Civil Service Retirement System
EPA Offering Buyouts to Reduce Personnel/by Admin(2)
It seems that many agencies are accepting president Trump’s idea of reducing the number of federal employees and the EPA Offering Buyouts is proof positive that Trump’s vision of a smaller government is becoming a reality. The Environmental Protection Agency has recently initiated steps to buy out certain personnel. The EPA has decided not to hire more workers unless it becomes necessary. It is believed that the agency may offer voluntary retirement as well. The impact of these changes on retirement benefits and federal retirement can just be guessed right now because no one knows the exact impact.
How the EPA Offering Buyouts Will Impact the Agency
The EPA has begun offering buyouts to reduce the number of federal employees in the Agency. The Agency has about 15,000 employees at the moment. This decision was probably taken because of an executive order by President Trump that was released last month and talked about streamlining agencies through the federal government.
How was the Message of Reducing Federal Employees at EPA Conveyed?
The message of reducing federal employees was conveyed via a letter sent by the Acting Deputy Director of EPA, Mike Flynn. This letter was sent to all the regional administrators. The content of this letter stated that the White House had asked federal government agencies to start taking immediate actions that are aimed at reducing the workforce.
The letter further stated that as per the said guidance, the EPA offering buyouts to start an early buyout or early out program. Flynn also mentioned that the goal was to complete the program by the end of the year.
Flynn also mentioned that though the governmentwide hiring freeze has been lifted, new recruitments at the EPA will not be encouraged. The resource situation of the agency is such that it has to opt to stay away from external hiring. This hiring freeze is not aimed at restricting recruitment for all the positions as there can be limited exceptions that are permitted on a case-by-case basis.
Setting of a Trend
Though the memo has minimal details about the agency’s plan to reduce the number of federal employees, it can be probably one of the several plans that will be submitted by various agencies.
It is also a fact that EPA has been a central target of the Trump administration as the President of the country, Donald Trump had earlier promised that he would reduce the agency to tidbits. The budget he has proposed would slash the funding of the agency by 30 percent and cut around 3200 federal employees. It will also obliterate funding for Superfund cleanups, climate change research and scrap over 50 programs. The efforts being made towards improving the energy efficiency, cleaning up the great lakes and funding infrastructure projects in the Native American communities are among the scrapped plans.
Understanding the Buyout
Those of you who don’t fully understand what the EPA Offering Buyouts will mean to federal employees must know that buyout is also known as a voluntary separation incentive payment. It is a cash payment that is made to a federal worker to tempt him or her to leave voluntarily. The maximum amount of money that can be offered per person is $25,000. This payment is taxable which means that the take-home value is reduced by a few thousand dollars at least.
Federal workers who are selecting this option must leave by a specified date, and they are not allowed to return to federal employment within five years unless they manage to repay the entire pretax buyout amount.
Is Early Retirement Offers on EPA Agenda?
In most cases, the buyouts are coupled with early retirement offers, but in the case of EPA, it is not clear whether they are on the agenda or not. For those of you who don’t know, Voluntary Early Retirement Authority lets federal employees retire before they reach the standard combinations of years of service and age.
The two most vital federal retirement systems are Federal Employees Retirement System and Civil Service Retirement System. The latter applies to people who were hired before 1984 which consists of less than 10 percent of the workforce. These people are now older and closer to retirement on an average.
Early retirement offers allow employees in either of the two systems to retire at any age with 25 years of service or age 50 with 20 years or service. It is potentially subject to a reduction in one’s retirement benefits.
Why are Layoffs Unpopular?
Laying off the federal workers or Reduction in Workforce is not preferred by federal agencies because it requires a tedious, expensive and disruptive process. RIFs have been out of trend as Agencies have not used them for decades and they try to avoid them. Agencies prefer other methods like cutting down the travel and other expenses as well as cutting down the feds via attrition.
Federal employees have been under the scanner since President Trump took over. The attempts to reduce the number of feds have been initiated at EPA by offering buyouts. The agency may also offer early retirement options which may badly impact retirement benefits and federal retirement.
Will Congress Approve Federal Employee Retirement Benefit Increases?/by Sonny Dothard
A congressman is attempting to create federal retirement benefit increases. The proposal offers the new calculation using CPI-E vs. CPI-W. Using CPI- U instead of CPI-W is also being proposed. It is not clear whether the Congress would even nod to change the way cost of living adjustments are being calculated. Even experts are hesitant about speculating on which way the wind will sway. If the method of calculation is changed, many people will need the help of someone who serves as a retirement guide.
Request for Change in Calculating Retirement Benefit Increases
The request for making a change in calculating retirement benefit increases was proposed by Congressman John Garamendi (D-Modesto, CA). Garamendi recently introduced the CPI-E Act of 2017 (H.R. 1251), a bill that would require the Cost of Living Adjustment (COLA) methodology to make use of CPI-E instead of the CPI-W. CPI-W is currently being used to calculate changes in retiree benefits for Social Security recipients and federal annuities provided under the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).
Talking about the proposed change in calculating retirement benefit increases, the president of National Active and Retired Federal Employees Association, Richard Thissen stated that the fact that it is already not being done is shocking. The COLAs are based on the costs experienced by clerical workers and urban wage earners rather than the costs experienced by elderly individuals.
It should be mentioned here that the retirees started getting calculating retirement benefits increase or Cost of Living Adjustments (COLAs), in 1975 only. Congress approved the automatic cost-of-living adjustments as part of 1972 Social Security Amendments. At that time only one Consumer Price Index was available, it was CPI-W. Before 1975, the retirement benefits were increased only when the Congress enacted a special legislation.
Experimental Price Index for the Elderly
The Bureau of Labor Statistics has expanded the number of CPIs since the 1970s, and it has created an experimental inflation measure which is known as Experimental Price Index for the Elderly. It is the responsibility of the Bureau of Labor Statistics to produce the Consumer Price Index.
CPI-W, on the other hand, measures the changes in prices for a market basket of services and goods bought by a household where more than half of the income of the household must come from wage or clerical occupations. The CPI-W population represents about 28 percent of the total U.S. population.
At present, the experimental CPI-E is calculated by using the households that include at least one reference person or spouse who is at least 62 years of age. It represents about 19 percent of the current CPI sample.
BLS has found that around four in seven major expenditure groups that are being measured by CPI older households are assigning a larger portion of their total expenditures to some categories that are rising rapidly like the medical care costs.
The Costs Involved
If the Congress approves a change on calculating retirement benefits increases and switches to CPI-E, it would cost several million dollars. The index sample will need to be expanded so that it becomes statistically defensible. BLS will also need to put greater resources into collecting information regarding senior discounts that have the potential to affect the final pricing of various goods and services.
Chained Consumer Price Index for All Urban Consumers
A few members of the Congress are also considering switching to Chained Consumer Price Index for All Urban Consumers (C-CPI-U) from CPI-W. It is believed that (C-CPI-U) will capture consumer expenditure substitutions so as to reflect true cost-of-living changes of the customers. On the BLS website, an example of consumer preferences between pork and beef can be found.
Beef and pork are two separate CPI item categories. If the price of pork increases and the price of beef do not, consumers might switch to beef from pork. The C-CPI-U is designed in such a manner that it accounts for this kind of consumer substitution between different CPI item categories. In this example, the C-CPI-U will increase but not by as much as the index that was based on the fixed purchase patterns.
Thus, the C-CPI-U is proven to increase at a slower rate than the CPI-E or CPI-W over the last decade which would save government’s money by lowering the amount by which retiree benefits increase.
An act known as the CPI-E Act of 2015 was similar to the bill that has been introduced by Congressman Garamendi. It died in a Subcommittee of the House during November 2015.
Though the efforts made by Congressman Garamendi to change retirement benefit increases are calculated in the future to have got some attention, no one can say for sure whether the proposed changes will be approved by the Congress this year, or ever. If the changes are approved, the process of calculating cost of living adjustments will change, and most retired people would need the advice of a federal retirement guide for managing their finances well.
Federal Employees May Get a Social Security Boost/by Sonny Dothard
A WEP provision of the old Civil Service Retirement System has been reducing the benefits of many federal employees. A new bill was introduced by Republican leader Kevin Brady to change the WEP provision. If the change is successful, it would benefit many federal workers. National Active and Retired Federal employees is playing a pivotal role in pushing for the change.
Why Federal Employees get Fewer Benefits?
The WEP provision of the old Civil Service Retirement System or CSRS reduces the benefits of the federal employees, state employees, county employees and even municipal employees who have worked in the private sector. Whether the employees worked in the private sector before, during or after the federal service time does not matter. It also includes the employees who receive an annuity from government employment that is not covered by social security.
All the federal and postal employees have contributed to the civil service retirement fund and the Social Security since last 30 years when the Federal Employees Retirement System was introduced. The people who retired under the old CSRS plan get significantly reduced Social Security benefits because of the WEP provision.
Though feds have hoped to get rid of WEP since the day it was created, they have been unsuccessful so far. They have now got a glimmer of hope as the Republican leader Kevin Brady has introduced a bill against WEP. It’s known as the ETPSA bill (H.R. 711).
Brady has got a better chance at getting the bill cleared because he is a republican who would have no problem in rounding up the supporters of GOP. He is also the Chairman of the influential House Ways and Means Committee. The committee has jurisdiction over Social Security.
If the efforts of Brady prove to be successful, the federal employees who are turning 62 this year would have the maximum benefit. Many of the people in this age group would be eligible to get a monthly benefit of $77. This bill may decrease the monthly benefit of about 17 percent feds by $13 per month.
The Fact Sheet
The National Active and Retired Federal Employees have played a key role in ensuring that all the current and retired federal workers get rid of the WEP provision. They are currently leading the charge to change the law. They even have a detailed fact sheet that explains how WEP works and what would be the impact of the changes.
Senate Passes Bill to Reduce FERS and CSRS Benefits Fraud and Misuse/by Andy Ramirez
Senate Passes Bill to Reduce FERS and CSRS Benefits Fraud and Misuse
This bill (S.1576) cracks down on federal retirement benefit fraud and misuse by giving U.S. Attorneys the statutory authority to prosecute retiree representatives who misuse funds from the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).
FERS and CSRS are the primary retirement funds of federal workers, and they’re managed by the Office of Personnel Management (OPM). S.1576 was introduced due to concerns about an increase in embezzlement of government benefits by dishonest representatives of retirees, and to help prevent the misuse of these retirement funds that the government pays.
This bill classifies the crime of misusing federal retirement funds as a felony. This is expected to deter deceitful behavior targeting retirees and provide the same protections to federal employees and retirees that Social Security and Veterans benefits recipients already have.
Bill to Reduce FERS and CSRS Benefits Fraud Sails Through Senate
It was introduced by Senators James Lankford (R-OK) and Heidi Heitkamp (D-ND) in June 2015. Lankford and Heitkamp are chairman and ranking member, respectively, of the Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management. The bill was approved by the Senate Homeland Security and Governmental Affairs Committee on June 24.
After the bill sailed through the full Senate with Unanimous Consent, Sen. Lankford issued a statement saying that “I’m pleased the Senate has passed this bill to protect the retirement and annuities of federal employees all across America from caretaker misuse and fraud. We must fight against the embezzlement of federal government civil worker benefits to ensure a stable retirement for them and their families.”
Other Federal Retirement Articles
Programming Error Forces DFAS to Issue CSRS Offset Program Refunds/by Andy Ramirez
Programming Error Forces DFAS to Issue CSRS Offset Program Refunds
It seems the DFAS payroll system has been erroneously taking too big a retirement savings plan contribution from the pay checks of federal civilian employees in the CSRS Offset program serviced by DFAS due to a programming error.
A majority of federal employees’ retirement plans are housed in either CSRS or the Federal Employees Retirement System (FERS). However, CSRS Offset houses the retirement plans of federal employees who were in CSRS for five years or more before FERS came along in 1987, and then quit and joined federal employment again after a year or more.
A letter sent by DFAS to those affected by the error explains that when a federal employee in the CSRS Offset program serviced by DFAS started earning enough to hit the maximum amount of Social Security contribution, the DFAS payroll would prematurely hike the CSRS Offset contributions to the full withholding rate.
So these employees were over-deducted in between these two points and paid more than they should have into the CSRS Retirement Fund. This went on until the system was fixed starting from the December 28, 2013 pay period.
DFAS Provides Refunds for Federal Employees in CSRS Offset Program
According to federal law, the agency is allowed to provide refunds for this error only for the six years prior to the date on which the error was discovered, which in this case was Feb 18, 2012. So this set of CSRS Offset will be getting the back pay and interest starting from February 18, 2006, through to the pay period ending December 14, 2013.
Those who are already retired and have started receiving retirement annuity benefits, OPM will adjust your annuity payments to account for the refund. Current and former federal employees who were in the CSRS Offset plan serviced by DFAS in between 2006-2013 should contact DFAS for more information about the refund (call 1-800-729-3277).
Records To Check Before Retirement/by Dianna Tafazoli
-Review your designation of beneficiary for the lump sum payment of retirement contributions when no one is eligible for monthly payments.
– If a copy is not in your folder, file a new designation. The designation is made on
Standard Form 2808 for CSRS and Standard Form 3102 for FERS. Make sure
the form shows very clearly the person(s) you want designated.
– FERS transfers and any prior designation made for CSRS is cancelled. You may want
to file a FERS designation. Automatic transfers to FERS from CSRS,- the designation
will remain in force.
If there is no designation of beneficiary, benefits will be paid as follows:
- Your widow or widower.
- Your children in equal shares.
- Your parents in equal shares.
- Your appointed executor or administrator of your estate.
- Your next of kin under the laws of the state you reside in when you die.
- What records are needed for my health benefits?
Inside of your OPF should be a record of all of your health benefit registration forms (Standard Form 2809) and where appropriate Standard Form 2810, Notice of Change in Health Benefits. When you retire be absolutely certain that your official records show a complete history of your health insurance enrollment for the last five years. Your records should include your current Federal life insurance coverage on a Standard Form 2817, “Life Insurance election”, and where appropriate, a current life insurance designation of beneficiary (Standard Form 2823).
P. S. Always Remember to Share What You Know.
Social Security: More Information/by Dianna Tafazoli
It is important that we gather as much information as possible to ensure the best use of our resources in retirement and maximizing your Social Security benefits (SSB) is an absolute must if you want to get the most out of your working years. Consider the facts below as part of your plan to retire well:
• Income from pensions, annuities and investments are not impacted by the earnings test. Earnings only apply to wages from a job or net earnings from self-employment.
• Forty credits are needed over the lifetime of one’s work career to qualify for Social Security retirement benefits.
• No estimate can be given if you have not earned enough credits to qualify for Social Security benefits.
• The closer you get to retirement, the more accurate your SSB estimations will be because there are fewer fluctuations in earnings and changes in the law.
• Currently you earn one credit for every $1200 you earn in wages or self- employment income. Earnings of $4800 will give you the 4 credits needed for one year.
• Actual Social Security Benefits calculations cannot be provided until you apply for benefits.
• Earnings may increase or decrease in the future.
• Once you begin receiving your SSB they will be adjusted for cost-of-living increases.
• Estimated benefits are based on current law (Laws are subject to change).
• Social Security Benefits may also be impacted by military service or pensions earned via work where you did not pay Social Security taxes.
For Federal and Postal employees the challenges of understanding Social Security stems from the fact that your employment benefits are already incredibly complex to fully understand. When you ad in Social Security you now also have to recognitize that if you focus solely on claiming at 62, 66 or 70 (the basic dates most people mistakenly select) you will miss out on a HUGE potential opportunity. Educating yourself on the different Social Security claiming strategies is a must. Recognition that if you are eligible for Social Security Benefits, in many instances if you delay claiming Social Security, your benefits will grow at 8% per year. That is an 8% guaranteed return from the U.S. Government – not too bad, especially when CDs pay 3% or less. All of this leads us to a simple reasoning, we highly recommend that you talk with a financial professional who is an expert in your FERS, CSRS & FEGLI benefits as well as one who has a great deal of expertise in Social Security claiming strategies.
P. S. Always Remember to Share What You Know.
Windfall Elimination Provision (WEP)/by Dianna Tafazoli
The Windfall Elimination Provision (WEP) only impacts individuals who earned a pension in any job and did not pay Social Security taxes, but worked long enough in other jobs to be eligible for Social Security Retirement or benefits due to disability. The Windfall Elimination Provision impacts Social Security benefits when any of an employee’s federal service after 1956 was covered under the old Civil Service Retirement Systems (CSRS). Social Security was not withheld from these employees’ checks because the Social Security System had not yet been formed.
The Windfall Elimination Provision (WEP) applies to federal workers if they reached age 62 after 1985 or became disabled after 1985. It also applies if you became eligible for the first time for a monthly pension based on work you performed where you did not pay Social Security taxes after 1985. The provision still applies even if you are still working.
Lower wage earners receive a higher return on their Social Security benefits than higher paid earners. While lower paid earners may receive as much as 55% of their income before retirement, high salary earners may only receive approximately 25% of their pre-retirement income. Social Security benefits were never designed to replace all of a worker’s pre-retirement earnings but only a percentage.
Prior to 1983 before Congress passed the Windfall Elimination Provision workers who had jobs not covered by Social Security, benefits were calculated as if they were low-wage workers. This allowed them to have the advantage of receiving a higher percentage of their pre-retirement earnings in addition to receiving a pension from employment where they paid no Social Security taxes.
To see the maximum amount your benefit could be reduced visit www.socialsecurity.gov/retire2/wep-chart.htm.
P. S. Always Remember to Share What You Know.
You may also want to read Government Pension Offset (GPO)
Social Security – Background/by Dianna Tafazoli
As we continue building our laundry list of things we need to know and do in order to prepare to retire well, Social Security is a major item on our list. The Social Security Act was signed on August 14, 1935 some 15 years after the Civil Service came into being on August 1, 1920. When the Social Security Act first came into being, it was only a retirement program for the primary worker. It was not until many years later around 1939, that benefits for survivors and the retiree’s spouse and children were added. Disability benefits were not a part of the program until 1956.
Today we look at the Social Security Act from a much smaller view than it was originally structured. The Act was extensive in its original format and contained provisions for national unemployment compensation, Aid for Dependent Children and assistance to states to support a number of health and welfare programs.
Today we think of Social Security as a core part of the retirement structure for employees of the Federal Employees Retirement System (FERS) as well as those employees under the CSRS Offset program. Individuals under these systems have social security deducted from payroll, while employees under the old Civil Service Retirement System (CSRS) do not.
CSRS employees may, however, be eligible for social security benefits because they worked in non-federal jobs where they paid into social security or via spousal or survivor benefits because of a spouse’s covered employment. The history of the Social Security Act and its expansion to cover the categories of spouses and survivors has been of great benefit to many families.
Two legal requirements may impact Social Security benefits for CSRS employees: the *Government Pension Offset and the * Windfall Elimination Provision. The Government Pension Offset does not affect CSRS Offset employees but the Windfall Elimination Provision might, depending on the beneficiary’s earned outside income while drawing Social Security benefits.
*DEFINITIONS: Government Pension Offset – This law affects spouses, widows and widowers who may qualify to receive a pension from a federal, state or local government where Social Security taxes were not paid from your work and may cause your Social Security spouse’s widow or widower’s benefits to be reduced.
Windfall Elimination Provision – Your Social Security benefits may be reduced if you receive a pension based on work you performed in a government agency or employment in another country where your employer did not withhold Social Security taxes from your salary.
We will discuss both Government Pension Offset and Windfall Elimination Provision in greater detail in a subsequent post.
P. S. Always Remember to Share What You Know.
Click HERE for information on Windfall Elimination Provision
Click HERE for information on Government Pension Offset
Click HERE for information on Social Security
Click HERE for information on CSRS
Click HERE for information on FERS
FEGLI – Option A Standard/by Dianna Tafazoli
FEGLI Option A – Standard Insurance
The Federal Government offers 3 other insurance options and we’ll discuss each in separate posts. Let’s begin with Option A- Standard Insurance.
You are entitled to continue your Option A into retirement. Option A is worth $10,000 and the cost of coverage will be your full responsibility. Premiums do increase with age. With the second month after you reach age 65, or the second month after your date of retirement, if you are already 65, your Option A will be reduced by 2% of the $10,000 or approximately $200.00 per month until it reaches $2500. $2500 will be the amount paid as a death benefit. At age 65 premiums will cease.
Many federal employee wrongly assess that $10,000 will be payable upon their death. So we want to emphasize that the amount payable under Option A is $2500 upon your death. It is a good measure to discuss insurance options with your family members or someone you trust so that they will understand what to expect from your coverage and the benefits your survivors are eligible to receive.
When preparing for retirement ask all the questions you can think of that might help you reach your retirement goals and retire well. After all, it is your life and you deserve to have the best information possible to take you into your next new adventure with confidence.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
About FEHB (Transporting your FEHB)/by Dianna Tafazoli
Can I Take My FEHB into Retirement?
Federal employees represent the largest workforce in the world. They also have some of the best benefits on the market with very competitive rates. The federal workforce is so large making it easy for the federal government, acting as representative agent, to negotiate rates that work in the best interest of the federal workforce and their families. Buying in large quantities can drive down costs making the rate for premiums paid by employees for health insurance some of the most competitive you will find.
The Federal Employees Health Benefit program (FEHB) is open to all employees who wish to participate. Employees can choose from a number of different health plans that fit their personal and family needs. As federal employees you get to take your health insurance into retirement if you have met the requirement of being enrolled in FEHB five years or from the earliest opportunity to enroll prior to retirement.
Although, as a retiree you get to enjoy the same low premium benefits in retirement, instead of paying those premiums bi-weekly, they will be deducted once per month from your Annuity. You also have the same opportunity to participate in open season just as you did while working.
It does not matter how often you change plans, as long as you meet the five year or first opportunity to enroll requirement, you can transport your FEHB into retirement.
P.S. Always Remember to Share What You Know.
Retire Well – Retirement Application/by Dianna Tafazoli
About the Retirement Application
We spoke briefly about the retirement application package in a previous post. The question of when the Retirement Application should be completed is relevant in evaluating your check list of things to do in order to take full advantage of your Federal and Postal Benefits.
Reading carefully all of the information in the Retirement Application package is a must before submission. There is no need to submit a letter of resignation since your completed application is equivalent to a resignation. Further, if you are eligible for benefits it is important not to resign with the intent of retiring later. Suppose you were to pass away after leaving your employment but before submitting your retirement application.
You would have no life insurance, no survivor benefit and no survivor health care coverage available to your survivors. It is always a good idea to talk to your human resource office when making important decisions that impact you and your family. Make sure your FEGLI coverage is appropriate for your needs and that you have a plan for your TSP.
P. S. Always Remember to Share What You Know.
Retire Well – FEHB/by Dianna Tafazoli
Federal Employees Health Benefits (FEHB)
We will talk more about FEHB in future posts as it is a very important feature in preparing to live well in retirement. Emphasis here is placed on eligibility to transport your FEHB into retirement.
Because you are a federal employee does not automatically qualify you to transport your FEHB into retirement. Make sure to check the qualifications and determine if you are eligible. You must meet the five year coverage provision in order to realize the benefit of your FEHB in retirement.
It always pays to never accept any provision without asking questions. Doing a bit of research and seeking additional information or the help of an expert is always a good idea. If a federal employee becomes ill before achieving the 5 year qualification to transport FEHB into retirement is he or she a most unfortunate employee?
Perhaps, not. Under exceptional circumstances the Office of Personnel Management (OPM) has the leverage through an Act of Congress to waive the 5-year requirement. It always pays to ask questions and seek additional information. Great resources for further information are the links included in this article.
P. S. Always Remember to Share What You Know.
Tips to Getting Your House in Order to Retire Well – Sick Leave/by Dianna Tafazoli
~~ Sick Leave
Capitalizing on every resource available should be a constant theme for those anticipating leaving the workforce to start a new beginning – Using the value of your accumulated Sick Leave as a Retirement Planning tool is no different. We invest a huge amount of time and energy in our jobs. By the same token we must prioritize preparing to live well in retirement. How do we do that?
By taking advantage of information and knowledge that will support and enhance our lives as we move into retirement. Today Americans are living longer, some past the age of one hundred. As such, we will need far more money than our parents to ensure our resources outlast us. We cannot afford to overlook or minimize any opportunity that will potentially brighten our retirement outcome.
As of 2014, for employees under the Federal Employees Retirement System (FERS) like their counterparts under the Civil Service Retirement System (CSRS), 100 percent of their unused sick leave to lengthen years of service towards retirement.
While employees cannot be paid for sick leave, its value is immeasurable because the more years of service you have under your belt, the greater your annuity. Sick Leave is no longer just available to cover illness, but Sick Leave can also serve as an important tool in evaluating and managing one’s financial picture in retirement.
For example, when calculating years of creditable service it might be that your hours fall short of a full month. By adding your accrued unused hours of sick leave to the formula, length of service is increased, thereby increasing your annuity. So don’t put sick leave on the back burner, because it can make your annuity check look very healthy.
P. S. Always Remember to Share What You Know.
For more information on Sick Leave;
Tips to Getting Your House in Order to Retire Well – Annual Leave/by Dianna Tafazoli
— Annual Leave
There are so many things potential retirees must consider when looking forward to the next adventure in life – retiring well. Although many people will not consider their accrued Annual Leave a prime subject when discussing retirement, your Annual leave needs to be considered both for you peace of mind and the ability to recharge your batteries away from work, but also for the potential retirement benefits for leave that is not used. Obviously, you should be taking advantage of your TSP account and making sure that you are prepared to maximimize any CSRS and FERS benefits you might be eligible for. But you also need to recognize that you have worked for a long time, most of us since high school. Once we entered the work world there was no turning back because we had to make a living. Having a job and taking on the responsibilities of life afforded us membership into the world of bona fide ADULTS.
There might have been times during your work career where accumulating annual leave meant taking a vacation or using your leave at your leisure. But when we start planning the next phase of our lives – retiring well – part of the process is making sure you are maximizing every benefit available to you. That includes viewing Annual Leave as money that will help sustain you as you transition from the work world into retirement.
You may wish to refresh your knowledge about Interim Payments and how it can be used to bridge the gap from retirement to full Annuity payments, because your lump sum annual leave payment is another piece of the puzzle we need to collect in order to make it complete. Preserving your annual leave when you are contemplating retirement is a way of building a cushion to cover your financial responsibilities until you receive your full annuity payment. The Lump Sum Payment you receive as a result of your annual leave accrual will create comfort and security; thus the importance for preserving as much annual leave as possible as you prepare to move into retirement.
The maximum annual leave carryover for most employees is 30 days or 240 hours. It is a good course to visit your human resources office or with a knowledgeable financial professional and discuss the importance of understanding the beginning and ending of the leave year versus the calendar year. Retiring before the end of the leave year impacts your annual leave accrual. Find out what you need to know in order to maximize every benefit that is available to you.
P. S. Always Remember to Share What You Know.
Tips to Getting Your House in Order to Retire Well – Interim Payments/by Dianna Tafazoli
The term Interim Payments is a term Federal and Postal employees should become thoroughly familiar with. Although the Office of Personnel Management (OPM) works diligently to get annuity checks to retirees in a timely manner, good planning dictates that we should be prepared for the unexpected or the glitches that often occur during the normal course of conducting business
Interim Payments represent approximately 75 to 80 percent of what you will receive in your full annuity check. Don’t despair, all deficits will be recovered when you begin to receive your full annuity check.
It is important when you are submitting your Retirement Application papers for both CSRS and FERS retirement and for all Federal and Postal Benefits and that you are certain to check and recheck your retirement application to make sure you have crossed all your T’s and dotted all of your I’s. Overlooking pertinent information will cause a delay in the processing of your application. I always recommend that potential retirees do a –dry run- or test drive of the application package to become familiar with its contents and requirements before submitting the actual package. You may even want to solicit the help of a financial professional to ensure that you have the ability to maximize your Federal and Postal retirement benefits. Potential retirees need to know what their responsibilities are towards enhancing a seamless process to retirement. Retirement packages are on-line and information about your TSP can be found at PSRetirement’s TSP portal which will give you valuable information as you begin getting our house in order to retire well.
P. S. Always Remember to Share What You Know.
For more information visit and to access your retirement accounts visit;
Emotional and Psychological Readiness/by Dianna Tafazoli
~~Item #2 – Emotional and Psychological Readiness
Psychological Readiness is an underrated part of adjusting to retirement. There is no denying the importance of those concrete items such as maximizing the benefits of the Thrift Savings Plan (TSP) and understanding how all of your Federal Benefits work in retirement. But in order to chart a workable course for retiring well one must be emotionally and psychologically ready to embrace change, accept new beginnings, expand horizons and brace for the sometimes unexpected.
There are things we need to know and do so that we chart a feasible course to retiring well. Whether you’re eligible for CSRS or eligible for FERS often concrete items that we can touch, sort of put our hands on prioritize the list of things we need to know and do in order to retire well.
Below is a list of things we can do to get ready psychologically and emotionally to retire well and ensure the resources we need to live the life we deserve outlast us.
• Define who you are, absent of your job’s title and work environment
• Outline your gifts and skills and how you can use them to improve the world around you
• Think about what you’ve always wanted to do but were restricted due to the time constraints of your job
• Do a 15 minute self-evaluation of where you are, where you’ve been and where you’d like to be 3-5 years post-retirement
• Write down 5 of the most intriguing places in the world where you’d like to live, one just might be in your own back yard
• Think about what you are going to do on the first morning of your retirement
We spend more waking hours on our jobs and with our work families than we do in our homes with our own families. Psychological readiness ensures you’ll be ready to tackle all the issues a new retiree faces. Retiring well means getting ready to face new challenges and opportunities, meeting new people, going to new places and understanding a new and better you. These are critical tools needed to get you emotionally and psychologically ready to live a life on your own agenda. Getting ready now means success when you enter your next adventure – retiring well!
P.S. Always remember to share what you know.
Let the Thrift Savings Plan (TSP) Help You Retire Well by Jay Hunt/by Jay Hunt
Let the Thrift Savings Plan (TSP) Help You Retire Well
by Jay Hunt
Jay Hunt of Stratico Retirement and Insurance Solutions is in the business of helping people, and here he discusses the benefits of the TSP, and what it has to offer.
Each year many public sector employees face one of the most significant challenges of their work career – what they should and need to do with regards to their TSP account and TSP Fund Selection? Will you be ready for the next adventure in your life? Will your savings match your income needs? Will you have the tools needed to turn challenges into opportunities that will outlast you and allow you to maintain the lifestyle you have grown accustomed to?
In this article and several other articles, we will publish in the ‘Retire Well’ series we will share the ten most important things you need to know and do to ensure a successful, comfortable transition into your next adventure – retirement.
Item #1- Let the Thrift Savings Plan help you Retire Well:
The Federal Government offers two retirement systems – Civil Service Retirement System (CSRS) for those individuals employed before January 1, 1984 and did not convert to FERS, and the Federal Employees Retirement System (FERS) for those individuals hired on or after January 1, 1984.
For FERS employees, TSP is one of the three legs of the stool that make up their retirement system in addition to the Basic Benefit Plan and Social Security. If an employee fails to participate fully in the Thrift Savings Plan, it is like losing one of the legs of the stool causing an imbalance. As a matter of fact, the TSP is potentially the largest component of the FERS enhanced by the employee’s contributions and the matching agency contributions. Maximum participation from the Agency Employer is a huge benefit that should be given strong consideration to ensure that you will see the benefits of your hard work by capitalizing on all available resources to retire well.
Although under CSRS employees do no reap the benefit of the agency automatic l% matching contribution for TSP, participation in the TSP is allowed. Having the opportunity to defer tax obligations on one’s income is an advantage that should not be overlooked; thereby, being one of the primary reasons why CSRS employees should consider maximizing participation in the TSP.
In essence by deferring the taxes due on earnings, a greater savings over a period of time with the added advantage of earning interest is realized. For both CSRS and FERS employees participating in the TSP is a formula for saving towards your retirement future and generating a plan that will increase your opportunity to retire well and cement the lifestyle you have worked hard to achieve.
The Thrift Savings Plan contribution limits for catch-up contributions for those ages 50 and older change from year to year and federal employees should always keep themselves aware of the most recent year TSP Contribution Limits. P. S. Always remember to share what you know.
Contact Jay Hunt
Stratico Retirement and Insurance Solutions