Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Satellite Communications: Acquiring SATCOM in Tight Times
- Transformative Technology: Desktop Virtualization in Government
- Value of Health IT
Shows & Panels
Super Investment for Office Elders
Tuesday - 7/6/2010, 4:00am EDT
Being the oldest person in the office (so I'm told) isn't much fun.
You may be furthest behind the technology curve.
You are doubtless missing out on all the fun of social networking.
You think twittering is for the birds.
Odds are, as a doddering senior civil servant, you can't name any of the winners of American Idol. Not one! Nor can you contribute to an intelligent discussion over why Jon and Kate Gosselin split. Or why Kate is estranged from her parents, or even who Jon and Kate are for godsake!
You've doubtless overlooked the benefits of Keeping Up With The Kardashians. Or how to accomplish same.
In short you're on the federal short list for Loser-Of-The-Year.
As a long-time fed, you may be eligible for one of the best super-safe investment options around. It's called the Voluntary Contributions program and it is available only to federal and postal workers who are under the old Civil Service Retirement System, or the CSRS Offset retirement program.
The program operates like a certificate of deposit, except that it's better, because for the next 12 months Uncle Sam has pledged to pay you 3.125 percent on your investment. Trying finding a 12-month CD anywhere else that pays that much!
Although its been around for years, the VC program (which is unrelated to the Thrift Savings Plan) remains one of the government's best kept secrets.
It is a separate program that lets eligible feds (once enrolled in the program) invest after-tax dollars into their VC account. Individuals can invest at their own pace - weekly, monthly, annually - by check, in increments of $25. That means you could invest $25, or $100 or $2,000 anytime. The only catch is that your investments cannot exceed the equivalent of 10 percent of your lifetime federal salary.
When you decide to cash out of the VC program, you can either take a lump sum (which most people do) or you can use it to boost (slightly) your monthly CSRS annuity.
When you withdraw the money (and you can only do it once) none of the money you invested in the VC program is taxed. That's because you invested previously-taxed money. What is taxed is the amount you earned on your investment.
In the past, during periods of high inflation the VC program paid a higher rate of interest. In 2000, for example, the 12-month guaranteed rate was 5.875 percent. The year before it was 5.67 percent. In 1992 it paid 8.125 percent, and so on. In 2009 the VC rate was 3.875 percent.
So what's the catch? Well you must be under the old CSRS (or offset) retirement system. It is not available to the majority of federal and postal workers who are under the newer FERS retirement plan.
To sign up you need a VC application form (SF 2804). The forms are available at your agency. Then send the application to:
US Office of Personnel Management
1900 E Street, NW, Room 3H30
Washington, DC 20415
You can also download the form by clicking here.
Once you've been enrolled you can send deposits to your VC account to:
Office of Personnel Management
PO Box 952015
St. Louis, Md 63195-2015
For more information, click here.
Oh, about Jon and Kate. We first reported years ago, it would never last!!!
To reach me: email@example.com
Nearly Useless Factoid
by Suzanne Kubota
Termites produce more methane than cows.
OTHER PAY AND BENEFITS NEWS
DFAS employees fired after security review
Pay your bills or lose your job. Thirty nine Defense Department workers whose jobs were at risk because of their bad credit ratings will lose their positions after all. Read more here.
TSP Snapshot: Riders on the storm
Investing for the long term needs to be the mantra of anyone who puts their money in stocks. This is especially true for feds whose investments are in the Thrift Savings Fund. And it becomes especially true when stocks and the TSP go through a rough patch, as we learn in this month's edition of TSP Snapshot. Read more here.
Wall Street worries hit your TSP planning
As the third quarter starts, employers cut 125,000 jobs from the nation's payrolls in June, but the loss was driven by a wave of census layoffs. Certified financial planner Arthur Stein explains what's ahead. Read more here.