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March 19, 2024

Federal Employee Retirement and Benefits News

Category: Jeff Boettcher

Posts by Jeff Boettcher

How Can I Make the Most of the Opportunities that Social Security Presents to Me and Maximize my Benefits?

When discussing the benefits that come from Social Security, there are a variety of different factors that need to be remembered and taken into consideration. Which of the following do you believe to be the most important benefit?

As of 2022, the most money received in a single month is capped at $4,194. On the other hand, when considered in contrast to the average monthly payment that retirees get, which is $1,657, this is a considerable increase in the amount received. When determining how much of a pension you are entitled to receive, knowing the age at which you become eligible for full retirement is essential. 

If you wish to be eligible for the maximum payment, you must continue to have an annual taxable income equal to or greater than the maximum limit. This is required for you to maintain eligibility. The Social Security Administration (SSA) must establish the appropriate amount for each benefit. This task falls within the SSA’s purview. It is accomplished by computing your new average income based on the 35 years you earned the most money throughout your career, then revising those averages to account for inflation. Another option is to calculate your new average income based on the years you made the least money throughout your career.

As a result of shifts in the consumer price index, the barrier undergoes yearly readjustment, and the change may be in either the upward or the downward direction (depending on the situation). The yearly limit permitted, established at $147,000 for the current calendar year, may go no higher. The maximum amount that could be borrowed in 1987 was $43,800, for instance. Despite this, a considerable segment of the population has yearly incomes much below the standard. The good news is that several straightforward approaches are available to increase the amount of money you get from Social Security.

How can I use this information to maximize my Social Security benefits?

Delaying the date on which you are initially eligible to collect benefits from Social Security is one of the most straightforward methods to raise the amount of money you earn from Social Security each month. This is also one of the most obvious ways. When an individual reaches the age of 62, they may be eligible to submit a claim. On the other hand, the amount of benefit you get will always diminish with time and is a constant. If you delay getting your benefits until you are older than 62, your payment will grow by one month per year until you reach the age of 70. 

If you cannot wait, the best approach to ensure that you get the maximum amount from your claim is to ensure that you have worked for a cumulative total of 35 years before filing it. This is the best method to guarantee that you receive the maximum amount from your claim. In the end, only a minuscule segment of individuals eligible to receive Social Security benefits apply for all of these payments.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

Health Insurers Are Already Looking To Expand Medicare Advantage In 2023 Despite Criticism

Despite unstable financial markets and criticism of some business practices, health insurers are already taking steps to increase their Medicare Advantage markets for 2023.

These efforts to expand their privatized Medicare programs into new states and counties will continue, notwithstanding the turbulent financial markets that may restrict funding for some businesses and regulatory inquiries into how these businesses determine risk adjustments and bill for sicker patients.

Established health insurers like United Healthcare of UnitedHealth Group, Elevance Health, and Aetna of CVS Health, Cigna, are anticipated to post positive results for their Medicare Advantage businesses in the upcoming weeks. 

Startups and smaller regional health plans leverage funds from their financial backers and investors to launch expansion into new regions in the coming year despite the competitive environment and unstable financial markets.

Consider Alignment Healthcare, which announced this week that it would enter the rapidly expanding Florida and Texas markets. According to the starting plan, which went public last year, there will be “an extra 1.1 million Medicare-eligible seniors in Texas and Florida alone, resulting in a total of 8.2 million Medicare-eligible seniors across 52 counties in six states in 2023.”

Health insurance companies have intensified their expansions into new regions around the nation, driving Medicare Advantage membership to all-time highs, according to a recent survey conducted earlier this year by The Chartis Group, 

Twenty-eight million people are currently enrolled in Medicare Advantage, which accounts for 45% of all Medicare recipients. This represents a +3 percent point increase in penetration over 2021 and a +9 percent increase in overall program enrolment. These findings are consistent with the Medicare Advantage products’ excellent value proposition and the industry’s ongoing efforts to produce new value for its customers. With this development, the competitive environment for health plans that manage these products is continuing to change. Some themes from analysis from the previous year have persisted, while others have taken on new forms in the shifting economy.

Enrollment in Medicare as a whole increased by 1 million this year. Though the increase has slowed relative to previous years, a large portion of this slowdown is probably due to the 300,000 COVID-19 deaths among those aged 65 and older per year in 2020 and 2021.

At the expense of 1.3 million beneficiaries of Original Medicare, the Medicare Advantage market added +2.3 million lives. The number of people switching from original Medicare to Medicare Advantage is at an all-time high. In comparison to 42 percent last year and 37 percent in 2019, the market share for Medicare Advantage has increased to 45 percent of all Medicare enrollment.

The race to reach 50% continues, with at least 50% of eligible beneficiaries using Medicare Advantage products in 11 of the 50 states. This is a significant industry milestone that has been long expected, even though it is primarily symbolic. Our research points to market penetration of 50% for Medicare Advantage by 2025.

 The federal government increases Medicare Advantage payments

The Biden administration and Congress continue to support the privatized senior benefits program known as Medicare Advantage. However, federal regulators and Congress have started to examine certain Medicare Advantage business practices.

One is the 8.5 percent income increase for Medicare Advantage plan payments for 2023 announced by the Centers for Medicare & Medicaid Services in April. At 4.88 percent, the growth rate was higher than the proposed rate hike announced earlier this year.

The assumption that more Medicare enrollees will receive care that had been put off throughout the epidemic is a significant factor in the increase, which is one of the greatest ever for Medicare Advantage. The increase may encourage more health insurers to enroll in Medicare Advantage or increase their participation in the profitable but divisive taxpayer-funded program, which is expected to cost $450 billion in 2019 — more than the combined budgets of the Departments of Education and Agriculture.

Medicare Advantage plans have agreements with the federal government to offer additional benefits and services to seniors, including nurse help hotlines, disease management, and some vision, dental, and wellness programs. Additionally, the Centers for Medicare & Medicaid Services recently permitted Medicare Advantage plans to offer more supplemental benefits, which has increased their appeal to senior citizens.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

House approves 23 Bill for Defense Spending with 4.6% Raise

According to the National Defense Authorization Act for Fiscal Year 2023, as passed in the House, military personnel would start receiving a 4.6 percent pay boost on Jan. 1. This is a result of the Basic Allowance for Housing (BAH), which was increased by 2% as part of the legislation that the House approved on Dec. 8.

Additionally, lawmakers requested that the Pentagon provide a study outlining “a more open, equitable, and adaptable manner” to determine BAH. The BNA (Basic Needs Allowance) cutoff is increasing. Those now making up to 150 percent of the federal poverty level would be eligible.

Other employee-related provisions include:

  • Increasing funds for commissaries to counteract increasing food and other goods prices.
  • The creation of a five-year trial program to reimburse service members for some childcare expenses they incur when moving or being assigned to a permanent change of station (PCS).
  • A decrease in daycare costs for kids of staff members at child development centers.
  • Expansion of important incentive programs for hiring and keeping employees.

The measure also tackles several other crucial childcare-related concerns, such as:

  • The need for all branches of the military forces to find methods to enhance childcare services in rural or underserved locations.
  • The services must also “promote and improve awareness of childcare choices,” according to another criterion.
  • A research study that contrasts the pay received by childcare providers with that of their civilian peers in their localities.
  • The release of pertinent My Childcare in Your Neighborhood Program information quarterly.
  • An evaluation of the viability of including au pairs in the program for in-home childcare.
  • A briefing to lawmakers on childcare on military sites without child development facilities or with centers that are present but insufficiently sized to offer enough open slots.

The quality of life provisions include $20 million for such organizations that help educate severely challenged children and $50 million to support local organizations that educate military children. Additionally, service members stationed in Alaska would be given training on special duty pay and a travel allowance. Service members may also be eligible to receive up to $4,000 in reimbursement for costs associated with transporting their pets during a permanent change of station movement to or from areas outside the United States.

Detection and prevention policies for sexual harassment would also be improved. A separate trial counsel would be assigned to handle these matters, adding another layer of independence from any command influence.

Such investigations would also be carried out by independent, professional investigators who were not part of the chain of command. Panels for court martials would be drawn at random. Reporting obligations would also increase to execute the New Special Trial Counsel Program. Civil servants would henceforth be permitted to submit enlarged, restricted reports of sexual harassment to eliminate the unrestricted-only status of such complaints.

Spouses would be paid for their relocation costs when asked to transfer their companies during PCS movements. Veterans who are disabled and some spouses may also be eligible for non-competitive appointment power.

The House took some steps to address lingering problems with healthcare. According to the law, the Navy SEAL (sea, air, and land) trainees’ medical care is to be investigated by the Pentagon inspector general. New regulations would ensure accountability for wounded, ill, and injured military personnel during the Integrated Disability Evaluation System (IDES) procedure.

Reducing end-strength authorizations among healthcare professionals would not be permitted by the services. Stockpiles of medications used to treat chronic diseases, such as insulin, would be maintained by implementing measures. Any decision to change the range of treatments offered at military healthcare centers should be communicated to Congress. The designation of “essential casualty facilities” would apply to certain facilities. In such cases, they would have to react to a national emergency. The military health service would establish centers of excellence.

Other clauses include mental health and suicide prevention. Some demanded the creation of a voluntary pilot program for securely keeping weapons owned by private individuals. Others suggested developing a curriculum for certifying mental health professionals knowledgeable about the needs of military members and their families, increasing the confidentiality requirements for service members, and finding ways to increase the number of military behavioral health providers.

Lawmakers are requesting the Government Accountability Office (GAO) to investigate the mental health coverage that TRICARE offers and audit the services provided by the organization’s behavioral health providers.



Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

Inflation In 2022 And The 2023 COLA

The yearly Cost-of-Living Adjustment (COLA) is calculated using a federal government index compiled by the Bureau of Labour Statistics (BLS). The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the index in question. Over the previous year, this metric has increased by 9.4%.

The COLA is calculated as follows:

• The Consumer Price Index (CPI-W) values are from the current year’s third quarter (July–September).

• These figures are compared to the average CPI-W measurement from the prior year’s third quarter (2021).

• The average reading for this year’s (2022) third quarter is compared to the previous year’s third quarter (2021).

• The difference is what beneficiaries will get as an increase in 2023, rounded to the closest 0.1%.

How much inflation will rise, and how will the final COLA computation be calculated?

The answer to this question will be calculated and announced in mid-October.

As of last year, federal retirees earned a 5.9% COLA raise under the Civil Service Retirement System’s (CSRS) Social Security benefits and annuities in 2021. Moreover, an increase of 4.9% was implemented in January 2022 for Federal Employees Retirement System (FERS) annuities.

So far in 2022, the average CPI-W for the third quarter of 2021 has increased by 5.50%. The annual COLA is calculated by comparing the changes in the CPI-W from one year to the other. Average of the third-quarter July, August, and September are used.

According to the Senior Citizens League, inflation figures from last month predicted a 7.6% COLA in 2023.

Later this year, the Federal Reserve will begin to hike interest rates to contain inflation. It is still under probability how successful it will be. Inflation has continued to rise so far.

While no one knows what will happen with inflation, some federal retirees and Social Security recipients may receive an 8% COLA increase in January 2023.

Reported Rate Of Inflation vs. Inflation in Reality

For many years, price fluctuations in a fixed-weight basket of commodities were used to measure consumer inflation. In other words, it calculated the cost of living for an individual or a family to maintain a consistent standard of life.

However, rising inflation has political ramifications. Elections are sometimes won or lost based on inflation rates. However, throughout the 1980s and 1990s, a new theory of assessing inflation arose for whatever cause.

Inflation is calculated by comparing the cost of at-bone steak from one year to the next, using a fixed-weight basket of commodities. A new measurement was developed throughout time. In other words, comparing what a family spent on food from one year to the next may be similar, but only because the family shifted from steak to chicken. Despite eating less expensive meals, the consumer’s “level of satisfaction” may remain the same.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

TSP Premature Withdrawal Consequences: Traditional and Roth

The Internal Revenue Code imposes penalties in specific situations, including a ten percent penalty for premature withdrawals from retirement funds. What is premature? That is debatable. In this post, we will explore the age you’d have to be to escape this consequence.

When IRAs (Individual Retirement Arrangements) were launched in 1974, the consequence was enacted. People who withdrew funds from their IRA at 59 years old were immune from the penalty. Those who take their funds before turning 59 and a half years would pay the consequences and taxes imposed on the funds they withdrew. The penalty’s limit of 59 and a half means the day on which you become 59 and a half. Until 1987, every fund in your IRA account was, in fact, pre-taxed. This means that contributions were made with pre-tax monies and your account matured tax-deferred.

The Roth Individual Retirement Arrangements was first launched in 1997. At that time, all earnings you withdrew before 59 and a half were subject to a premature withdrawal penalty. Early withdrawal penalties do not apply to conversions or contributions you make before reaching that age. Withdrawals from your Roth Individual Retirement Arrangements account are viewed as arriving first from contributions, then conversions, and finally from earnings. That’s not the case with the Roth Thrift Savings Plan (explained below); withdrawals from the Roth Thrift Savings Plan are proportional to earnings and contributions.

The Thrift Savings Plan was established in 1987. Like a standard IRA, it permits tax-deferred earnings and pre-tax contributions. It features a ten percent penalty for premature withdrawals up to 59 years. However, the consequence isn’t always applicable. You are excluded from the penalty if you retire from your government position in the same year you reached 55 (or beyond). 

This exclusion from the consequence will start the same year you turn 55, but on the very day you turn 55. If you split in one year before you turn 55, the ten percent penalty will become applicable until you turn 59 and a half. Suppose you’re a particular class worker (such as a firefighter or a police officer). In that case, you’re free from the consequences after you reach the age of 50. Funds taken from your Roth Thrift Savings Plan are subject to this rule.

If you split between 55 (or 50) and 59 and a half, don’t expect to pay remit taxes upon withdrawing from your Roth Thrift Savings Plan. A Roth Thrift Savings Plan account has two parts: the paid contributions and profits earned from these contributions. You pay taxes as you contribute. Still, part of the profit is only non-taxable if you take funds out of the account five years or more after creating your Roth and for a minimum of 59 and a half years.

Watch out for the “Roth Tax Trap†if you retire before 59 and a half and start withdrawing funds from your Thrift Savings Plan. The withdrawal would be commensurately from your Roth and traditional accounts. You’ll have to make tax payments on parts of your fund’s withdrawal that emerge from the income component of your Roth account until you are 59 and a half years old. 

This is because you may pick which portion of the Thrift Savings Plan your payouts originate from (Roth or traditional). Suppose you are withdrawing funds from your Thrift Savings Plan before age 59. In that case, it is best to withdraw your funds solely from the conventional component of your Thrift Savings Plan.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Social Security and the Offset for Government Pensions

What if you were employed by the government but did not contribute to Social Security while you were employed? In that case, the Social Security Administration would reduce your Social Security spousal, widow, or widower benefits by two-thirds of any government pension you get. This is known as the Government Pension Offset (GPO).

How does this work?

A spouse who receives an annuity from a job where he or she did not pay Social Security taxes, such as those receiving a CSRS annuity, has their Social Security payment reduced or eliminated by the GPO. If you fall under this category, your CSRS annuity will be decreased by $2 for every $3 you get in your Social Security spousal payment.

Your Social Security spousal benefit will be affected by your CSRS annuity to the full extent of its increase, up to and including its elimination.

For instance, you wouldn’t earn anything from Social Security if your monthly CSRS annuity was $1,500 and you were eligible for a $900 spousal benefit. That’s because $1,000 is equal to two-thirds of $1,500. If you deduct it from $900, you’re left with nothing.

Why would the government treat its workers this way? 

The Social Security System was created to give those who did not work or had little income during their working lives a basic minimum level of financial security. In other words, spousal payments weren’t intended to supplement the Social Security benefits of working couples who were each eligible for one.

If one of them qualifies for both an earned Social Security benefit and a spousal benefit, they can only receive the benefit with the higher amount, not both.

CSRS beneficiaries who were married to Social Security beneficiaries were formerly entitled to both a full CSRS pension and a full Social Security spousal payment. However, Congress determined in 1982 that a worker who was enrolled in a retirement system for which they were not paying Social Security payments was benefiting unfairly. So, the statute was altered.

The Social Security Administration has created two clarifying examples that provide the best justification for the change:

Jude Fred receives a monthly Social Security income of $600. Ana, his wife, may be eligible for a wife’s benefit of up to $300, or 50% of Jude’s.

However, Ana also contributed to Social Security through her employment, making her eligible for a $400 retirement payout. Since her $400 retirement benefit effectively cancels out her $300 spousal benefit, she will not receive any spousal benefits.

Jude’s next-door neighbor, Robert, also receives a monthly Social Security income of $600. However, his wife, Mary, was employed by the federal government and received an $800 monthly civil service pension rather than a job requiring her to pay Social Security taxes.

Mary would have been qualified for both her $800 civil service pension and a $300 spousal benefit on Robert’s Social Security record had the government annuity offset rules not been in place.

With the offset clause in effect, Mary is treated the same as Ana because she is no longer eligible for Social Security benefits as a spouse.

The GPO affected about 11.5% of the 6.25 million spouse or widow(er) beneficiaries in 2020. The average non-covered pension for GPO beneficiaries in 2020 was $2,531, more than $1,000 above the typical Social Security retired worker payment of $1,544. The average non-covered pension for beneficiaries impacted by the GPO was $3,193 per month. Nearly three-quarters of beneficiaries had their entire spouse or widow(er) benefit deducted.

The way forward

It is frequently suggested that the GPO should be repealed since it was some accident or unexpected effect of a poorly thought-out amendment in the legislation during the Social Security reforms of 1980.

Congress consciously implemented the GPO to eliminate what it saw as an unfair advantage. Knowing that is little consolation to those experiencing its effects or who will retire in the future. But until and unless it is changed, it is the law.

It’s best not to hold your breath in hope, despite recent efforts in Congress to repeal or relax both the WEP and the GPO. Those proposals have been circulating since shortly after those provisions were passed nearly forty years ago.

Plan instead as if they will still be in place. Verify that your additional assets and investments, along with your CSRS and Social Security benefits, will be enough to cover your retirement expenses.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Going Back To Work Again After Retirement

Federal agencies frequently reach out to federal retirees as a potential source of recruits, particularly for highly specialized positions or when a sudden increase in work necessitates it. They prefer to hire individuals with experience in government services instead of new entrants.

Meanwhile, some federal retirees look for re-employment because they feel they still have more to offer the workforce or because retirement is not going as well as they had hoped financially or in other ways.

However, there are a few unique considerations when returning to work after retirement.

If you willingly retire, you will still be paid your annuity, but your new job’s income will be lower because of that pension. For instance, you would receive just $60,000 ($100,000 – $40,000) if your annuity was $40,000 and your salary was $100,000.

However, if your retirement were forced due to a RIF, job abolition, transfer of function, reorganization, or right-sizing, your annuity would end, and you would start receiving the entire income of your new position. Therefore, you would share the same employment status with any other government employee holding a similar post and a comparable service record.

You will also become eligible for a supplemental annuity if you worked full-time, continuously for at least one year, or its equivalent if you worked part-time.

On the other hand, if you worked for at least five years or the equivalent, you would typically be entitled to a re-determined annuity that would take the place of the one you are presently receiving. To be eligible for those extra benefits in either scenario, you must contribute to the retirement fund while working or until your next retirement.

You would also need to meet the age and service criteria if your annuity ceased when you started your new job to be able to retire again.

In exceptional circumstances, you might be able to get both your annuity and your total wage. Initially, this exception only applied to jobs for which it was difficult to find or keep a qualified employee, where there was an immediate danger to your life or property, or when an emergency situation called for employment.

But over time, several other authorities have increased this payment for additional reemployed annuitants. Limited-time appointments are a government-wide authority, and agency-specific regulations are mostly in DoD. Ask if one of the exceptions applies to you if you are a retiree being considered for re-employment.

Impact of going back to work after retirement.

 1. The Good: Health Insurance

The natural aging process can result in future increases in healthcare expenses. These expenses can deplete your funds, depending on your health benefits.

Health insurance may be the main reason for returning to work for those who retire before they reach 65 (especially considering the costly out-of-pocket costs of private insurance).

Consider returning to work if you’re purchasing pricey private health insurance before turning 65, when you would be eligible for Medicare.

In most circumstances, enrolling in a group health plan through your job could be less expensive than paying for your own health care out of pocket.

2. The Bad: Social Security 

Your Social Security benefits can reduce if you opt to re-enter the workforce, depending on your age at retirement. According to the Social Security Administration, the full retirement age (FRA) is 67 for those born in 1960 or after.

The amount of Social Security payments you might get will reduce if you retire before FRA. If you haven’t reached FRA, there is an offset that, dependent on when you retire, can reduce your Social Security payment.

For every $2 you earn over the annual cap while not at FRA, the Social Security Administration will withhold $1 from your benefit payments. That cap is $19,560 for 2022.

They’ll also take $1 from your benefits for every $3 you earn over $51,960 in the year you attain full retirement age (FRA).

3. Potentially Bad: Pension Suspension 

Your pension from your previous agency may be affected if you start working again. If you re-join the workforce for a different agency, you can still be eligible to receive pension benefits from your previous employer. However, regulations may vary from plan to plan.

 By collecting pension payments from your previous employer while being paid a salary at a new one, you’ll be able to expand your revenue stream further. Payments might halt if you decide to work for your former agency once more.

The agency paying your pension will often stop paying benefits if you work for them again, though regulations may differ based on your employer’s pension plan. If you decide to return to your old job, speak with the firm to learn more about how your pension can be impacted.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Could You Benefit From Semi-Retirement?

In recent years, the idea of “semi-retirement” has been added to the classic notion of “retirement” as the point at which people quit working altogether. People typically work fewer hours during this transition phase to full retirement, either at their previous jobs or in a new part-time position.

The benefits of semi-retirement include increased income, engagement, satisfaction, and even greater physical and mental health. This article examines everything you should know about semi-retirement.

Semi-Retirement Foundations and History

A person enters semi-retirement when they quit working full-time in their prior career and start working fewer hours or, possibly, putting regular workweeks at another money-earning endeavor they find more fulfilling and delightful.

Deciding to semi-retire is different from maintaining a regular work schedule as long as possible, even after retirement age.

The federal policy that reduced Social Security benefits when recipients made money from working discouraged semi-retirement for a long time. But thanks to revisions to the earnings limit regulation, social security recipients can earn any amount of money from working after reaching full retirement age without reducing their benefits. This has made semi-retirement more appealing.

According to the 2022 Transamerica Retirement Survey, over six in ten (58%) workers now intend to continue working at least part-time in retirement.

Forms of Semi-Retirement

Working fewer hours for your current employer, taking on new part-time employment, or launching a business are all semi-retirement options. According to an Express Employment Professionals survey, 79% of respondents chose semi-retirement to convert to a flexible work schedule. In comparison, 59% want to work fewer hours for the same employer or become consultants.

Each of these choices has its advantages and disadvantages. For example, a person is likely to make more money per hour working for the same employer while working fewer hours remotely or on a flexible schedule. But only 21% of businesses, as per the Express Employment survey, provide semi-retirement employment opportunities.

Similarly, part-time or seasonal employment might provide freedom and the chance to pursue a personal passion or learn a new skill. However, part-time employment may not offer any benefits at all and is likely to pay less.

Also, starting a business can be rewarding, but the hours may be challenging, and getting a new firm off the ground may be challenging without incurring debt. Another option is consulting, which offers the chance to make more money per hour without needing to invest in a firm.

Pros of Semi-Retirement

One of the biggest advantages of semi-retirement is the ability to earn more money. Without a pension or significant personal assets, retirees may be concerned that their Social Security income won’t be enough to support a comfortable standard of living.

Semi-retirement is a valuable source of supplementary income to aid with living expenses. Retirees with some personal assets and a pension might postpone claiming Social Security payments while in semi-retirement, increasing their monthly benefit.

Social Security is still the most significant retirement benefit for most Americans. If you wait until you are 70 years old to start receiving Social Security benefits in 2022, the maximum payout is $4,194 per month or $50,328 per year. You can enhance your maximum benefit by working more and earning more money.

People who continue to work after retirement would also benefit from social interaction that might otherwise be absent if they stopped working altogether. This kind of activity can benefit physical and mental health more than total leisure.

Cons of Semi-Retirement

Choosing semi-retirement can result in having a much lower income for those who retire before being eligible for Social Security or pensions. This represents the biggest barrier to semi-retirement for many workers.

Another potential difficulty in semi-retirement is health insurance. Moving to part-time employment, whether at the same firm or a different one, a person who previously had health insurance via their employer risks losing that benefit.

Suppose the individual isn’t old enough to be eligible for Medicare at age 65. In that case, they will probably have to pay for COBRA benefits or insurance they acquire through the Health Insurance Marketplace established by the Affordable Care Act or on the open market.

Conclusion

Semi-retirement entails working fewer hours remotely or with a more flexible schedule during the transition to full retirement. Semi-retirement can give you more leisure time than you had during most of your working years while still bringing value-added income, satisfaction, and involvement. However, finding health insurance and an employer supporting semi-retirement can be challenging.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

FERS OPM Medical Retirement: Income Opportunity

The federal disability retirement benefit is large, but it is without a doubt less than the national worker is accustomed to receiving. Therefore, many people fall back and do not try to qualify for federal disability retirement. However, we should encourage an employee to enjoy the perk, mainly if their alternatives at work are limited. 

When an employee’s medical issues make it impossible for them to continue working at their job position, federal disability retirement is typically the best option. It has several benefits. One of the most favorable benefits is that a federal employee qualified for Federal Disability Retirement can continue to work in any private enterprise position that falls within the person’s medical constraints. Let me tell you more about it. 

Does Filing For Disability Benefits Mean Your Career Is Over?

Filing for disability benefits does not mean the employee’s professional journey is over. Though you won’t be working as an employee, it doesn’t mean you can’t take any other job.  FERS disability retirement allows you to shift from your current position into a new career. Therefore, after qualifying for a medical retirement through OPM, many government employees find another job or create a less demanding business. These jobs provide them with financial stability and improve their health, because losing your job can badly affect your psychological well-being. 

For instance, a postal worker may have difficulty carrying the mail because of a knee issue. However, this does not preclude the employee from beginning a business, developing websites, engaging in sales, or indulging in many other jobs that do not place the same load on his knee.

Based on input from prior Federal Disability Retirement customers, here is a list of potential work prospects in the private sector.

  • Teaching Assistant 
  • Babysitting Helper
  • Realtor 
  • Dental Assistant
  • Office Admin 
  • Insurance Agent 
  • Content Writer

Limitation

Although it is a beneficial aspect, there is a limitation to it. FERS has set up an earning limit of less than 80% of their income at the previous posts for workers availing of disability benefits. Moreover, disabled employees must notify the OPM if their earnings exceed 80% of their existing federal employment wage. They will examine your statements to decide if you will keep receiving disability retirement income or whether your income exceeded the 80% earning limit. If you surpass the 80% earning limit, you will be judged recovered to earnings potential and will not be eligible for federal disability monthly payments.

Final Words

The Federal Disability Retirement benefit is a complicated and perplexing subject. It is vital to comprehend the long-term consequences for you and your family. Therefore, consult a professional lawyer to evaluate the advantage in light of your circumstances and choose the best course of action. 

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

What are the Differences Between Postponed and Deferred Annuities?

Meeting age and service requirements are two necessary conditions for annuities, especially in terms of an immediate and unreduced annuity. However, suppose you are looking to leave the employ of the federal government or were let go due to downsizing. In that case, you may be entitled to a postponed or deferred annuity if you don’t currently qualify for voluntary retirement. Although some agencies currently undergoing reorganization and substantial restructuring, among others, utilize voluntary early retirement to increase the number of eligible employees for retirement, it isn’t always the case.

Proposed annuities are available to FERS employees who meet specific criteria, including service requirements (under the MRA+10 provision) and the age requirement. Unfortunately, CSRS employees are not eligible to receive a proposed annuity. For FERS employees, though, individuals may choose to postpone receiving an annuity to another date to eliminate or reduce the age penalty should they fail to meet unreduced annuity requirements.

Annuities are calculated according to the FERS formula, depending on the length of service, unused sick leave, high-3 of your separation, and the remaining age penalty. Although you are ineligible for SRS, you can receive Social Security benefits and a COLA on FERS civil service benefits starting at 62. However, this does eliminate any FEHB and FEGLI coverage on the date of separation. Once your retirement begins, you may reenroll if you had previously been enrolled for five consecutive years prior to separation.

Deferred annuity eligibility is dependent upon a few circumstances for individuals planning to leave the government before reaching immediate annuity eligibility. Qualifications include a minimum of 5 years of civilian service and refraining from requesting a retirement contributions refund. Plus, individuals under FERS and CSRS are eligible based on your high-3 and length of service (at the point of separation). This case is much unlike voluntary retirement, where unused sick leave will not be used to calculate service time. Finally, those covered by CSRS can begin receiving their deferred annuity upon reaching 62, with an amount that will increase with annual COLAs.

However, more deferred annuity options are made available to those covered by FERS. These options include unreduced deferred annuity eligibility at age 62 with a minimum of 5 years of service, age 60 with a minimum of 20 years of service, or minimum retirement age with a minimum of 30 years of service. Upon meeting your MRA, you will become eligible for a reduced FERS annuity at the ten-year service mark. This reduction includes a 5% penalty for each year you were less than 62 years old at the point of separation. It is important to note that deferred retirees are ineligible to receive FERS SRS (special retirement supplement), which typically approximates the SS benefit earned during employment (paid up to 62).

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Getting A Head Start For Retirement Plan

Long-term planning is the most effective method to ensure a prosperous retirement. However, only some have years to prepare for their retirement.

Steps You Should Take When Your Retirement Is Near

There are numerous things to consider before retirement. We have gathered a few of the most important steps for your retirement planning to save you from panic after seeing a lengthy planning procedure. But to avoid end-moment problems, take the suggested action two months before your retirement. 

1. Confirm when you’ll be eligible for retirement benefits

The first step is to determine your eligibility. You can begin collecting retirement benefits when you turn 62. However, you are eligible for all benefits once you reach full retirement age. Your benefit amount will rise if you postpone claiming your benefits from full retirement age until age 70.

2. Decide when you want to retire

It can be complicated to determine whether it is time to retire. Some people find it easy to make a decision. They know they are ready to retire from their careers and embrace their golden years. Others, though, may find it more difficult.

  • Do you have a strong desire to try something new?
  • Do you feel sluggish going to work daily but are frightened to quit a successful position you’ve worked hard to obtain?
  • Or do you simply not feel as happy or content as you once were?

If any of these apply to you, it may be time to retire.

3. Request an annuity estimate from your agency’s HR office

After deciding that it is time to retire from your work, request an annuity estimation. You can also check your annuity statement through OPM’s Online Retirement Service. All you need to do is sign in with your account on their website, and you can easily access your annuity statement. 

4. Get information about other benefits you may be eligible for

The next stage is determining eligibility for additional benefits such as Thrift Savings Plan (TSP) payment alternatives or other entitlements such as Foreign Service, Social Security, Medicare coverage, private company pensions, and Individual Retirement Accounts (IRA). You should consider boosting your investments in the Thrift Savings Plan to provide some more muscle for your retirement income.

5. Attend a pre-retirement counseling seminar

After learning about your eligibility for various benefits, you should have a complete picture of all sources of retirement income and when they are payable. Then try to look for pre-retirement seminars around you. Attending pre-retirement workshops and courses can offer you the knowledge to assist you in becoming more confident in your retirement plan selections.

6. Review and reconfirm the benefits and their values

Check your OPF to ensure that your Designation of Beneficiary forms are accurate and validate your retirement eligibility date (as well as your ability to maintain your FEHB) FEGLI coverage into retirement) as your retirement date gets closer. Review the retirement process in person with the HR department of your company. Verify that they have recorded all the information about your health and life insurance coverage.

7. Decide a schedule and submit final papers

As your retirement date approaches, you’ll need to update those dollar figures, investigate your TSP options, and verify your retirement applicants’ date and OPF to ensure your Designation of Beneficiary forms are up to date. If you’re married, you should also consider your possibilities for death benefits.

Finally, you must set the schedule, complete the documentation, and submit it to your personnel office to ensure everything is in order. It should be done around two months before retirement in case complications develop, such as your candidacy for retirement or any other problem. 

Final Words

FERS provides federal employees with many retirement alternatives. The conditions for each form of retirement and the rewards provided differ. Workers may generally begin collecting benefits when they satisfy specific standards and complete the necessary paperwork.

However, you need to be well prepared for your rainy days. Retirement means that you will no longer receive your monthly income. Your income will be the TSP funds you saved and FERS retirement benefits only. Besides, the rate at which inflation rises will be challenging to survive on a lesser income and wholly depend on your retirement funds. Therefore, you must get a head start on retirement planning long before retirement. 

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Workers Place the Most Value on TSP, Annuities, and FEHB.

According to a poll of federal employees, the TSP, retirement annuities, and the FEHB health insurance program are the most highly regarded benefits. Employees generally see these benefits as satisfying their needs and offering a fair value.

The OPM recently revealed the results of the 2021 Federal Employee Benefits Survey, which were in line with earlier surveys conducted yearly.

The TSP, retirement annuities (FERS or CSRS), FEHB coverage in retirement, and FEHB generally all received ratings of important or extremely important from 96% to 95% of respondents, 93% to 95%, respectively. In addition, the response about FEHB coverage in retirement grew by one point. Otherwise, those were constant from 2019.

Dependent care flexible spending accounts, which increased from 22% in 2019, were again at the bottom, coming in at 27%. Thirty-five addition,  percent of those polled claimed they were ineligible because they lacked a qualifying dependent, which keeps the overall number down. Above that was the FLTCIP long-term care insurance scheme, which received a 41% rating of importance or high importance, down one point from 2019.

In a similar vein, 93% of respondents to the TSP and 95% of respondents to the FEHB believed that the latter addressed needs to a significant or moderate level, while 87% of respondents to the TSP and 73% of respondents to the FEHB thought the latter offered a good or exceptional value (since the survey went only to active employees they were not asked whether the FERS or CSRS annuities met their needs or were a good value). They were either identical to the 2019 survey’s responses or were within one point of it.

Like previous studies, the FEHB had a moderate to substantial impact on 72% of respondents’ decisions to accept a federal position. However, it had an even more significant impact on 79% of respondents’ decisions to stay with the government. In addition, 78 and 88% of retirement annuities were available, while 71 and 81% of eligible participants in the TSP did so.

Furthermore, despite being qualified, survey results revealed a pattern as to why employees do not sign up for optional benefit plans. Among individuals who weren’t signed up for the FEHB, FEGLI, and FEDVIP dental plans, the most frequently cited excuse was coverage by comparable other insurance.

However, among those who did not participate in FLTCIP or FEDVIP vision, the most typical justification was that the participants did not think the programs were worthwhile. The most frequent excuse for not participating in dependent care accounts was ineligibility, whereas the most frequent one for flexible healthcare spending accounts was lack of interest.

The most frequent excuse given by the 2% of people who don’t contribute to the TSP is that they can’t afford to.

Breakdown of result Results of Enrollment

The 2021 FEBS included questions that, like earlier surveys, asked respondents to specify which benefits programs they were enrolled in. With modest increases (three percentage points or less) in several programs, reported enrolment remained stable between 2021 and the latest survey administration in 2019. However, the reported enrollment in the Federal Employees Dental and Vision Insurance Program (FEDVIP) Vision increased by five percentage points between enrollment results in 2019 and 2021, which was the most significant shift. Therefore, the 2021 FEBS enrollment figures are shown for all programs.

Reasons for Refusing to Join Benefit Programs

To get insight into the potential factors influencing decision-making and how they might differ between programs, participants who said they DID NOT enroll in each benefit program were asked to explain the primary reason. The survey’s overall findings were basically in line with earlier iterations.

High-uptake programs’ deterrents to participation tend to remain constant over time. For instance, the majority of workers who were not registered in the Federal Employees Health Benefits Program (FEHB) stated, “TRICARE covers me,” “I receive health insurance via someone else’s job or retirement annuity,” and “I cannot afford to make TSP contributions.”

Finding enrollment obstacles and chances to increase employee uptake can be achieved by analyzing these results for programs with lower enrollment. For example, the program is unavailable to employees who are not responsible for paying for dependent care expenses, even though DCFSA through FSAFEDS had the lowest reported enrollment in 2021 (7%).

According to the FEBS findings, 35% of people who are not already registered in DCFSA reported not enrolling because the program does not apply to them. In addition, employees’ claims that the FLTCIP and FEDVIP-Vision programs are not a good value were cited as the most frequent deterrent to enrollment. This suggests room for program enhancement and improved employee outreach.

Table 2 below lists the primary reasons for not enrolling in each benefit program.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

The Risk of Inefficient TSP Contributions

How much is sufficient? What role does greed play while making future investments? What risks should you take or avoid to achieve your financial objective? How much is too much?

These are easy to answer. How much is sufficient depends on who is asking, who is being asked, and what the topic is.

Is it your retirement fund, your kids, your closet full of suits, or your stash of potato chips? The target is constantly shifting. When it comes to having enough money to retire, it depends on your age and financial situation, which might change over time. It most likely will.

Aiming for a million-dollar nest egg would be feasible at age 25. But by age 50 or 60, that might have changed. Possibly experienced one or two severe recessions or saw astronomical inflation. Right now, they say, there is no one getting any younger. However, the world and the economy are constantly changingfrom the price of gas and infant formula to the possibility of an escalating war in Europe.

Abraham Grungold, a recently departed federal employee, shared his opinion on these issues. Abraham recently left the government after a long career and many years as a TSP investor. He amassed a million-plus dollar fortune. He stated the following through cautious and consistent investing.

How much is sufficient for TSP?

Over 100,000 TSP millionaires are among the nearly four million federal employees participating in the Thrift Savings Plan (TSP). So how much TSP money is required to fund a comfortable retirement? What is the minimum required income for a comfortable retirement?

It depends on various variables that vary depending on each person’s financial and personal demands. Federal and state taxes may differ from the figures in the two scenarios below.

Single Individual: Let’s say you have a 30,000 annuity, a 20,000 SSA benefit, and 500,000 in your TSP after 30 years of federal employment at age 62. You can withdraw 4% of that amount yearly for the next 25 years, or 20,000, from your TSP. Your annual total decreases to roughly 55,000 from 70,000 after taxes. Will your lifestyle be satisfied by this level of income?

Married couple: Let’s use the example of a couple who are both 62 years old and have a federal employee as one spouse. Additionally, they have $1 million in retirement savings, including their TSP.

Spouse #1 has a $30,000 annuity, whereas Spouse #2 has a $20,000 Social Security benefit. Over 25 years, they will withdraw 4%, or $40,000, of their $1,000,000 investment. Their total income, which is $110,000 annually, is reduced to about $85,000 annually after taxes.

Will this income support your lifestyle?

Before retirement, federal employees must maximize their contributions, invest aggressively, and think about a plan for unforeseen life occurrences to obtain the desired amount of retirement income. Several federal workers have said that $2 million will be plenty for their retirement. But is it sufficient?

There are unforeseen twists and turns in life. Listed below are a few unforeseen circumstances that may arise upon retirement:

1. Inflation and the overall increase in prices.

2. A mortgage for a vacation or second house.

3. Prescription drugs and medical needs.

4. College expenses for the grandchildren.

5. Nursing or long-term care facility.

It is highly recommended that anyone close to retirement develop a thorough income plan before committing to a specific retirement date. That can give retirees peace of mind and may even result in an earlier retirement date for individuals who had believed they had more time left.

You should adopt a cautious attitude and keep extremely strict tabs on your spending in retirement. Even if they are making withdrawals, TSP participants still need to invest somewhat actively to prepare for these unforeseeable catastrophes and keep growing their TSP.

“As a financial advisor, I frequently receive inquiries from federal employees about their retirement plans, TSP accounts, and non-TSP assets.” “I advise them to have a backup plan in place for retirement to handle any unforeseen circumstances.” Abraham says, “The answer to these retirement questions is to save as much as you can in your TSP.”

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Life Insurance for Federal Employees: Advantages and Disadvantages of FEGLI 

Because they are automatically enrolled in the basic plan as soon as they start work, many federal employees believe that Federal Employee Group Life Insurance (FEGLI) is the best plan. Many choose one of the three additional coverage options (Options A, B, or C). But how can federal employees ensure they get the most cost-effective plan with the best coverage? Have they considered all of the advantages and disadvantages of the plans? Are they aware that there are other options?

Here are FEGLI’s pros and cons to help federal employees understand the program’s expenses and benefits. This list should assist federal employees in determining whether FEGLI is the appropriate plan for their families.

FEGLI Advantages 

• Convenience  You are automatically enrolled in basic coverage regardless of age or health. You won’t have to take any medical tests, and as long as you work for the government and pay the premiums, you’ll be covered. You don’t have to worry about making payments because the premiums are withdrawn automatically from your paycheck.

• Ability to adjust coverage amount  The base plan covers your salary + $2,000, rounded up to the closest thousand, but you can choose to increase your coverage. Option A increases your coverage by $10,000, while Option B allows you to pick even more.

• Family coverage  In addition to yourself, Option C allows you to cover your spouse and children. Other plans require you to have individual insurance for each individual.

FEGLI’s Disadvantages

• Cost  Option A, B, and C are optional coverage that adds to the cost of the base plan, and premiums rise as you get older. Because the premiums for coverage for your husband and children are calculated based on your age rather than the age of your family members, these costs will rise as you get older. You’ll have to pay an additional premium if you want to add Accidental Death and Dismemberment Insurance.

• Coverage may be limited  You will only be eligible for coverage if you work for the federal government or retire from that employment. You lose your FELGI coverage if you choose to quit or are fired.

• Limited alternatives  FEGLI provides a few options, but none of them are Whole Life Insurance, Single Premium Whole Life, or Universal Life Insurance. These insurance have features and benefits that FEGLI’s plans do not.

• Difficult to raise coverage  You can reduce your coverage anytime. Still, you can only increase it during open enrollment periods by having a physical exam or a “Qualifying Life Event.” It’s not a good idea to wait for these open enrollment periods to enhance your coverage because the last one was in September 2004.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

3 Social Security Changes That May Impact Millions Of Americans Who Aren’t Yet Retired In 2023

Social Security checks are currently sent to over 48 million seniors each month. But many more people will follow in their footsteps over the coming years.

Therefore, it is advisable for those who are still in the workforce to pay attention to significant changes to the federal program. The following three Social Security changes will affect millions of Americans who will retire in 2023.

1. A higher taxable income threshold

The Federal Insurance Contributions Act (FICA) limits payroll taxes to people who make up to $147,000 per year. In 2023, this maximum taxed income will rise to $160,200, which is the biggest annual increase in Social Security history.

How many Americans will be affected by this increase? 

According to the U.S. Census Bureau, 19.6% of American households made $150,000 or more in 2021. That represents more than 25.7 million homes.

This statistic includes an undetermined number of households with two incomes. However, according to the 2020 census, single heads of households made up about 35% of all households. The increased maximum taxable income would affect at least 9 million Americans the following year, according to this assessment.

2. Early claimants’ earnings test

Some people who receive Social Security benefits are still working. Benefits may be withheld from anyone who applies for benefits before reaching full retirement age.

Every $2 earned over $19,560 will result in a $1 benefit deduction from the federal government in 2022. Every $3 earned over $51,960 will result in a $1 benefit deduction from the government. These two ceilings will rise in 2023. The lower amount will be increased to $21,240, while the higher sum will now be $56,250.

The number of Americans this move will impact has yet to be discovered with certainty. However, a survey earlier this year by the Nationwide Retirement Institute revealed that 42% of respondents intended to apply for Social Security payments before reaching full retirement age while continuing to work.

But keep in mind that persons aged 26 and over were included in this study. It might not entirely reflect the number of people who filed for Social Security early and kept working in 2023.

3. Increased advantages

The 8.7% cost-of-living adjustment (COLA) that retirees will benefit from next year won’t be given to Americans who still need to reach retirement age. However, this rise will still be beneficial to people who are a few years away from retirement.

The average Social Security retirement payment will rise in 2023 thanks to the historic COLA. The maximum advantage will follow. As a result, the base Social Security benefit that the millions of Americans who have not yet retired can expect will also be higher.

You can be in line for much higher benefit amounts depending on how soon your retirement occurs. All but three years had seen an increase in the monthly amount since 1975, when Social Security started instituting an automatic yearly COLA.

Of course, inflation is not the only reason for these rises. In reality, the purchasing power of Social Security retirement benefits is decreasing in real terms. The purchasing power could, in some ways, decline even with regular COLAs.

The largest adjustments are still to come

The biggest changes to Social Security are still to come, even though these three key changes will affect Americans who still need to retire. Social Security will run out of money by the year 2035. This will result in a roughly 24% loss in benefits if nothing is done.

It’s a safe bet that Washington officials will strengthen the program to maintain benefits. However, the modifications they make to do this will have an undetermined impact on millions of Americans.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Turning TSP Money into an Annuity

The Thrift Savings Plan is a retirement investment made available to federal and uniformed workers. Withdrawals can be made in a large sum once or paid monthly or form an annuity; however, an annuity is the least common choice. Fewer than 1% of all withdrawals from TSPs are used to buy annuities.

Before completely dismissing it, you should know what it is and how it works. Then, you can tailor the TSP annuity benefit to satisfy your specified needs with the conventional retirement benefits given by FERS and CSRS. 

DIFFERENT TYPES OF ANNUITIES PROVIDED BY TSP

A TSP account holder can select an annuity from one of three available options:

Single life

A single-life annuity offers you steady payments for the rest of your life.

Joint life with a spouse

You will continue receiving payments from a joint life with a spouse annuity as long as you and your spouse are alive. Upon a partner’s passing, the survivor will continue receiving annuity payments until their death.

Joint life with someone other than your spouse

This refers to an annuity paid out for your lifetime and the lifetime of another person you choose (who is not your spouse). Even when one of you dies, the other will continue to receive annuity payments for the remainder of their life.

Those considered to have an insurable interest in you include your 

  • Former marriage partner, 
  • Biological or adoptive relatives closer to you than first cousins, and 
  • Those with whom you live in a relationship, which forms a common-law marriage in countries that recognize such unions.

NOTE THAT:

1) The TSP is not an annuity; instead, it transfers money to a private commercial company.

2) You may also mix different annuity options with various available features of your choice, including a predetermined payout made to you after ten years. The payments will rise with time. The standard repayment sum will increase by 2% per year. It is necessary to know that not all annuity features can be combined with the basic annuity types. 

3) Let’s say you and the other annuitant pass away before the annuity payments equal the account balance used to acquire the annuity. In such an event, the difference will be returned to the beneficiary in cash. Payments will go to your beneficiary if you pass away during the first ten years.

4) A joint life annuity may provide a 100% or 50% survivor payout. If you have a joint annuitant, your monthly annuity payments will stay the same (100%) or be reduced by 50% upon the first death.

5) If you are a married participant with a balance over $3,500, your withdrawal choice must meet the requirements of your spouses’ rights.

6) Suppose you and your spouse are FERS members. In that case, your spouse will be eligible for a joint and survivor annuity with a 50% survivor benefit, level payments, and no cash return feature unless you sign a written waiver of this right. As a married CSRS member, the TSP must notify your spouse of your withdrawal election.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

How to Select the Ideal Retirement Savings Account Between a Roth And a Pre-Tax Account

Should I fund a Roth or pre-tax account? This question is tricky because it can take decades before you realize whether or not your decision was wise. Financial advisors say that a few crucial elements might make a choice simpler, as well as circumstances where “success” is more likely.

According to Ellen Lander, principal, and creator of Renaissance Benefit Advisors Group with headquarters in Pearl River, New York, “there is no clear answer; therefore, you have to leap.”

Main Distinctions Between a Pre-tax Account from a Roth Account

Americans who fund qualifying retirement accounts like 401(k) plans or individual retirement accounts receive financial benefits under the tax rules. The main distinction between a pre-tax and a Roth account is when savers receive those benefits and when their taxes are due.

Pre-tax accounts give savers an immediate tax break. Contributions are not subject to income tax; instead, they are subtracted from savers’ taxable income, lowering their tax obligation. So they’ll have to pay taxes after they take money out of retirement accounts.

With a Roth account, on the other hand, investors pay tax up front when they contribute but not when they withdraw money in retirement.

The Best Option is a “Tax Bet”

Taxes are the main factor to consider when deciding whether to save in a pre-tax or Roth account. It all boils down to this: Will you pay more or fewer taxes when you retire?

If higher, saving in a Roth account now and paying taxes at your existing, lower rate makes sense. If lower, it often makes more financial sense to save in pre-tax accounts and postpone paying taxes.

The decision between pre-tax and Roth investments is irrelevant mathematically if your current and future tax rates are the same, according to David Blanchett, who’s head of retirement research at PGIM, an asset-management division of Prudential Financial. In that case, you’ll have the same amount saved for retirement after taxes.

However, due to unpredictable personal circumstances and potential policy changes, it is hard to predict whether your future tax rate will be lower, the same, or greater.

Ted Jenkin, a licensed financial advisor and the CEO of oXYGen Financial, described the decision as “essentially just a tax bet.”

A Roth is Ideal for Young Professionals in Most Cases

Financial gurus say that young people in their early twenties and thirties are usually the best candidates for Roth savings.

These young professionals have a good chance of earning higher salaries later in life and enjoying higher living standards when they retire. These higher salary and income requirements could result in a higher tax rate in the future.

“I’d say a Roth account always wins when it comes to younger people,” said Lander. Jenkin, a CNBC’s Advisor Council participant, advises customers of all ages “nearly always” to use a Roth 401(k) or IRA when their federal tax rate is at or below 24%.

This includes married couples and single people in 2022 with taxable incomes under $340,100 and $170,050, respectively.

When a Pre-tax Account is Ideal

Spending usually decreases after retirement compared to one’s peak working-years expenditures. A pre-tax 401(k) or IRA may be financially advantageous since a reduced tax rate may be associated with these lower-income needs.

According to the 2021 Consumer Expenditure Survey, households’ average annual expenditure peaks between the ages of 45 and 54, or about $84,000, while spending decreases to approximately $52,000 annually for people 65 years of age and older.

Naturally, there is no assurance that your tax rate will decrease as you age. Furthermore, some people might believe they can only afford to put money down for retirement if they receive the tax advantage upfront from a pre-tax account.

According to advisers, a pre-tax retirement plan and using the additional cash the tax savings leave in your paycheck to help pay down debt may be a better option for someone with high-interest credit card debt or another sort of loan.

The Benefits of Diversification

Besides advising retirement savers to diversify their holdings, financial counselors frequently extol the virtues of tax diversification, particularly for investors for whom the distinction between a pre-tax and Roth account is ambiguous.

To balance their tax risk, these investors might decide to allocate half of their contributions to a Roth and the other half to a pre-tax account.

“I really like the [option] of half and half,” Lander said. “You’re just partly mistaken.”

Retirees have financial options thanks to the two tax tiers. For instance, retirees about to enter a higher tax bracket may choose to remove funds from a Roth account to meet their income requirements. The individual wouldn’t move into a higher tax rate because a Roth withdrawal doesn’t contribute against taxable income.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

How you can increase your 401(k) savings

It’s been a challenging few months for anyone contributing to a 401(k). Your account balance has probably decreased as the value of both stocks and bonds has decreased. Younger investors should not overreact. Even if you haven’t seen one before, extended down markets are unavoidable. The good news is that they allow you to purchase more shares at a discount.

But regardless of your age, now is an excellent moment to reassess your 401(k) strategy if you’re experiencing anxiety. This is crucial if your contribution amount has not changed since you enrolled in the plan or were enrolled automatically.

This article outlines the steps you can take to increase your 401(k) savings.

How Much Can You Contribute to 401(k) in the Coming Year?

The Treasury Department is required by law to raise 401(k) contribution caps as the cost of living rises. This is consistent with the IRS‘ most current inflation-adjusted tax rule.

The current 401(k) contribution limit is $20,500 (an increase of $1,000 from 2021). You will be permitted to make a $22,500 contribution to the 401(k) plan starting in 2023. You can also make an additional $7,500 contribution if you are over age 50, for a total donation of up to $30,000.

What Happens if I Have a Different Kind of Retirement Plan?

Other retirement plan types, such as 403(b)s, the majority of 457 plans, and federal Thrift Savings Plans, are subject to the new $22,500 contribution cap.

Also increasing is the IRA. In 2023, the IRS will increase the annual contribution ceiling for traditional and Roth IRAs to $6,500. That is an increase of $500 from this year.

Since pensions are getting harder to get, most people must rely on retirement savings (as well as Social Security). Therefore, these inflation adjustments are essential, regardless of your retirement goals.

Steps to Increase Your 401(k) Plan

1. Refuse to accept the standard savings rate

It’s becoming more common for new hires to automatically open a retirement account at work, most frequently by having 3% of their pay put into their employer’s 401(k) plan. But while saving 3% of your income is better than nothing, it might not be enough to support your present standard of living in retirement.

When you earn a raise, save 1% extra each year until you’ve hopefully saved up to 20% of your pay.

2. Get a 401(k) match

The typical 401(k) match is about 50 cents for every dollar saved, up to 6% of gross income. Make sure you save enough money to leverage your employer’s 401(k) match, if available.

3. Continue until you have vested

You won’t be able to keep your employer’s 401(k) match until you have fully vested in the 401(k), which may take up to five or six years of employment with the company.

Depending on their years of service, some employers permit workers who leave before they are fully vested to keep a portion of the match, while others demand that they forfeit the entire match. Working for a company until you reach your full 401(k) vesting benefit might occasionally be worth thousands of dollars.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

10 Simple Ways to Derail a Federal Retirement

Are you planning for retirement? Here are 10 common ways you can derail your federal retirement plan.

1. Simply show up

The days of “putting in my time” and retiring with a prosperous financial life are long gone. This is especially true thanks to the dubious idea of the Minimum Retirement Age (MRA). To maximize your benefits, you’ll need a solid plan.

2. Pay your bills in full before starting any savings

No! Change that. Your income and way of life need to be separated by a wedge. The best people were those who built and sustained that wedge. They never overspent their resources and never even came close to doing so. They advanced in this fashion thanks to raises and bonuses.

3. Take out a loan for tomorrow

The use of TSP loans must be a last, absolutely last resort. Better yet, refrain from doing it. However, this practice results from a poor cash flow plan. Now hear this: debt is not a friend. Although it might be a tool, it is not a fix. One of the pillars of financially successful people is effectively managing and ultimately getting rid of installment debt.

4. Silo Save

Silo Save TSP (Thrift Savings Plan) is great, but it’s not a strategy. The retirees who are the most successful have assets in standard plans like TSP and non-retirement assets. Once your TSP has been maximized, start slipping some cash into a conventional investment account. You can do it alone or with a consultant. Just go ahead and do it.

5. Poor TSP funding

The majority of people don’t optimize their contributions. A sizable TSP balance is required if you plan to retire before age 65. Period.

6. Losing your balance

This means the allocation in your TSP, not market fluctuations. You can’t just have it fixed and forget it, even if you have configured a sensible asset mix among the five main funds in your TSP. Now, you don’t have to try to steer too hard. Remember to take another look at it a year from now if you determine that 40% of your investments should be in C funds based on your age and risk tolerance. You must do more than smile if it is now 48%. It’s time to transfer the surplus to the other funds (the ones that didn’t perform as well). This may seem illogical, but it’s the best decision you can make.

7. Poor TSP technique

Investing 20% in each core fund or a small amount in all funds (including all lifecycle funds) isn’t a recipe for success. Both aren’t entirely in C (since it’s been doing fantastically!). Your asset portfolio should fairly represent your capacity to bear risk in both good and poor times. Trying to time the market or changing your investment strategy depending on “what’s occurring” is a road to tears. Keep in mind that you will require a large balance.

8. Forgetting to bring your umbrella

This doesn’t imply that you should walk with an umbrella to avoid getting wet. It’s about not having enough liability insurance. Nothing can wreck your retirement dreams more quickly than an incident followed by a negative ruling. Get a price on an excess liability umbrella immediately and check your auto and home limitations.

9. Ignoring the risk of long-term care

Insurance rates keep rising (even for Fed plans), but the problem persists. You need to clearly understand your commitments and resources, as well as have a working plan in place. Will you look for care at home? You might require a facility. Right now, ask those challenging questions!

10. Mishandling FEGLI

The Federal Employee Group Life Insurance Plan is your best workplace plan. This does not imply perfection, though. For instance, by law, an employer plan must charge all employees similar premiums for optional coverage depending on age (the unsubsidized part). Therefore, everyone pays the same amount, whether they smoke or not, and as long as they are in good health. As a result, as we become older, these plans get significantly more expensive. This is the truth. Throughout your career, trying to shop around and examine options from the private sector might save you tens of thousands of dollars. Every cent you save can support your retirement.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

Can You Finance Your Retirement With Social Security?

Most Americans lack confidence in the future of the Social Security program. According to a recent survey, 23% of Americans think the program won’t exist by the time they retire, and 46% think it will offer far fewer benefits than now.

Despite this, most Americans say they will rely on Social Security to pay for at least some portion of their retirement. While 26% said they would use Social Security to cover less than half of their retirement expenses, 51% said it would cover more than half (31%) or all (20%) of their expenses.

However, is this a sure bet? The survey team consulted experts to learn what you should know about relying on Social Security to pay for your retirement. Here is what they said.

Can Americans rely on Social Security to fund their retirement in its current form?

One-fifth of Americans intend to finance their whole retirement with Social Security benefits. Still, even if the program is kept in place, most retirees will probably find it challenging to do so.

Frank Murillo, a partner and managing director at the Snowden Lane Partners, says, “Unless you can actually stick to a budget, which in my experience most people don’t, Social Security is not enough for most retirement needs.”

There are differences in what people expect to spend in retirement and what they do. “Recreating the Dollar is an exercise I undertake with the clients I deal with where we put together sources of income to look like what they had throughout their working years. The findings of how much they can genuinely spend after stretching it over a respectable amount of time are eye-opening.”

According to Wade Pfau, the Retirement Income Center co-director at the American College of Financial Services, Social Security was never intended to be a retiree’s sole source of retirement income.

He said the benefit “is intended to replace around 40% of the typical indexed lifetime income of someone who has worked and earned an average pay over their career.” Many retirees will aim to replace a greater proportion than this.

Most financial gurus advise saving at least 70% of your pre-retirement income for retirement.

Katherine Tierney is a CFA senior retirement strategist at Edward Jones. She said, “Since Social Security is probably only going to make up a percentage of your retirement income, it’s crucial to have a well-rounded approach to satisfy your income demands in retirement.” We advise you to take action right now to learn what you must do to realize your dream retirement. A financial advisor can help outline your objectives, create a plan to achieve them, and track your progress if you are unclear on where to begin.

What to Do If Social Security Is the Only Retirement Income Source You Have.

Although financial experts do not advise relying only on Social Security for retirement income, this is the case for many Americans. According to another poll, 36% of Americans have less than $10,000 saved, and 25% have not yet begun saving for retirement.

Colleen Carcone, head of wealth planning solutions at TIAA, said, “Each scenario is unique. Some people can live wholely on Social Security exclusively.” Continuing to work while delaying your Social Security benefits might help you narrow the gap between the amount you need to retire successfully and the amount you have saved. A delayed start will result in a larger check when you start receiving benefits.

The Future of Social Security: What Will It Look Like?

According to the survey, most Americans think Social Security benefits will be cut or eliminated in the coming years. Are these worries justified since the Social Security trust fund is projected to exhaust in 2035?

Most analysts anticipate that Social Security will endure, but doing so will probably necessitate significant modifications to the current scheme.

A few straightforward fixes will probably be implemented, according to Jeremy Finger, CFP, founder of Riverbend Wealth Management. “First, we can remove the Social Security tax earnings cap, making any income over $147,000 subject to tax. The Social Security trust fund might be extended as a result. The second option is to raise the full retirement age, which would be similar to a salary reduction. For instance, persons born after 1970 could not be eligible for full benefits until they were 68 or 69 years old. Third, they might raise the Social Security payroll tax.”

According to Finger, the Social Security trust fund should be in balance using one or a combination of these remedies. However, Finger does not advise relying on Social Security to finance your retirement because there are enough unknowns.

I wouldn’t suggest that clients base their Social Security decisions, he said, “on what the government might do.”

There is a high possibility that payments will be cut in the upcoming years, regardless of how the Social Security trust is ultimately funded (and most experts think this will happen before it gets emptied).

Carcone says, “Social Security may be cut to match incoming cash from people and their companies.”

When preparing for retirement, Social Security’s uncertain future should be considered.

You will be less dependent on Social Security benefits the more you save over time through pension schemes and portfolio building.

Conclusion

Social Security isn’t going anywhere for the time being, and there are hopes that the government acts to replenish the reserves or pass relevant laws like those advised above.

But before then, you must have other retirement savings since Social Security covers less than 40% of an individual’s retirement income.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

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