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Have you Reached a Life Insurance Milestone?

May 8, 2018 /by Admin

Life insurance is always a challenging thought to confront- the idea that you have to pay to protect yourself in the event of your death is a grim concept, but it is also a necessary one. Remember, in the best case scenario, you will never have to use it- but if you do, it can be what stands between your family and financial destitution. Life insurance in general should be a large part of your insurance strategy, and there are many versions of insurance to consider. However, if you have not yet established a life insurance policy, there are three major life milestones that should lead to thinking about your policy.

Buying your first home

When you buy your first home, it can be an adrenaline rush. It is a major goal for most people, up to 75% in the United States, but according to a report from the Federal Reserve Bank of New York, the amount of home-secured debt the average 65-year-old was still paying off had increased 47% since 2003. If your family loses your income, the payments for your house could prove to be too much to bear.

Getting married

Marriage is another part of most American’s lives that makes it vital to have life insurance. If you get married at an early age, student debts are often a large financial weight on the surviving spouse. Even if there is no debt involved, the average cost of a funeral can be over $10,000.

When you have a child

Children are often the best part of anyone’s life, but they are also the most expensive part of anyone’s life. From birth to age 17, the USDA says that the average cost of child rearing is over $200,000.

There are many ways life insurance can prove to be a benefit to you and the people you love, and assuming you choose the right insurance, it can be surprisingly affordable. Choose a good term life insurance policy that will cover you throughout the period you will be most financially at-risk, such as the period of time from a child’s birth to age 18, or when you will be paying off the majority of your mortgage. Talk to your financial counselor and take all the possible factors into consideration before you make any decision about your financial future.

How Medicare Works with Self +!

May 7, 2018 /by Admin

Health expenses are increasing with no real signs of slowing down any time soon. And for seniors, the costs can be astronomical. Of course, most employees and retirees when they turn 65, will see Medicare covering most of these expenses. It’s not a gift because they paid into the Medicare fund while they worked and had employer-matching contributions paid.

Before employees and retirees turned 65, the FEHB or Federal Employees Health Benefits program would pay up to 75 percent of the premium. What happens to the coverage when the person turns 65, and they are Medicare-eligible? Simply put, the FEHB coverage will end, and Medicare is now the primary payer. FEHB premiums will still go to the insurance companies even though Medicare is taking care of the majority of the bills.

In the yearly published “Guide to Health Plans for Federal Employees, there is information from the Medical Expenditure Panel Survey from the Health and Human Services Agency on Healthcare Research and Quality.

To use Blue Cross basic, which is a very popular FEHB option, the federal government pays yearly premiums of a little more than $17,000 to the insurance company for every couple – no matter what the age status is for either person.

Now, given that the yearly health expenses of a couple is more than 21,000, the $17,000 the government pays is not enough to cover a person 65 and older. The costs, however, are offset by the younger insureds’ costs. Don’t forget the Medicare payments for members 65 and older.

Medicare pays the majority of their bills. For instance, a $100,000 hospital bill is primarily taken care of by Medicare except for the $1,300 deductible. This amounts to 98.6 percent of the bill getting paid off. For non-hospital or doctor expenses, Medicare will pay 80 percent. Once Medicare makes payments, the costs for people 65 and older tend to decline significantly.

Age Group Average Yearly Expenses

55 and under $9,270
55 to 64 $17,700
65 and older $2,163 after payments made by Medicare

If 55 and under are over one-third, the total average is likely to be lower if the Medicare group is larger. For the 55 to 64 group to increase, it would have to increase the total overage but not near as much.

With every group being one-third, the $9,711 expenses are much less than what Blue Cross pays off the $17,233. The federal community knows that extra FEHB premiums are addressed by seniors through the Medicare dividend and is applied to the whole pool. Thus, every one attains a lower premium. The Office of Personnel Management completely supports this belief.

When looking at the $17,233 premium for self +1 against the basic Blue Cross $9,711 average net costs, it’s clear to see this isn’t going on. It appears the premium is much less. When the self +1 level began, there was some concern. However, it looks like the issue is the result of not applying the Medicare dividend to the premium decrease.

Will A Trade War Hurt The TSP?

May 6, 2018 /by Admin

The last few months have been a rollercoaster ride for the stock market, and the rollercoaster seems to be getting even faster with the prospect that a U.S. and China trade war could ensue. The question is, does it really matter and how big of a deal is it?

Nothing is conclusive at this moment. And, only time will tell if a trade war possibility will, in fact, have an effect on the market and TSP funds. Still, there is some idea of what could happen.

U.S. Trade Deficit

The U.S., since the 1980s, has had an ever-increasing trade deficit with the world, as we import more goods than the country exports. At the current rate, the U.S. deficit is sitting at $60 billion a month.

Based on 2017 information from the Census Bureau:

The U.S. exported approximately $1.5 trillion goods but took in $2.3 trillion, giving the nation an $800 billion deficit.
The U.S. imported $505 billion of Chinese goods but exported $130 billion to the country, meaning there is a $375 billion deficit with China.

Nearly half of the country’s total trade deficit is with China alone, and the number is only increasing. The start of a deficit between both countries occurred in 2002 when it hit $100 billion. In 2005, that number hit $200 billion, and the number continues to grow. It could hit $400 billion before too much longer.

Why is that?

It’s because many U.S. companies have outsourced manufacturing jobs to China. As China grows in its development and becomes more expensive, companies are looking to other Asia regions to outsource jobs and manufacturing.

Simply put, the country’s gross domestic product is just below $20 trillion, which means the deficit of $800 billion is about four percent of the country. A China trade deficit equates to two percent of the U.S. economy.

Understanding The New Tariffs and What It Means Competition-Wise

It’s only natural the U.S. government wants to get control of the deficit, especially with China. For U.S. workers, it also makes sense. After all, outsourcing means companies can find less expensive labor overseas, which drives down wages and boosts the unemployment rate in the U.S.

However, many companies are looking to embrace both outsourcing and globalization where financially it makes sense to do it. After all, they save money, provide goods to American consumers at a lower price and stay competitive in the worldwide market.

There are a plethora of competing interests going on here.

The Trump administration announced in 2018 that it would implement tariffs on certain types of exports. To date, here’s what has been suggested.

January 2018 – 30 percent tariff on imported solar panels – to last four years and decrease five percent each year. Tariffs were added to imported washing machines.
March 2018 – 25 percent tariff on steel; 10 percent tariff on aluminum. A number of economic regions were excluded from the tariffs, but China remains included in them.
March 2018 – New tariffs were included on $50 billion worth of imports from China. This caused the Dow to drop 724 points – the fifth-biggest daily drop in American history.

In response to all this, China announced it would put a 15 to 25 percent tariff on more than 100 American import goods, and then announced a few days later, an additional 100 or more items would be tariffed. This is when President Trump announced another $100 billion of Chinese imports would be subjected to tariffs, but this has yet to be implemented. This created rumblings of a U.S. and China trade war, but there is no direct announcement as of yet.

A big concern investors have is how much China owns in U.S. Treasuries, which is $1.2 trillion – more than five percent of the nation’s federal debt. Should China quit buying or selling them in retaliation for these tariffs, it could lead to higher interest rates for the U.S. debt and cause upheaval in the global bond market, so a U.S. and China trade war may not be in China’s best interest.

Is there a balanced solution to it all?

As it currently stands, the S&P 500 is roughly 10 percent off from the highs, and the future price-to-earnings ratio is thought to be 16.4x. The latest market drops and volatility have given some high U.S. stock valuations some breathing room, but the U.S. is still considered expensive by the majority of the metrics.

There is still a lot of room for stock prices to drop should the U.S. and China trade war become reality. However, you can decrease your portfolio’s volatility by holding onto a lifecycle fund or TSP funds. Just ready yourself for the news – good or bad.

How TSP Payments Are Provided Using The IRS Life Expectancy Guideline

May 5, 2018 /by Admin

Most people, when they want to withdraw money from their TSP, use the equal monthly payments. When the TSP Modernization Act is enacted, it gives people the option to pick how they want their payments – annually, quarterly or monthly. For now, there are two choices in how to get monthly payments – as a fixed dollar amount that chances once a year or through the IRS life expectancy table.

The selection can be made on the form TSP-70 (or Request for Full Withdrawal) or form TSP-77 (or Request for Partial Withdrawal When Separated). Here’s a look at the payments a person could receive if they choose the IRS life expectancy table option.

There are one of two reason people opt for the IRS life expectancy table payout, and both of them involve no IRS penalties. People who retire from the federal service before turning 55 avoid the 10 percent early withdrawal penalty using the age-based withdrawal methodology until they hit 59 and half years. The TSP’s life expectancy option is a way to meet the tax law requirements.

People 70 1/2 or order and withdrawing from the TSP must withdraw a set amount or be subjected to a 50 percent penalty for not taking the required minimum distribution. The life expectancy option will meet this requirement as well.

For people who choose the equal monthly payments using the IRS life expectancy table, the payment amounts are calculated every year on the account’s balance at the end of the year and the outstanding life expectancy. Once a person reaches the age of 70 1/2, the calculation follows the required minimum distribution rules.

The TSP will use the Uniform Lifetime table to determine what the payments should be.

Here’s an example of a person who stops working for the federal government at 56 years old with a TSP balance of $356,000 with a yearly rate increase of five percent. Here’s what she’ll get based on the Retirement Income Calculator.

At 56 years old, she’ll get a monthly payment of $1,088.85.
At 65 years old, she’ll see an increase to $1,613.23 a month.
When she turns 70, they increased to $1,961.94 a month.

When the required minimum distribution starts at 70 ½, the monthly amount declines to $1,245.51. If she lives an active lifestyle, she may decide to focus on a set dollar amount that is more in-line with how she spends.

A change can be made during the yearly open season, which begins Oct. 15 and runs to Dec. 15. Changes become effective January. Once the life expectancy monthly payments are switched to a set dollar amount, there is no going back. With the TSP Modernization Act, more changes will be allowed.

If the same individual continues with the life expectancy payments and lives to her 90^thbirthday, she’ll be getting $2,601.72 each month and still have more than $325,000 in her TSP fund.

Paying Taxes

Federal income tax is imposed for any withdrawals made from a traditional TSP, but based on the ordinary income. These equal monthly payments have a subjected withholding of the following: you’re married filing jointly and have three dependents you’re claiming. This is the lowest withholding rate and will not be enough for federal income taxes, which means you’ll end up paying in taxes if you’re not careful.

IRS life expectancy table payments are not permitted for rollover distribution and may not be rolled into an IRA.

Offset Your Tax Bill By Withholding More From Your TSP Account

May 4, 2018 /by Admin

Most people have filed their federal tax returns by now, and many of them have already spent the money received. While refunds are tremendous and spending them for what a person wants is lovely, it’s the money you end up owing and more that costs more than just the money you have to give. It’s a wounded pride that is coupled with a penalty and higher tax payment.

Did you know that your withdrawals from the TSP could be the reason for the federal income taxes you have to pay on? Although there are some exceptions, taking roughly equal payments each month constitutes a withholding of federal taxes like you are married, filing a joint return and have three dependents you are claiming.

This not near enough withholding to cover TSP withdrawals. If 90 percent of the taxes owed is not paid for by the end of the year, you will pay a 10 percent tax penalty. This 10 percent is the difference between what was withheld and the 90 percent amount.

If this is happening to you, consider increasing how much you withhold on the TSP withdrawals, by preparing the W-4P form (Withholding Certificate for Pension or Annuity Payments) and give it to the TSP. The form can be downloaded in the “forms and publications” category on the Internal Revenue Service’s website.

To stay current on the latest TSP tax rules, read Tax Information: Payments from Your TSP Account. You can find this on the TSP website under the forms and publications category.

Something else to keep in mind: if you’ve been deployed at any time and contributions was made to the traditional TSP from any tax-exempt income, some of the future withdrawals are based on these contributions that were not taxed when you withdrew them.

To learn more about your TSP withdrawal options, click here.

Thrift Board To Search For New I and F Fund Managers

May 3, 2018 /by Admin

The Thrift Board revealed that new managers for its F and I Funds would be chosen. In November 2017, the Board sent out a “Request for Proposals” for a new F Fund manager, and it hopes a decision on that Fund would be announced soon.

The Board has yet to issue an RFP for the I Fund manager but intends to later in the year. The I Fund manager will need to deal with the index change the I Fund watches. Right now, the I Fund watches the MSCI EAFE index, which looks at the economies of developed countries only – think the FarEast and Europe.

Not too long ago, the Thrift Board voted to change the index guidance for the I Fund, using the MSCI All World index. This index will look at everywhere but the U.S. It’s believed the change will occur early in 2019.

L Fund changes are also being looked at. The Board is going to do its yearly review of the five L funds – to determine their allocation. This exercise tends to lead a change in the assets of one or more of the funds. For instance, a variation in the L income Fund several years back led to a one percent shift between three stock funds; the F and G Funds were unaffected.

The L Fund’s most significant change is still scheduled for implementation in 2020 when it goes from a 10-year interval to a five-year one. The Board opted to make the change because the majority of private sector target dates are based on a five-year interval. This lets individuals target their money better.

The new Blended Retirement System is currently executed for uniformed services. The Board reminded members that a TSP account was needed to be eligible for the BRS. Service members who have a TSP account can opt in the BRS program to have government matching contributions allocated to the account. Those without a TSP account and want the BRS one must set up a TSP account.

The TSP Modernization Act will bring some significant changes to the TSP, which the Board plans to implement before the two-year deadline approaches the legislation imposed.

How TSP Annuities Are Set Up For and Paid Out

May 1, 2018 /by Admin

The primary federal retirement program provides various ways in which to set up survivor benefits. The Thrift Saving Plan (TSP) offers a plethora of opportunities in setting up the annuity benefit. TSP withdrawals can be made by multiple of ways and annuity is just one of the options available, either through a lump sum, a monthly payment or through a combination of both.

There are three kinds of TSP annuities:

Simple Life –This annuity is paid once to you in your life.
Joint Life (with Spouse) –This annuity will be paid out to you while you’re both living. If one of you passes on, the annuity is given to the survivor.
Joint Life (Not with a Spouse) –The annuity is paid to you and the person you designate for the benefit while living. Your designated chosen partner should have some insurable interest in you. The survivor of either one of you will get the benefit. People who are deemed to have an insurable interest in you include – blood relatives, former spouses, adopted relatives and those you’re dating and living with.

A joint life annuity pays a monthly payment of either 100 or 50 percent. If both you and the insured are still alive, it pays 100 percent. If either one of you dies, it pays a 50 percent survivor benefit.

There are some annuity features combinable with basic annuity kinds such as:

Cash refund– This option means if either one of you dies before getting payments that equal the account balance amount, the difference between the annuity purchase balance and payment sum is given to the beneficiary in a cash refund.
Increasing payments –With this option, the monthly payment amount grows up to three percent annually (dependent upon the consumer price index).
10-year definite payout –If you die during the first 10years of the annuity, the beneficiary gets payments for the rest of the 10

Available features may not be combined with all basic annuity types, and after the purchase of an annuity is made, the money is given to a private company. This company is the one that gives out the benefit.

A married person with a $3,500 or more account balance means spouses’ right requirements are applied to the withdrawal choice.
Married FERS participants’ spouses can have a joint and survivor annuity with its level payments, 50 percent survivor benefit level and the no cash refund feature unless they waive their rights to it.
A married CSRS participant means the TSP will inform the spouse of the withdrawal choice.

TSP Board to Review Funds

April 29, 2018 /by Admin

The L Funds biggest change is still scheduled to be implemented in 2020when it goes from a 10-year interval to a five-year one. The Board opted to make the change because the majority of private sector target dates are based on a five-year interval. This lets individuals target their money better.

The new Blended Retirement System is currently being executed for uniformed services. The Board reminded members that a TSP account was needed to be eligible for the BRS. Service members who have a TSP account can opt in the BRS program to have government matching contributions allocated to the account. Those without a TSP account and want the BRS one must set up a TSP account.

The TSP Modernization Act will bring some big changes to the TSP, which the Board plans to implement before the two-year deadline approaches the legislation imposed.

Stock Market Fluctuations Increase as Giants Stumble

April 28, 2018 /by Admin

Data compiled by Bloomberg reveals that according to the Standard & Poor’s 500 index, there has been a massive drop in stock prices. The US stock markets valuation has experienced a 10% drop in the last couple of days. This translates to a loss of $2.6 trillion for the economy.
This has been the worst April for the United States stock market since 89 years back when we had the Great Depression which was brought about by the devastating crash of 1929.
The stock market is shaky, and this goes beyond last week’s sell-off. Worse is yet to come, and we need to be prepared for a global market crash. The massive level of volatility for the stock market is shown in the Dow Jones Industrial Average (DJIA) and the S&P 500.
Despite showing stable long-term trends, stock exchanges can gain or lose large values within short periods. At times sudden shifts occur, and even experts are caught unawares.
It’s important to learn and understand stock market fluctuations. Have a keen eye for features in the macroeconomic environment that might trigger swings. This will keep you ahead of the game in all your trading activities.
Stock valuations are so unpredictable and change on a daily basis. This volatility can be caused by a variety of reasons which include:
i. Current political state and government interventions.
ii. Bank Interest Rates.
iii. Actual demand for the shares.
iv. The financial health of the company.
v. The resignation of well-known directors.
vi. Miscellaneous problems such as company strikes.
Tech industry billionaires have been the worst hit in the recent stock market plunge. These peoples’ net worth is directly tied to their companies’ stock prices and a dip in the market results in a proportional loss.
Mark Zuckerberg, for example, has seen his fortunes shrink by more than $10 billion. Within two days in which there was a data scandal surrounding his company, the Facebook founder and CEO lost $9 billion.
Another tech company that is also having a decline in its profit margins includes Apple. The company recently released the iPhone X, which did not get as great a reception into the market as had been anticipated. This has already affected its stock prices.
Just recently, Donald Trump criticized Amazon and said the online retailer is taking advantage of small retailers.
Another factor that has played a major role in the fluctuations being experienced is the introduction of cryptocurrency. Last fall, Bitcoin prices shot up as buyers went on an investment spree for not wanting to miss out on such a great opportunity.
Today Bitcoin has fallen to below $7,000.
Aggressive buying, as well as reduced buying interest, are some attributes that made the prices to fall. Panic buying is almost always never a smart choice.
According to Dow Theory, the distribution phase is usually the warning phase for an upcoming downtrend. Here, you find big sellers after sensing trouble, selling their stock to other buyers.

Trade Wars Increase Financial Tension

April 27, 2018 /by Admin

President Trump was true to his word when he told the nation he intended to enter into a trade war with China. Whether or not he was telling the truth when he said it would be “easy to win,” has yet to be seen. No matter what the outcome might be, at this stage our current back-and-forth naming of new tariffs with the Asian economic giant certainly has sensible investors worried. Working for the federal government is no protection here. The Thrift Savings Plan (TSP) portion of the Federal Employees’ Retirement System (FERS) is that which the employee has the most control over and can often make the difference between a comfortable retirement and a stressful one.

The reason for this is that unlike the FERS Annuity and Social Security, the TSP allows employees to determine their own level of contribution and choose from a set of funds that can vary in performance. Market volatility caused by the looming trade war caused the majority of TSP funds to fall in March even though the first direct measures taken against China did not take place until March 22^nd when the first $50 billion worth of goods to receive tariffs was announced. That day saw the Dow Jones Industrial Average drop 724 points, a figure that represents the fifth-largest single day drop in the Dow’s history.

While this was the first major move by the White House directly targeted at China, they had been hinting at it from they began imposing tariffs earlier this year. In January a 30% tax on imported solar panels was implemented. The idea was to make U.S. solar panel manufacturers more competitive, but many experts doubted its effectiveness while cautioning that the move could cause huge job losses for solar installers, salespeople, and others working in the industry outside of manufacturing. The U.S. did not single out China at the time, but the majority of solar cell imports do come from Chine. At the beginning of March, a 25% tariff on imported steel and 10% tariff on aluminum was announced. However, shortly after it was announced that many North American, European, and other countries would be excluded from the tariff. China did not make that list.

There is no doubt that investors have been feeling the pressure. In regards to the TSP, post separation withdrawals and retirement applications have both been increasing since the beginning of the year. The Office of Personnel Management has reported huge backlogs in their ability to process claims.

Many powerful, and sometimes surprising, players have entered the arena to try and dissuade Trump from pursuing trade wars. Apple CEO Tim Cook was in Washington, D.C. on Wednesday where he had a closed-door meeting with the President. Speculation suggested that Cook would try and steer Trump away from further escalation of the trade barriers being put in place in the way of tariffs between the U.S. and China. Chinese trade is vital to Apple both for selling their products and meeting the huge demands of their supply chain. Cook’s private meeting with the President followed his participation in talks between Trump and French President Emmanuel Macron.

Macron’s visit was closely followed by another visit from a European Union head of state, German Chancellor Angela Merkel on Thursday. She was there for much the same reason as Macron, in hopes of tempering down the first signs of a trade war between the U.S. and the E.U.

With so many different interests at play on a global level, it must be expected that investors are jittery and markets are seeing increased volatility. The suggestion most frequently proffered to federal employees worried about their TSP is to diversify in a number of the different funds.

Downturns in Financial Markets Leave Upcoming Retirees Shaken

April 26, 2018 /by Admin

Financial markets recently took a massive swing into volatility, with the Dow Jones average fluctuating by hundreds of points in a single day- last Tuesday, the blue-chip benchmark plummeted 1.7%, making it the longest streak of losing sessions since March 2017. Many of those who rely on the market for their retirement funds, especially those close to retirement, are naturally worried about this downturn and what it may mean for those who do not have a lot of time to make up any losses they may incur due to the unpredictable movements of the market.

In this context, it can be hard to remain calm. More than 45 million Americans are over 65, which is typically when the main weight of living expenses tends to shift from active income to savings. In the currently tumultuous financial environment, between Federal Reserve interest rates rising, mounting global uncertainty, and trade wars looming on the horizon, it is important to stay calm and not follow the moods of the market. If you panic and sell based on relatively standard fluctuations, you could lose a large portion of your potential savings.

Money manager John Dorfman believes that markets will remain choppy, possibly even trending downwards, but he maintains faith in the underlying U.S. economy.

Tom McClellan, a market timer, says that the market could remain bearish for as long as four months, bottoming out sometime in August. He points specifically to the continued poor performance of high-yield corporate bonds and high performance in the customer discretionary market as compared to the consumer necessity market. This could spell bad news for those who are only months away from retirement, but historically bear markets are followed by a surging bull market, so there may not be much need to worry if you have a decent amount of time to recover from potential downturns. If you do not, however, shifting funds to gold and silver are typical responses to this situation.

In times like these, it is best to speak with a financial professional, and if you are looking to withdraw your TSP, there are several ways to do it while minimizing financial risk.

Military Retirement: How it Works

April 25, 2018 /by Admin

The Blended Retirement System just changed how retirement works for military personnel around the world, introducing military TSP plans to the previous pension program. As of the publishing date of this article, there are over 1.7 million people serving in the military. Military service refers to all those in the US Navy, the US Army, the Air Force, the Coast Guard, and the Marine Corps.

The United States Government offers generous pensions for military service, which are adjusted for inflation by annual Cost of Living Adjustments (COLAs).

Recently, a new retirement program was introduced for those in the military. This program is called Blended Retirement System, or BRS, and is a combination of the traditional military pension and a defined contribution plan with a military TSP.

This new system took effect on January 1st, 2018. Its main aim is to ensure that military personnel have a secure future, but under this new program, military pensions are reduced by 20%. This reduction is made up for, however, by the defined contributions in the Blended Retirement System.

Those members of the military that have been in service for twelve or more years as of the 31st of December, 2017, remain on the traditional retirement plan, earning a guaranteed monthly check for life based on their salary and length of service.

Those who have served for less than 12 years have an option to choose whether they will remain in the old legacy plan or they will join the new BRS program.

Any new members joining the military are automatically enrolled in the BRS program and contribute towards retirement.

Eligibility

For one to earn a guaranteed retirement pension, one has to serve for at least 20 years. Most people, however, never stay for the 20 year period. 83% of members leave before achieving this “20 or nothing” milestone.

You start receiving benefits on the day after retirement no matter how old you are. As long as you served for 20 years, you could be 39 and still get your benefits.

Members who stick around and serve for 40 years receive a monthly pension worth 100% of their final salary.

At age 62, you also start receiving additional retirement benefits from your social security fund.

What happens in case of death?

Retired members may participate in plans that allow continued annuity to their families after death. These are the:

1. SBP (Survivor Benefit Plan)

2. RCSBP (Reserve Component Survivor Benefit Plan)

Military and the TSP

This plan is the part of the BFS that involves investment accounts into which you make defined contributions. There are two options where you can either make your contributions before or after tax; the traditional TSP or the Roth TSP.

Members contribute up to 5% their salary and receive matching contributions.

For new members who joined the service after 1st January 2018, these matching contributions begin after the first two years of service. Members who have been in the military before this do not experience a delay of military TSP matching contributions.

An automatic 1% is made by the government for new members two months after their enrollment. The government will contribute this 1% whether or not the member contributes anything.

Your contributions are matched dollar for dollar for the first 3% and 50 cents per dollar for the remaining 2%.

USPS LiteBlue Basic Overview

April 23, 2018 /by Admin

USPS Job Bidding

The whole bidding process of USPS job bidding on LiteBlue is fully automated. For you to be able to access and submit a bid on a posted assignment, you require your employee ID and PIN. Applications must be sent before the specified deadline.

USPS job bidding is an important part of the job.

The Human Resources office has a review and evaluation committee. This committee is responsible for conducting interviews and any other form of applicant assessment. Selection of the most qualified employee for placement is based on factors such as:

The applicant’s eligibility to bid.
The bidder’s qualifications in relation to the standard requirements set.
The successful completion of training for the position if required.

Liteblue Portal Services

This portal was formed to foster faster communication and easier data flow for all its employees. Before its creation, management of postal services was chaotic. This system handles and manages all employees’ details while providing a secure login.

LiteBlue helps postal employees to monitor their assignments, work progress, career path and payroll services easily. Employees can access their work profile and get updates about their job roles in their respective accounts. It also allows easy USPS job bidding to change your work location.

It has also been made possible for employees to communicate with their colleagues or supervisors in a formal and orderly manner. This communication follows the appropriate hierarchical levels.

The LiteBlue application can be installed in phones to access the services.

Other portals that work in sync with LiteBlue include eRetireportal, EPayrollapp and PortalEASE

The Post Office: A General Overview

The United States Postal Service is also referred to as the U.S. Mail or the Post Office. The USPS is an independent agency of the federal government that provides postal services. Being independent means that the USPS builds its own revenue and funds itself.

By volume, staff, and revenue generated, the United States Postal Service is the most significant global mail service. It delivers 47% of the total world’s mail.

Operation

The USPS operates 31,585 post offices and serves up to 142 million delivery locations. Deliveries made on a daily basis total of 660 million pieces of mail which adds up to 153.4 billion pieces annually.

Deliveries are not made on Sundays, on Christmas and Thanksgiving, or on other observed federal holidays.

Together with the United States’ Department of Defense, they jointly operate a system that delivers mail to the uniformed service. This system has two branches, one that delivers for the Army and Air Force, called the Army Post Office. The second one is the Fleet Post Office which serves the Navy, the Coast Guard, and the Marine Corps.

Employment

The United States Postal Service is the second largest civil employer in the United States with around 574,000 employees.

USPS employees’ rights are represented by a couple of labor unions which are:-

APWU – The American Postal Workers Union
NALC – The National Association of Letter Carriers
NRLCA – The National Rural Letter Carriers’ Association
NPMHU – The National Postal Mail Handlers Union

TSP, FERS and Public Sector Retirement

April 22, 2018 /by Admin

TSP and FERS Employees

The Thrift Savings Plan is a retirement package for federal employees. Almost all federal employees are eligible for this program, and TSP and FERS work very well together.

TSP and FERS are important parts of your retirement — https://upload.wikimedia.org/wikipedia/commons/thumb/4/4f/US_Capitol_west_side.JPG/1200px-US_Capitol_west_side.JPG

Employees make optional contributions to an account, which are then matched by their employers. Matching contributions only apply to 5% of your salary. The agent makes two types of contributions which are:-

An automatic 1% whether you contribute to your account or not.
The first 3% attracts a dollar for dollar compensation while the other 2% gets 50 cents for dollar compensation.

The amount you invest determines how much you will receive after retirement. TSP and FERS work well together, providing both income based on contribution and on your years of service.

Federal Employees Retirement System

FERS is considered to be the best retirement plan as employees under it receive benefits from different sources. The three components of FERS retirement are the basic pension, Social security, and TSP. TSP and FERS are one of the best retirement systems for federal employees.

Basic FERS Pension

A pension fund is a scheme that provides cash payments to retirees to give them some form of income after their working years. In some places, it is also referred to as superannuation fund.

Usually, the employer contributes on the employee’s behalf by setting aside a pool of funds. This is as a way of appreciating their contribution in the organization. One’spension depends on how much they used to earn and the length of service. Upon retirement, the employee either decides to get the whole amount as a lump-sum or receive smaller monthly payments.

Social Security for FERS

Social security is a government program funded by both the employees and their employers. During their working years, employees under FERS pay 6.2% of their salary into the system. The employer then matches these contributions.

General Public Sector Retirement Information

The public sector is also referred to as the state sector and is comprised of organizations that are owned and run by the US government. The main reason for these organizations’ existence is to provide basic goods and services to citizens. Examples include the National and Local governments, military and healthcare institutions.

If an organization cannot be categorized under the public sector it automatically falls under the private or voluntary sector.

Retirement Age

65 is the normal retirement age common for most companies’ retirement plans. However, 66 is the full retirement age where you can collect your social security benefits. If you apply for social security before 66, the benefits received will be reduced.

There are however other significant ages that can help someone to decide their retirement age. For example:-

At 59.5 you’re allowed to withdraw from plans such as the 401(k)s and not be penalized.
At 62 you can collect your first social security retirement benefits.
At 65 years one becomes eligible for Medicare. If you decide to retire before 65 you will have to pay for your own health insurance.
At 70 you are obliged to start collecting your benefits.

Matching Contributions for Thrift Savings Plan

April 20, 2018 /by Admin

The Thrift Savings Plan is an investment retirement saving plan that benefits federal retirees as well as those in the military. TSP matching contributions are the part of the TSP that the United States government contributes to their retirement savings based on the employee’s contribution.

TSP matching contributions offer an advantage for your retirement.

As a Federal Employee, who has enrolled with the Federal Employee Retirement System, one should be able to make automatic contributions annually into their employer-sponsored savings plan.

TSP matching contributions

This retirement savings plan can include making a contribution of up to 5% your salary that your employer matches up. The other option is making catch-up contributions which are, however, not eligible for TSP matching contributions.

Employees who are 50 years or older and approaching retirement can pay catch-up contributions, which helps them accumulate bulk savings within a shorter period.

Contribution Limits

For regular employees, the matched amount is $18,000 while that for employees age 50 or older it is $24,00. Older employees can pay an additional $6,000 as a catch-up contribution. These limits are likely to increase yearly with inflation.

Withdrawing Money

Federal employees can choose the traditional TSP option and make tax-deferred contributions until they are withdrawn and taxed as normal. With the Roth TSP option, you get to make after-tax contributions. The benefit for this is the ability to make untaxed withdrawals, which, when combined with the TSP matching contributions, can be quite substantial.

The Roth TSP is a better investment option. It allows you to pay all your taxes as you contribute, meaning that you will not be charged for your withdrawals when you retire. This will save you some serious money in the long term.

Maximum Compensation

Stick to contributing a fixed percentage of your salary as opposed to contributing a set amount of your salary to ensure that you are maximally compensated for every pay period. This means that even when you get a pay rise, the amount you contribute goes up automatically.

Matching Contributions

Contributions are additional benefits given to federal employees on top of their salaries. You should not miss out on this, as it is free money.

Here is the ratio in which the US government contributes to the 5% of your salary:-

There is a fixed 1% automatic contribution whether or not you contribute to TSP.

For example, if you earn $70,000 annually, you will receive an automatic $700 on top of your salary.

On the first 3%, there’s a full hundred percent dollar-for-dollar match.
For the remaining 2%, there’s a 50 cents-for-dollar match.

Retirement

It is important to note that you can only get access to the matching contributions after you leave the job. For you to be vested or entitled to keep the contributions, it requires that you have worked for at least three years.

You forfeit the 1% automatic contributions if you leave before your tenure is up.

How prepared are you for federal retirement?

April 18, 2018 /by Admin

The United States Government has made federal retirement preparation easier to save up for the future by making available a contributions account called the Thrift Savings Plan. Members of the uniformed service are also a part of this program.

Federal Retirement preparation is not easy to understand. TSP makes it possible for retirees to have some form of income. With the TSP program, federal employees get similar retirement benefits as those in the private sector.
TSP is a component, among three others, of Federal Employee Retirement System. The other two are social security and FERS annuity. TSP gives the investor several options to pick from. These options can be broken down as follows:-
1. The government security investment fund – G Fund which has the lowest volatility.
2. The fixed income index investment fund – F Fund which has a low risk.
3. The common stock index investment – C Fund which has moderate risk.
4. The small capitalization stock index investment – S Fund
5. The international stock index investment – I Fund which is more volatile than the C Fund.
6. The specific lifecycle fund – L Fund
The L Fund series is a combination of all the G, F, C, S and I funds. However, if you’re not pleased with the L Fund, you can create your own combination of preferences from the other five investment options.
The good news is that it’s never too early to start your federal retirement preparation. You can start saving on your first day of work. Proper planning is key to a financially secure retirement.
FERS makes sure that later on your spouse and your kids are provided for, not only while you work but also after you’ve retired. It is therefore vital that you update your beneficiaries regularly in case there are changes such as divorce or any new children.
As a FERS employee, one has to make sure that they contribute a minimum of 5% of your salary to your TSP which the government matches up. Your contributions are matched at a rate of one dollar per dollar for the first 3% and fifty cents per dollar for the remaining 2%. Any contributions above 5% are not matched.
There are limits, however, whereby those below age 50 can contribute up to $18,500 annually while employees 50 years or older can contribute an additional sum of $6,000, called the catch-up contribution. It couldn’t get any better than this!
As you work, keep your retirement in mind. Make sure you live comfortably in future by getting a suitable Federal Retirement Savings plan.

What You Should Know About Social Security Near Retirement

April 16, 2018 /by Admin

What You Should Know About Social Security Near Retirement

For roughly 50 years, American citizens could look forward to retiring at the age of 65 because it meant they didn’t have to work anymore. Thanks to the Social Security Act of 1935, they could retire at that age and get full retirement benefits that would help pay their living expenses.

However, the full age of retirement is no longer 65. That age has been increased up to age 67, although it really depends on the year that you were born. This is because Congress amended the law back in 1983 so that the retirement age would increase gradually throughout the next 22 years. The reason for this increase had to do with people living longer because of improvements in the field of medicine and health. Overall, the life expectancy of people increased which meant they’d keep getting those benefits for longer than originally intended by the government.

Of course, people who’ve paid enough into their Social Security from years of working can still retire at the age of 65. In some cases, they can even retire earlier at ages like 64, 63, or even 62. The only downside of retiring this early is that their monthly payments are lowered.

Therefore, if you want to find out the best age for collecting your Social Security retirement benefits, you should go to the Social Security website and read the online document entitled “When to Start Receiving Retirement Benefits.”

You can easily apply for your Social Security benefits online too. Just visit www.socialsecurity.gov/applyforbenefits and fill out the online application.

Most people should still financially plan for age 65 as their age of retirement. Despite the age when you collect Social Security benefits, age 65 is when most working people are able to get their Medicare benefits. This is the health insurance coverage they’ll use for the rest of their life. But, you need to have enough work credits saved to get approved for Medicare at this age.

To find out if you have enough of these credits, you can visit www.socialsecurity.gov/myaccount and review your Social Security account to see how many credits you have and how many you need to qualify for Medicare. If you don’t have an account, you can create one online too.

If you’re under 65 and already collecting Social Security benefits, hospital insurance (Medicare Part A) and supplemental medical insurance (Medicare Part B) will automatically be set up for you and ready to take effect immediately when you turn 65 years old. Your Medicare card will be mailed to you a couple of months prior to the day you turn 65.

If you’re not collecting benefits before 65 and you want to get Medicare Part A and Part B when you turn 65, then you can apply for it online at www.socialsecurity.gov/applyforbenefits. You must do this within 3 months before turning 65. This is when the initial enrollment period begins for Medicare. This enrollment period lasts from 3 months prior to turning 65 to 3 months after turning 65.

To find out more information about this, visit www.socialsecurity.gov and use the array of tools on the website to figure out the best way to plan for your retirement.

Class Action Lawsuit Could Mean USPS could owe 130k Employees

April 15, 2018 /by Admin

A class-action lawsuit filed ten years ago is finally seeing a ruling, with a violation of the Equal Unemployment Opportunity Commission’s standards. An employee who had been injured on the job complained that USPS subjected its employees to a ‘pattern and practice’ of discrimination when she was told that her post-disability assignment was extraneous work and she was escorted off of the premises. This was under the National Reassessment Program, which was launched as a ‘return-to-work’ initiative that would also get rid of jobs that USPS deemed unnecessary or non-essential to their core functions.

USPS fought back against the claim, saying that its actions did not classify as wrongdoing, but internal documents, such as an email from 2010 that congratulated colleagues of a Texas district leader for reducing injured employees on the roll, say otherwise. The email played the song ‘Cripple Creek’ as the district leader said that the goal of reducing injured employees on the roll by 25% had been reached.

IOD (Injured on Duty)employees were not provided with the reasonable accommodations that they had previously been provided, and they were unceremoniously ousted without warning. In one case, an employee with a mild knee injury that prevented standing for long periods of time was given a job as a safety instructor, but under the National Reassessment Program, his role was deemed unnecessary and he was given indefinite leave without pay. The negative sides of the program were exacerbated by a toxic work environment, with employees commenting things like ‘see you at Walmart’, and saying that the rule was ‘past due’.

Employees subjected to this ruling need to proactively file claims to make sure that they get the appropriate payout for their discrimination grievances. The original person to file the claim received attorney’s fees and other ‘individual relief,’ but it is still necessary to actively file to make sure that it is possible to receive this payout.

If you are worried about this happening to you, there are some ways to pad the effect of an injury or illness. USPSdisability.com is a good resource to make sure that some essentials are covered, though the National Reassessment Program may not be relevant for much longer. There are an estimated 130,000 former postal employees who may be affected by this ruling and an anti-discrimination oversight body.

Living your Best Retirement Life is Easier Than You Think

April 14, 2018 /by Admin

the best retirement life is spent with making connections and having fun

As famous, or perhaps infamous, gonzo journalist Hunter S. Thompson once said, “Life should not be a journey to the grave with the intention of arriving safely in a pretty and well-preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!” Living your best retirement life is the perfect time to

Retirement is your opportunity to squeeze those last bits of joy from yourself, to finally do what you’ve always wanted to do. But how do you live your best retirement life and make sure that you leave this life with no regrets? If you’ve invested with intelligence, you could potentially be looking at thirty to forty years of retirement. What lessons do you need to learn before you start your journey?

First, and most important, remember that you have to actively seek out your dreams. Don’t just let yourself settle and become complacent- make that phone call, visit your friends and family, and reconnect!

Second, searching for happiness is a wild goose chase. Your bucket list, comfort, and seeing happiness as a goal to be reached- just slow down and do what you want. Go see the world, learn a new language, do something because you want to. You are responsible for your own happiness, and only your own happiness, and that is only found in the present.

Something to make your transition into retirement easier is to make sure you are not alone. Without the comfort and routine of a daily job, it can be a challenge to avoid the doldrums from your retirement and to become withdrawn. Making positive social connections, perhaps by taking up a new hobby or joining an organization, can be a good way to avoid this outcome and make your retirement a happy one.

Another important strategy to enjoy your retirement is to make sure that you are exercising regularly. Good health isn’t a guarantee as we age, but there are light exercises that can make your health slightly easier to maintain. Even just 30 minutes a day of light aerobic exercise can be enough—definitely not a massive commitment.

Finally, and most importantly, remember that this is not the end of your life. With the potential to live for as long as you worked over the course of your life, there are many things you can do that will make your retirement the best years of your life.

Remember to talk to a financial professional about your retirement so that you can live your best retirement life.

Late Retirement Planning: Pitfalls and Ideas

April 13, 2018 /by Admin

Not all of us are the perfect retiree, with maxed-out IRAs and TSPs and a perfect financial plan. Sometimes, the realities of life have gotten in the way and make it hard to save appropriately for retirement. However, when it gets closer, there are still steps you can take to make sure that you retire safely and comfortably, with a good chunk of hard work.

Stash all the money you can

Since you haven’t had the time for interest to build up, now is the time to start fixing that. If you have access to a TSP account, this would be the best way to save, although you should talk to a TSP specialist to find the right funds for you. If you do not have access to a TSP or 401(k), then a traditional or Roth IRA would be the best place to start, making the maximum allowable contribution.

Don’t expect to rely on Social Security

Social Security and Medicare are currently in danger. While it is not very likely that the program will crash and burn entirely, the fact that the tax laws related to Social Security changed from being tax-free to getting taxed up to 85% in the highest tier means that going forward, relying too much on Social Security could end up being a disadvantage, even if you consider yourself to be in the middle class. However, staying with your job can add to your social security benefits by as much as 7% per year, so the option is still theoretically viable so long as you make intelligent investments.

Work Part-Time as a Supplement

One way to help you as you ease into retirement is downgrading to a part-time job instead of fully quitting the workforce. Not only does this potentially ease the transition into the 25 to 30 years you could potentially be living in retirement, but you could also make some extra money to supplement your savings.

Don’t forget to account for inflation

We are currently in a period of minor inflation, but to become complacent in this period is a dangerous idea. Since you could be spending twenty-five-plus years in retirement, even a minor inflation rate of 3% cuts your purchasing power in half over twenty years. Don’t just make sure that your post-retirement income will match your current cost of living- make sure that you account for the potential weakening of your money over a period of time.

If you feel like you cannot do all of this planning on your own, consulting a financial expert with specialization in the Federal space may be a good idea.

Category: Articles

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Military Retirement: How it Works

USPS LiteBlue Basic Overview

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Liteblue Portal Services

The Post Office: A General Overview

Operation

Employment

TSP, FERS and Public Sector Retirement

TSP and FERS Employees

Federal Employees Retirement System

General Public Sector Retirement Information

Matching Contributions for Thrift Savings Plan

TSP matching contributions

Contribution Limits

Withdrawing Money

Maximum Compensation

Matching Contributions

Retirement

How prepared are you for federal retirement?

What You Should Know About Social Security Near Retirement

What You Should Know About Social Security Near Retirement

Class Action Lawsuit Could Mean USPS could owe 130k Employees

Living your Best Retirement Life is Easier Than You Think

Late Retirement Planning: Pitfalls and Ideas

Stash all the money you can

Don’t expect to rely on Social Security

Work Part-Time as a Supplement

Don’t forget to account for inflation

TSP & Retirement