CD Financial March 2019

Give us a call! 949.359.5100

MARCH 2019



30270 Rancho Viejo Road Suite D San Juan Capistrano, CA 92675

TSP Promises and Pitfalls


Every federal employee has the option to enroll in the Thrift Savings Plan (TSP), and they are also automatically enrolled as part of the Federal Employment Retirement System (FERS). The TSP is designed to work like 401(k) plans do in the private sector. It’s a great option to help federal workers grow their nest eggs for retirement. However, many people fail to take advantage of everything the TSP has to offer. While the promise of the TSP is great, it’s not without pitfalls. All FERS employees receive an automatic 1 percent match of their pay at 100 percent, with no action required on their part, and it is their obligation to put 5 percent of their pay into the TSP to receive a match. I’ve met hundreds of employees who’ve never funded their TSP, yet it is an essential part of their benefits and retirement package. I’m convinced this is the reason why, on July 31, 2010, the federal government made it mandatory for new hires to be automatically enrolled for 3 percent of their pay, matched at 100 percent. The final 2 percent (totaling 5 percent of pay) is matched at 50 percent. A 50 percent return on your money is fantastic, yet some employees still point out that they can’t afford the last 2 percent. If you are a FERS employee, don’t ever make the mistake of funding less than 5 percent of your pay across 26 pay periods annually. The full 26 pay periods allows all the matching dollars from the government to come into play. At most private companies, there’s someone on staff to assist employees (usually in HR) who helps guide you through the 401(k) process and the maximization of your benefits. Public servants typically have no such internal resource, which means that they must seek advice on their own or on the web, which is where they are most often directed. You may agree that when starting a new job, you’re mostly chasing after learning your duties, assuming that the rest is handled. Also, there are many who don’t learn by reading but rather through instruction. The problem is, their investments may not be examined for years. If you make no fund election yourself, you will default to the G Fund. This fund invests exclusively in a nonmarketable short-term U.S. Treasury security that is specially issued to the TSP, and the earnings consist entirely of interest income. The promise of a no-loss G Fund with steady returns sounds attractive, but years may pass before you find — after a decade or more — that this fund may have been too conservative for your early earning years. I can’t tell you how many times I’ve heard, “Charles, I wish I would’ve known this years ago.” Unfortunately, G Fund returns are modest in comparison to market averages over longer periods of time. It may feel like you’re making

money from the G Fund — technically, you are — but in the grand scheme of things, you’re missing out on the improved returns you’d see from a more diversified portfolio. These problems have not gone unnoticed. In a July, 2011 letter to investors, the TSP stated that one of their major problems is that workers “invest money too conservatively in [their] early saving years.” It’s conventional financial wisdom to gradually move from riskier investments to more conservative investments as you near retirement. You can do this automatically through the TSP’s lifecycle funds as well as other financial products not exclusive to the TSP. You can even find some smartly designed ETFs in the private sector managed by Blackrock — the same company that manages the TSP’s funds. Another pitfall with self-managing the TSP is the simplicity of having just 5 funds. This allows a quicker understanding of the investments but creates a tendency to want to alter them in the event of a market downturn. When the market recovers, you may fail to recoup those losses. As such, what seemed like a prudent financial maneuver ends up costing you money. Fellow co-workers may be sincere, giving you what they believe is good advice. The recent stock pullback of late 2018 caused many to move their assets to the G Fund in January, only to see the C, S, and I funds rebound drastically. When I asked a handful of federal employees why they did this, the answer was always similar. “A co-worker told me to do it,” or, “I was afraid of sustaining any more losses.” A thoroughly analyzed retirement income plan may help overcome these emotional reactions. You can avoid the pitfalls inherent in the TSP by following advice from that same letter to investors. “Don’t just wing it; consult a financial planner if necessary.”The precise strategies that could benefit you the most will depend on your goals and circumstances, but everyone can benefit from having a well-defined strategy in place. Your financial future is too important to leave to chance or emotional investing. It’s essential to examine what you’re doing and assess whether it’s the best plan for you. It’s a shame that the government doesn’t provide more help in this regard, but that’s exactly what we’re here to do. Creating a written retirement income plan is of utmost importance, so that, whether the market is up or down, your income is secure. -Charles Dzama


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PEANUTS AND CRACKER JACKS The Best Opening Days in Baseball History

Baseball’s opening day has been an American holiday of sorts since the Cincinnati Red Stockings threw out the first major league pitch in 1869. To celebrate the start of the 150th season of professional baseball, here are three of the best opening days in baseball history.

Spring is in the air, and it’s time to celebrate with another round of spring- cleaning. Banish the clutter and make room in your life for something new! Many charities see a sharp increase in donations as spring-cleaning season starts. Donating your used books, kids’ toys, and gently worn clothing allows your old items to have a second life. However, when filling that donation box, make sure you’re donating each item because it can do good and not just because you feel bad about throwing it away. Charities have a big problem with well-meaning citizens dropping off items that are better left in the trash. There are many items charities simply cannot handle. Most charities will have lists of items they can and cannot accept on their websites. Some items that you should not donate include: DONATE WITH CARE The Right Way to Donate After Spring-Cleaning


On April 15, 1947, an opening-day game changed the course of Major League Baseball. On this day, Jackie Robinson started for the Brooklyn Dodgers, becoming the first African-American player to start for a major league baseball team. Robinson’s historic showing was lackluster, going 0-for-3 at the plate and making a solid showing on the infield at first base, but his mere presence in a Dodgers uniform had already broken history. Despite his nationally-recognized skills — Robinson was named MVP of the MLB farm team league in 1946 — the backlash that followed his rise to the pros, both from fans and teammates, was palpable. Still, as well-known sportscaster Howard Cosell said, “Suddenly, it was a new beginning.”


Considered one of the best teams in baseball history, the 1927 New York Yankees started their historic run and 25th season by dismantling the Philadelphia Athletics with a score of 8-3. The slugfest was true to form for the 1927 Yankees, whose players would go on to make up baseball’s famous “Murderers’ Row.”With sluggers like Lou Gehrig, Earle Combs, Babe Ruth, Mark Koenig, Bob Meusel, and Tony Lazzeri, it’s no wonder this team went on to win its fifth championship that year.

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Expired medications

Old TVs


Loose remote controls

Personal care items, like soap, shampoo, or makeup




Tangled cords or phone chargers Any broken, damaged, or dirty items

For decades, no one could match George Herman Ruth. The Great Bambino’s all-time home run record seemed

These items may be unsafe to sell, costly to ship, or impossible to refurbish effectively. When a charity regularly receives items they cannot use, they have to spend hours of manpower sorting through things that end up in the trash anyway. This process can be expensive for organizations with already-strained resources. Some local charities spend over $1,000 a year on dumpster and trash removal fees for unusable donations. While charities will have no choice but to throw unusable donations in the trash, there are services you can use to make your spring- cleaning eco-friendly, even for items you can’t donate. For example, if you have torn or stained blue jeans, reach out to Blue Jeans Go Green. This program keeps denim out of landfills by turning it into insulation. And while Goodwill can’t take your batteries or old flip phone, you can check out to learn how to safely recycle your e-waste.

like an impossible feat of strength —

that is, until Henry “Hammerin’ Hank” Aaron came along. On opening day, April 4, 1974, Aaron smashed his 714th

homer, tying Babe Ruth for the most home runs ever hit and extending the Atlanta

Braves’ shutout lead over the Cincinnati Reds. A few weeks later, Aaron surpassed Ruth’s record, prompting a standing

Your donations can be a big help to local charities. Just don’t “donate” your garbage.

ovation from the crowd.

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3 Unique Therapy Animals Everyone has heard of therapy dogs and cats, but did you know virtually any critter can be a therapy or support animal? Therapy animals help humans cope with PTSD, anxiety, depression, injury, high blood pressure, and chronic pain, as well as a wide range of other conditions and difficulties. Therapy animals range from guinea pigs that can fit in a purse to dolphins that swim with amputees. Here are three unique companions who make a difference in the lives of people who need them.

beneath his desk to pet Buttercup. Afterward,

Rojo the Llama

the child spoke to the class for the first time. “It was a remarkable breakthrough,” says Brady.

Mountain Peaks Therapy Llamas and Alpacas in Portland, Oregon, has conducted over 1,500 visits during the last decade and helps over 10,000 people each year. Their star llama, Rojo, is one of just 14 llamas registered as a therapy animal in the United States. Rojo’s exceptionally gentle temperament is calming to everyone who meets him. He’s so well-loved and has become such a big deal that he has his own Facebook page and two children’s books!

Rocky the Miniature Horse

Buttercup the Pot-Bellied Pig

At just 32 inches high and 325 pounds, Rocky packs a lot of cuteness into one small package. He’s not a pony but rather a breed of miniature horse historically used in coal mines in the 17th century. His specialty is working with retired veterans at the VA Community Living Center in Phoenix, Arizona, where the residents know him and look forward to his visits. For some, Rocky’s visits are bittersweet. “I wish I could have had more time to spend with horses,” says one veteran as he scratches Rocky’s ears. “There’s something calming about them.”

Lois Brady, a speech pathologist who works with special needs students in San Francisco, has a secret weapon in her arsenal: Buttercup, her black, 70-pound Vietnamese pot-bellied pig. His docile nature makes him the perfect companion for autistic children, who are often easily startled. Because Buttercup is an unusual sight in classrooms, children find him fascinating. In 2017, an autistic student who had never spoken to his classmates before felt compelled to crawl out from

Everything Popcorn


Inspired by Food & Wine Magazine.


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3/4 cup popcorn kernels 2 tablespoons flaky sea salt 1 teaspoon black sesame seeds 2 teaspoons white sesame seeds

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2 teaspoons granulated garlic 2 teaspoons granulated onion

1/3 cup canola oil

4 tablespoons unsalted butter, melted



In a small skillet over medium heat, toast sesame seeds. Shake skillet often and cook until white seeds are golden and fragrant, about 2 minutes. Transfer to a small bowl and add garlic, onion, and salt. In a large saucepan, combine popcorn kernels and oil. Cook over medium-

high heat, covered, until popcorn kernels start to pop. Once popping, continue cooking and shaking the pan intermittently until popping ceases, about 3–5 minutes. Transfer popcorn to a large mixing bowl. Pour in butter and toss to coat. Finally, add seasoning, toss again, and serve.

Solution on page 4




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INSIDE 1 30270 Rancho Viejo Road Suite D San Juan Capistrano, CA 92675

How to Make the Most of Your TSP


Why Charities Hate Spring-Cleaning

3 Great Opening Days in Baseball


Llamas, Pigs, and Horses … Oh, My! Everything Popcorn


Considering the Costs of Home Care


To Live Your Best Retirement

When retirement approaches, you may be thinking about the freedom you’ll

In most cases, neither Medicare or Medicaid covers in-home care. There are some exceptions, like home- and community-based services that are state and locally funded and cover those who qualify through Medicaid. If you or your spouse are veterans and meet the requirements, you may be eligible for aid and attendance benefits. These benefits are paid for by the VA in addition to a veteran’s monthly pension. It may cover the costs of in-home care for veterans who require the aid of another person or are housebound. Visit to learn more. Still, you may not want to rely on qualifying for one of these services. Consider adapting your estate plan to include designated in-home care. Meet with your attorney to review your living trust and see if it addresses a caregiver. Talk to your family members and loved ones about the possibility that you or your spouse may need this service. While a family member may offer to step into that role, consider how easily they will be able to carry it out. Even a part-time caregiver could provide you with support and make your family members feel like they are not doing it alone. Planning for the possibility that you may need in-home care services can help make your retirement even more enjoyable. Knowing you’ll have a close helping hand can ease your family’s worries and even strengthen your bond.

enjoy after putting in your last nine-

to-five. It’s a culmination of years of hard work and a cause for


Before you get to celebrate, though, it’s important to consider what kind of support you might need down the road. With our generation living longer than

our parents, there’s a possibility that we may require additional support services. You and your spouse may not know if either of you will need in-home care, but considering this possibility and the financial factors that come with it can help you better enjoy this exciting phase of your life.

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