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Economics 101
"How the Fed Works"
You
hear people refer to the Federal Reserve or the "Fed" all the time.
Yet, there are probably very few people who actually know how it works.
You might be aware that the Fed creates money, or controls interest
rates, or maybe you even think they created the economic mess our
country is in.
The December issue of Time magazine had a
magnificent article detailing how the Federal Reserve Bank works. It is
simple, clear and understandable. The article provides great
explanations for why the Fed holds the power it does and why people
like Alan Greenspan and Ben Bernanke are considered to have power that
rivals the president. The article will increase your awareness
of the fragility of our financial system and why we might not be out of
the woods just yet. For a quick review of the article in video format, click here: Time Video - The Fed
This is a new era not only for Americans, but for
the world, at large. The 21st century will be about self reliance and
the more information you access and understand, the better position
you'll be in to guide your own destiny. |
Steps to Retirement Planning
In this final piece on the value of converting your
traditional IRA or 401(k) or in some cases, your TSP (depending on your
age and whether you are retired or not), we'll look at the long-range
value of the Roth IRA.
A compelling reason to convert
retirement assets to a Roth IRA is to enable IRA beneficiaries to
"stretch" the account, tax-free, over their lifetime. Similar to
traditional IRA's, Roth IRA's allow beneficiaries to stretch the IRA by
taking only the minimum required distribution each year over his/her
life expectancy. But unlike traditional IRA's, Roth IRA's permit the
undistributed amount to continue to be invested and grow tax-free (not
just tax-deferred) over the beneficiary's lifetime. Imagine the
value to a grandchild who inherits a Roth IRA in their early 20's!
2010
offers a unique opportunity to convert traditional IRA's to Roth's
because the income limit that restricted many middle class federal
workers from being able to convert has been eliminated. This
year, everyone from Bill Gates, Warren Buffett, and you is eligible to
do a Roth conversion.
If you'd like a compilation of all the articles in this series, contact my office at the e-mail or phone number below. |
Wasn't That Super....
This year's Super Bowl will be hosted in Miami.
What city has hosted more Super Bowls than any other (counting this year) AND how many have they hosted?
Be the first to reply with the correct answer(s) and win a gift card to Starbucks.
By the way, congratulations to Jason Wahl for answering last months question correctly. The question was - What year was it when the crystal ball dropped in Times Square for the first time? Answer: The ball first dropped in Times Square in 1907 but the crystal ball first dropped in 2000.
Thanks for participating! |
For quickest response, send your answer to:
federal.info@sklenar.com |
Contact Us
Phone: 866-792-6668 (Toll Free) 712-792-6400 (Local) Fax 712-792-6670
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Alphabet Soup
Depositing to Your Retirement System for Temporary Time During Your Federal Service
Last month we covered how temporary time is
reflected in a CSRS retirement calculation. This month, we'll
review that same information for those in the FERS retirement
system. Remember, normally temporary time was worked early in your
career and is often forgotten.
FERS - The calculation
for temporary time applying to your retirement benefits is more to the
point than CSRS. In many cases, the answer will simply be - you are not
allowed to make a deposit, and you will not receive any credit for
temporary time.
There is an exception to the above.
If your temporary time was prior to January 1, 1989, AND you make a
deposit for the time, it will count both toward eligibility for
retirement and your annuity computation. If a deposit is owed and
you are eligible to make a deposit, your deposit will be calculated on
1.3% of your basic pay at the time plus variable market interest.
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Unthinkable
The USA is projected to average a deficit of $605 billion per year for the next 10 fiscal years (i.e., 2011-2020), equal to $69 million of deficits per hour for the next decade (source: CBO). |
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TSP Returns
Just when you thought it might be safe to dip your
toe back in the investing waters, TSP starts off with negative returns
for all funds except the G and F Funds. Because we're only one
month in, January and YTD returns are the same.
G Fund
January: .29%
F Fund
January: 1.54%
C Fund
January: (3.60%)
S Fund
January: (2.43%)
I Fund
January: (5.17%)
LIFECYCLE FUND RETURNS
L Income
January: (.45%)
L 2010
January: (.58%)
L 2020
January: (2.03%)
L 2030
January: (2.49%)
L 2040
January - (2.88%)
Returns courtesy of :
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Letter from the Editor
We can provide
one-hour "lunch and learn" programs to federal agencies in your
area. Topics range from "How to Allocate Your TSP in Volatile
Markets," to "Roth IRA's - To Convert or Not to Convert, That is the
Question," to "Early Career FERS - What Every New Federal Employee
Needs to Know." We attribute these programs' success to the fact
that employees don't have to take off from work to attend, the sessions
are held right on the agency's site, and employee's can attend those
sessions that interest them most.
If you'd like to learn more about bringing these sessions to your agency, contact my office.
Cordially,
John Sklenar
202 West 7th Street
Carroll, Iowa 51401
Email: federal.info@sklenar.com
Website: www.sklenar.com
Phone: 866-792-6668 (Toll Free)
712-792-6400 (Local) Fax 712-792-6670
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