- The Washington Times - Tuesday, June 4, 2002

After the September 11 terrorists attacks, the stock market and the federal Thrift Savings Plan went into the tank.
But the market and the TSP have rebounded and are back above their September levels. The TSP, half of which is in the stock market, is worth well over $100 billion and it is expected to double the retirement incomes of thousands of federal and military investors.
The prudent question now is: What about next time? What happens if (the experts say "when") terrorists strike again. After all, most people invest for long-range goals like retirement, but often react to short-term (good and bad) situations.
Paul Yurachek, a financial planner with American Express Investors in Bethesda, says, "The only lasting effect [the attacks] had on the market is a reluctance to invest new money and people should ask themselves what kind of money they need for the short term and the long term."
If you are talking short term (12 to 18 months), then Mr. Yurachek advises TSP investors to play it safe and invest in the Treasury-backed G Fund.
For money that you won't touch for the long term, he recommends the C Fund, which tracks the S&P; 500 index. It returned 20 percent to 40 percent during the 1990s but dropped in the last two years. "You might only get 8 or 9 percent over the next 10 years from the C Fund," he says, "but that's still better than 2 percent in a CD or money market.
"You can't change your life waiting for the next attack, which could be 10 years away," he said.
In fact, he says, the best potential for growth in the TSP is in the S (small-cap index) and I (international stock index) funds. When the country is coming out of a recession, the small companies that survive come out faster.
Finally, he says, the hottest TSP fund for the past two years, the bond-indexed F Fund, "is at risk when interest rates start to rise. If I had money in the F Fund, I would move it to the G Fund and capture the gains."

Lifelong perk
Health insurance for life is a perk few Americans except those who retire from the federal government enjoy, and should be considered by federal workers who use their private-sector spouses' insurance.
They ignore the dozen or so federal plans available to them, but when they retire or their spouse dies or they divorce the feds find themselves without coverage.
Most companies cut off employees when they retire (some now are ending health plans for workers too), or hit age 65.
To be eligible for lifetime coverage, feds must be enrolled in any one of the federal health plans for five years prior to retirement. Many pick a low-premium plan (and never use it) just to keep their eligibility. Some, who drop federal coverage to save money, wind up old, retired and uninsured.
Bottom line: If you are in the Federal Employees Health Benefits Program, then keep the coverage. If you are eligible but don't have coverage, run, don't walk, to sign up during the next open season that begins in November.

Long-term care insurance
Federal workers, military personnel and retirees will have a chance to sign up for the federal long-term care health insurance program between July 1 and Dec. 31. Premiums are based on the amount and length of the benefit and your age when you are accepted for coverage.
Many younger, healthier federal workers can get equal or better coverage from individual plans sponsored by a dozen top-rated companies. But for retirees and older employees, the federal coverage may be the only long-term care insurance they can get. For information on the program, call 800/582-3337 from 8 a.m. to 8 p.m. weekdays.

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