Take Charge of Your Financial Future!

Numerous studies have found a majority of Americans are not prepared for retirement and face the prospect of having to work longer than they expect. Younger workers today also face a much longer life expectancy. One out of four 65 year olds today can expect to live into their 90s.

Until about two years ago, I was like the majority of Americans; I had given little thought to my retirement investments and could think of a million better things to do with my Sunday afternoons than figure out how I would support myself in my old age. But as the big 3-0 loomed closer and closer, retirement started to seem like something I needed to think about now rather than the far distant future. To educate myself, I signed up for a course in financial management through Arlington County and started to dig around the National Finance’s Center’s Employee Personnel Page and the TSP website. Embarrassingly, at the time, I had no idea how much I was contributing (somewhere around 10 or 11 %?) or to which fund I was contributing. I found out that I was contributing the maximum percent allowable (15%) in the G fund. Bonus points for contributing the maximum percent allowable. Negative points for contributing to the G fund in my 20s.

For those of you that have no idea why contributing to the G fund in your 20s is not the best idea, this blog is for you. Below are some basics that will start you on your path to financial security.

What is the TSP?
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees. These funds are for your retirement and you cannot withdraw them without penalty until you leave Federal service. You pay no taxes on TSP contributions or earnings until you withdraw your account. TSP is voluntary. You don’t have to contribute anything. There are limits to the amount you can contribute to TSP, however. The federal government matches contributions to TSP from one to five percent, depending on the amount you contribute to TSP.

TSP is only one aspect of your retirement savings…depending on whether you fall under FERS or CSRS, you also receive set benefits, including (1) a FERS or CSRS annuity based on your years of service and your salary and (2) Social Security (who knows if it will be around when you decide to retire). Both of these benefits are made on your behalf by your agency and are mandatory.

What’s so bad about the G fund?
The G fund is GREAT…if you are only a couple of years away from retiring. If you are like me, however, and just beginning your federal career, putting all your $$ into the G fund just doesn’t make much sense because of its low return on investment. The most difficult aspect of investing is figuring out your risk profile (and your tolerance for risk) and how that relates to your age.

The TSP offers all participants a choice of six investment funds:
1. Government Securities Investment (G) Fund - invested in short-term, risk-free government securities. (In other words, the really safe fund. Of note, this is also the default fund. If you do not remember selecting a fund, as I did, this is most likely the fund to which you are contributing.)
2. Fixed Income Index Investment (F) Fund - invested in fixed income securities from the Lehman Aggregate Bond Index. (Reliable fund, with minimal risk of investment loss, but is not a big earner.)
3. Common Stock Index Investment (C) Fund - invested in Standard & Poor’s 500 index, which includes some of the largest companies in the country, such as Coca-Cola, Ford, and McDonald’s. (Riskier than the G or F fund, but still a good long-term growth fund.)
4. Small Capitalization Stock Index Investment (S) Fund- invested in small and mid-sized companies from the Wilshire 4500 Index. (Another good long-term growth fund; tends to be more volatile and aggressive than the G, F, or C funds.)
5. International Stock Index Investment (I) Fund- invested in international stocks indexed from Morgan Stanley's Europe, Australasia, Far East, or EAFE, Index of large-company foreign stocks. (Again, good long-term growth fund; tends to be more volatile and aggressive than the G, F, or C funds.)
6. Lifecycle (L) Funds- These funds balance your contributions among the five funds based on your projected retirement date. Thus, those closer to retirement would chose the 2010 mix, which would put a higher percentage of contributions in the safer, more reliable G fund. Those further away from retirement such as me would invest in the 2030 or 2040 model, which has a larger percentage of funds in higher yielding, but more volatile options.

Your Next Steps
1. Go to http://www.tsp.gov/account/index.html to learn more about your TSP account.
2. Attend YGL’s upcoming event: Success with your Money with Janet Bodnar, Kiplinger Personal Finance Magazine on July 30, 2008 from 11:30 to 12:30 pm. For more details, check out our event calendar!
3. Take control of your financial future!

Kate Walker, President
Young Government Leaders

Technically Speaking...

I heard something the other day which I thought was quite interesting. Before I get into that I will stray for a moment. How important do you think computers and technology are? I think so much revolves around technology nowadays whether an individual is a public or private worker, a student in college or just starting kindergarten, and even for those who are retired or stay-at-home parents. My hope is that affluent people and high level politicians would fall into the same category as well. Technology such as computers is a basic staple in the daily activities of most offices. Of course there have been times in the past where I was more familiar and/or skilled with a system or a program than my supervisor, but never have I seen a Director or those in main leadership positions to be completely and utterly computer illiterate, unable to independently work on computers at a very basic level (i.e. email, Word, or some other basic computer function relevant to their work). It’s okay if you have a supervisor who doesn’t know the intricate details of how you do your job, after all that’s why they hired you and there needs to be something that you’re indispensable and best skilled for. However, to have a leader who has the basic knowledge and ability to understand and use a computer as relevant to the surrounding work environment may alleviate some thoughts of general incompetence at the top. If your boss didn’t dedicate time to have an understanding at this very basic level, what would that say about their commitment for bigger and much more complicated things? Wouldn’t there be some concern as to how they even worked their way up to that level without knowing the basics? Hopefully this sounds strange, although we see something similar when children slip through the cracks and never learn to read. They continue into adulthood and somehow are able to remain illiterate. Now of course reading in some form has always been around and computers have not, but if you have remained in the workplace especially in high level positions throughout this technology era you should have picked up something just as your subordinates and your peers around you have done. How would you feel with having a commander-in-chief in this day and age who may be brilliant, but to-date hasn’t learned the basics of the growing technology in their surrounding environment? Maybe you haven’t noticed but technology is shaping the world and most certainly the federal workplace. We all know that learning something through a book or some other second hand source is no match for the real world hands-on experience. So although this may not be a matter of substantial debate, I found it quite interesting when I heard that someone running for one of the most esteemed positions – the 2009 Presidency of the United States of America - didn’t possess these basic skills. I have spoken to some people who find this to only be a minor concern for what would make an effective President. However, I believe that these kinds of skills are important in a candidate - don’t you?

Marissa Pretto, Treasurer
Young Government Leaders

Dedicated to the Mission

Last month I had the opportunity to work with Federal employees at Camp Arifjan, Kuwait. The thought of working in a potentially hostile environment would make some people uneasy, but it was definitely not the case with the personnel I had met. These Federal employees, both male and female, were motivated, had a strong work ethic and were dedicated to the mission.

The fact that these employees had volunteered to live and work in such austere conditions immediately displayed a certain level of motivation in my eyes. These men and women are vigilantly working alongside our members of the Armed Forces to ensure the mission is accomplished. From the moment I landed, I found myself working 12-13 hour days just trying to understand the dynamics of the mission and some of the tasks the organization was trying to accomplish. It appeared as if they were trying to complete so much with such limited resources, yet somehow managed to get them done.

What also surprised me was how much more money contracted personnel made in these high threat areas. They would make two or three times more than the average Fed, have much of that tax free and enjoy plenty of perks. Taking all of this into account, I realized that these Federal employees believed in public service and were dedicated to the mission. They had a vested interest in seeing their organization succeed and the mission accomplished. The operations tempo is always high in Southwest Asia and many Feds in the theater, similar to our Armed Forces, are away from their families and work long hours for 6 or sometimes 7 days a week. I hope others will take note as this experience speaks volumes about our deployed Feds/Service Members and the kind of people who are dedicated to the mission and their country.

Shaun Khalfan, Strategic Planning Committee
Young Government Leaders
2007-2008

A Week of Training

As part of the GSA program, twice a year, the agency brings together all the “interns” (full time employees that are on a 2-3 year career track and rotate throughout the agency) for a week of professional development. All 80 or so individuals get together in a L’enfant Plaza Conference room and look forward to a week of lecture, interaction, and socialization away from the cube. I, for one, think this is a great experience. Each of us has the opportunity to network with employees, find out what others are currently doing in their rotations or tracks, discover previously unearthed information about the agency that you had no idea about, and gain leadership skills - all at the same time!

We had Management Concepts present lessons on both hard and soft skills, such as Professionalism in Communication and Building and Sustaining Relationships in the workplace. The agency also had employees across the divisions come in and give presentations on useful information like Writing in PBS and an in depth Who’s Who?

After a week of opportunities to converse with the Executive Team and other interns, I felt energized and more aware of my mission.

Does your agency organize conferences like this for young employees? Do they have team building training opportunities? Are there other avenues that your agency builds on employees’ relationships or morale?

Mary Morrison
YGL Social Networking Chair

The Importance of Mentors

Throughout your career, regardless of private or public employment, it is important to think about your mentors. Who are your mentors? Do you have mentors? What role are they playing in your career?

Mentors play a vital role shaping and influencing their mentees’ careers. A mentor can help you decide if you are in the right job or position. These individuals can help you decide whether making a career change is the right choice for you. Mentors can make sure that you are making the most of the opportunities available to you in your current position.

Often people think that mentors must lie within their organization or company. This isn’t necessarily true. As a young employee, you should have a variety of mentors. I recommended that you have multiple mentors both within and outside of your organization to help guide you through your career. Here are some people that might be great mentors---

1. Your previous supervisors
2. A professor from your graduate program
3. A higher level employee within your organization that doesn’t directly supervise you
4. A person in your career field or your career field of interest
5. A relative who cares about your advancement
6. A close friend

As you can see, when talking about a mentor it is important not to limit your options. Your potential list of mentors is limitless; just make sure you have variety in your selections. Each person brings a different perspective; ideas about how to handle situations; and suggestions for opportunities that you should experience.

Take some time in the near future to assess your mentor network. If you don’t have at least one mentor, think of a person that could serve that role for you and ask them to serve as your mentor. Don’t be afraid to ask somebody you see as a role model or a coworker. You will never know what they will say until you ask!

Good luck picking a mentor in the next few months. These will truly prove to be an asset for the rest of your career.

Cara Spiro
Professional Development Co-Chair

“Around the Fed in 80 days...”

We all know the concept behind the movie or book "Around the World in 80 days". What if as a young Fed we could apply this concept to our career?

Gone are the old days when a Federal Employee spent their entire career in one agency. Previously, it was considered a sign of experience or loyalty. Today a young Fed can be seen equally as knowledgeable or experienced having done various stints at different agencies. In some cases, even be considered a subject matter expert after spending only 2 1\2 years at an agency. Gone are the days of appearing like a job hopper after spending as little as 2 to 5 years at an agency and then deciding to move to another.

With this in mind, I implore young Feds to take the chance and work at different agencies they have been dreaming about. It would be almost like traveling to different foreign countries you've always wanted to visit. There are hundreds of different agencies and sub-agencies. These agencies all have different missions, cultures and ways they serve the public.

Since leaving college in May of 2005, I have now spent almost three years in the Federal Government. I have worked for the Smithsonian Institution and I am currently working for the United States Coast Guard. I'm sure what I learned at the Smithsonian has helped me in my current position.

There are, however, many other exciting agencies: Customs and Border Protection, Immigration and Customs Enforcement, Department of Homeland Security, Office of the Comptroller of Currency, Peace Corps and the Department of State. I hope all young Feds take the time to prepare a list of dream agencies they would like to work for.

It is true spending an entire career in one agency is very safe. However, spicing it up and taking a risk of going "Around the Fed in 80 days" may be just the ticket to career advancement!

I.J Ezeonwuka,
YGL Chapter Liaison, 2007-2008

Reinventing Government: Inside and Out

T.S. Elliot called April “the cruelest month.” Even disregarding Tax Day, April was a cruel month for me this year. It was the month I choose to leave the federal government. Two weeks ago I officially decided that instead of converting to the civil service at the end of my PMF in the fall, I will be attending Rice University to complete my PhD in Political Science (hey, at least it’s related).

It is with great sadness that I leave the government. Although I have occasionally had Kafkaesque experiences, the time I have spent in the government has, in large part, been personally and professionally fulfilling. Not to mention my time with the excellent members of YGL. I’m extremely sad that I won’t be around to see my fellow Gen Y’ers will step up to the challenge of reinventing the government during the next administration.

The reinvention of government is not an option, but a necessity. However, it will not be accomplished solely by current feds. To succeed, it must be a collaborative effort by groups and individuals across the country. It will take former feds (like I soon will be), academics, grassroots activists, non-profits, state and local governments, and countless others to force the federal government to flatten its organization and breakdown barriers to progress. Right now some of the most innovative projects in the public sector are taking place at the state and local level. They are partnering with private enterprise and non-profits, exploiting existing opportunities as well as creating their own. They are combating issues like global warming and the housing crisis, occasionally hitting a home run, frequently striking out. But they are trying and innovating, while the federal government often acts like a pitcher on the disabled list.

As the 21st century progresses and Gen Y and Gen X begin to move into positions of influence, the government will not have the luxury of watching from the sidelines. If we fail to act, action won’t fail to be taken. We will be forced to act quickly and decisively, or watch the federal government’s influence diminish and its power for positive change shrink. A void will be left that other stakeholders - state and local governments, non-profits, private enterprise, even foreign countries - will fill, but only the federal government can act with the best interests of the whole nation in mind.

So what can we do to prepare for our inevitable roles as leaders in the federal government over the next few years of our careers? I have a few suggestions:

1. Focus on collaborative efforts
Collaboration will be even more important in the century to come than it is now. Everything is interconnected from environmental issues and urban planning, to homeland security and agriculture. The government will need outside actors (such as academics as I hope to be) to accomplish its goals, not just as regulated entities, but as partners and allies.

2. Be prepared and empowered to act
One of the major factors promoting intractability in the federal government is the constant quest for ‘more data’ or ‘more information.’ While the accurate information is priceless to a decision maker, demanding ‘further study’ is often simply an excuse for delay and inaction. Inaction is safer; the status quo is always comfortable. But neither accomplishes our primary goal of better serving the public. We need to become significantly more comfortable with risk and dismiss the “manufactured uncertainty” that so often plagues our policy debates. “There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.”

3. Get out more
Compared to previous generations, ours is much more comfortable with change and movement. Take this with a grain of salt if you must from someone leaving the federal government, but we must bring that mindset to reinventing government. The old model of federal employment where people spent 30-40 years at the same agency is no longer viable. Federal employees need rotational opportunities, exchange programs, sometimes even new jobs. To properly collaborate with and even understand our clients, we will need to move in and out of government, to the non-profit, private, and even contracting sectors, to learn the skills we will need to serve the public.

What is needed to reinvent the government is not so much new policies and procedures as it is a new mindset, a new outlook. Many might argue that some of the things I’ve suggested are already being done. Multiple agencies have private sector advisory councils; rotations are available to certain employees, etc. But it’s the difference between embracing change and being forced into it. It’s the difference between being reactive and proactive. A reactive government is no longer viable. We need a proactive, responsive government. To get that, we need an adaptable, knowledgeable workforce that has seen and done more than sit inside a federal building. So, while soon I will no longer be a public servant in fact, I’ll still be one in spirit. Hope to see some of y’all out in the world.