Friday, October 23, 2020

Life Insurance as Retirement Investment

As a follow-up to my previous, very broad post about financial management in the Foreign Service, I thought it might help to share something M and I only learned about relatively recently: life insurance as an investment. Like many other government employees, Foreign Service members have access to robust retirement options. For example, I have the combination of Social Security (though I had plenty of public school teachers tell my generation not to count on this one), a pension, and an IRA through the Thrift Savings Plan (TSP, the U.S. government employee retirement plan).

But what if you have more disposable income and would like to invest that in more diverse sources to build wealth for the future? There are so many options out there. A popular avenue with Foreign Service Officers is real estate, which I'll address in a future post. But another strategy involves life insurance. I first learned about this method attending financial education webinars for Foreign Service members, and after that M and I did a deep dive into how this mysterious new world works.

We ultimately decided to purchase permanent life insurance. Unlike FEGLI (Federal Employees' Group Life Insurance), my new life insurance plan is tied to me as an individual and not to my job. In other words, if something unexpected happens and I need to leave government service, I'll still be covered. This advantage alone probably would've been enough to convince us to make the switch, but there were other reasons, too.

At the risk of sounding morbid, I have to say that not too long ago, I thought life insurance only mattered if you die. Turns out, there are plenty of plans that go far beyond this. One thing I like about the plan I ultimately selected, for instance, is that it will pay out a stipend even prior to my passing if I'm diagnosed with a serious illness or suffer a major accident. That security and peace of mind is well worth our investment. Moreover, because I chose a permanent life insurance plan instead of a term life insurance plan, I can collect that savings tax-free with compound interest as a boost to my income in retirement. (Term insurance is cheaper than permanent insurance but is designed to provide coverage only within a specified timeframe. Make sure you hear both sides of the debate, though; some prefer term life insurance plans or say to skip life insurance entirely.) Because I'm starting the process at a young age and in good health, life insurance is much more affordable.

If you want to learn more about life insurance as a retirement investment, I highly recommend you check out The Purpose of Money, a podcast and online resource for personal finance and investment run by our friend and colleague Acquania. You can even contact her through her website and she will do customized financial advising for you and offer helpful advice on your retirement savings plan, no matter where in your investment journey you are. (I should add that we're not getting any kind of referral bonus or kickback for sharing information about her financial advising services; we really just think they're that good!) We especially hope this post was helpful to other investment newbies looking to diversify their savings and build some financial security for the future. If you have investment tips, please feel free to comment them below.

Tuesday, October 13, 2020

ConGenerally Speaking...

I know, it's been I while since I threw a pun in the title of a post. I hope this one got at least a few of my readers groaning and rolling their eyes, the mark of every truly great pun.

This is a bit of a victory post: after a year of delay when our Baghdad assignment was cancelled, and an additional four-month delay due to the pandemic, I finally started ConGen! ConGen is the common name for Consular Tradecraft training. It was required for me to be able to do my next job in South Korea, which could include adjudicating visas and helping U.S. citizens abroad.

Let me be clear (because some have already asked): I will not be giving out visa advice or coaching anyone, even people I love, on how to increase their chances of getting a visa. All I'm going to say is apply early, organize all your required documents and trip information, and be open and honest. You can find all of the publicly available information on visas at travel.state.gov. Trying to give people I know special treatment is the type of thing that could not only cost me my job but compromise the integrity of the process (not to mention national security). So please do not pressure the Consular Officer in your life to give you advice!

It's often way too much information for one person to try and remember it all anyway. The best we can hope for is to memorize where to go find information. Every day brings new tests of our resourcefulness and judgment. I'm also becoming much more intimately acquainted with certain sections of the Foreign Affairs Manual (FAM) and Foreign Affairs Handbook (FAH), the compendia of regulation and policy information we need to do our jobs. To my dismay as a stickler for rules and clarity, I came across a poorly written part of the FAM during ConGen. The people I first complained to brushed it off, but then I found the people who write the FAM and suggested that they change it, and they actually agreed! They're working on it now. I love it when nerds and rules enthusiasts band together. (Unfortunately, I can't share the portion that is getting updated here because it's sensitive but unclassified, but suffice it to say I am very proud of myself.)

One of my biggest takeaways from this course is just how important local conditions are. Everything from the most common types of cases, pitfalls to watch for, and statistics on refusal and admittance rates vary widely from post to post. Moreover, certain programs and special requirements have a big impact on circumstances. For example, we have a visa waiver program in place with South Korea, so a lot of the most common tourist visas don't need to be issued at all in my office.

At the same time, worldwide travel demand has decreased drastically as a result of the pandemic. Consular work probably looks very different now than it did even just a year ago. I'll just have to wait until I get to post to see what it'll look like for me!