Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

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Weathering
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by Weathering »

tj wrote: Sun Feb 02, 2025 10:15 pm
chinchin wrote: Sun Feb 02, 2025 9:21 pm

I don't know what qualifies as "mass," but in my agency, there were rumors of buyouts and early outs coming last time Trump was president (never happened). This time around, we haven't got any "deferred resignation solicitation."

Mass RIFs are not unprecedented. Literally happened under Clinton.

If "nobody understands what is going on," how can you manage your assets based on that? You can't. So my point stands.
Non-career staff at OPM have sent mass emails to every civilian in the US government circumventing communications through chain of command. That did not happen under Clinton, Trump or anybody else.
+1 to everything tj is saying.
I will add that my ears perked up when I heard VERA on Friday (even that communication left a lot of room for differing interpretations), but I’m enjoying my work too much to consider the fork. I just hope my favorite co-workers don’t leave.
tj
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by tj »

Weathering wrote: Sun Feb 02, 2025 10:25 pm
tj wrote: Sun Feb 02, 2025 10:15 pm

Non-career staff at OPM have sent mass emails to every civilian in the US government circumventing communications through chain of command. That did not happen under Clinton, Trump or anybody else.
+1 to everything tj is saying.
I will add that my ears perked up when I heard VERA on Friday (even that communication left a lot of room for differing interpretations), but I’m enjoying my work too much to consider the fork. I just hope my favorite co-workers don’t leave.
So far nobody has been officially been offered a VERA. I don't think I'd want to rely on getting VERA in conjunction with a resignation if I didn't actually see the VERA paperwork first.
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EngCapt1
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by EngCapt1 »

tj wrote: Sun Feb 02, 2025 10:27 pm So far nobody has been officially been offered a VERA.
DW received email Friday from her agency's HR offering VERA. :confused
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tj
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by tj »

EngCapt1 wrote: Sun Feb 02, 2025 10:59 pm
tj wrote: Sun Feb 02, 2025 10:27 pm So far nobody has been officially been offered a VERA.
DW received email Friday from her agency's HR offering VERA. :confused
No, she didn't. The email said that agency has requested VERA from OPM and OPM indicated that they would grant it. (This is a template that literally every government agency sent out, likely at the order of OPM).

That is a very different thing than her personally receiving an offer to VERA.

A legitimate VERA would not be contingent on somebody taking up the offer of this mysterious "deferred resignation".


Example of actual VERA offer:

Image
Image
Image
Last edited by tj on Sun Feb 02, 2025 11:15 pm, edited 1 time in total.
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EngCapt1
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by EngCapt1 »

tj wrote: Sun Feb 02, 2025 11:04 pmNo, she didn't.
Most certainly did.
tj wrote: Sun Feb 02, 2025 11:04 pm The email said that agency has requested VERA from OPM and OPM indicated that they would grant it. (This is a template that literally every government agency sent out, likely at the order of OPM).
This wording is not even close to the email she received. I have no further input here.

:beer
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tj
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by tj »

EngCapt1 wrote: Sun Feb 02, 2025 11:15 pm
tj wrote: Sun Feb 02, 2025 11:04 pmNo, she didn't.
Most certainly did.
tj wrote: Sun Feb 02, 2025 11:04 pm The email said that agency has requested VERA from OPM and OPM indicated that they would grant it. (This is a template that literally every government agency sent out, likely at the order of OPM).
This wording is not even close to the email she received. I have no further input here.

:beer
Really? You don't even know what the wording is.

It was not even close to this?

Image

Image

Image
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EngCapt1
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by EngCapt1 »

tj wrote: Sun Feb 02, 2025 11:16 pm Really? You don't even know what the wording is.
I do know what the wording in her email is, as we've spent a good part of the weekend discussing it. The VERA offer came late Friday afternoon from her agency's HR... and it's not the Treasury Department. The screenshots you're posting are similar to what she received earlier in the week. The email she received Friday afternoon is for VERA, not deferred resignation.

:beer
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tj
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by tj »

EngCapt1 wrote: Sun Feb 02, 2025 11:32 pm
tj wrote: Sun Feb 02, 2025 11:16 pm Really? You don't even know what the wording is.
I do know what the wording in her email is, as we've spent a good part of the weekend discussing it. The VERA offer came late Friday afternoon from her agency's HR... and it's not the Treasury Department. The screenshots you're posting are similar to what she received earlier in the week. The email she received Friday afternoon is for VERA, not deferred resignation.

:beer
I guess she is lucky then. I'm shocked her agency works at warp speed. Perhaps they were already planning VERAs before this all started.

That doesn't mean everyone who eligible for a VERA is going to get one, like some people seem to think, which was the point.

The screenshots I posted are all from Friday, not earlier in the week. When agencies sent out their own correspondence to try to "legitimize" the deferred resignation offer.
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EngCapt1
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by EngCapt1 »

tj wrote: Sun Feb 02, 2025 11:35 pm Perhaps they were already planning VERAs before this all started.
This is quite possible, as the offer was very specific to certain select positions within the agency. Most positions/job classifications in her office are not even eligible for this round of VERA, but a few are.
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trueblueky
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by trueblueky »

tj wrote: Sun Feb 02, 2025 11:04 pm
EngCapt1 wrote: Sun Feb 02, 2025 10:59 pm

DW received email Friday from her agency's HR offering VERA. :confused
No, she didn't. The email said that agency has requested VERA from OPM and OPM indicated that they would grant it. (This is a template that literally every government agency sent out, likely at the order of OPM).

That is a very different thing than her personally receiving an offer to VERA.

A legitimate VERA would not be contingent on somebody taking up the offer of this mysterious "deferred resignation".


Example of actual VERA offer:

Image
Image
Image
That survey memo on agency letterhead is similar to what we used with base closures (1988, 1991, 1993, 1995, 2005). It's nothing like the "resign?" email.

I was personally involved in one base closure, so that my position moved to another state. No one who was willing/able to move lost a job in the dozen bases we close; understand that some had personal/family reasons why that couldn't relocate, and some took early retirement or found a different federal job.

I was also involved in a reorg that moved me to another command. That took three letters at different points in the process. There's a process to follow.
VaR
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by VaR »

delamer wrote: Mon Jan 27, 2025 12:39 pm
ZMonet wrote: Mon Jan 27, 2025 12:06 pm

The 20% is mostly in the TSP G-Fund. The total mix is about 50% pre-tax, 35% after-tax, and 15% Roth
Given your concerns, I’d put a couple years of expenses in your after-tax account. You could either reduce your G Fund allocation to keep bonds/cash at 20% or allow the bonds/cash allocation to drift up.

Being able to cover your expenses for awhile with no tax consequences is a good position to be in. And if you are unemployed for a significant amount of time, you can tap the G Fund and pay little in taxes.

Good luck; between the job uncertainty and (for many) the loss of work-from-home opportunities, feds are not in a good place now. I’m expecting to get word that a lot of my former colleagues are retiring ASAP.
We could have a side-discussion about this strategy, but I wouldn't do this. I'm one of those who was convinced by another thread somewhere on this board that it's ok to keep your after-tax account in equities as a tax-preference strategy. If one needs to withdraw the money in an emergency, you do need to sell the equities but you can always rebalance your tax deferred or Roth accounts to increase equity to compensate. So in the non-emergency case, you can keep your asset allocation in their optimal accounts, but in the emergency case, you're also pulling money both from the optimal account and from what you believe to be the right part of your asset allocation.

The G Fund is a great benefit. I can't access it myself, but I have a relative who does.
delamer
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Re: Federal Employees Nearing Retirement (5-8 years): Should We Adjust Our 80/20 Asset Allocation Amid Job Uncertainty?

Post by delamer »

VaR wrote: Mon Feb 03, 2025 9:32 am
delamer wrote: Mon Jan 27, 2025 12:39 pm

Given your concerns, I’d put a couple years of expenses in your after-tax account. You could either reduce your G Fund allocation to keep bonds/cash at 20% or allow the bonds/cash allocation to drift up.

Being able to cover your expenses for awhile with no tax consequences is a good position to be in. And if you are unemployed for a significant amount of time, you can tap the G Fund and pay little in taxes.

Good luck; between the job uncertainty and (for many) the loss of work-from-home opportunities, feds are not in a good place now. I’m expecting to get word that a lot of my former colleagues are retiring ASAP.
We could have a side-discussion about this strategy, but I wouldn't do this. I'm one of those who was convinced by another thread somewhere on this board that it's ok to keep your after-tax account in equities as a tax-preference strategy. If one needs to withdraw the money in an emergency, you do need to sell the equities but you can always rebalance your tax deferred or Roth accounts to increase equity to compensate. So in the non-emergency case, you can keep your asset allocation in their optimal accounts, but in the emergency case, you're also pulling money both from the optimal account and from what you believe to be the right part of your asset allocation.

The G Fund is a great benefit. I can't access it myself, but I have a relative who does.
Your strategy is fine for some people. In fact, it’s probably beneficial in terms of long-run portfolio returns.

But psychologically, many benefit from having some funds that aren’t taxed on withdrawal and that won’t need to be sold at a loss. It’s “sleep well at night” money and may increase their willingness to hold equities.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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