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Federal Employees Benefits Q &A

Do you have questions about your federal employee CSRS or FERS pension/annuity or federal employee retirement planning? Concerns about your Thrift Savings Plan (TSP) account or what about federal employee pay and leave issues?

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The Q&A forum is moderated by Ed Zurndorfer -- an expert on federal employee benefits -- and a Certified Financial Planner, chartered life underwriter and chartered financial consultant in Maryland.

Zurndorfer is also the author of several federal employee benefits guides published by Federal Employees News Digest.

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#1 Posted : Sunday, February 24, 2019 9:40:03 AM(UTC)

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I'm a new employee that started 2/17 and working on my benefits onboarding.

I have questions about the life insurance and TSP benefits.

Is the life insurance worth it for the price? I will be 50 next month and have also received an offer from an existing life insurance policy to add additional coverage which the premium amount is lower than the government plan, but it is 40K lower. It would be $140 less a year for $200k instead of $240K of coverage.

For the TSP account, is it better to go with the Roth IRA option or the traditional IRA option? What is the best fund to put the money into

Thank you for any guidance.
Ed Zurndorfer  
#2 Posted : Monday, February 25, 2019 5:41:14 AM(UTC)
Ed Zurndorfer

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With respect to which life insurance coverage is better (from the federal government or from a private insurance company), you need to first ask yourself three questions, namely: (1) What is the purpose of the life insurance - why are you buying it; (2) For how long, that is, until what age will you need life insurance; and (3) How much life insurance coverage will you need. That being said, the good news about the Federal Employees Group Life Insurance (FEGLI) plan is that as a new employee you are guaranteed coverage (no medical exam) if you enroll within 60 days of your hire date. The bad news about FEGLI is that if you are in good health FEGLI is more expensive than a comparable term life insurance offered by a private insurance company. Of course, you will have to qualify medically if you want to own a private life insurance policy.
With respect to the TSP, assuming that your income is still low enough to contribute to a Roth IRA, you should contribute the maximum possible to the traditional TSP (maximum contribution for 2019 is $19,000 plus $6,000 in "catch" contributions). You can also contribute a maximum $7,000 to a Roth IRA ($6,000 plus $1,000 catch-up) for 2019.
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