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June 21, 2018

Public Sector Retirement News

Federal Employee Retirement and Benefits News

Tag: Federal Employees Retirement System

Federal Employees Retirement System

EPA Offering Buyouts to Reduce Personnel

It seems that many agencies are accepting president Trump’s idea of reducing the number of federal employees and the EPA Offering Buyouts is proof positive that Trump’s vision of a smaller government is becoming a reality. The Environmental Protection Agency has recently initiated steps to buy out certain personnel. The EPA has decided not to hire more workers unless it becomes necessary. It is believed that the agency may offer voluntary retirement as well. The impact of these changes on retirement benefits and federal retirement can just be guessed right now because no one knows the exact impact.

EPA Offering Buyouts
The EPA has begun offering buyouts to reduce the number of Agency employees

How the EPA Offering Buyouts Will Impact the Agency

The EPA has begun offering buyouts to reduce the number of federal employees in the Agency. The Agency has about 15,000 employees at the moment. This decision was probably taken because of an executive order by President Trump that was released last month and talked about streamlining agencies through the federal government.

How was the Message of Reducing Federal Employees at EPA Conveyed?

The message of reducing federal employees was conveyed via a letter sent by the Acting Deputy Director of EPA, Mike Flynn. This letter was sent to all the regional administrators. The content of this letter stated that the White House had asked federal government agencies to start taking immediate actions that are aimed at reducing the workforce.

The letter further stated that as per the said guidance, the EPA offering buyouts to start an early buyout or early out program. Flynn also mentioned that the goal was to complete the program by the end of the year.

No Hiring

Flynn also mentioned that though the governmentwide hiring freeze has been lifted, new recruitments at the EPA will not be encouraged. The resource situation of the agency is such that it has to opt to stay away from external hiring.  This hiring freeze is not aimed at restricting recruitment for all the positions as there can be limited exceptions that are permitted on a case-by-case basis.

Setting of a Trend

Though the memo has minimal details about the agency’s plan to reduce the number of federal employees, it can be probably one of the several plans that will be submitted by various agencies.

Targeted Approach

It is also a fact that EPA has been a central target of the Trump administration as the President of the country, Donald Trump had earlier promised that he would reduce the agency to tidbits. The budget he has proposed would slash the funding of the agency by 30 percent and cut around 3200 federal employees. It will also obliterate funding for Superfund cleanups, climate change research and scrap over 50 programs. The efforts being made towards improving the energy efficiency, cleaning up the great lakes and funding infrastructure projects in the Native American communities are among the scrapped plans.

Understanding the Buyout

Those of you who don’t fully understand what the EPA Offering Buyouts will mean to federal employees must know that buyout is also known as a voluntary separation incentive payment. It is a cash payment that is made to a federal worker to tempt him or her to leave voluntarily. The maximum amount of money that can be offered per person is $25,000. This payment is taxable which means that the take-home value is reduced by a few thousand dollars at least.

Federal workers who are selecting this option must leave by a specified date, and they are not allowed to return to federal employment within five years unless they manage to repay the entire pretax buyout amount.

Is Early Retirement Offers on EPA Agenda?

In most cases, the buyouts are coupled with early retirement offers, but in the case of EPA, it is not clear whether they are on the agenda or not. For those of you who don’t know, Voluntary Early Retirement Authority lets federal employees retire before they reach the standard combinations of years of service and age.

The two most vital federal retirement systems are Federal Employees Retirement System and Civil Service Retirement System. The latter applies to people who were hired before 1984 which consists of less than 10 percent of the workforce. These people are now older and closer to retirement on an average.

Early retirement offers allow employees in either of the two systems to retire at any age with 25 years of service or age 50 with 20 years or service. It is potentially subject to a reduction in one’s retirement benefits.

Why are Layoffs Unpopular?

Laying off the federal workers or Reduction in Workforce is not preferred by federal agencies because it requires a tedious, expensive and disruptive process. RIFs have been out of trend as Agencies have not used them for decades and they try to avoid them. Agencies prefer other methods like cutting down the travel and other expenses as well as cutting down the feds via attrition.


Federal employees have been under the scanner since President Trump took over. The attempts to reduce the number of feds have been initiated at EPA by offering buyouts. The agency may also offer early retirement options which may badly impact retirement benefits and federal retirement.

Will Congress Approve Federal Employee Retirement Benefit Increases?

A congressman is attempting to create federal retirement benefit increases. The proposal offers the new calculation using CPI-E vs. CPI-W. Using CPI- U instead of CPI-W is also being proposed. It is not clear whether the Congress would even nod to change the way cost of living adjustments are being calculated. Even experts are hesitant about speculating on which way the wind will sway. If the method of calculation is changed, many people will need the help of someone who serves as a retirement guide.

Retirement Benefit Increases

Request for Change in Calculating Retirement Benefit Increases

The request for making a change in calculating retirement benefit increases was proposed by Congressman John Garamendi (D-Modesto, CA).  Garamendi recently introduced the CPI-E Act of 2017 (H.R. 1251), a bill that would require the Cost of Living Adjustment (COLA) methodology to make use of CPI-E instead of the CPI-W.  CPI-W is currently being used to calculate changes in retiree benefits for Social Security recipients and federal annuities provided under the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).

NARFE’s Opinion

Talking about the proposed change in calculating retirement benefit increases, the president of National Active and Retired Federal Employees Association, Richard Thissen stated that the fact that it is already not being done is shocking. The COLAs are based on the costs experienced by clerical workers and urban wage earners rather than the costs experienced by elderly individuals.


It should be mentioned here that the retirees started getting calculating retirement benefits increase or Cost of Living Adjustments (COLAs), in 1975 only. Congress approved the automatic cost-of-living adjustments as part of 1972 Social Security Amendments. At that time only one Consumer Price Index was available, it was CPI-W. Before 1975, the retirement benefits were increased only when the Congress enacted a special legislation.

Experimental Price Index for the Elderly

The Bureau of Labor Statistics has expanded the number of CPIs since the 1970s, and it has created an experimental inflation measure which is known as Experimental Price Index for the Elderly. It is the responsibility of the Bureau of Labor Statistics to produce the Consumer Price Index.

CPI-W, on the other hand, measures the changes in prices for a market basket of services and goods bought by a household where more than half of the income of the household must come from wage or clerical occupations. The CPI-W population represents about 28 percent of the total U.S. population.

Present Scenario

At present, the experimental CPI-E is calculated by using the households that include at least one reference person or spouse who is at least 62 years of age. It represents about 19 percent of the current CPI sample.

BLS has found that around four in seven major expenditure groups that are being measured by CPI older households are assigning a larger portion of their total expenditures to some categories that are rising rapidly like the medical care costs.

The Costs Involved

If the Congress approves a change on calculating retirement benefits increases and switches to CPI-E, it would cost several million dollars. The index sample will need to be expanded so that it becomes statistically defensible. BLS will also need to put greater resources into collecting information regarding senior discounts that have the potential to affect the final pricing of various goods and services.

Chained Consumer Price Index for All Urban Consumers

A few members of the Congress are also considering switching to Chained Consumer Price Index for All Urban Consumers (C-CPI-U) from CPI-W. It is believed that (C-CPI-U) will capture consumer expenditure substitutions so as to reflect true cost-of-living changes of the customers. On the BLS website, an example of consumer preferences between pork and beef can be found.

Beef and pork are two separate CPI item categories. If the price of pork increases and the price of beef do not, consumers might switch to beef from pork. The C-CPI-U is designed in such a manner that it accounts for this kind of consumer substitution between different CPI item categories. In this example, the C-CPI-U will increase but not by as much as the index that was based on the fixed purchase patterns.

Thus, the C-CPI-U is proven to increase at a slower rate than the CPI-E or CPI-W over the last decade which would save government’s money by lowering the amount by which retiree benefits increase.

An act known as the CPI-E Act of 2015 was similar to the bill that has been introduced by Congressman Garamendi. It died in a Subcommittee of the House during November 2015.


Though the efforts made by Congressman Garamendi to change retirement benefit increases are calculated in the future to have got some attention, no one can say for sure whether the proposed changes will be approved by the Congress this year, or ever. If the changes are approved, the process of calculating cost of living adjustments will change, and most retired people would need the advice of a federal retirement guide for managing their finances well.

Court Orders OPM to Restore Blind Vet’s FERS Disability Benefits

Court Orders OPM to Restore Blind Vet’s FERS Disability Benefits

benefitsA federal judge in the U.S. District Court for the District of Columbia has ordered the U.S. Office of Personnel Management (OPM) to restore the Federal Employees Retirement System (FERS) disability benefits for blind navy veteran Glenn Minney.

Minney had a distinguished career in the Navy, which spanned decades and included a Purple Heart Medal and other military honors. In April 2005, he was in Iraq when an explosion ended up making him almost completely blind. He was fully blinded in his right eye and mostly blind in the left eye, which qualified him for retirement and disability benefits.

OPM approved his FERS disability benefits in 2011 and started sending him payments. He eventually started working as a legislative liaison for the Blinded Veterans Association, a position that helped him earn $56,000 per year.


 Minney vs. OPM FERS Disability Benefits Termination Case 

Since his pay exceeded 80% of the salary at the position from which he retired as a federal employee, OPM sent him a letter saying that his FERS benefits had been terminated. He and his daughters were left without the health benefits that came with FERS, so he filed a lawsuit in the federal district court seeking an injunction on the FERS termination.

Thing is that OPM had sent him written notices about this. Minney was never able to read any of it, and claimed that one of the key notices had been sent to a wrong address. He was never verbally or in any other way notified that earning money in a non-federal position would result in his FERS being terminated.

Technically, you could say that OPM was within its rights in cutting off the FERS benefits for Minney. But it also shows the robotic nature of a vast bureaucracy that can’t be flexible to the needs of a severely disabled and much-decorated war veteran. So it’s refreshing to see a federal judge recognize and rectify this rather unpleasant nature of your typical federal agency.

Senate Passes Bill to Reduce FERS and CSRS Benefits Fraud and Misuse

Senate Passes Bill to Reduce FERS and CSRS Benefits Fraud and Misuse

CSRSThe U.S. Senate, in one of its rare acts of bipartisan support for a bill through Unanimous Consent, has passed the Representative Payee Fraud Prevention Act of 2015.

This bill (S.1576) cracks down on federal retirement benefit fraud and misuse by giving U.S. Attorneys the statutory authority to prosecute retiree representatives who misuse funds from the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).

FERS and CSRS are the primary retirement funds of federal workers, and they’re managed by the Office of Personnel Management (OPM). S.1576 was introduced due to concerns about an increase in embezzlement of government benefits by dishonest representatives of retirees, and to help prevent the misuse of these retirement funds that the government pays.

This bill classifies the crime of misusing federal retirement funds as a felony.  This is expected to deter deceitful behavior targeting retirees and provide the same protections to federal employees and retirees that Social Security and Veterans benefits recipients already have.

 Bill to Reduce FERS and CSRS Benefits Fraud Sails Through Senate 

It was introduced by Senators James Lankford (R-OK) and Heidi Heitkamp (D-ND) in June 2015. Lankford and Heitkamp are chairman and ranking member, respectively, of the Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management. The bill was approved by the Senate Homeland Security and Governmental Affairs Committee on June 24.

After the bill sailed through the full Senate with Unanimous Consent, Sen. Lankford issued a statement saying that “I’m pleased the Senate has passed this bill to protect the retirement and annuities of federal employees all across America from caretaker misuse and fraud. We must fight against the embezzlement of federal government civil worker benefits to ensure a stable retirement for them and their families.”

Other Federal Retirement Articles

IMPORTANT UPDATE…FEGLI Open Enrollment Season!  by Gary Fouts

No COLA Increases in Social Security Benefits

Are You Thinking About a “Deferred” Retirement?  by Gary Fouts

SCOTUS Ruling Impact on Federal Employee and Retirement Benefits

Social Security for FERS Employees by Todd Carmack


FERS – An Overview

FERS (Federal Employees Retirement System) – An Overview


Working for the federal government has its perks, and one of them is a comprehensive retirement package, commonly referred to as FERS (The Federal Employees Retirement System). The multi-faceted program empowers its employees to easily take their financial future into their hands and have adequate financial coverage throughout their golden years.

The FERS Basics:

FERS has three main components that make up the retirement package, Social Security, a Basic FERS Annuity and the Thrift Savings Plan. All federal employees are enrolled in FERS if they were hired after January 1, 1984, have elected to transfer into the FERS program, have rejoined the federal government after a break in service with more than one year, but less than five years of creditable CSRS service or upon rehire into a FERS position after a separation from a FERS position.

FERS and Social Security:

Federal employees are will enjoy the security that comes with being covered through Social Security. Employees pay 6.2% of their earnings up to the maximum taxable wage base and the government matches your contributions throughout your career. The benefits cover employees and their family members’ financial coverage who fall under Old-Age Survivors and Disability Insurance (OASDI), Social Security’s Medicare Hospital Insurance for beneficiaries over the age of 65.

Most of the cost of Social Security is paid for through payroll taxes. Each year you pay a percentage of your salary up to a specified earnings amount called the maximum taxable wage base. The Federal Government, as your employer, pays an equal amount. The percentage you each pay for old age, survivor, and disability insurance coverage is of your earnings.

FERS Basic Benefit Plan:

Federal employees who are lifers will reap the benefits from the Basic Benefit plan after they have earned five years of creditable civilian service. Employees who transfer from the Civil Service Retirement System are also eligible to participate in the program (these employees are commonly called Trans-FERS).

As part of the FERS Basic Benefit Plan, employees will also gain survivor and disability benefits after 18 months of credible civilian service. Now what does credible service mean? Credible service means the employee has made contributions while serving as a federal employee. The contributions you are making to FERS for your future is about a 7% difference from your standard pay. This 7% will encompass the 6.2% paid to Social Security and 0.8% to your FERS Basic Benefits plan.

Employees are eligible to withdraw all of their contributions if they decide to leave the Federal Government, however, if they return to work for the Federal Government, the employee will not be eligible to receive benefits based on service covered by that refund. Good news, there are no regulations if you refund your Basic Benefits plan contributions back into FERS.

FERS Retirement:

The FERS Basic Benefit Plan takes your financial future by offering three different retirement options to accommodate your life and financial needs. The plan allows for Immediate, Early and Deferred Eligibility.

Immediate Retirement allows employees who are 62 years of age and have five years of credible service or are 60 years of age with 20 years of service to start receiving retirement benefits within 30 days of stopping work.

Early FERS Retirement allows is available to employees who have been involuntary separated or voluntary separations during major reorganization or reductions in the federal workforce. Eligible employees must be 50 years of age with 20 years of service, or any age and 25 years of service.

Deferred FERS Retirement is determined by the employee’s age and number of years of creditable service. Each case will vary, and will be dependent upon the employee’s Minimum Retirement Age.

FERS and Employee Disabilities:

Life sometimes throws you a curve ball, and sometime they strike you out. If a federal employee becomes disabled during their tenure with the government, they may be eligible for FERS disability benefits to supplement part of their income.

Employees are considered disabled under FERS if they are unable to perform useful and efficient service in their position due to disease or injury. In some instances, the agency may offer the employee an alternate position that accommodates their disability – but if the employee declines the alternate position then they will no longer be considered disabled under the FERS benefit program.

You may also qualify for Social Security disability benefits if you are unable to work in any substantial gainful activity.

FERS Benefits to Surviving Family Members:

Dealing with a loss of a family member is never easy, but also dealing with the loss of income can add salt to the wound. Under the FERS program, actively working employees who have at least 18 months of credible service will have a peace of mind knowing that their spouses will receive financial aid after they are gone.

After a FERS-covered federal employee passes away, the surviving spouse can either receive a lump sum payment plus the higher half of your annual pay rate at death, or the spouse may elect to receive half of the employee’s high three—year average pay. In addition, an employee that has 10 years of service, your spouse will also receive an annuity equaling 50% of their spouse’s accrued basic retirement benefit. These FERS benefits are paid in addition to any Social Security, group life insurance, or savings plan survivor benefits. For your spouse to be eligible to receive all of the benefits under FERS, you must have been hitched for at least nine months.

When a retired federal employee passes away, the employee’s FERS annuity is automatically reduced by 10% for the surviving spouse. Unless those benefits are jointly waived in writing by the retiree and the spouse before retirement.

Children may be eligible to receive an annuity up to the age of 18, or 22 if they are full-time students and children who became disabled before the age of 18. Depending on how many children an employee has will determine the amount of aid received following the employee’s death. The FERS surviving child benefit is $344 per month, per child and $413 if orphaned. The total children’s benefit is reduced dollar for dollar by any Social Security children’s benefits that may be payable.

Recommended Articles

Federal Employee Retirement Checklist by Gary Fouts

What Are Your TSP Options With the New Phased Retirement Program? by June Kirby

Understanding The Thrift Savings Plan, By Todd Carmack

Congress Mulls FERS Contribution Increases and Benefits Cuts

Congress Mulls FERS Contribution Increases and Benefits Cuts

Federal Employees Retirement SystemA Congressional push for reforms to federal retirement contributions and benefits seems to be gaining some momentum. There is now a very real chance of another round of changes to the Federal Employees Retirement System (FERS) involving federal retirement benefits cuts and an increase in the retirement contributions that must be made by federal employees.

Earlier this year in March, Rep. Bruce Westerman (R-AR) introduced legislation (H.R. 1230) that will change the formula for calculating federal employee benefits. The formula currently takes the average of the highest three years of pay. The bill would change this to the average of the highest five years of pay.

If passed into law, the bill will go into effect from Jan 1, 2017 and would reduce federal employee benefits by $3.1 billion over a 10-year period.


Will Congress Hike FERS Contributions Again?


Another bill under consideration that was included in the House Budget resolution increases required federal retirement contributions to six percent of federal employee salaries.

This would build on the federal retirement contributions hikes approved by Congress through the Bipartisan Budget Act of 2013. Federal employees hired before 2013 contribute 0.8 percent into FERS, while those hired in 2013 must pay 3.1 percent and those hired after Jan 2014 must pay 4.4 of their federal employee salaries into FERS.

The National Treasury Employees Union, the largest independent federal union, representing 150,000 employees in 31 agencies and departments, has issued a release in which they say that $21 billion has been lost through increased retirement contributions for recent and new hires. This is in addition to the $137 billion in lost pay as the federal workforce went without raises in 2011, 2012 and 2013.

NTEU National President Colleen M. Kelley said in the release that “I am asking you to look elsewhere for additional savings. Enough is enough. This country has the greatest civil service in the world, but that will not continue to be the case if Congress continues to use their pay and benefits as a piggy bank to fund other things.”

Kelley added that it is becoming difficult to recruit new employees and to retain good employees.



Recommended Articles

Federal Employee Retirement Checklist by Gary Fouts

What Are Your TSP Options With the New Phased Retirement Program? by June Kirby

Understanding The Thrift Savings Plan, By Todd Carmack

Records To Check Before Retirement

It is best to make certain all of your records are in place when anticipating retirement.  Tips to get in shape for retirement.

-Review your designation of beneficiary for the lump sum payment of retirement contributions when no one is eligible for monthly payments.

– If a copy is not in your folder, file a new designation. The designation is made on

Standard Form 2808 for CSRS and Standard Form 3102 for FERS.  Make sure

the form shows very clearly the person(s) you want designated.

FERS transfers and any prior designation made for CSRS is cancelled.  You may want

to file a FERS designation.  Automatic transfers to FERS from CSRS,- the designation

will remain in force.

If there is no designation of beneficiary, benefits will be paid as follows:

  1.  Your widow or widower.
  2.  Your children in equal shares.
  3.  Your parents in equal shares.
  4.  Your appointed executor or administrator of your estate.
  5.  Your next of kin under the laws of the state you reside in when you die.
  • What records are needed for my health benefits?

Inside of your OPF should be a record of all of your health benefit registration forms (Standard Form 2809) and where appropriate Standard Form 2810, Notice of Change in Health Benefits.  When you retire be absolutely certain that your official records show a complete history of your health insurance enrollment for the last five years.  Your records should include your current Federal life insurance coverage on a Standard Form 2817, “Life Insurance election”, and where appropriate, a current life insurance designation of beneficiary (Standard Form 2823).

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


For Postal Employees – LiteBlue and the TSP

Federal and Postal Employees – Choosing a Financial Professional

The Thrift Savings Plan (TSP)

Is All ‘Your’ TSP Money Actually Yours?

Federal Retirement Benefit Analysis

How To Best Fund Your TSP

Is Your Thrift Savings Plan (TSP) Working For You?


FERS: Learn About The Federal Employees Retirement System

Learn about the Federal Employees Retirement System (FERS)

fersDo you have questions about the benefits and eligibility criteria of the Federal Employees Retirement System (FERS)? Below we have listed the main characteristics and details of the FERS program, which can help you determine the best course of action for your retirement planning needs.

The Federal Employees Retirement System (FERS) is the retirement system that replaced for nearly all employees employed after 1984, the former retirement system, the Civil Service Retirement System (CSRS). The main goal and purpose of FERS was to provide federal and postal employees with a retirement solution, similar to that offered by the private corporations within the industry, under the 401(k).

Components Of The FERS Plan

The Federal Employees Retirement System is a three tiered system which consists of:

1.    FERS annuity

2.    Social Security

3.    Thrift Savings Plan

The FERS benefits includes the FERS annuity, along with eligible participation in Social Security, and a defined contribution plan, the Thrift Savings Plan (TSP) designed to be similar to the benefits offered in private market 401(k) plans.

Federal Employees Retirement System Annuity Eligibility Criteria

The eligibility criteria for FERS employees, In order to become eligible for a FERS annuity, are as follows;

1.    A federal employee needs to conform to the minimum age requirements, along with

2.    The required number of years of credible service, to derive benefit from the plan.

The FERS age requirements and the specified number of years of credible service, are based on a sliding scale and both are equally important. The rules provide convenience to employees in case of a voluntary or involuntary separation from the service, and an employee can qualify for early retirement based on reduced benefits. Federal and postal employees who qualify for a full retirement package under FERS will likely have either of the following two criteria;

a)    25 years of service to their credit with any age, or

b)    A 20 years’ service record with the age of 50.

If any employee suffers from a physical disability and can no longer continue with their job, then a disability retirement is available for them. Employees with a medical disability need to have at least 18 months of service to their credit.

Additional Information

Employees become automatically eligible for the Federal Employees Retirement System at their first day on the job. According to the rules the employees who were hired or rehired before the introduction of FERS, were automatically provided coverage under the new retirement plan.

The rules stipulate that if a federal employee covered by FERS leaves their job before retirement, they can still easily have their Thrift Savings Plan transferred to their new job or IRA and of course continue their Social Security benefits that were earned while working within the Federal Employees Retirement System (FERS).

Social Security: More Information

Social SecurityIt is important that we gather as much information as possible to ensure the best use of our resources in retirement and maximizing your Social Security benefits (SSB) is an absolute must if you want to get the most out of your working years.  Consider the facts below as part of your plan to retire well:
• Income from pensions, annuities and investments are not impacted by the earnings test.  Earnings only apply to wages from a job or net earnings from self-employment.
• Forty credits are needed over the lifetime of one’s work career to qualify for Social Security retirement benefits.
• No estimate can be given if you have not earned enough credits to qualify for Social Security benefits.
• The closer you get to retirement, the more accurate your SSB estimations will be because there are fewer fluctuations in earnings and changes in the law.
• Currently you earn one credit for every $1200 you earn in wages or self- employment income. Earnings of $4800 will give you the 4 credits needed for one year.
• Actual Social Security Benefits calculations cannot be provided until you apply for benefits.
• Earnings may increase or decrease in the future.
• Once you begin receiving your SSB they will be adjusted for cost-of-living increases.
• Estimated benefits are based on current law (Laws are subject to change).
• Social Security Benefits may also be impacted by military service or pensions earned via work where you did not pay Social Security taxes.

For Federal and Postal employees the challenges of understanding Social Security stems from the fact that your employment benefits are already incredibly complex to fully understand.  When you ad in Social Security you now also have to recognitize that if you focus solely on claiming at 62, 66 or 70 (the basic dates most people mistakenly select) you will miss out on a HUGE potential opportunity.  Educating yourself on the different Social Security claiming strategies is a must.  Recognition that if you are eligible for Social Security Benefits, in many instances if you delay claiming Social Security, your benefits will grow at 8% per year.  That is an 8% guaranteed return from the U.S. Government – not too bad, especially when CDs pay 3% or less.  All of this leads us to a simple reasoning, we highly recommend that you talk with a financial professional who is an expert in your FERS, CSRS & FEGLI benefits as well as one who has a great deal of expertise in Social Security claiming strategies.
P. S.  Always Remember to Share What You Know.

Read more about your Social Security benefits

Having a well defined Retirement Plan is more important now than ever before

Social Security – Background


Social SecurityAs we continue building our laundry list of things we need to know and do in order to prepare to retire well, Social Security is a major item on our list.  The Social Security Act was signed on August 14, 1935 some 15 years after the Civil Service came into being on August 1, 1920.    When the Social Security Act first came into being, it was only a retirement program for the primary worker.  It was not until many years later around 1939, that benefits for survivors and the retiree’s spouse and children were added.  Disability benefits were not a part of the program until 1956.

Today we look at the Social Security Act from a much smaller view than it was originally structured.    The Act was extensive in its original format and contained provisions for national unemployment compensation, Aid for Dependent Children and assistance to states to support a number of health and welfare programs.
Today we think of Social Security as a core part of the retirement structure for employees of the Federal Employees Retirement System (FERS) as well as those employees under the CSRS Offset program.  Individuals under these systems have social security deducted from payroll, while employees under the old Civil Service Retirement System (CSRS) do not.
CSRS employees may, however, be eligible for social security benefits because they worked in non-federal jobs where they paid into social security or via spousal or survivor benefits because of a spouse’s covered employment.  The history of the Social Security Act and its expansion to cover the categories of spouses and survivors has been of great benefit to many families.
Two legal requirements may impact Social Security benefits for CSRS employees:  the *Government Pension Offset and the * Windfall Elimination Provision.  The Government Pension Offset does not affect CSRS Offset employees but the Windfall Elimination Provision might, depending on the beneficiary’s earned outside income while drawing Social Security benefits.
*DEFINITIONS:  Government Pension Offset – This law affects spouses, widows and widowers who may qualify to receive a pension from a federal, state or local government where Social Security taxes were not paid from your work and may cause your Social Security spouse’s widow or widower’s benefits to be reduced.
Windfall Elimination Provision – Your Social Security benefits may be reduced if you receive a pension based on work you performed in a government agency or employment in another country where your employer did not withhold Social Security taxes from your salary.
We will discuss both Government Pension Offset and Windfall Elimination Provision in greater detail in a subsequent post.
P. S. Always Remember to Share What You Know.

Click HERE for information on Windfall Elimination Provision

Click HERE for information on Government Pension Offset

Click HERE for information on Social Security

Click HERE for information on CSRS

Click HERE for information on FERS

Tips For Staying Healthy


~~Tips for Your Health

Often time retirees find that a great portion of their social life has been left in the office.  You spend the majority of your waking hours at work and as a result you spend most of your time with your work family.  But when you retire, that work family does not necessarily retire with you.  When you call them they may not have time to talk.  Their schedules may now be very different from your own.  Just finding time to do things together might become a challenge.  It does not mean they don’t want to spend time with you; it is just that your schedules are now very different.
It might be time you established a new group of friends and acquaintances.  You worked most of your adult life so you have probably had to organize a few committees, focus groups, teams and the like.  Use the team-building skills you acquired from work to do something innovative and fun in your community:
• Start a walking club in your community.  Name the group, print up some tee shirts and design activities that will bring about some health competition.
• Start a book club.  Select interesting books and enjoy discussing the book over some home-made health eats.
• Buzz around to see if there are any thespians (would-be actors) and talented writers lurking around in your neighborhood.  Start a community play house so that your community can enjoy the arts right in their own back yard.
• What about a biking and hiking club.  Getting in touch with nature is both stimulating and refreshing.
• Travel clubs are nice.  You don’t have to travel alone and depend on the social generosity of strangers.  There are lots of group discounts just waiting to be had.
• Go dancing.  Listen to some great music (the language of the Gods) it even soothes the savage beast.
• I live in the Washington Metro area and the Kennedy Center offers free, magnificent performances throughout the year.  Wherever you live, I am sure you can find something equally as entertaining.
• Have you considered going to school.  They say children keep you young.  Volunteer at one of the local schools in your community.  You are filled with knowledge, share it with a kid.  They say the “darndest” things and they keep you laughing and feeling young, most of the time.
• You are looking good.  Keep yourself looking good because it makes you feel good.  We are so used to getting ourselves shined up for work, but when we stop working often we forget about continuing to care about what we look like.  Ladies you no longer have to wait for weekends to get your hair done.  You are free to go during the week at your leisure and even meet up with some of your new friends afterwards for a nice walk indoors or outdoors.
• What about a community cook-in healthy living café?  Loneliness has a tremendously negative impact on our health.  Once you have formed the healthy living café, the group can alternate preparing aesthetically pleasing, calorie sensitive, and budget conscious, great tasting meals.  This eliminates the loneliness, controls weight, reduces high cholesterol, hypertension and brings together a circle of supportive friends with a common goal.
Retirement can be fun and exciting.  It can be a time of discovery and new beginnings. Your health is what is most important.

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

Click HERE for information on Retirement Planning

An Economically Changing World

EconomicallyThe world is changing.   As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed.  The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables.  Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains.  I remember parents saying, “Save for a rainy day.”   The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees.  Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed.  Providing support to family members is what we do as Americans until they can get on their feet.

Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means.  We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity.  Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master.  There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.


Use’s easy access for more information on your TSP Account and Login information.

Postal LiteBlue

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

About FEHB (Transporting your FEHB)

Can I Take My FEHB into Retirement?

FEHBFederal employees represent the largest workforce in the world.  They also have some of the best benefits on the market with very competitive rates. The federal workforce is so large making it easy for the federal government, acting as representative agent, to negotiate rates that work in the best interest of the federal workforce and their families.  Buying in large quantities can drive down costs making the rate for premiums paid by employees for health insurance some of the most competitive you will find.

The Federal Employees Health Benefit program (FEHB) is open to all employees who wish to participate.  Employees can choose from a number of different health plans that fit their personal and family needs.  As federal employees you get to take your health insurance into retirement if you have met the requirement of being enrolled in FEHB five years or from the earliest opportunity to enroll prior to retirement.

Although, as a retiree you get to enjoy the same low premium benefits in retirement, instead of paying those premiums bi-weekly, they will be deducted once per month from your Annuity.  You also have the same opportunity to participate in open season just as you did while working.

It does not matter how often you change plans, as long as you meet the five year or first opportunity to enroll requirement, you can transport your FEHB into retirement.

Social Security is also a key component for eligible Federal and Postal employees

Postal employees can access their FEHB accounts HERE

How do your Medicare elections fit with your FEHB elections?

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

Retire Well – Retirement Application

About the Retirement Application

Retirement ApplicationWe spoke briefly about the retirement application package in a previous post.  The question of when the Retirement Application should be completed is relevant in evaluating your check list of things to do in order to take full advantage of your Federal and Postal Benefits.

Reading carefully all of the information in the Retirement Application package is a must before submission.  There is no need to submit a letter of resignation since your completed application is equivalent to a resignation.  Further, if you are eligible for benefits it is important not to resign with the intent of retiring later.  Suppose you were to pass away after leaving your employment but before submitting your retirement application.

You would have no life insurance, no survivor benefit and no survivor health care coverage available to your survivors.  It is always a good idea to talk to your human resource office when making important decisions that impact you and your family.  Make sure your FEGLI coverage is appropriate for your needs and that you have a plan for your TSP.

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


To access your TSP account

Learn more about your FEGLI coverage

Frequently Asked Questions about Federal and Postal Retirement

Retire Well – FEHB

Federal Employees Health Benefits (FEHB)

FEHBWe will talk more about FEHB in future posts as it is a very important feature in preparing to live well in retirement.  Emphasis here is placed on eligibility to transport your FEHB into retirement.

Because you are a federal employee does not automatically qualify you to transport your FEHB into retirement. Make sure to check the qualifications and determine if you are eligible.  You must meet the five year coverage provision in order to realize the benefit of your FEHB in retirement.

It always pays to never accept any provision without asking questions. Doing a bit of research and seeking additional information or the help of an expert is always a good idea.  If a federal employee becomes ill before achieving the 5 year qualification to transport FEHB into retirement is he or she a most unfortunate employee?

Perhaps, not.  Under exceptional circumstances the Office of Personnel Management (OPM) has the leverage through an Act of Congress to waive the 5-year requirement.  It always pays to ask questions and seek additional information. Great resources for further information are the links included in this article.

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

Postal employees access your FEHB through

Tips to Getting Your House in Order to Retire Well – Sick Leave

~~ Sick Leave

Sick leaveCapitalizing on every resource available should be a constant theme for those anticipating leaving the workforce to start a new beginning – Using the value of your accumulated Sick Leave as a Retirement Planning tool is no different.  We invest a huge amount of time and energy in our jobs.  By the same token we must prioritize preparing to live well in retirement.  How do we do that? 

By taking advantage of information and knowledge that will support and enhance our lives as we move into retirement.   Today Americans are living longer, some past the age of one hundred.  As such, we will need far more money than our parents to ensure our resources outlast us. We cannot afford to overlook or minimize any opportunity that will potentially brighten our retirement outcome.

As of 2014, for employees under the Federal Employees Retirement System (FERS) like their counterparts under the Civil Service Retirement System (CSRS), 100 percent of their unused sick leave to lengthen years of service towards retirement.

While employees cannot be paid for sick leave, its value is immeasurable because the more years of service you have under your belt, the greater your annuity.   Sick Leave is no longer just available to cover illness, but Sick Leave can also serve as an important tool in evaluating and managing one’s financial picture in retirement.

For example, when calculating years of creditable service it might be that your hours fall short of a full month.  By adding your accrued unused hours of sick leave to the formula, length of service is increased, thereby increasing your annuity.    So don’t put sick leave on the back burner, because it can make your annuity check look very healthy.

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

For more information on Sick Leave;


To calculate the value of your Sick Leave

Tips to Getting Your House in Order to Retire Well – Annual Leave

— Annual Leave

Annual LeaveThere are so many things potential retirees must consider when looking forward to the next adventure in life – retiring well.  Although many people will not consider their accrued Annual Leave a prime subject when discussing retirement, your Annual leave needs to be considered both for you peace of mind and the ability to recharge your batteries away from work, but also for the potential retirement benefits for leave that is not used.  Obviously, you should be taking advantage of your TSP account and making sure that you are prepared to maximimize any CSRS and FERS benefits you might be eligible for.  But you also need to recognize that you have worked for a long time, most of us since high school.  Once we entered the work world there was no turning back because we had to make a living.  Having a job and taking on the responsibilities of life afforded us membership into the world of bona fide ADULTS.
There might have been times during your work career where accumulating annual leave meant taking a vacation or using your leave at your leisure.  But when we start planning the next phase of our lives – retiring well – part of the process is making sure you are maximizing every benefit available to you.  That includes viewing Annual Leave as money that will help sustain you as you transition from the work world into retirement.
You may wish to refresh your knowledge about Interim Payments and how it can be used to bridge the gap from retirement to full Annuity payments, because your lump sum annual leave payment is another piece of the puzzle we need to collect in order to make it complete.  Preserving your annual leave when you are contemplating retirement is a way of building a cushion to cover your financial responsibilities until you receive your full annuity payment.  The Lump Sum Payment you receive as a result of your annual leave accrual will create comfort and security; thus the importance for preserving as much annual leave as possible as you prepare to move into retirement.
The maximum annual leave carryover for most employees is 30 days or 240 hours.  It is a good course to visit your human resources office or with a knowledgeable financial professional and discuss the importance of understanding the beginning and ending of the leave year versus the calendar year.  Retiring before the end of the leave year impacts your annual leave accrual.   Find out what you need to know in order to maximize every benefit that is available to you.
P. S.   Always Remember to Share What You Know.



For more information on your Interim Payments and retirement income sources

Your TSP (Thrift Savings Plan) structure and investment options

How can your accued Annual Leave be used as a retirement tool

Emotional and Psychological Readiness

~~Item #2 – Emotional and Psychological Readiness

Psychological readinessPsychological Readiness is an underrated part of adjusting to retirement. There is no denying the importance of those concrete items such as maximizing the benefits of the Thrift Savings Plan (TSP) and understanding how all of your Federal Benefits work in retirement.  But in order to chart a workable course for retiring well one must be emotionally and psychologically ready to embrace change, accept new beginnings, expand horizons and brace for the sometimes unexpected.

There are things we need to know and do so that we chart a feasible course to retiring well.  Whether you’re eligible for CSRS or eligible for FERS often concrete items that we can touch, sort of put our hands on prioritize the list of things we need to know and do in order to retire well.
Below is a list of things we can do to get ready psychologically and emotionally to retire well and ensure the resources we need to live the life we deserve outlast us.
• Define who you are, absent of your job’s title and work environment
• Outline your gifts and skills and how you can use them to improve the world around you
• Think about what you’ve always wanted to do but were restricted due to the time constraints of your job
• Do a 15 minute self-evaluation of where you are, where you’ve been and where you’d like to be 3-5 years post-retirement
• Write down 5 of the most intriguing places in the world where you’d like to live, one just might be in your own back yard
• Think about what you are going to do on the first morning of your retirement

We spend more waking hours on our jobs and with our work families than we do in our homes with our own families. Psychological readiness ensures you’ll be ready to tackle all the issues a new retiree faces.  Retiring well means getting ready to face new challenges and opportunities, meeting new people, going to new places and understanding a new and better you. These are critical tools needed to get you emotionally and psychologically ready to live a life on your own agenda.  Getting ready now means success when you enter your next adventure – retiring well!

P.S.   Always remember to share what you know.

Your CSRS benefits explained.

For complete information on FERS benefits

Are you emotionally prepared to retire?

Your TSP information and account access

Let the Thrift Savings Plan (TSP) Help You Retire Well by Jay Hunt

thrift savings plan tsp

Let the Thrift Savings Plan (TSP) Help You Retire Well

by Jay Hunt

Jay Hunt of Stratico Retirement and Insurance Solutions is in the business of helping people, and here he discusses the benefits of the TSP, and what it has to offer.

Each year many public sector employees face one of the most significant challenges of their work career – what they should and need to do with regards to their TSP account and TSP Fund Selection?   Will you be ready for the next adventure in your life?  Will your savings match your income needs?  Will you have the tools needed to turn challenges into opportunities that will outlast you and allow you to maintain the lifestyle you have grown accustomed to?
In this article and several other articles, we will publish in the ‘Retire Well’ series we will share the ten most important things you need to know and do to ensure a successful, comfortable transition into your next adventure – retirement.
Item #1-   Let  the Thrift Savings Plan help you Retire Well:
The Federal Government offers two retirement systems – Civil Service Retirement System (CSRS) for those individuals employed before January 1, 1984 and did not convert to FERS, and the Federal Employees Retirement System (FERS) for those individuals hired on or after January 1, 1984.

For FERS employees, TSP is one of the three legs of the stool that make up their retirement system in addition to the Basic Benefit Plan and Social Security.  If an employee fails to participate fully in the Thrift Savings Plan, it is like losing one of the legs of the stool causing an imbalance.  As a matter of fact, the TSP is potentially the largest component of the FERS enhanced by the employee’s contributions and the matching agency contributions.  Maximum participation from the Agency Employer is a huge benefit that should be given strong consideration to ensure that you will see the benefits of your hard work by capitalizing on all available resources to retire well.

Although under CSRS employees do no reap the benefit of the agency automatic l% matching contribution for TSP, participation in the TSP is allowed.  Having the opportunity to defer tax obligations on one’s income is an advantage that should not be overlooked; thereby, being one of the primary reasons why CSRS employees should consider maximizing participation in the TSP.

In essence by deferring the taxes due on earnings, a greater savings over a period of time with the added advantage of earning interest is realized.  For both CSRS and FERS employees participating in the TSP is a formula for saving towards your retirement future and generating a plan that will increase your opportunity to retire well and cement the lifestyle you have worked hard to achieve.

The Thrift Savings Plan contribution limits for catch-up contributions for those ages 50 and older change from year to year and federal employees should always keep themselves aware of the most recent year TSP Contribution Limits. P. S.  Always remember to share what you know.

Jay Hunt
Jay Hunt of Stratico Investments

Contact Jay Hunt

Stratico Retirement and Insurance Solutions

[email protected]


More From Jay Hunt

Article: FAQ Regarding New TSP Investment Options by Jay Hunt

Article: Leaving and Rejoining Federal Service: Benefits Retained and Benefits Lost by Jay Hunt