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March 29, 2024

Federal Employee Retirement and Benefits News

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All the latest articles covering the information that you will be craving to devour will be available via this category. From getting to know how indebted our company is to reading about the presidential elections; from knowing about new retirement plans to finding out how security breaches can affect your life; you can browse it all!

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5 Things You Must Do If You Are Eligible for Federal Retirement

federal retirementIf you are a Federal employee who is counting the days to his or her retirement then you must remember to do certain things. These things will help you to get your money soon after retirement and would save you from any unforeseen financial trouble.

How to make Federal Retirement Easy on You?

  1. Check your service records: If you are among those people who are about to retire in a few years, you may want to start checking your federal service records and make sure there are no loopholes. If you have any time lag then you may want to prepare an explanation of the same to speed up the process of your application.
  2. Connect with HR: You may also want to connect with the HR department (ORM) to see that they have all the data required to process your federal retirement Also, check that your crucial details like address are not misspelled or obsolete. Remember, a little mistake can cause a lot of time delay.
  3. Save Some Money: It would also be smart for you to start saving some money for the days when your retirement benefits application is being processed by the concerned departments. As you will not have a regular income, you may want to pay up your bills in advance. It will save you from embarrassments like having to borrow a few bucks from your friends or relatives.
  4. Track Your Application: The progress of your application can be tracked online in all cases. These online checks will let you know how soon you will get your money and you will not have to visit the respective office every now and then. If you really need the money you can also request the concerned department to process your application a bit faster.
  5. Be Prepared for Different Outcomes: The outcome of the entire process can be different in unusual cases. For instance: If a retired employee has had a divorce and is bound by law to take care of the spouse financially, the employee would get only half of the amount unless the matter is studied by the respective authorities. So you must be prepared for these obstacles in advance and discuss your case with an expert to avoid feeling disappointed in the end.

It is assured that these steps if taken at the right time will make your federal retirement process much smoother.

Making the Most of TSP Contributions by Paul Kalra

Thrift Savings Plan (TSP) Advice from Paul Kalra

Paul Kalra Paul Kalra, CFP, ChFC, CLU

If you are a FERS (Federal Employees Retirement System) employee who contributes to the TSP (Thrift Savings Plan) each year, there are some important things to know when it comes to making your contributions. This is because maxing out your deposits too early in the year could actually put you at risk of losing some of your matching contributions.

Each year, the government can contribute up to 5% of your salary to the TSP plan in a number of different ways. These include:

  • Agency automatic 1% contributions
  • Dollar-for-dollar contributions (on the first 3% of pay that you contribute)
  • 50 cents on the dollar (on the next 2% of pay that you contribute)

While it is a good strategy to obtain as much of the employer matching as possible, because there is an annual limit on TSP plan contributions, by “maxing out” your annual contributions too early in the year, employer matching contributions can be lost by not making any deposits after the plan has met its annual contribution limit.

Things to Consider

When it comes to making your annual TSP contributions, there are several important factors to consider. For example, you need to be aware of when you actually reach you annual contribution limit for the year. This is because when this limit has been reached, your employee contributions into the plan must be suspended for the rest of the year. In fact, the TSP system won’t even allow any contribution by an employee to be processed if it will cause the total amount of deposits for that year to exceed the annual limitation.

In addition, if you have reached your annual contribution limit prior to year-end – and further deposits have been suspended – this also means that agency matching contributions will also be suspended. This is because these contributions are based on the amount of contribution that an employee makes into the TSP in each pay period. Therefore, if you aren’t making any contributions, then there won’t be anything to match.

It is important to note, however, that if you are a FERS employee, your agency is still required to make an automatic 1% contribution – even if your employee contribution and agency matching contribution has been suspended.

More about Paul Kalra, CFP, ChFC, CLU:

Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.

In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.

THE TSP STEPS UP FOR THE MILITARY by Dianna Tafazoli

military pay

Many individuals go into the military but do not retire or serve a full 20 years, the time usually required to retire and have a pension.  Those leaving the service before that time are left without a pension.  The Thrift Savings Plan (TSP) is estimated to add 250,000 military personnel each year to the rolls starting in 2018.  New troops to the military will be automatically signed up to the TSP starting January 1, 2018.  This will allow the troops the same level of participation as other TSP participants.

More than 83% of military personnel do not have retirement and by participating in the TSP, the retirement dynamics could change for military personnel who certainly need security in retirement.  The TSP has more than 4.7 million participants.  Adding the military personnel to its rolls will more than  strengthen the TSP and give the military the kind of added protection they need in retirement.

Often those military personnel who do have retirement of 20 years are young enough to go into another career.  They receive a monthly pension upon retirement or have the option of receiving a lump sum.  Many times troops use the lump sum money to make investments or purchases that might not be wise and find themselves still without the protection needed in retirement.

It is a good time for the Department of Defense to begin educating the military forces about the TSP and how it can help to ensure a safe and secure retirement future.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli

Retirement tips for people of all ages

phased federal retirement tips[Photo credit: Lending Memo]

Retirement for most is something that looks placed in the very distant future but in the world of today, to have a sustainable post-retirement life, you need to start preparing as soon as you possibly can. It doesn’t matter whether you have realized this at 20, 30 or even 50, if you have realized it before your retirement age has dawned upon you, then you still have time. Following are some retirement tips available for people of all ages:

Retirement tips for all:

20s:

IF you are in your 20s you need to realize and understand the concept of time value of money. You might have just ended your academic career and have landed a job that pays you a fair amount. The blood that is currently running in your veins is adequately paced so the thought of saving for retirement is unlikely to cross your mind. But this is the time to think about the time when you won’t have the energy to make a living for yourself. Researchers believe that this is the most ideal time to start living your life according to a budget and saving as much as you can.

30s:

If you are in your 30s, you have looked at and understood life a lot. You need to balance your spending and save money from now on. If you have a family, then you will probably do it anyway but if you are planning to settle, then make sure you are on the right track when it comes to saving.

40s and 50s:

This is arguably the most critical stage. Retirement now shouldn’t feel like being far away. Now you desperately need to shift towards building your retirement income. Get the guidance you need and start investing in retirement plans.

60s:

At this stage, you are of course retired. You need to spend the money you have according to the amount you have left. IF you saved enough, at this stage, you will live some of the best years of your life.

 

Longer Probation Periods for New-Hire Federal Employees

The Government Manager’s Coalition (GMC) and the National Active and Retired Federal Employees Association (NARFE) have jointly sent a letter to congress to lengthen probationary periods for new-hires in the federal service to better reflect the realities of the modern workplace.

Current Probationary Period

At present, new-hires are given an automatic 12 month probationary period that his inclusive of any training time. It is a straight 12 months from the date of hire. This period is supposed to allow managers and supervisors provide an adequate assessment of the employee’s ability in the position. It also ensures that employees within that 12 month period that fail to live up to expectations can be terminated much easier than the more formalized process that protects most federal employees. After the employee reaches the first day after 12 months they fall into the more protective status whether they have received an adequate assessment or not.

Current Issues

GMC and NARFE both agree that the current one-size system does not fit the complex realities of the current workplace. All positions are not equal and as such although many positions may only have 2-4 weeks training, some more complex departments and positions can have 2-3 month training regimens in order to fully bring a new-hire up to speed. This leaves many agencies only 9 months to assess the potential of new-hires and less if you consider it generally can take up to 1 month to properly evaluate new-hires.

The Problem is Real

Many Managers find themselves in a position to have to make a “gut” call on employees without a true evaluation process with enough time to truly flesh out these new employees. Worst, there are a number of agencies that have been unable to make the deadline for review and those new-hires, when the twelve months is up. This places an unfair burden on the employee to perform and the manager to make final decisions with minor observation and guess work. The request comes on the heels of a GAO report outlining the issues with probationary periods and its resultant substandard employees that get into federal service simply because their probationary periods have lapsed.

Necessary Changes

The letter requests that Congress look at the matter in their next session that starts January 12, 2016. One of the major changes being proposed is that training not be included in the twelve months of probation. Any position that has less than 1 month of training would remain at a twelve month probationary period. However, positions that have longer than a month training would in effect extend the probationary period by the number of weeks past the one month. For example if there were 7 weeks of training in a position, 3 weeks would be added to the probationary period making it 12 months and 3 weeks long. In this manner it gives managers a minimum of 11 months to properly evaluate and assess employees.

Secondly, the groups propose that managers have to actually certify an employee before their probation ends in order to put an end to auto-enrolled new-hires that simply go past 365 days without a formal review. This puts the onus on employees to get evaluated and ensures only the best employees in federal service.

Unfortunately, NARFE may see this backfire as they struggle to maintain their representation across older established workers and younger ones just getting into service.

 

RHODES MUST FALL CAMPAIGN – by Dianna Tafazoli

rhodes must fallThe Rhodes Must Fall Campaign has been successful in having the statute of Cecil Rhodes removed from Cape Town University in South Africa.  Cecil Rhodes is known by many as the philanthropist behind the Rhodes Scholarship and perhaps the naming of the country of Rhodesia after himself.  Cecil Rhodes was a multifaceted man with one of his labels being that of an ardent racist.  For that reason the Rhodes Must Fall Campaign is on a quest to erase his name and image from as many places as possible.  With their success in South Africa a campaign is now being waged to remove the life size statute of Cecil Rhodes that stands in front of the Rhodes building at England’s Oxford University.

The University has formed a committee to study the request to remove the Rhodes statute and it is not known on which side they will come down on.  Recently, the Mayor of New Orleans, Mitch Landrieu, led the charge to remove four confederate statutes from Tivoli Circle formerly known as Lee Circle which celebrated the likes of Lee, and G. T. Bauregard.  If the impetus is to remove the statutes of all racist minded individuals who stand in our states, towns, cities, countries and nations, there is a lot of work to be done.  The effort might add to the much needed jobs which would boost the economy, but will it change how people think?

Depending on how far we want to drill down, we might have to remove some U.S. Presidents from the rolls of great Americans along with renaming that huge building that sits on Pennsylvania Avenue in Washington, DC – J. Edgar Hoover.  The effort to remove his name has been tried before put it didn’t get much mileage -maybe this is the right time to try it again.  I would be in favor of removing both Hoover and Rhodes from the annals of history but when I began to speak about my very deep animus against Cecil Rhodes then I would have no reference point.

I agree that neither man needs to be memorialized in stone, but they are a part of history be they on this side of the globe or on another side.  How can we speak of or demonstrate the perils of racism and inequality if we erase history.  I am not for celebrating evil men and women at any time in history but I am for identifying them and educating about them so as to avoid their rising again.  I applaud the efforts of Mayor Landrieu because his and the efforts of the Rhodes Must Fall Campaign are clearly an awakening and an awareness that there are good people in the world who sincerely care about correcting an evil and honoring the being of every person irrespective of their pigmentation, their religious beliefs or who they chose to love.

I was wondering what kind of gift could I give to the nation without being uneven.  Mayor Landrieu and The Rhodes Must Fall Campaign solved my problem.  My gift to the nation is “never close your mind to an idea that might just inspire mankind to promote fairness and equality.”

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli

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THE TSP STEPS UP FOR THE MILITARY by Dianna Tafazoli

 

Federal government should pave the way for AUV revolution

autonomous vehicleWe live in a world continuously changed and left rattled by technological advancements. The introduction of autonomous vehicles is set to bring about a paradigm shift in the automobile and general transportation industry. The economic and social benefits that this will entail are vast. The federal government needs to be very proactive in this regard to ensure that the US remains the center for this rapidly developing technology.

Federal government to support autonomous vehicle revolution:

The need is ever-increasing. It initially grew as a method for the disabled to move from one place to another without requiring the ability to control the vehicle but since its inception, it has transformed from being a small niche to something huge. People have become increasingly lazy and with the advent of smartphones, people like to sit back every once and a while with their phone in hand to check the notifications that might have piled up. This is the reason why many a people will prefer a way to be able to multi-task while driving.

Apart from this, the economic benefits that the country can get from this endeavor are wide spread. The state of the art technology and engineers that are required for the successful undertaking and completion of such projects is indigenous to the United States and with worldwide brands like Tesla present, the future presents a very viable picture. The federal government needs to play a pivotal rule in this regard if the country is actually going to come front as the pioneer supplier of autonomously perfect vehicles. The government did recently announce that a 10 year long program that amounts to about 4 billion dollars in worth is going to be dedicated for this purpose and here’s hoping that there are other enabling steps that follow too because this can end up being a huge breakthrough.

How to make your retirement savings plan risk-free

retirement savingsRetirement plans are talked about a lot these days in workplaces and between federal employees. A good retirement savings plan can go a long way in making a retiree live a prosperous life. Some workspaces provide the facility to invest in a plan automatically but participation is only one step in the right direction. Another thing to remember and pay heed to is the risk management that’s essential. Following are some of the reasons how you should tackle the risks that you might encounter:

Make your retirement savings plan risk-free:

  1. How risk tolerant are you?

You are going to have to deal with some degree of risk no matter what the nature of your investment might be. You need be self-aware firstly and this will allow you to choose the investment plan that suits your nature best. You might also be provided with some tools to manage your risk tolerance potential as well.

  1. Diversity:

Diversification is always desirable. Everybody can benefit from it. Don’t put all of your investments in to one plan and always try to consider a varying mixture of bonds, cash and stocks.

  1. Regular maintenance:

Maintenance needs to be done regularly as well. IF you need to make sure that you don’t have to deal with any undesirable happening at any time, then you need to make sure that you keep your eyes open and not be naïve all the time.

  1. Allocate your assets properly:

Always allocate your assets in the best way possible. There are a lot of categories available to invest in and this requires you to divide your assets accordingly.

Savings plan are good for every employee but at times they can also end up hurting you so it’s always recommended to pay proper heed to risk maintenance in this regard.

Cheney to run for House seat

130718_liz_cheney_ap_328Dick Cheney is not a name that needs any introduction in the paradigm of the US government; the former Vice President’s elder daughter has now stood up tall and is set to announce that she is going to run for Congress. She made a failed attempt 2 years ago when her Senate campaign ended up being a total disaster. She has been a full time resident of the state for not so long and this can end up being another mountain to climb for her.

Liz Cheney to run for Congress:

The only seat up for grabs in Wyoming has already attracted many potential suitors’ attentions and Liz filed the documents this past Friday indicating that she is going to join the race.

It’s expected that she is set to announce within a few days and the 1st of February is a date indicated by some of her campaign officials as the time when she will formally make the declaration. Gillette is the town in the state that has faced many downturns in the coal industry recently and it’s apparent that she will build her case around the fears that the Government is preparing a war on coal with the regulations regarding the climate change getting expanded with every passing day.

The fellow competitors/candidates have some shown great excitement as well and Tim Stubson who is also a state representative said that he wasn’t surprised to hear the news. He said that he is aware of the backing she has and her addition can possibly lead to an interesting turn of events in the race.

As already mentioned, Liz, 49 led a really tragic Senate campaign in 2013 when she tried to unseat Mike Enzi who is a fellow republican. At that time, she failed to get any major traction. This time, the results can differ.

 

Theranos lab is a jeopardy to patient safety, says the Government

theranosThe Centers for Medicare and Medicaid services has always been vigilant in making judgements about various medical centers across the country and recently they have ruled the Theranos Facility in Newark, California is posing an “immediate jeopardy to the safety of patients”. A letter has been sent to the company in this regard assigning them 10 days to improve the lab and ensure “acceptable evidence of correction”

Theranos lab under scrutiny:

The document lists down a lot of problems and probably the most significant one being the one with the laboratory director. Apart from him, the technical supervisor and the analytic systems of the lab have all been deemed incapable of performing standard procedures. This has all been concluded after the department made inspections in December. There has not been much explanations associated with the discoveries as presented by the department but condition level deficiencies have been the biggest culprits in this regard.

The lab could even lost its certification if it doesn’t take immediate correctional actions and that would mean that the Theranos lab would not be able to perform any tests. CMS can also decide upon fining the lab up to 10 thousand dollars per day.

Even though there are concerns regarding the lab that do need correction, we still feel that they could have been provided with a little over 10 days to make the required changes. The administration of the lab has ascertained that they realize they have made some mistakes and there are some infrastructural changes that are needed but they require some more time to make all the corrections. They have ensured CMS that their efforts are in full flow and they will try their best to meet the deadline but if they don’t, we certainly hope that they get an extension to right their wrong.

Police retirement benefits need to be restored

police retirement benefitsThe Utah Legislature is now in session and the legislators will do themselves and the general public a lot of good if they urge the Utah Retirement board to go back on their previously formed decision concerning the retirement benefits of law enforcement and correctional officers and reverse it.

Restore the police retirement benefits:

The concerned officers are servants of the society and they need to be compensated accordingly for their valour and service. Previously, they were liable to achieve retirement upon 20 years of service and then receive 50 percent of their last pay. The new plan, that is regarding the police and other law enforcement officials requires agencies to hire qualified men and women and make them work at-least 25 years before they can get retirement. Also, they would now only be liable to receive around 37.5 percent.

This decision is not the ideal way of thanking the men and women who took upon the responsibility of wearing a badge with pride and honour. The final decision lies in the hands of the board but it’s the legislators’ responsibility to make their voices heard to the board and possibly restore the retirement benefits that the officers deserve.

 

SAINT MOTHER TERESA by Dianna Tafazoli

mother teresaThe Vatican is making way for Mother Teresa to become a Saint. Mother Teresa who died in the same week as Lady Diana in 1997 was barely mentioned in many media outlets because her death was competing with Lady Diana’s – the People’s Princess. Mother Teresa, the small woman known as the “Saint of the Gutter” spent her life taking care of the poor and disenfranchised.

Pope Francis announced that Mother Teresa will be canonized next September, 2017. It is said that the Vatican is looking for one more miracle performed by the late Mother Teresa. Mother Teresa was from Calcutta and was also known as the Jewel of India. The Church is said to wait about 5 years before they even think about canonization of anyone. It has been well over 5 years since Mother Teresa died. As a matter of fact she, like Lady Diana, has been dead for 18 years. The people of Calcutta have something to look forward to next and so does the world.

P. S.  Always Remember to Share What You Know.

Dianna Tafazoli

How Obama plans to change retirement accounts

President Barack Obama talks with Israeli Prime Minister Benjamin Netanyahu during a phone call from the Oval Office, Monday, June 8, 2009. Official White House Photo by Pete Souza.This official White House photograph is being made available for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way or used in materials, advertisements, products, or promotions that in any way suggest approval or endorsement of the President, the First Family, or the White House.

2015 saw the introduction of a new retirement account by the name of myRA and there was a lot talked about the account as well. In the budget that is set to hit center stage in 2017, President Obama plans on making some changes in the retirement accounts as well:

How retirement accounts will change in 2017:

  1. Automatic IRAs: Employees are almost all the times automatically added to the workspace’s 401(k) plan unless they vote out of it. In the coming budget, the President intends to automatically enrol all of the employees into individual retirement accounts. This is indeed a great initiative.
  2. Employers will have larger tax breaks: Small businesses and their owners are liable to receive tax credit whenever they set up a new retirement plan. The President wants to triple this credit and make the amount go up to 1500 dollars per year for as much as 3 years for small companies that offer retirement plans.
  3. Port your benefits: The budget will also make the proposal to allow the funding of pilot programs that will be helpful in making benefits portable for those people who would like to change jobs.
  4. Participate part time: Employers will have the authority to not include the part-time employees in the retirement plans of the country. To be considered eligible for a retirement plan, you would have to work at-least 500 hours per year for 3 or more years.
  5. 401(k) plans but pooled: Small businesses find it excessively hard to set up and then manage the 401(k) plans. Currently employers that have a “common band” can establish 401(k) plans. Obama intends to remove the common bond requirement.

These alterations are looked forward to by many of the retirees and they can help the federal government in making the post-retirement lives of retirees a lot better.

OPM has urged agencies to restrain from borrowing

office of personnel management opm employee express

The Obama Government is all set to commence within a year and the Office of Personnel management aka OPM has urged all the agencies of the current policies to stop political appointees from borrowing their way in to positions. This was made evident by the Acting Director Beth Cobert.

OPM urges agencies to not borrow:

OPM will, under the contemporary procedure make sure that it considers applications submitted by all the people who have held political positions in the last five years and intend to continue operating as a career appointee. These policies are as old as the Carter administration and OPM revised its policy in 2010 when it opted to conduct some reviews before hiring on a continued basis rather than before a presidential transition only.

Cobert also mentioned to the agencies that the department will also continue to review the applications for all the appointees of a non-career nature who intend to become a part of the SES (Senior Executive service) before the applicant decides to formally appear before the Review Board.

The guidance also emphasized the importance and vitality of holding regular meetings with officers and employees. The purpose of these meetings should not only be restricted to making sure that the employees are well-bonded and happy with their workspaces but they should also ensure that the employee’s performance gets evaluated periodically. This will in the longer run mean that the evaluation results don’t come as a surprise to the employee once the real time comes.

While OPM has been dealing with all sorts of predicaments in the recent times, it’s good to see that their stance in this regard is solid and not shaky.

How the Government is making it easy to make retirement savings

military retirement guide
(the-military-guide.com)

If you are somebody who lives from paycheque to paycheque, then it’s really hard to save for retirement. The US Government with the never ending urge to help the society is trying to make it a little easier for you to make retirement savings.

Retirement savings made easier:

The retirement savings contributions’ credit is not given much attention most of the times. The credit, the objective of which is to provide the low earning workers to make voluntary contributions to their 401(k) or IRA plans. This has been indicated by the Internal Revenue Service.

This credit will be given in addition to the income on tax returns’ reduction for all the contributions to the retirement plans.

Just like the deductions or the tax credits, the credit phases as the incomes become higher in amounts. The credit phases out at around 30 thousand dollars for all the single taxpayers and for married couples (that file jointly) it amounts to around 61 thousand dollars. It’s just over 45 thousand dollars for the head of the households. It’s worth mentioning that the person needs to be at least 18. In order to claim the credit you would have to fill the form 8880.

The treasury department insists that the contributions can be made through a bank account, via an employer or by navigating all or some of their tax refund to the myRA account.

 

Social Security Navigation and Optimizing Benefits

social securitySocial security is one of the most important fund and it plays a really vital role in how Americans decide on funding their retirement accounts today. Many researches indicate that more than half of the American population rely on Social security as a huge retirement income source.

How to navigate social security and earn benefits:

In the past few months, there were some alterations made to the process of married people earning retirement benefits. The “Restricted application” and “File and suspend” strategies that were used by some of the federal employees who also happened to have spouses working in the government are soon to become a matter of the past.

The “File and suspend strategy” allows a married couple to maximize the Social security benefits. This will be applicable when both of the spouses have reached their full retirement age and one has been the main bread runner. Let’s say that the primary earner is eligible to earn a specific Social security amount then their spouse would ideally be liable to get half of that amount too. The real magic happens when the primary earner goes on and suspends their benefits till they reach 70 and thus gets advantage in the form of added suspended retirement benefits. This strategy will die on May 1st.

The restricted application strategy is still going to be available for another 4 years. It’s when you are at your full retirement age and have not applied to receive any benefits previously and you file solely for the spousal benefit that is pertaining to the record of your spouse.

These two strategies have been in practice for quite a long time now and while they are exploitable (till they expire) if you manage your contributions throughout your career properly, you can end up having substantial social security when you need it.

Will TSP be effected by American Savings Act?

The TSP could be closely linked to the new system that will be created once the recent developments regarding the American Savings Act gets put into place. As we mentioned in the previous posts we made, a system that will be identical to the TSP is to be developed and a bill regarding it has already been proposed. It will be another way for the Americans who plan on making retirement savings to actually set up accounts and do so.

Will TSP be affected by the new system?

TSP could be one of the organizations whose proceedings can get affected by this new system. The FRTIB or the Federal Retirement Thrift Investment Board is the agency that manages the plan and it previously was of the idea that TSP should not be applicable to all the working Americans. The reason behind this isn’t hard to grasp however. The TSP has a very simplistic design with just 5 core funds and 5 lifecycle funds.

While the ASA in theory intends to have as low expenses as that of TSP, the ability for the new applicants to get the same low fees is at risk of getting changed. Once TSP gets opened to over 70 million Americans that have still not got any retirement coverage, rudimentary alterations would have to be made to the TSP infrastructure.

It’s also assumed that the American Savings act might end up establishing an organization that’s identical to TSP just so the structure that’s currently in place for the federal retirees, military personnel and federal employees keeps on functioning as it’s with its low fee structure and limited options to invest. We will have to wait and see how these developments occur and at this time, the best we can do is keep our fingers crossed and hope for the best.

A retirement proposal based on TSP has arrived

Thrift Savings Plan TSP

Retirement plans have been with us since the beginning of time and they are always things that federal servants have in their minds when they are near their retirement age. Recently a new retirement proposal has come forth which has been modelled around the TSP and is available to be enjoyed by the federal employees of the state. This will be an additional option along with the usual private sector 401(k) plans; the Washington organization announced.

A TSP modeled retirement proposal:

CAPAF or the Centre for American Progress Action fund was the group that detailed this past week the idea to create a plan that goes by the name National Savings plan. This can be used specially by those that don’t have an accessible retirement account that they are currently a part of. This plan is starkly similar to TSP as it makes the retirement level adjustments according to the person’s distance from their retirement. IT’s worth mentioning here that the Thrift Savings Plan has around 4.7 million participants.

The people responsible for the spawning of this new proposal have something big and beautiful in mind. They want to aid those workers that are beyond the boundaries of the federal government and don’t have any plans in practice available at their workspace. David Madland, who is a senior follow at the action fund of CAP believes that TSP is a very simple and good way to prepare for your post-retirement life and that has been their main motivation of conceiving this new plan.

While the plan is still in the “proposal” phase, we hope and expect that the road that lies ahead for it is paved by success as it only means to bring good to the community. The approval phase is probably going to take a little longer than expected but we can all keep our fingers crossed for now.

 

Things to know about federal retirement and taxes

phased federal retirement [Photo credit: Lending Memo]

If you are a servant of the federal government, then there is nothing you would look forward to more than achieving your federal retirement and enjoy the benefits that follow. The road towards retirement isn’t always an easy one but if you follow the right procedures and fund the right account then when the time comes, you normally have what you would hope for. Here is a list of things that we believe every federal retiree or future retiree should know:

Things to know about federal retirement:

  1. The federal income tax will purpose all of the incomes that you get out of retirement. This is inclusive of TSP, Social security and IRAs etc. So, this entails that the amount you will lose to federal income tax will be dependent upon the marginal tax bracket within which the income lies.
  2. It doesn’t matter if you are getting a CSRS or a FERS pension, it won’t be fully taxable. The reason being that you made the contributions from dollars that were already taxed. This does make sense because otherwise you would be taxed twice.
  3. The deductions because of TSP don’t affect the retirement income either. This is because retirees can’t make TSP contributions.
  4. The payroll taxes will not be deducted from your retirement income but only from your earned income. So, you won’t be parting with any money pertaining to your Social security tax or the Medicare tax.
  5. Around 85 percent of the Social security benefits are taxable. The specific amount is based on the provisional income. This is a very important keyword and to find out the figure, you can add ½ of your social security, some non-taxable income and all of your taxable income. This provisional income will then be compared with certain thresholds meant for joint and single filters.

 

The increasing number of women in Federal Government

federal government women

There was a time when women weren’t an integral part of a society and we fear those times. We have come a long way and now women constitute a pivotal part of our cabinet. There is a heavy percentage of women present in executive top level positions in the federal government and they have been making some good advancements and taking some noticeable steps in the recent past too. This is not just talk but a report released by OPM in 2014 revealed that around 34 percent of senior positions at federal workplaces are held by women. This though is not also seen in the private sector where women carry only 14.6 percent of the executive positions (this was indicated by a Center for American progress report in 2014).

Women with executive federal government jobs:

The best part about this is that women are found in the upper levels of the government as well. We have seen stark rises in the numbers as in 1976, there were only 21 percent women who held executive positions in both administrative and professional paradigms and now (As indicated by a Merit Systems Protection Board report) the number has gone up to 44 percent. With the passage of another 5 years, we are expected to see even better results.

The former OMB administrator, Karen Evans thinks exactly like we do. She said that women hardly played any role in the cabinet before; just like in 1965 when Johnson had no women in the cabinet and it stayed the same with Nixon in charge. When Carter assumed office, he gave 3 women the change to occupy cabinet and we have only seen advancements ever since.

While we await reports that will surely indicate better results, let’s hope that this trend continues on for an endless period of time.

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