information on this limit, including what happens to Agency
Matching Contributions when the annual limit has been reached.
Articles of Interest
Are You on Track? …Which Track?
Getting—and staying—on track in planning and saving for your retirement are major goals of our retirement financial
education strategy. A recent survey by OPM (http://www.opm.gov/retire/asd/htm/2006/06-105.asp) found the majority of
Federal employees (more than eight in ten) state they are on track or ahead of schedule in planning and saving for their
retirement years. However, less than half have calculated how much they need to save for a comfortable retirement and
almost four in ten employees who have calculated this need have estimated/guessed or used a self-created worksheet. Our
retirement financial education programs will help you bridge the gap between feeling you’re on track and having a plan to
follow.
Helpful Links
This issue’s featured benefits link is www.MyMoney.gov. MyMoney.gov is the U.S. government's website dedicated to
teaching all Americans the basics about financial education. Whether you are planning to buy a home, balancing your
checkbook, or investing in your 401k, the resources on MyMoney.gov can help you do it better. Throughout the site, you
will find important information from 20 federal agencies government-wide.
Links for information on Federal benefits and retirement financial education.
· OPM Information for Federal Benefits Officers http://www.opm.gov/benefits
· OPM Insurance Services Information http://www.opm.gov/insure
· OPM Retirement Information & Services http://www.opm.gov/retire
· Federal Long Term Care Insurance http://www.ltcfeds.com
· Federal Flexible Spending Accounts https://www.fsafeds.com/fsafeds/index.asp
· Federal Employee Dental and Vision http://www.opm.gov/insure/DentalVision/index.asp
· U.S. Financial Literacy & Education Commission www.MyMoney.gov
· Social Security Administration www.ssa.gov
· Federal Thrift Savings Plan www.tsp.gov
Feedback
What do you think about the Retirement Financial Education eLetter? We welcome your comments and suggestions for
future topics covered in the eLetter. Send your comments to benefits@opm.gov.