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March 29, 2024

Federal Employee Retirement and Benefits News

Tag: federal employee benefits

federal employee benefits

Essential Things to Think About for Life and Long-Term Care Insurance (FEGLI and FLTCIP)

The Federal Employee Group Life Insurance program, or FEGLI, is one of the many FERS benefits available to federal employees. You can get group life insurance while you’re employed, and under some circumstances, you might be able to keep using it after you retire.

Young federal employees are urged to get life insurance via FEGLI if needed, especially if they have a family or would leave someone else to care for if they pass away. The amount of insurance you require varies based on several factors, but FEGLI is affordable and can typically be afforded at the highest level when younger. FEGLI becomes more expensive as you age and may no longer be affordable, especially if your retirement plan predicts that you’ll also need long-term care insurance coverage.

The Importance of Life Insurance

Both young and old may find life insurance to be helpful. The most common life insurance application is to replace lost income while working. FEGLI is the most affordable option for meeting this demand while employed. Term insurance offers the next best instant price.

It’s crucial to remember that there are various schools of thought regarding the appropriate amount of life insurance. What would you wish you had done to support your family after you passed away? Replacing the financial resources you would have otherwise contributed is one straightforward solution. Many people want to use their early death to pay off their home and their children’s college loans.

Another way to look at it is to ensure that the current objectives are still reachable for those you leave behind.

Your FERS pension is secure as a qualified federal employee up until the time of your passing. Your surviving spouse could receive up to 50% of your FERS annuity if you chose the survivorship benefit. Over time, that loss can become substantial, reducing one of your Social Security benefits, particularly if one spouse passes away significantly sooner than the other.

Term insurance provides life insurance for a set amount of time (term). This can often be purchased in 5-year installments between five and 30 years. Utilizing this to cover a particular risk at certain points in your life is preferable. If both of you pass away or just one of you, things like having money set aside for mortgage payments, student loans, preschool, college, weddings, etc., would be helpful.

Renewing is pricey beyond your “term.” Insurance companies may occasionally allow holders of term policies to upgrade to a permanent policy at the age they reach without undergoing additional medical testing. Your advanced age may significantly raise the expense of waiting. Furthermore, the policy you would select today and the policy that would be presented to you upon conversion might not be the same.

Considering Long-Term Care Insurance

One vital thing to remember is that neither the FEHB nor Medicare will pay for lengthy long-term care requirements. A Medicare component covers the initial few months of an event, but any expenditures incurred beyond that are your own.

Long-term care events often last two to three years. At this point, you may need to live in an assisted living or skilled nursing facility, or you may need assistance from caregivers who visit your home. The duration of long-term care events has occasionally increased to five or six years due to advancements in medical care.

A long-term care event may be self-insurable for some families with no problem. These prices may vary significantly depending on where you live and the type of service you receive.

FLTCIP first seems to be a reasonable purchase, but its price gradually rises over time.

The Premium Stabilization Feature  (PSF) of FLTCIP is one great advantage. These conventional long-term care insurance policies typically have prohibitive costs as you get older. Due to the expense, many families renounce their insurance just as their children reach the age when they most need it. Long-term care insurance costs typically increase dramatically over time, but not when they are included in specific insurance policies. The PSF for FLTCIP is determined by taking a percentage of the premiums paid for the FLTCIP 3.0 group policy.

The PSF amount may reduce your future premiums or result in a premium death benefit reimbursement. If you haven’t opted out, are 85 years old or older, and have participated in FLTCIP 3.0 for at least ten years, you are eligible for this. Additionally, you need to have enough PSF to cover 50% of your monthly premiums for the upcoming 12 months or longer. The premium refund death benefit is calculated based on your coverage at the time of your death. The remainder would go to your beneficiary.

Insurance prices may be less high the earlier you plan and get the coverage you require. But this does not imply that you should buy insurance right now. It involves attention, study, and must-have features that suit your needs, just like purchasing a car.

Similar to purchasing a car, if you’re not diligent, insurance too might have a lot of unnecessary and hidden charges. Certain carriers specialize in various types of insurance. Some have ideas that work well in one area but poorly in another. As your future is at stake, be sure your advisors are having these crucial conversations with you.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Helping a College Graduate Prepare for Retirement is the Best Gift You Can Give Them

Recent college graduates are met with severe economic headwinds in the form of rising rent, escalating student debt, and general inflation. The advice that young people should “save early and save often” is given so often that it may seem hard to follow. Despite this, it is essential to emphasize the benefits of doing so for those who can secretly save some money.

Regret is often cited as one of the most convincing reasons. That is, by other people. According to a poll by Magnify Money, over 70% of members of Generation Z and 77% of millennials said they wish they had started investing earlier.

The median amount in retirement accounts for people with all income levels is around $15,000. The tidal wave of national sorrow should not come as a surprise, given that 90% of wage workers across all age groups are not on pace to retire comfortably. It is when it is too late that one realizes the strength of compound interest, which is the most powerful law in the whole economic world.

Consider the following: According to the research conducted by the consulting firm Aon, by the age of 35, you should have saved twice as much for retirement as your yearly wage, and by the age of 45, four times as much, seven times as much, and 11 times as much by the age of 67. This indicates that a person who is 45 years old and earns $100,000 per year ought to have $400,000 in retirement savings. In comparison, a person who is 67 years old and makes the same amount needs $1.1 million in retirement savings to supplement their Social Security benefits and maintain the same standard of living until death.

The most basic calculations tell us that beginning to save at a younger age will involve the fewest sacrifices on our part. Because you have a head start, the early portion of that $1.1 million comes from investment profits rather than your earnings. The sooner you start saving, the more work will be done for you by the financial markets.

A 25-year-old individual who earns an average salary must set aside 16% of their annual income to have the appropriate amount in their retirement account when they are 67. When this individual is 35 years old, they will need to set aside 25% of take-home income; if they are 50 years old, they will need to set aside 50% of their earnings.

The average beginning wage for a recent college graduate is around $55,000. However, if Social Security, taxes, and healthcare costs are included, take-home income is closer to $40,000, equivalent to $3,300 per month. If you make more than $55,000 per year, saving $800 for retirement (about 16% of your monthly earnings) plus $250 for a condo (if you’re attempting to cobble together a down payment of roughly $40,000 in 10 years) on top of that is practically impossible.

However, if the new graduate’s company pays $400 of the goal of $800 to a 401(k)-type plan, and the worker’s contribution of $400 comes before tax, then the new graduate’s net take-home pay would be $300 less while they are still saving $800 a month for retirement.

Unfortunately, most employees under 40 do not participate in a retirement plan. It is quite evident that we need a national retirement system and a solution to the spiraling expenses of higher education.

Even though retirement seems so very far away, there are a few things that a young graduate may do to assist in preparing for it in the interim. These items can help prepare for retirement. First, whether you are a recent college graduate’s parent, relative, or friend, remember that a monetary present is always appreciated. Still, a session with a reputable financial consultant can be an even better gift for them.

Here is how to locate an advisor that you can trust. Significant life events, such as high school graduation, a wedding, or the birth of a child, may serve as a springboard for daydreaming about the future. If the preparation is successful, it will cost a lot less than coping with regret at age 50 and being on the verge of poverty when you are 67.

For graduates, the best way to prevent regret in the future is to start keeping track of the money spent on fleeting pleasures right now. Instead, try the slow-building process of saving $100 per month in an emergency fund in case of unexpected expenses. To fulfill the criteria for the personal finance merit badge for the Boy Scouts, you will need to keep track of your spending for three months and create short-, medium-, and long-term objectives.

Typically, regret is caused by the advertising’s primary source of revenue, which is your impulses. Even if it often precedes the second human need, which is to live a life free from regret in old age, I do not criticize the human impulse to strive for social position and comfort with automobiles, clothing, and homes. However, you should be aware of consumption urges and how they seldom lead to a state of satisfaction. Employing self-psychology to save as much as you can as early as possible serves you well until we have a better system for retirement savings.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

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.

6 Social Security Facts Every Woman Should Know

Social Security is a significant source of retirement income, particularly for women. But how well do you comprehend the advantages you are entitled to? Here’s what you should know about social security for women.

1. Women in retirement face more financial difficulties than males.

Although women rely on Social Security more than men, their payouts are usually less. After all, you earn more Social Security credits and receive larger benefits if you work more and pay more taxes. According to the Social Security Administration, women often live longer but earn smaller pensions and have fewer assets than men.

Women should make sensible investments and be aware of the Social Security benefits to which they are entitled if they want to avoid financial difficulties in retirement.

2. You can begin receiving partial benefits at age 62.

The Social Security Administration (SSA) states that you can begin collecting partial benefits at age 62 if you have been employed and paid Social Security taxes for at least ten years and have accrued at least forty work credits.

You will receive all your legally due benefits if you wait until you reach full retirement age.

Depending on your birth year, the SSA defines “full retirement age” as being between 66 and 67. Locate the chart on page 7 of SSA Publication 05-10024 to know your exact full retirement age.

3. Marital Status Doesn’t Limit Social Security Benefits

According to Christopher Liew, CFA charter holder and creator of Wealthawesome.com, you and your spouse can apply for Social Security benefits independently and individually. However, you both must have prior employment history and separate service records.

That implies that your combined retirement benefits should automatically exceed $3,500 per month if you have a claim for $2,000 per month and your spouse has a claim for $1,500 per month. You are not just allowed to receive 50% of your spouse’s pension, which is surprising.

4. You are often paid a higher rate if you are eligible for two benefits.

If you’re married, you might qualify for a portion of your spouse’s Social Security payment, ranging from one-third to one-half. Women with a spotty job history will find this helpful.

You’ll likely get the benefit with the highest rate, though, and not both. Because of this, most working women in retirement receive their own Social Security pension rather than their husbands.

The higher your spousal Social Security benefit or your own Social Security benefit will be paid to you as a spouse.

5. Working While Retired Can Reduce Social Security Benefits

You become eligible for a portion of your Social Security benefits when you turn 62. But if you choose to continue working while getting those benefits, the Social Security Administration will lower your payouts by $1 for each $2 you make over the yearly cap, which is $19,560 in 2022.

The Social Security Administration (SSA) will only lower your benefits by $1 for every $3 you earn beyond the yearly cap ($51,960 in 2022) if you continue to work in the year you reach full retirement age. Your benefits won’t be cut in this way after you hit FRA.

6. Widows are Entitled to Social Security Benefits From Their Spouse

A widow may be eligible for 71% of her deceased spouse’s benefits at age 60. Once a widow reaches the full retirement age, this percentage increases to 100%.

The SSA might be able to provide you with a lump sum payment of $255 if you were cohabitating with your spouse at the time of their death.

7. You May Still Be Eligible for Your Ex’s Benefits If You’re Divorced

You might believe that once you get divorced, all of the financial advantages of marriage are lost. But it doesn’t usually work that way when it comes to Social Security.

If you are currently single and your ex-spouse was married for at least ten years, you might be eligible to file for benefits depending on their employment. (This does not reduce the advantages they get.)

Just make sure that neither of you was married to anybody else when you were eligible for Social Security pension benefits. Your ex-service spouse’s history will determine how much of a Social Security pension you can receive.

During the divorce process, some women might consent to waiving their claim to their ex-spouse’s social security benefits. But the SSA hardly ever carries out these orders.

If you are aged 60 or older, and your ex-spouse has passed away, and you want to know your exact full retirement age, you are still eligible to receive benefits based on their job (or 50 if you have a disability).

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

What You Should Know About DoD Civilian retirement  

Federal employees, who work alongside active-duty personnel to keep the mission going, eventually reach the age where they can retire. But it’s critical to ensure that a worker is physically, financially, and intellectually prepared to retire.

The Office of Personnel Management‘s (OPM) website includes resources and tools for potential retirees on the three components of financial retirement planning: Social Security, government pensions, and the Thrift Savings Plan (TSP).

The Benefits and Entitlements Service Team (BEST) manages Offutt’s civilian retirement program. BEST is in charge of providing customer service and up-to-date benefits information to Air Force civilian workers.

BEST’s customer service section advises persons considering retirement to know how many years of service they have, how many years of creditable civilian service they have, and their minimum age and years criteria. Those who retire before the required number of years and at the required age may be penalized.

Due to the large number of retirement claims submitted in 2021, processing times were delayed. People can apply for retirement six months before the proposed retirement date and 60 days before the requested retirement date. The retirement application can be completed in 30 days if there are no problems.

BEST advises maintaining a copy of all submitted documents. While their office can answer broad inquiries about the retirement process, they will refer them to a counselor if a caller requires assistance with the whole application.

According to a BEST representative, the regular leave will be paid directly to the employee, and sick leave will be added to your credited time in service in one-month increments. She advised employees to save for a few pay weeks if the initial retirement payout is delayed due to processing issues.

Remember that federal taxes will be deducted automatically from your retirement pay, and state taxes will vary depending on where you retire.

Because the retirement dashboard is tailored to the employee’s job profile, BEST advises using the Government Retirement and Benefits Platform. The site has a wealth of information, and employees can also request precise projections of their expected annuity and premium deductions.

The GRB Platform gives you the tools you need to change your perks and other information. It connects to personnel and payroll systems, online benefits enrollments and updates, and online retirement applications. Health and life insurance, social security, the Thrift Savings Plan, long-term care insurance, flexible spending accounts, retirement, and workers’ compensation are all covered.

The GRB Platform can also calculate an estimated Federal Employees Retirement System (FERS) retirement salary, which can be factored into future planning. Other items to think about and plan for include life and medical insurance and when to collect Social Security.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

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.

The Increase of Fed Rate Might Encourage Floating Rate Annuities

The Federal Reserve Board goes to great lengths to raise interest rates by 0.75 percent on average, and American life and annuity companies are attempting to be courteous about that now.

In the same way, the Federal Reserve raised its target range for the rates of federal funds. However, these are the rates at which the bank advances reserves to one another nightly, on Wednesday from 0.75% to 1% to 1.5% to 1.75%.

Also, because an annuity delivers a guaranteed minimum interest rate, Security Benefit may refer to it as a fixed or non-variable annuity. For instance, a rate sheet that became effective on Monday states that the set income interest rate is 1%. Equally important, on even a 5-year agreement, the firm offers a higher base rate with a 1.6% guarantee duration.

We can say that the floating-rate addition is also available with the product, and its value is based on how the three-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (SOFR) reference rate performs. Moreover, according to Security Concern, the current rate of 1.43% SOFR increase will raise the overall awarded interest rate to 3.03% in the agreement’s first year. In the same way, the annual maximum interest rate will indeed be 5.1%.

In addition to the above content and by offering brief annuities or using a “laddering” technique, in which new annuities are financed with certain sums of money at predetermined intervals, other businesses may assist customers in managing interest rate unpredictability. This strategy results in average annuity portfolio crediting rates that progressively increase while increasing interest rates and slowly decline during periods of dropping rates.

The Look for New Concepts

According to a recent remark by Security Benefit’s head of distribution, David Byrnes, recent Fed rate rises may prompt customers to explore other bonds. However, buyers are bracing themselves for further volatility, according to Byrnes. “The bond’s poor record in the stock market in the recent year, mediocre profits in Q1, increased worries, and future predicted percentage raises the contribution in the atmosphere,” he said.

He noted that searching for solutions that can protect principles when interest rates climb may be advantageous for floating-rate annuities. Also, by limiting the amount of currency that individuals and businesses may use to make purchases, the action aims to lower inflation.

Rising interest rates may benefit or harm life and annuity issuers differently. They may also bring attention to the products like non-variable annuities with floating interest rates created for times of interest rate volatility.

The Sense

Adding some essential points to the above content, we can say that financial services organizations can start wanting to provide their customers items with alluring advantages instead of merely doing so out of politeness.

The Whole Image

Customers may be tempted to move money out of annuities that are fixed and fixed cash-value life protection into alternative “currency saving” products if banks raise the rates on certificates of deposit and money market fund rates to rise. In the same way, higher rates could also have a negative impact on the sales of the mutual fund affiliates of life insurers, earning based on the assets process of a variable annuity. However, rising rates may also cause the billions in bonds in life insurers’

In addition to the above content and for the brokers within the significant fixed insurance of life, fixed annuity, longstanding incapacity protection, and the other protection and insurance process for a long life, bond yield hikes may be very beneficial.

Menus of Products

Equally important, the product menus of life insurance companies are also being examined to determine what choices are currently available for customers searching for solutions to deal with increasing interest rates or interest rate ambiguity. For instance, Security Benefit cites the Rate Track Annuity contract as something it currently provides. This is known as a single annuity premium or a deferral annuity that helps you pay a greater total rate while interest rates rise.

Contact Information:
Email: [email protected]
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

The Matter of Retiring from Government Employment

It’s easy to conclude that retirement is sheerly based on numbers, especially when it comes to the federal government’s opinion on retirement. According to the CSRS and FERS retirement programs, employees are eligible to voluntarily retire after so many years of service or a specific age. Whether retirement is due to a disability or an early-out offer, there are many different rules to consider.

Federal employees are generally aware of the specific date they will meet either of those numbers many years in advance. Some of them spend time counting down the years, which turns into months and, eventually, days. As many hope for an early-out option to shorten their countdown, up to 15% of federal employees are currently eligible to retire & remaining on the job.

Federal employee retirement remains on a voluntary basis, aside from a few occupations, including law enforcement. With some employees remaining ten years past their retirement age, one must wonder why they would choose to stay at work time and time again. Aside from financial readiness, other personal factors may play a role in this decision.

One study concluded that individuals have the option of receiving benefits at different ages. There are also phased-in benefit reductions to monthly benefits before the full retirement age (FRA). For example, raising the full retirement age (FRA) beyond 65 would result in fewer people claiming benefits at 62 due to the severe reduction in benefits. Ultimately, the government offers a variety of policies to encourage later retirement.

Contact Information:
Email: [email protected]
Phone: 8132032515

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.

The Cost of Federal Health Insurance Will Rise Slightly in 2022

According to figures published by the Office of Personnel Management (OPM) on September 29, federal workers registered in a health insurance policy under the Federal Employee Health Benefits (FEHB) scheme should anticipate their health insurance expenses to rise by around 2.4% in 2022. That cost hike resulted in an average 3.8% rise for workers and a 1.9% rise for the government, according to the constitutionally required cost distribution between the government and employees.

In a press release, OPM Director Kiran Ahuja stated, “Quality health insurance has never been more vital, and OPM is ensuring that all eligible enrollees have the information they need to make educated choices about their coverage.” “The pandemic highlights an employer’s obligation to offer excellent, cheap, and trustworthy healthcare alternatives to its employees.” The federal government, as the country’s biggest employer, is happy to set an example by offering a diverse range of health insurance plans via the FEHB and FEDVIP that provide the deserved coverage for every individual.”

The cost hikes for health insurance in 2022 are lower than in 2020 and 2021, but they were still almost twice the record low 1.3% rise in 2019. According to the OPM, if Feds receive the 2.7% raise in pay that President Joe Biden plans to implement in 2022, the average health insurance costs for Feds will be around 4.8% of their salary, a slight increase from the average 4.7% of salary cost for Feds in 2021.

In a message, National Treasury Employees Union National President Tony Reardon stated, “Clearly, the government did a better job bringing down the employees’ part of premium expenses in the FEHB scheme for 2022, and we appreciate that improvement.” “However, we will advise our members to plan for price hikes by evaluating all of their choices during the forthcoming open enrollment season and deciding which plan is best for themselves and their families.”

Because of enrollment numbers, average yearly expenditures, the age of people enrolled, and other considerations, federal workers are not assured of receiving precisely the average cost rise on their plans in 2022. Feds who transfer strategies between 2021 and 2022 may experience a more considerable or lower rise, no increase at all, or even a cost reduction.
While increased insurance prices may be inevitable, federal workers and retirees should be aware that they have several alternatives to select from during the open season. Although most subscribers will only face a 5% rise if they re-enroll in their existing plans, it’s still vital to consider your alternatives. In a statement by Ken Thomas, the National Active and Retired Federal Employees Association National President, he stated, “NARFE urges all participants to carefully evaluate the plans and pick the one that best matches their requirements.”

According to the Office of Personnel Management (OPM), insurance costs were primarily due to rising drug prices, chronic sickness expenditures, and medical innovation. COVID-19 costs pushed up pricing, as did increasing demand for mental healthcare, according to OPM. COVID-19 cost the FEHB scheme nearly $1 billion in 2020. However, since many insured individuals postponed medical procedures and utilized their insurance less in the early months of the pandemic, the pandemic helped lower medical insurance costs.

Overall, COVID-19 expenses are predicted to reduce in 2022 due to vaccines and the requirement that government workers obtain them since the federal population is less likely to have a severe coronavirus illness. Next year, federal employees will have 275 options, one less than in 2021, with the same 18 countrywide plans accessible to federal employees in any location of the country. The remaining 257 plans are offered in some nation regions. They include 192 HMO plans, 37 high-deductible health plans, and 28 consumer-driven health plans.

These plans signify a trend away from HMO plans, which have cheaper premiums but seldom cover out-of-network care, and toward HDHP plans, which have lower rates but larger deductibles. 20 of the 23 new plans offered by current FHB carriers are HDHPs. The new carrier, Virginia-based Healthkeepers Inc., also provides an HDHP plan. 

Federal employees may also choose between 18 fee-for-service plans, which pay healthcare providers directly or reimburse enrollees for services delivered, and 28 consumer-driven health plans, which establish spending limitations before an enrollee’s part of the expenses rises. In 2022, FEHB providers will be required to implement a new feature that will alert members when a medicine that requires prior permission is about to expire. 

Prior authorization is a procedure that insurance companies need for some drugs that may have less expensive alternatives, have serious side effects, are only used for aesthetic reasons, or are created for particular age groups and medical problems. When a doctor prescribes one of these drugs, the insurer goes through a review procedure to see whether they would cover it. Patients taking maintenance drugs must have their prior authorizations for such prescriptions evaluated regularly, or they will expire. The new 2022 requirement requires FEHB carriers to inform participants 45 days before their prior authorizations expire.

The FEHB program’s open season starts November 8 and ends December 13.

OPM Retirement Backlog Keeps Increasing.

The Office of Personnel Management (OPM) data shows that the retirement backlog has reached a new high of 36,603, which was last recorded in March 2013.

The current backlog of OPM retirements is 36,349. It has increased by 16% in 2022 and 48% since its low point of 24,619 in May 2021. Recently retired federal employees waiting for their claims to be processed did not expect to miss the days when the OPM retirement backlog was “only” 24,000 claims.

The number of retirement claims received by OPM’s retirement services office was higher than usual last month. The backlog grew because OPM received 10,042 new claims and only processed 9,117. It increased by nearly 3% at the end of February.

Despite fluctuations over the last five years, OPM’s retirement backlog has increased by 77% since March 2017.

How long does the OPM take to process a federal employee’s retirement claim?

The Office of Personnel Management (OPM) claims to process federal employee retirement applications in 60 days on its website. With such a large backlog, it’s understandable that some new federal retirees may have to wait longer.

This is an OPM website response to one of the frequently asked questions:

“Retirement Services makes every effort to process retirement claims within sixty days. However, if we require additional information from you or your previous employer, your claim may take longer to process. If your retirement claim, for example, has unique conditions, it may take longer than usual (e.g., applying a specific retirement law, evaluating a court order, etc.)

It may also take longer if we need to contact you to make a benefit election (such as a service credit deposit), if we need to contact your former employer for further information, or if a benefit from another agency, such as the Social Security Administration, affects your claim.”

What Can Federal Employees Do to Make the Retirement Application Process Go More Quickly?

According to OPM, the most straightforward approach to minimize delays is to submit your retirement application packet early and double-check that everything is in order. Another question from the OPM website:

By submitting your application ahead of time and ensuring that your Official Personnel Folder (OPF) is complete, you can assist reduce processing delays. Your personnel and payroll offices will be able to finish their actions before your retirement date if you submit your documentation early.”

How to Avoid Common OPM Retirement Application Errors

Any errors on your OPM retirement application packet will only slow down the process further, so be sure you don’t make any.

Initial retirement cases completed in less than 60 days took an average of 44 days, while those completed in more than 60 days took 128 days.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Investment Window Policies Finalized by TSP

TSP account holders have awaited the opportunity to move their investments away from mutual funds throughout the program’s history. Having gone into effect on June 1st, the Federal Retirement Thrift Investment Board (FRTIB) has adopted a new rule without any changes. TSP participants were poised to begin utilizing the new mutual fund window the same month to expand their horizons and save money.

A new record-keeping system enables investments to be made through the mutual fund window, thanks to the ease of an app, new online features, and additional security features. More significantly, certain transactions had to experience suspended access between May 26th and the early-June launch date. In addition, a new annual administrative fee, annual maintenance fee, and individual trade fee were enacted, specifically for those who opt for the window. Minimal initial transfer amounts and a limit on investments through the window were also put into effect. These changes mean that the option will be extended to investors with $40k or more invested within a TSP.

Because the FRTIB has expressed the value of overall transparency toward TSP participants, the fees have been posted in dollar amounts. Through account maintenance fees and transaction fees, TSP participants choose to pay indirectly through revenue shares. There is also a limit regarding the amount of retirement savings that can be used for mutual funds. While many have criticized the 25% cap, the FRTIB assures investors that the cap is not intended to replace core TSP funds. The mutual fund window was created to enhance TSP rather than provide it as an alternative to core options.

Contact Information:
Email: [email protected]
Phone: 7735026467

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

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.

There is a major issue in your retirement savings plan: GMO

Americans nearing retirement are shocked. Unsophisticated “McMoney” accounting consultants told them that bonds were secure, steady, and reliable and that balancing stocks and bonds was fine in all scenarios.

To their dismay, none of these things are true in January. GMO analysts James Montier and Martin Tarlie wrote a report explaining why these assumptions are erroneous, how they might harm our retirement accounts, and what we can do.

If financial planning had an anthem, it would be “Let’s Do the Time Warp Again.” Planners develop client portfolios using old, outdated ideas. Portfolios are designed using 1952 technology and 1970s assumptions. According to a 50-year-old methodology, today’s retirees face huge portfolio risks.

These techniques are “Random walk” assumptions — market simulations. Assuming stock and bond fund returns don’t affect past performance. Montier and Tarlie debunk it. Valuations, which are based on current performance, affect future returns. Ascending must descend. Buy low, sell high.

Why presume random returns? They may question you if you don’t have orange-and-brown shag carpeting, an avocado green bathroom suite, bell-bottom jeans, or pork chop sideburns. Okay. Expect a slump if stock prices rose faster than profits, dividends, or economic growth over a decade. After a decade or more of Fed manipulation, bond prices may have risen. Financial journalists and specialists are “shocked, astounded” by the decrease in bond prices this year. Bond index funds have lost 10%, including the iShares Core U.S. Aggregate Bond Index ETF AGG, -0.35% TIP, -0.25%, and VAIPX, +0.40% have dropped roughly 9%. Long-term Treasury bonds dropped 30% today. This is the worst bond market since the 1970s. Some say it’s worse than the 1840s.

The typical “60/40” portfolio of 60% stocks and 40% bonds has lost a disastrous 16%.

Should we be surprised? Bonds enable: Price rises reduce yield or interest rate. After a generation of rising prices and falling yields, bonds entered 2022 more expensive than ever. If you purchase a 10-year Treasury bond on January 3, 2019, at a yield of 1.6% and hold onto it for ten years, I can tell you how much you will have profited.

Even if 10-year Treasury bonds have returned 5% annually historically, this is immaterial. Investing in a 10-year Treasury bond with a 5% starting yield is the only way to earn 5% yearly compounded.

TIPS are much more straightforward. Through a clever computation, annual returns are adjusted to match the consumer-price index, assuring a “real” inflation-adjusted yield beyond what inflation would offer. 10-year TIPS yielded 1% less than their nominal rate to start the year. Investing in the bond for ten years would reduce your purchasing power by 10%(without extra fees).

Error-free. Definitely. If you could earn a profit instantly, you may have traded commodities. Such enterprises’ capital loss shouldn’t have shocked investors. TIPS with a negative “real” yield were worse than cryptocurrencies. TIPS could not be held to maturity to increase wealth. The math didn’t work.

“Investors” bought Treasury bonds with 1.6%-2% yields in January. 1-year bonds yielded 0.4%, 10-year bonds yielded 1.6%, and 30-year gave 2%. When did inflation peak? It’s 7%. Burning money is a waste.

My friend was new to financial advising. I warned him to avoid “confiscation certificates.” Falling stocks are less predictable. Bonds weren’t appealing.

Valuation, growth, and yield affect equity returns, argue Montier and Tarlie. Return generator characteristics. Easy math. They use 1890s stock market data to verify it. U.S. stock prices have risen for 15 years.

Montier and Tarlie emphasize advisor risk. Risk isn’t volatility. Retirement poverty is “ruin.” “Putting it all together, you get a harsh judgment of how the financial planning industry helps folks prepare for retirement, including simplistic “glide pathways” given by a sector whose main goals are to collect assets and avoid being sued. The challenge is replacing or adding to it. Montier and Tarlie provide two possibilities.

The first is a “glide path” that avoids pricey equities and bonds. The GMO warned for years about inflated U.S. equities, but it was too early to act (and at worst, plain wrong). The probabilities favor their second idea. Reduce long-term bonds for equities and “short-term bonds” like Treasury bills or near-cash. When bonds are pricey, the short-term paper may be safer.

Warren Buffett and Andrew Smithers recommend Treasury bills or short-term bonds to complement equities.

Even minor exposure to commodities (through futures funds like DBC or resource stocks funds like GNR) may help diversify a portfolio. Simple models with basic assumptions shouldn’t be trusted.

Contact Information:
Email: [email protected]
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

Strategies for Long-Term Financial Security: Advice for Federal Employees

Long-term financial security is a top priority for federal employees as they plan for retirement and navigate the complexities of the federal benefits system. This article provides actionable advice and strategies to help federal employees achieve long-term financial security, covering topics such as retirement planning, investment management, healthcare costs, and estate planning.

Planning for Retirement:

  1. Start Early and Save Consistently: Begin saving for retirement as early as possible and contribute consistently to retirement accounts such as the Thrift Savings Plan (TSP) and Individual Retirement Accounts (IRAs). Take advantage of employer matching contributions and tax-deferred growth opportunities to maximize your retirement savings potential.
  2. Understand Your Retirement Benefits: Familiarize yourself with the various components of your federal retirement benefits package, including the Federal Employees Retirement System (FERS), Social Security, and TSP. Understand how each component works, how benefits are calculated, and what options are available for distribution and survivor benefits.
  3. Develop a Retirement Income Plan: Create a comprehensive retirement income plan that outlines your sources of retirement income, estimated expenses, and investment strategies. Consider factors such as inflation, healthcare costs, and longevity when projecting your retirement income needs and develop a plan that aligns with your goals and risk tolerance.
  4. Seek Professional Guidance: Consider working with a certified financial planner or retirement advisor who specializes in federal employee benefits. A professional advisor can help you develop a personalized retirement plan, optimize your investment portfolio, and navigate the complexities of the federal benefits system.

Managing Investments:

  1. Diversify Your Investments: Diversification is key to managing risk and optimizing returns in your investment portfolio. Spread your investments across different asset classes, such as stocks, bonds, and real estate, to reduce volatility and enhance long-term growth potential.
  2. Rebalance Regularly: Regularly review and rebalance your investment portfolio to maintain your desired asset allocation and risk tolerance. Rebalancing involves selling assets that have performed well and reinvesting the proceeds in underperforming assets to maintain your target allocation.
  3. Consider Lifecycle Funds: Consider investing in lifecycle funds offered through the Thrift Savings Plan (TSP), which automatically adjust your asset allocation based on your target retirement date. Lifecycle funds are designed to become more conservative as you approach retirement, reducing risk and preserving capital.
  4. Monitor Fees and Expenses: Be mindful of fees and expenses associated with your investments, including management fees, expense ratios, and trading costs. Minimize fees where possible by investing in low-cost index funds or ETFs and avoiding unnecessary trading activity.

Contact Information:
Email: [email protected]
Phone: 7988550130

Ways You Can Invest in Veteran Hires

If your firm has dedicated time and resources to veteran recruitment or is stepping up these efforts, you also have to think of ways to invest in their success once they’ve been hired. Here are some top tips.

Benefits & Policies evaluation

Actions speak louder than words when developing a diverse, engaged workforce. You can take action by offering more tailored benefits to veterans and military-connected individuals. Group life and health insurance can enhance veterans’ government coverage. If you hire or recruit many veterans, you should provide them special perks personalized for their circumstances. Many of these options offer profitable rates, individual customer care, and financial education resources for military-connected employees.

Many industries now allow remote or hybrid work. Make sure military spouses and veterans have flexible work opportunities too. Providing a serving spouse job stability in the face of relocations or allowing a recently-separated veteran to find a permanent home while keeping employment at your company helps employees and lets your company retain top talent regardless of location and lifestyle.

Inform staff about affinity groups and EAPs. Many give veterans direct access to additional resources and incentives, such as mortgage recommendations, gym membership discounts, and physical and mental health help. Show your support by continuously connecting with affinity groups and making their resources available to veteran employees during onboarding and through internal communications.

Promote networking

Many veteran employees will be at a significant transition point in their lives and careers. Using existing talents and structures can make employees feel welcome and supported. If your company employs veterans or military-connected individuals, create a special employee resource group for them. That can help them find mentors, learn about corporate culture, and exchange experiences. Human resources and benefits decision-makers should stay in touch with this group. Their feedback on things like family leave, childcare, and training programs might help identify a need for changes. Your employees will appreciate you actively listening and changing corporate regulations.

Encourage learning

Your organization needs a thorough education program to encourage veteran hiring. Easy access to certificates, college credits, and tuition help is a win-win. They’ll gain skills and confidence in a new job setting or industry, making them an asset to your company. HR and mentors should ask veterans what they want from their careers in the future and support further education.

On-the-job training and development initiatives for new hires of various backgrounds are also important. If you have a network of veteran employees, foster mentorship through training and development initiatives. Discuss these programs with new and old employees. Their experience can guide training and development structure, goals, and metrics.

If you’re still hiring experienced employees, external organizations and affiliates can help. American Corporate Partners can help with mentoring, hiring, and onboarding as you build internal procedures.

Engage with other firms and service organizations

Even if your veteran hiring and engagement program is robust, consider chances to collaborate with local and national service organizations. Countless organizations range from general awareness to industry or issue-specific. Explore affiliate programs with these organizations to determine if they may offer mental health or financial advisory services to your veteran personnel.

Providing annual service hours is another approach to keep staff engaged and strengthen ties to local military and community organizations. That’s a win for local nonprofits, veteran employees wishing to continue active in service, and your company as it grows its role as a change-maker for staff and the community.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Don’t Put Your Customers’ Retirement Plans in the Hands of Medicare

Health Savings Accounts (HSAs) can assist with paying current and future medical costs, including those associated with retirement. There was a time when many workers in the United States could look forward to a comfortable retirement, complete with profit sharing and investments, a pension, benefits from Social Security and Medicare, and other amenities. They were confident that their golden years would be marked by rest, mental tranquility, and relatively few worries regarding their medical expenses.

Unfortunately, times have changed. Presently, a pension plan is available to only 15% of workers employed in the private sector in the United States. Only about one-fifth of companies in the United States offer a profit-sharing program. The Dow Jones Industrial Average experienced a value reduction of more than 10% during the first four months of 2022. Those who are 64 years old have a median balance of less than $85,000 in their 401(k) accounts, but the average balance for this age group is $232,000.

There is no cookie-cutter model for retirement. However, one factor that will affect everyone throughout their senior years is the rising expense of medical care. Many regulations come with Medicare, and if seniors break any of them, it might increase the amount of money they have to pay for their medical treatment for the rest of their lives. According to Katy Votava, president of Goodcare.com, “People do feel overwhelmed and baffled by Medicare. However, there are a few fundamental tasks that a consultant can perform.”

Advice for those working in the financial sector

There are, without a doubt, many intricacies to Medicare’s requirements. Taking on such a challenge might be difficult if you do not have someone on your team who is fully committed to working through the issue. However, there are several methods that financial advisers may utilize to start the discussion with clients, as well as resources that they can send customers to get the dialogue started.

Include discussions about healthcare on the agenda for your next client meeting. “Put it on the yearly agenda, and a lot of those problems will fall out before they’re a crisis,” Votava said. “Put it on the quarterly agenda, and it will fall out before it’s a catastrophe.” When customers reach the age of 62, you should begin discussing Medicare with them. Ask them what physicians they are currently seeing and whether they will be able to continue seeing those doctors once they become eligible for Medicare.

Develop working ties with Medicare specialists in your area so that you may recommend consumers to them. As a start, asking customers who have previously been through the procedure for their recommendations on impartial insurance companies is a good idea. Prepare a list of resources for the clients in advance. Eldercare.gov, Medicare.gov, the Medicare Rights Center, and State Health Insurance Assistance Program (SHIP) are excellent places to start when looking for information on Medicare. Advisors may also help clients troubleshoot a few critical circumstances in which clients are most likely to make mistakes by engaging in certain problem-solving activities.

Reaching the age of 65

When it comes to becoming eligible for Medicare, reaching age 65 is a prerequisite. However, precisely what this entails is shifting due to the growing number of people who continue to work into their 60s. Because of this, many of your customers are likely to inquire about Medicare with the same query: “Do I have to sign up when I am 65, or can I wait?” according to Votava. If a customer has a health plan through their employer that satisfies the requirements, they can put off enrolling in Medicare if they continue coverage as long as they stay in their job. This is on the condition that they have not begun receiving retirement payments from Social Security, which would result in their automatic membership at the age of 65 in Medicare Parts A and B, which cover medical and hospital insurance, respectively.

Your client’s company must have at least 20 employees to be eligible for the delay. According to Votava, the employment plan cannot be either a retiree plan or a COBRA plan. According to her statement, the plan’s prescription medication coverage must also satisfy the criteria of Medicare. Votava advised that if the individual already had the necessary coverage, they might put off enrolling in the program until a later date that offered a special registration period. “If none of those conditions apply to you, then you should enroll in Medicare,” Votava says.

According to Votava, one thing you will want to make sure your customers who are still working and are in their 60s think about is that Medicare coverage might sometimes be a better option than an employment plan. If a customer is going to be required to join up beyond the age of 65, they do not want to wait until the last minute as the penalties are expensive. The first registration period begins three months before a person turns 65 and continues until three months after that milestone birthday.

If your client misses that date and does not have creditable coverage, they will face a 10% surcharge on their premium for every 12 months they wait. J.P. Morgan Asset Management provided this information. “If someone goes into it with the mindset, ‘Hey, I’m in excellent condition,’ it may end up being extremely expensive,” Roy said. Electing to enroll for Medicare only once the client absolutely needs to could be a grave error, as “choosing to go that route will set [them] back a lot of money.”

Contact Information:
Email: [email protected]
Phone: 8132032515

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.

Social Security: Cost of Living Raise Might Result in Benefits Running Out Sooner

The most considerable boost in Social Security benefits since 1981 was great news for retirees. However, it also served as a clear reminder that the program is costly, with benefits cuts expected unless it’s retooled in the coming years.

With the announcement of the benefit boost, last week came the word of a tax increase for many Americans, with salaries subject to the Social Security payroll tax scheduled to jump about 9% next year.

Even before the announcement of the cost-of-living adjustment (COLA), the Social Security trust fund was projected to run out of reserves by 2035 if nothing was done. Historically, Social Security reforms haven’t been well received by the public. The question is, does the program require reform, and if so, what changes are coming?

Where Things Are Now

Social Security is a “pay as you go” system, with current income paying current payments. Payroll taxes of 12.4% (employees and employers each pay half, while self-employed workers pay the whole amount) support around 90% of benefits.

However, demographic trends indicate that the revenue stream is under threat, as the number of pensioners rises faster than the number of employees paying taxes. There were 3.4 employees for every Social Security recipient in 2000. Actuaries for the program predict that number will fall to 2.4 by 2030.

That implies more has to be raised from each worker, paid less to each recipient, or do a little of both.

A far lower portion of income is derived through taxes on Social Security benefits, which were initially implemented as part of a reform package in 1983. According to the Social Security website, around 40% of recipients pay taxes on a portion of their payments.

Increasing Payroll Taxes

The expected Social Security shortfall is around 3.4% of taxable payrolls. According to Alicia Munnell, the Center for Retirement Research at Boston College’s director, raising the payroll tax rate by 1.7% for employees and employers would allow everyone to receive full benefits for the next 75 years.

The maximum amount of salaries subject to Social Security payroll tax will increase from $147,000 to $160,200 in 2023. Rep. John Larson (D-Conn.) proposes reinstituting a payroll tax for incomes of $400,00 while simultaneously establishing a minimum payout of 25% over the poverty level. Currently, benefits are calculated based on your 35 highest-earning years, with no minimum.

Increasing the taxable base would increase revenues, especially if the payments didn’t result in extra benefits. However, Johnson is concerned that if it became a terrible deal for higher-income individuals, it would lead to less support for the program. What you receive has always been proportional to what you put in, and if politicians sever that relationship and Social Security is perceived as welfare, support may dwindle.

Increase the Taxable Wage Basis

The maximum wage amount subject to the Social Security payroll tax is linked to a national average wage index and adjusted yearly. The 9% increase for next year is based on the 2021 index, which was boosted when things returned to normal following the pandemic-related shutdowns of 2020.

According to Munnell, one option to increase revenue is to include employer contributions to employee healthcare insurance in the taxable salary base. According to Social Security actuaries, this would lower the 75-year deficit (the timeframe used to determine solvency) by nearly one-third. The plan would tax both employer and employee rates for employer-sponsored group health insurance, so both employees and employers would pay more.

Johnson believes this would make sense because when Social Security was created, practically all of the compensation came in wages, and today more of it comes in benefits.

Increasing the Full Retirement Age (FRA)

The FRA is the age at which you receive 100% of the guaranteed benefits. For most people, that’s 66 or 67. The age was raised from 65 to 67 during the 1983 reforms. Still, the adjustments weren’t implemented for 17 years “to give people time to adjust employment and savings behavior to the fall in benefits, according to Johnson. He also stated that the modifications to the FRA in 1983 resulted in a 12% reduction in benefits.

There has been discussion of increasing the retirement age to 69. That, however, would punish people with physically demanding professions who cannot work longer and may be forced to file for Social Security early. Many people file at the earliest age of 62, resulting in a 30% loss in compensation compared to waiting until FRA.

Trim Benefits

Rather than raising taxes, Andrew Biggs, a senior scholar at the American Enterprise Institute, advocates for measures that gradually reduce benefits for medium and upper-income workers while boosting them for lower-income earners.

“We’re a wealthy country, and it’s not unreasonable to expect Social Security to give a genuine guarantee against poverty in retirement years, which it now doesn’t since there’s no minimum benefit,” said Biggs. “At the same time, retirement savings outside of Social Security have increased considerably across all demographics, demonstrating that medium and upper-income individuals can and will save more for retirement on their own.”

What Happens Next?

Because there is little overlap between Democratic and Republican ideas for Social Security reform, Johnson believes a solution will be reached at the last minute. He thinks the most likely conclusion will be an increase in the taxable wage base and a reduction in benefits for the highest-income recipients.

According to him, part of the issue is that no one will be better off if you’re talking about fixing the program’s finances. So, you either reduce benefits or lower taxes, and neither is an achievement on which to run for reelection.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with helping them pursue the most comfortable financial life possible. Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career. Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community. Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School. Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age. With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion. Aaron can help you and your family to create, preserve and protect your legacy. That’s making a difference.

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.

The 9 Life Transformations That Have An Impact On Social Security Benefit

Everything in life is not permanent since change is constant in life. However, the social security benefit is about to change. Therefore, regardless of the factors that influence the social security benefits, you will enjoy the positive side of having more income during retirement.

Some factors that influence social security benefits are:

1. Change of name: For instance, if you decide to change your name legally from Claire Martins to Claire John, you should notify and contact the SSA about the changes in your name. It will help avoid errors in remitting your salary or wages into the social security earning file. 

You need to present some documents to the SSA to accept your new name and issue your new security card, such as:

• Certificate of naturalization bearing your new name.

• Marriage certificate.

• Divorce decree.

• Court order showing approval of your new name.

2. Change of address: The SSA needs to be informed of your new location to prevent them from sending your monthly check or other valuable documents to a different address. Your relocation from one state to another will not affect your security benefits payouts. However, it can influence your check due to the taxes assigned by the state. 

Social security is treated differently in some states.

3. Adoption or extension of the family: If there is a new member in your family, either you adopt or expand your family, the social security administration needs to be informed, as the latest member could be part of the beneficiary of the social security retirement packages. 

Your children under 18, unmarried or full-time students in or below grade 12, and children with disability are eligible for the benefits without reducing your retirement benefits.

4. Change of citizenship status: If you satisfy specific required conditions by the SSA as a legal immigrant in the state, you can be eligible for social security benefits. Such conditions include work credits or earned equivalent credits from your work history in your previous country.

 As an American citizen, you have the right to receive your benefits if you relocate to one of the eligible countries. However, suppose you decide to leave for some country like Moldova, Kazakhstan, Tajikistan, Belarus, Azerbaijan, Kyrgyzstan, and Uzbekistan, where the SSA cannot make social security payments. In that case, you might not get the benefits.   

5. If you receive a pension from your new work not covered under social security: During your years in service, suppose you didn’t pay taxes for social security, the SSA may reduce the widow, spouse or widower benefits by more than 60 percent of the payments you receive as pension from the government. This act is termed government pension offset (GPO).

6. If you are convicted of a crime: if you are found guilty of an offense and sentenced for 30 or more days, the SSA can deprive you of your entire social security benefits. However, the SSA will return your benefits a month after your release once you are acquitted.

7. You are no longer in charge of your social security recipient child: The American government provides social security benefits for children aged 18 and above who are disabled before they are 22 years or continuously disabled. The benefits can last for the time they are incapable of doing any work or until they die from the disability. 

8. If you don’t have practical fund management skills: After retirement, you might be the one who can’t control your financial affairs. When you identify this challenge, inform the Social Security Administration. They can help you conduct a discreet investigation and appoint someone who might be your family member, organization, friend, or an individual to assist you in monitoring your benefit affairs. Failure to do so may cause a monthly benefit check delay or errors in your earning record.

9. Suppose the beneficiary dies: For example, if the social security inheritor died in July, you must refund the benefit they paid in August to the social security administration. They are not entitled to social security payouts again.

You can contact the social security administration (SSA) at 1-800-772-1213 if you have any challenges concerning the social security benefits.  

Contact Information:
Email: [email protected]
Phone: 6232511574

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

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.

You should Get Yourself Ready for a Lengthy Retirement

Everyone has the same hope: to extend their lifespan. Everyone has the hope that they will have a long life. But do we have the financial resources to support such a long life?

Let’s look at a handful of intriguing results from a study conducted in 2022 by Age Wave and Edward Jones so we can go on to prepping.

The pensioners questioned have indicated that they anticipate living a mean of 89 years, and they believe that a pension that lasts for 29 years is perfect.

Nearly a 70th of those polled responded positively to the question of whether they aspire to reach the age of 100. What is the primary motivation behind this wish to live a long life? To have more opportunities to enjoy with their loved ones, including family members and friends.

There is no way for any of us to know how much longer we will continue to exist because none of us can see the future. These ideas, however, have a genuine foundation in truth, thanks to advancements in medical care and a growing understanding of the importance of leading health behaviors.

On the other hand, if you want to spend those additional years with your loved ones and benefit from a longer lifespan, you need to ensure your financial situation is in good form. What steps can you take to ensure that this occurs?

The following are some of the most fundamental actions to take:

– Start saving and investing often and frequently. Even though it has been around for a long time, this bit of financial guidance is still relevant today. The sooner you begin setting money aside and making investments for your golden years, the bigger the potential accumulation will be. Consider the following: If you saved up only $5,000 a year at the age of 25, invested it at an annual rate of return of 6.5 percent, and decided not to make any premature withdrawals, you’d have $935,000 by the day you got to the age of 65. 

You will only eventually wind up with $460,000 if you wait until you are 35 years old to begin saving for retirement, and if you received the same 6.5 percent yield (remember, with no premature pulls), you would save. And if you didn’t start putting money down until you were 45 years old, you’d finish up with just over $200,000, assuming the same return of 6.5 percent.

– Be wary of borrowing. When you hit retirement age, you probably do not want to be weighed down by responsibilities. Therefore, while you are still gainfully employed, you should try to eliminate any undesirable obligations, especially those loans that do not offer the monetary advantages of tax-deductible interest charges. The less debt you have, the more money you can put away and invest wisely.

– Continue to evaluate how far you’ve come. You must keep a close eye on the steps you take to realize your objective of having a decent retirement. Your portfolio holdings may see oscillations over the short term, particularly in highly unpredictable capital markets like those we witnessed at the beginning of this year. If you look at the long-term consequences, though, you will have a far better understanding of the predicament you are in.

For instance, during the past ten years, has the growth of your assets been on par with what you had anticipated? And looking ahead, do you believe that you are in great condition, or do you anticipate needing to adjust how you invest your money? Please remember that if you are over 50, you are liable to earn “catch-up” payments to your 401(k) and IRA. These payments enable you to contribute more money than the standard limitations do. As you get closer to retirement, you also might want to consider modifying the mix of investments you hold to reduce the amount of risk you are exposed to eventually.

You may contribute to the attainment of this goal by considering your financial decisions and acting in a way that is in line with your own best interests.

Contact Information:
Email: [email protected]
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

Sin #3 and Your 401(k)

What dangers should you accept to reach your financial objective, if any? What’s the cut-off point? That’s a simple question, but the answer can be complex.

How much is “enough” depends on a myriad of factors. What’s more important to you: your nest egg, your kids, or something else? Additionally, “enough” is a moving target. When you can retire depends on your age and your financial situation, both of which are subject to change as you get older. Yes, it most likely will.

At 25, aiming for a million-dollar nest egg could be a realistic target. But things may have shifted by the time you get to middle age. Possibly there have been one or more severe economic downturns. Or dramatic rises in prices. Like now, for example. There are constant shifts in the world and economy, from gas and baby formula prices to the possibility of a broader war in Europe. So far, changes haven’t been for the better in many situations. So we went to a recently retired fed, Abraham Grungold, to get his take on things. After a lengthy government job and TSP investment, he recently retired with over a million dollars in his bank account. In his own words:

TSP — How much is enough?

Over 100,000 federal workers have become millionaires through the Thrift Savings Plan (TSP). How much money in a TSP would be enough to live comfortably in retirement? Is there a magic number for a secure retirement? Various elements, some of which are unique to each person’s personal and financial circumstances, determine the answer. Note that federal and state tax rates are subject to change. Thus, the numbers in the following two scenarios should be treated as approximations.

An Individual

If you retire at age 62 after 30 years in the federal government and receive an annuity of $30,000, a Social Security payment of $20,000, and a total of $500,000 in your Thrift Savings Plan, you can expect to receive $20,000 year for the next 25 years. Your yearly gross salary is $70,000; once taxes are taken out, you’ll be left with about $55,000. Will your current standard of living be supported by this income?

A Couple

Consider a relationship in which one partner is a federal employee, and both are 62 years old. Furthermore, they have $1,000,000 in their TSP and other retirement accounts.

An annuity of $30,000 is paid to Spouse 1, while Spouse 2 receives $20,000 from Social Security. They plan to spend $40,000 a year, or 4% of their $1,000,000 nest egg, for the next 25 years. They make a combined $110,000 annually before taxes, which amounts to about $85,000. Could they maintain their current standard of living on this salary?

Before retiring, government employees should put as much money as they can into savings and invest aggressively to ensure that they will have sufficient funds to have a comfortable retirement and some funds left aside for unexpected expenses. When I asked several former government employees, they all assured me that they were able to retire comfortably on $2 million. But do you think that’s enough?

Some unexpected events will arise in your life. The following are examples of unforeseen challenges that retirees may face:

Everything’s getting more expensive due to inflation.

  • Financing for a vacation or secondary residence
  • Meeting medical and pharmaceutical costs
  • Spending on grandkids’ higher education
  • Nursing homes or other facilities providing long-term care

After you have retired, you need to be watchful and keep a close eye on how much money you are spending. Even if they take money out of their tax-deferred savings plans (TSPs), investors still need to make significant investments to ensure they have money set aside for unexpected expenses and that their accounts continue to grow.

Many federal workers have reached out to me as a financial coach with questions about their retirement, TSP, and assets outside the TSP. I think it’s essential for them to have a backup plan in place for when they retire. The best way to prepare for these challenges as a senior is to save as much as possible in a TSP.

Contact Information:
Email: [email protected]
Phone: 7735026467

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

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.

You Can Now Appeal Your Hospital Observation Status As A Medicare Beneficiary 

Hospitals use the term “observation status” when billing Medicare. Unfortunately, it may be detrimental to patients in the hospital who count on Medicare for their healthcare. Even for a few days or overnight, people treated in hospitals may discover they were not admitted as inpatients.

When hospital patients are assigned Observation Status, they may well be charged for healthcare services that Medicare typically covers if they had been admitted as inpatients. For example, patients can be billed for their drugs. As a result, if someone needs to travel to the hospital, they may wish to bring their meds.

Patients will also be unable to acquire Medicare coverage if they require nursing home care following their hospital stay. Medicare coverage only applies to nursing home care for people who have had a 3-day inpatient hospital stay – observation status does not count.

Medicare Part B covers outpatient observation status, while Part A covers inpatient hospital stays. If they are designated as Observation Status, Medicare participants enrolled in Medicare Part A (but not Medicare Part B) will have to pay for their entire hospital bill. 

What is the significance of this?

If you visit the hospital, you’ll be admitted as an inpatient, implying that Part A Medicare covers any service you receive. You can also be placed on “observation status,” which means your expenses will be reimbursed by Medicare Part B.

Now, you may be wondering if you can find out your condition before coming to the hospital. This, according to Oh, isn’t quite possible.

This creates confusion and is a big problem because some people don’t know their status or assume they’re covered under Part A while covered under Medicare Part B due to their observation status. These two halves have differing cost-sharing outcomes, which could spark a dispute.

There have been attempts to address this, such as the Notice Act. The hospital must inform patients of their condition under this provision. There’s also the Two-Midnight Rule, which states that a patient is deemed inpatient if they stay in the hospital for two midnights (and therefore covered by Medicare Part A). Even if a person stays over two midnights, they may be under surveillance status.

Medicare patients can now appeal their admission classification, whether admitted as an inpatient or as a patient under observation. People can start the process as soon as they receive their hospital bills.

The Part B deductible will be the most affected if Medigap covers you. The majority of Medigap insurance would cover the remaining costs. If you have Part A, Medigap will cover the difference.

Contact Information:
Email: [email protected]
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

Here Are Three Ways to Protect Your Retirement Fund from a Downturn

It’s normal to feel uneasy about retiring when the economy could be in a downturn, but there are methods to keep your current standard of living in retirement even if the economy takes a downturn. Inflation is at 40-year highs, interest rates are rapidly rising, and equities have had their worst first half since the 1920s, so investors are understandably nervous. From that viewpoint, let’s take a look at three of the most efficient strategies to sustain your nest egg in retirement and prevent the danger of ever running out of money.

Look into Certain Annuities

If your retirement income is not certain, either via a pension or significant Social Security payments, a single-premium annuity might be a wise investment. If you want to spend retirement living well on a fixed income, you may want to consider annuitizing a part of your stock portfolio.

Some annuities cost too much, while others have too many extra costs or confuse riders. A retiree whose portfolio consists only of equities and bonds may be persuaded to forego annuities after reading this. If you are concerned about market volatility over the next decade or about longevity risk, however, single-premium annuities may make sense to allay the risk of outliving your money in retirement.

Pick Up a Part-time Job

Even tiny sums of income in retirement — or the years leading up to it — may make a tremendous impact on the degree to which you need to depend on unpredictable assets. Part-time employment may offer income levels in the $10,000 to $20,000 area, which, when paired with Social Security, can go a very long way in relieving the burden on your portfolio.

To use an extreme example, let’s say you can supplement your $30,000 in yearly Social Security income with an additional $20,000 from part-time work. In addition, let’s say you estimate your first year of retirement would need an annual budget of $70,000.

If you were to opt out of part-time employment, the 4 percent guideline for a 30-year retirement would imply a personal savings target of $1,000,000 ($40,000 divided by 4 percent). If you work part-time after retirement, you may cut your portfolio withdrawal need in half, allowing you to live comfortably on half as much money.

Needless to say, little sums of earned revenue count more than they would look.

Delay applying for the Social Security benefits

Delayed Social Security credits are a particularly effective tool for anyone who can afford to wait on filing. Social Security payments increase by 8 percent annually for each year you delay filing for them. In addition, you will get yearly inflation adjustments (sometimes known as cost-of-living adjustments or COLAs) to help offset the impact of inflation on your spending power. This will be helpful if the present inflationary situation lasts longer than expected.

Social Security, for many seniors, operates as a minimum amount of guaranteed income meant to cover basic living expenditures. Investment returns from stocks are volatile, while Social Security is guaranteed for life. The longer you wait to file, the more you’ll finally get, and the less you’ll need to depend on your investment portfolio to fulfill spending demands.

Considering the Next Ten Years

The most a retiree can do is make an educated guess about how things will play out and then prepare accordingly. Rather than depending on just a few sure bets when developing your financial plan for the next ten years, it is in your best interest to take into consideration a variety of potential economic outcomes. Doing so will allow you to achieve far better results. It is a hazardous gamble not to anticipate a decade of outperformance in the economy, but it is not a risky play to anticipate a time of catastrophic economic devastation. Keep a level head and put your attention on improving the factors that are within your direct control.

Contact Information:
Email: [email protected]
Phone: 9568933225

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

Managing Retirement-Related Healthcare Costs

When people begin planning for retirement, the typical expenses taken into account include housing, utilities, gas, and even food. Unfortunately, retirees fail to consider the increasing cost associated with healthcare costs during retirement. By failing to manage healthcare costs before retiring, aging individuals risk facing an expensive oversight later in life. With healthcare being one of the most costly aspects of retirement, it’s imperative to plan before being slapped with sticker shock at the beginning of your golden years.

In 2021 alone, your average retired couple needed to plan for over $300k in savings to cover the entirety of their healthcare expenses alone. According to a survey conducted by RBC Wealth Management, up to 80% of the individuals surveyed felt they would fail to afford healthcare in retirement. Concern has arisen due to the simple fact that retirement funds are fixed figures. Although it’s essential to understand how health insurance premiums change over the years, it isn’t worth stressing over.

As you age, the expenditures associated with healthcare increase. For example, a couple between 65 and 74 should plan to spend $12k per year. As the couple ages between 75 and 84, it increases to $21k. During your golden years, you may notice that your set retirement income remains the same as healthcare costs rise. For this reason, individuals choose to invest in plans such as a health savings account (HSA) or 401(k).

Planning for future medical costs can mean the difference between enjoying retirement and scrambling to stay on top of your finances. You will be far ahead of the curve by estimating costs ahead of time and putting a healthcare plan into your plan from the beginning. Start by considering your family and medical history, especially if you suffer from a chronic condition or have spent any time smoking.

The location of your retirement is another commonly overlooked factor, but why does it matter? Regarding retirement healthcare, the state where you purchase your policy may offer different benefits to solo and spousal plans. Some families purchase gap insurance to bridge the gap in existing coverage, with options such as COBRA. Gap insurance helps pay for areas traditional insurance providers do not cover, which means it won’t cover 100% of your bill. For example, eye exams, long-term care, and dental or hearing care aren’t covered by Medicare plans and are billed as out-of-pocket expenses without gap insurance.

Contact Information:
Email: [email protected]
Phone: 6232511574

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

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.

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