FEGLI

FEGLI or the Federal Employee Group Life Insurance is a group life insurance policy that covers most of the federal employees.

Top Tips for Mid-Career Federal Employees Planning for Retirement

March 5, 2024 /by kevin wirth

Ensuring you have done everything to get the most out of your retirement benefits should be on your mind before retiring. Of course, there are quite a few tasks to complete throughout your federal employee career, even in the early stages and beyond. However, for individuals in the mid-career years of said tenure, there are particular tips for improving the outcome of retirement benefits.

Federal employees with 5 to 15 years of active service would be considered mid-career. Mid-career federal employees are eligible to receive a pension once they reach 60 to 62, should they decide to leave government employment. However, this only applies if retirement contributions are left within the retirement system, even with only five years of service. You must adhere to specific rules if you are considering leaving government service mid-career and well before retirement.

Maintaining eligibility is not automatic, especially when filing for a future pension. Once you have met the 5-year service mark, additional specific actions can enhance your benefits upon retirement. For example, making deposits eligible is crucial as “buying back” the appropriate time served in the military. As a mid-career employee, there’s never been a better time to start researching this before retiring. The longer you wait to calculate the possible interest owed, the more it will accrue. Unfortunately, most federal employees owe thousands in interest unnecessarily due to a deposit that wasn’t made early on.

Working until your MRA, or Minimum Retirement Age, is an often overlooked way of maximizing your federal retirement benefits. It is best to determine your MRA based on your birth year and your youngest possible retirement age. With at least ten years of service, upon reaching your MRA, you may be eligible to retire from your position within the government onto an immediate annuity. Deferred and postponed are two other types of annuities available upon retirement from government service. By learning the difference between each annuity, you are poised to take advantage of all the benefits available.

FEGLI insurance continues to rise, and while you are in your mid-career years, it may be easy to overlook these small increases. However, there has never been a better time to be proactive about life insurance and estate planning. A thorough life insurance review could save thousands of dollars or more. This practice includes a look into your applicable Health Savings Account (or HSA) to ensure you receive the tax-saving benefits before retiring.

Contributions made into a Thrift Savings Plan (or TSP) should increase every year. As a federal employee, you should strive to improve your TSP through good investment strategies to further increase your retirement’s value. As a result, you are more likely to thrive in retirement than those throwing caution to the wind and hoping for the best.

Regardless of whether you want to remain under federal employ, undoubtedly, you have already invested in your future with a mere 5 or 10 years of service. Should you choose to leave well before retirement, there are many trade-offs regarding future benefits whether or not you remain in the federal career path. You will be well-equipped to enjoy your golden years by maximizing the available benefits.

Contact Information:
Email: [email protected]
Phone: 9143022300

Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial planning.

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Ohio Lawmakers Get Advice From a Policy Group on Federal Expenditure

December 14, 2023 /by todd carmack

On Monday, a group of experts in Ohio explained how the state’s money would be spent. It was an earnest discussion that would benefit many young students. However, a Columbus-based institute, The Buckeye Institute, firmly believes that the unexpended money from American Rescue Plan Act Dollars should be spent correctly. It can be done to help overcome unemployment by rebuilding Ohio’s unemployment trust fund. They are sure that it will be valuable to people so they can find something for themselves and work. Therefore, this plan can be implemented and prove to be helpful.

Moreover, they should make the internet more accessible. They can advertise the Ohio Afterschool Enrichment education savings account program for students. Students will learn many tips that they could use if they ever face these issues.

Logan Kolas, an economic policy analyst, stated to The Buckeye Institute that Ohio lawmakers would have to ensure that the money is spent correctly. If the money is being expended in the best way, it will ensure the unemployment decline. Therefore, Kolas’s recommendation to the lawmakers was to limit investment spending, especially the ones that are one-time and are confined to a specific end date. Due to the pandemic, everyone has suffered a significant loss in education, jobs, and people.

Furthermore, the memo explains that they can tackle the learning loss during the pandemic by expanding the education savings account program. Thus, Kolas told the memo that Ohio lawmakers could spend Washington’s remaining funds collected during the pandemic. Therefore, Ohio can make most of the situation if they stick to a spending plan. Not only will they be able to help everyone but overcome the current unemployment situation in the state.

Other than this, many action plans have been generated for a good cause. This year, it is the second time that The Buckeye Institute has insisted on restoring the pre-pandemic fund levels by using one-time federal money. It was issued in February, five months after Gov. Mike DeWine announced covering the unemployment benefits. It would be done by providing a repayment of the federal loans. Center Square reported previously that in September 2021, DeWine announced that Ohio should use funds from the American Rescue Plan. They should begin the process to repay the US Treasury Department, which is to be done by Thursday. If the loan is not paid by Monday, the Federal government will charge 2.777% interest. Thus, it means employers will have to pay high taxes for unemployment. The quick payment was dissimilar to actions that took place in the recession of 2008. Thus, the state had to borrow money to cover unemployment benefits. According to the Ohio Department of Jobs and Family, Matt Damschroder, they had to pay $258 million as a form of interest.

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.

Private Life Insurance Considerations of a Government Employee

December 2, 2023 /by mack hales

Federal Employees’ Group Life Insurance (FEGLI) is an excellent choice for specific government employees. However, there are a few reasons employees may opt to purchase private insurance as they age instead. If the federal government has ever employed you, you may have some understanding of how FEGLI benefits you and your coworkers.

FEGLI stands as one of the most comprehensive employer-provided insurance programs in the United States. Like term life insurance, FEGLI doesn’t earn interest or build cash value. Upon employment, government employees have enrolled in the program automatically, with extended coverage until they choose to opt out. But what are some of the features of a FEGLI policy?

Plans Offer Lower Coverage Limits
With an amount less than seven times your salary, FEGLI policies max out at five times your yearly salary.
Rates Increase after the Age of 50
If you start when you are younger, you can enjoy cheap premiums. However, as you age, policy rates increase with time.
Coverage Decreases at Retirement
Most insurance plans offered by an employer do not allow policyholders to keep their plans after retirement. This is where FEGLI is unique; however, even the basic FEGLI plan will decrease in coverage upon retirement.

You must look into the coverage options set forth by your chosen FEGLI plan. Please note that just because you received automatic enrollment doesn’t mean it is tailor suited to your needs. Even the private insurance marketplace has various cost-effective options for more efficient policies. Consider contacting a federal retirement consultant to determine whether a FEGLI plan is right for you or help you find something in the marketplace instead.

Contact Information:
Email: [email protected]
Phone: 7705402211

Bio:
Mack Hales has spent the past 4 decades helping clients prepare for retirement and manage their finances successfully. He also works with strategies that help clients put away much more money for their retirement than they could in an IRA or even a 401k. We involve the client’s CPA and/or their tax attorney to be sure the programs meet the proper tax codes.

Mack works with Federal Employees to help them establish the right path before and after retirement. The goal is to help the client retire worry-free with as much tax-free income as possible and no worries about money at risk of market loss during retirement.

Mack has resided in Gainesville, GA since 1983, so this is considered home. Mack is married to his wife of 51 years, has two boys and five grandchildren.

Should You Keep Your FEGLI in Retirement?

October 28, 2023 /by michael crowe

You will be required to make some critical decisions concerning your FEGLI coverage when you retire. It would be best to precisely determine which of those benefits you wish to preserve, considering how much you are ready to pay. Here are some of your options.

Basic Insurance

As I mentioned last week, you were automatically protected by basic insurance when you were employed unless you declined it. Your base pay – the amount from which retirement deductions are deducted – rounded up to the next $1,000 plus $2,000 equals your coverage.

When you retire, you’ll have three options for basic insurance coverage: a 75% discount, a 50% discount, or none at all. If you choose the 75% discount, you’ll keep paying the same rates for this coverage as you did as an employee until you reach the age of 65.

You won’t have to pay any more premiums after that, and the face value of your insurance will decrease by 2% every month until it reaches 25% of its actual worth.

If you choose the 50% discount, your basic insurance will be decreased by 1% per month until it reaches 50% of its face value. You will have to pay higher premiums in exchange for the enhanced benefit.

Option A – Standard Insurance

If you choose basic insurance, you also can purchase an extra $10,000 in coverage at your own expense. At first, premium rates for younger employees are low, but they rise over time. Premium deductions will halt after the calendar month in which you turn 65 if you haven’t already terminated that coverage (which you can do at any time). Your Option A insurance will automatically depreciate by 2% every month until it reaches 25% of its face value at that moment.

Option B – Additional

Option B allows you to select a coverage amount that was one to five times your yearly basic salary, rounded up to the nearest $1,000. You can choose to keep that coverage once you retire. You’ll be stuck paying the entire price if you do, which will only increase as you get older. You can either reduce the number of multiples or let the dollar value of that coverage fall at a rate of 2% per month for 50 months until it hits zero, starting at age 65. You can also cancel the coverage to eliminate the cost.

Option C – Family

Option C allows you to cover your spouse and to qualify dependent children under one policy at your own expense if you choose it. You could choose up to five multiples of coverage, with each multiple equaling $5,000 for your spouse and $2,500 for each of your children, much as Option B.

Contact Information:
Email: [email protected]
Phone: 6023128944

Bio:
Mike was born in Chicago, Illinois on August 13, 1946. He was brought up in the
suburb of Skokie on Chicago’s northwest side and graduated from Niles Township (
East ) high school In 1964. Two years later he joined the US Air Force in November of
1966. After 2 years of Intense training he volunteered for Viet Nam and was sent to
Bien Hoa Airbase, which was 25 miles from Saigon, the nation’s capital. He
volunteered for a number of especially dangerous missions on his days off, such as
flying as a door gunner on a US Army helicopter and as a technical assistant on a
psychological operation on an Air Force O-1E observation aircraft. Capping off his
impressive accomplishments was winning the coveted Base Airman of the Month for
March 1969, a feat which was featured in the Pacific Stars And Stripes newspaper
read by every service man stationed in the Pacific theater of operations. After his
Viet Nam tour of duty he was stationed at Luke Air Force Base in Glendale, Arizona
where he met and married his wife, Lequita.
He graduated from Arizona State University in May, 1973, and after a 30-plus year
career as a financial advisor he joined a number of service organizations including
Easter Seals and Valley Forward, sponsor of EarthFest. He was also involved with the
National Federation of Independent Business and became the longest-serving
chairman of the Leadership Committee ever. He spoke before the ( AZ ) House Ways
and Means & Senate Finance committees. He then joined Disabled American
Veterans ( DAV ) in September of 2015. He rose quickly through the ranks and
became Chapter 8 Commander in May of 2019 where he served with Distinction for 3
years before being “ termed out”. The next year, as Vice Commander, he won the
title of National Champion Recruiter!

How You could benefit your Employees with a 529 Day Plan

August 28, 2023 /by michael crowe

529 Day is observed on May 29th to raise awareness about the importance of planning and saving for higher-education expenses through 529 plans.

With rising education costs, inflation, and market volatility, individuals can feel overwhelmed with future savings. According to Sallie Mae, in 2021, family income and savings covered more than half of college costs, but only 58% of families had a plan to pay for all four years of college.

Employers can aid their employees in navigating this obstacle by providing education-focused benefits and options, such as 529 plans. Many of your participants may not understand what a 529 plan is or how it can impact their college planning.

Your participants must know the fundamentals of this financial gem and how you can assist them in navigating their family’s educational needs.

What exactly is a 529 plan?

A 529 plan is a flexible investment account that allows families to make tax-deductible contributions and watch those funds grow tax-free. Once you’re ready to pay for education expenses, you can make tax-advantaged withdrawals from your 529 plan account as long as the funds are used for qualified educational expenses.

A 529 plan can fit any budget. Although some plans require a small initial deposit, there are no minimum contributions once your account is open.

Individual tax advisors can help your employees understand their situation better. Withdrawals made to cover qualified educational costs are generally exempt from income taxes at the federal and state levels. State-sponsored retirement plans, such as 529s, are open to participants from all over the country. It is possible to incorporate a 529 plan into your tax planning strategy because many states offer income tax deductions or credits (note that some may be limited to residents investing in the in-state plan) to encourage people to make contributions to 529 plans.

Types of 529 plans

Prepaid tuition plans and education savings plans are the two main types of 529 plans. At least one type of 529 plan is offered in each of the fifty states and the District of Columbia. A prepaid tuition plan is also sponsored by a group of private colleges and universities.

What is the purpose of a 529 plan?

A 529 plan may be used for qualified education expenses, such as room and board, books and supplies, semesters abroad, and apprenticeship programs. Also, you might be able to use money from a 529 savings plan to pay back part of your qualified student loans for elementary and secondary school.

Who can benefit from a 529 plan?

Your participants should be aware that 529 plans are not just for children. Any adult can start a 529 plan for anyone’s or their own future college costs. It’s also possible for anyone else, including parents, grandparents, aunts, and uncles, to contribute to the plan along the way.

A 529 plan’s beneficiaries can be changed anytime without paying fees or penalties, and there are no restrictions on the beneficiaries’ income or ages. This feature gives you even more flexibility regarding who can use the 529 plan proceeds, when, and why â€” for example, if your niece receives a full scholarship or your spouse decides to return to school.

Having a 529 plan doesn’t mean you can’t get financial aid. If you are a parent and manage a 529 account for your child, your child’s financial aid will be cut by no more than 5.64% of the account’s value. Nevertheless, the rules vary based on the relationship between the account holder and the beneficiary; therefore, you must consider this when making your selections.

Is a 529 plan suitable for your staff?

A 529 plan is an excellent solution for various educational planning needs because of its flexibility. However, it is essential to encourage your participants to investigate the options and ensure that they comprehend how this type of account would affect taxes, overall financial planning, future retirement needs, and the intended recipient. Then, they can make an informed decision.

Employers can add value by providing employees access to financial coaches, tax experts, or advisors to discuss their situations and explore tools and opportunities or by offering matching contributions to 529 plans or student loan repayment. Also, help your participants find and contact any 529 plans they’re interested in, so they can learn more about the plans’ specific rules and tax implications. Go the extra mile for them!

Regarding meeting their families’ financial and educational requirements, employees need to know that they have options and that you are available to assist them if they have any questions. More than two-thirds of Americans have never heard of 529 plans, according to a survey by the College Savings Plans Network in 2019. In addition to offering matching contributions, you can benefit your employees by educating them about 529 plans and instilling the idea that “the earlier, the better” when planning future educational expenses.

Please take note of the following disclosure: Assets can only be accumulated and withdrawn tax-free if used to pay for qualified expenses. Expenses eligible for reimbursement include tuition, fees, room and board, books, and supplies at any accredited post-secondary institution. Qualified education expenses include K-12 tuition beginning on January 1st, 2018, as noted in the Tax Cuts and Jobs Act of 2017. The new tax law caps qualified 529 withdrawals for eligible K-12 tuition at $10,000 per beneficiary per year, with state tax treatment varying by state. The tax treatment of K-12 withdrawals by many states is under review.

Before making such withdrawals, account holders should consult a qualified tax advisor, as they may be subject to adverse tax consequences. Earnings from non-qualified distributions are subject to federal income tax and a 10% penalty.

Contact Information:
Email: [email protected]
Phone: 6023128944

4 Ways to Avoid the FEGLI Trap Right Now

July 26, 2023 /by joe carreno

When you initially started working for the federal government, you were handed a bundle of paperwork to sign. It was probably similar to when you went to buy your house, which you may not have fully understood what you were signing.

You were likely given the opportunity to sign up for Federal Employees Group Life Insurance (FEGLI) among those papers. Your FEGLI Basic benefit was almost equal to your wage under this program – even more if you were under 45.

In the meantime, your FEGLI premiums climbed over time as you worked. You might not have noticed these gains because they were so gradual, probably because your pay increased in tandem with your premiums, masking the cost increase.

If you’ve been a federal employee for a long time and are now ready to retire, you might be startled to learn that taking your FEGLI into retirement will be highly costly. This is especially true if you choose to keep everything.

Understanding “FEGLI’s trap”

While you’re working, your FEGLI coverage has been so handy and reasonable that you don’t consider other options for retirement, and it arrives just when you need it the most. You only realize it when it’s too late.

FEGLI was created to provide coverage at a reasonable cost while you are working. It was never meant to be a long-term life insurance policy that you would keep indefinitely.

Here are 4 steps to take right now to avoid falling into the FEGLI trap:

1. Determine the quantity and cost of your current FEGLI coverage.

2. Estimate the increase in premium costs.

3. Check to see if this is the right life insurance policy.

4. Determine alternatives to your present FEGLI coverage and their costs.

What to Avoid?

Based on your judgment, you should ensure that any other policy you purchase is in force before canceling your other coverage. Do not drop your coverage because FEGLI becomes prohibitively expensive in retirement. If you don’t qualify for added coverage and have no other options, you will regret your choices. You want to ensure that you have every chance of having enough coverage.

What specific role does FEGLI play?

Of course, FEGLI is only one element of the puzzle. As you get closer to retirement, you’ll need to evaluate all of your benefits.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.

Federal Benefits Open Season

May 26, 2023 /by joe carreno

The Federal Benefits Open Season in 2022 will run from November 14 to December 12, according to the official announcement of the Office of Personnel Management (OPM). This open season is for the federal benefits programs’ 2023 plan year.

Which federal benefit programs are open for enrollment during this open season?

The Federal Benefits Open Season is the time to consider your health, dental, vision, and tax-saving needs and enroll or change your enrollment.

You can hold elections during the open season that you typically can’t hold at any other time of the year.

Not all health, dental, or vision plans are the same. The purpose of the open season is to exercise your right to choose. By planning ahead of time, you’ll have access to the healthcare services and supplies you require at a price you can afford.

Dental and vision coverage can supplement existing coverage or pay for services you do not currently receive. A flexible spending account can assist you in lowering your taxable income.

During the yearly open season, federal employees have the option to enroll in, change plans or plan options, change the type of enrollment they make, or cancel their registration for the following:

Federal Employees Dental and Vision Insurance Program (FEDVIP)
Federal Employees Health Benefits Program (FEHB)

The Federal Flexible Spending Account Program (FSAFEDS) is open to returning participants and new applicants.

The FEGLI and FLTCIP programs do not participate in the annual open season.

Premium Rates for FEHB and FEDVIP in 2023

OPM published the FEDVIP and FEHB premium rates in late September 2023. By the first week of November, participants can access specific federal benefits open season information on its website by the first week of November, including 2023 FEHB plan comparison tools.

Options Available During the 2022 Federal Benefits Open Season

Federal Employees Health Benefits (FEHB) program

What are my options for the FEHB open season in 2022?

Enroll
Modify plans
Modify plan options
Alter the enrollment type (to Self, Self Plus One, or Self and Family)
Cancel insurance coverage

What if I don’t do anything?

Your current coverage will be maintained. If you’re happy with your FEHB plan, you don’t need to do anything. However, you must switch plans if your plan has discontinued coverage in your area or is ceasing participation in the FEHB program.

When does the enrollment or change become effective?

Employee pay will begin on the first day of the first pay period beginning on or after January 1, 2023. It will immediately follow a pay period in which they were paid.

Federal Employees Dental and Vision Insurance Program (FEDVIP)

What are my options during the open season?

â€¢ Enroll

â€¢ Change plans

â€¢ Change plan options

â€¢ Change the enrollment type (to Self, Self Plus One, or Self and Family)

â€¢ Cancel insurance coverage

What if I don’t do anything?

Your current protection will continue. If you’re happy with your FEDVIP, you don’t need to do anything.

When does the enrollment or change become effective?

January 1, 2023

Federal Flexible Spending Account (FSAFEDS)

What are my options during the open season?

â€¢ Enroll in or re-enroll in the Health Care FSA (HCFSA), the Limited Expense Health Care FSA (LEX HCFSA), and the Dependent Care FSA (DCFSA).

What if I don’t do anything?

It is not guaranteed that your election will go forward. You must re-enroll to continue your account(s) for the next benefit year.

Note: To carry over unused funds from this plan year’s HCFSA or LEX HCFSA, you must re-enroll in either of these two plans the following year. DCFSAs do not qualify for carryover.

What else should I keep in mind?

The minimum annual election amount for all FSAFEDS accounts is $100, while the maximum contribution to a Health Care or Limited Expense Health Care FSA is $2,750 per participant. The Dependent Care FSA has a $5,000 maximum per family.

The Internal Revenue Service sets the contribution limits for Flexible Spending Accounts, which are subject to change. If FSAFEDS adopts new maximums, the public will be notified.

When does the enrollment or change become effective?

January 1, 2023

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.

What to Know About the FEGLI’s Living Benefit

April 26, 2023 /by aaron steele

The living benefit is a provision available through the Federal Employees Group Life Insurance (FEGLI) program that most enrollees hope they’ll never need but should be aware of.

You might choose a lump-sum payment if you have a terminal illness and have a proven medical prognosis of fewer than nine months to live. Eligible people under 45 can choose a full lump-sum payout equal to the basic life insurance amount they’re entitled to plus any additional benefits that will take effect nine months after the OFEGLI receives a properly filed living benefits claim form. Employees are the only ones who can choose to get partial living benefits; annuitants do not have that option. If you select a living benefit, your beneficiaries will not be eligible for basic insurance benefits.

You and the assignee cannot choose living benefits if you have already assigned your life insurance policy coverage.

Because of the early payment of benefits, the amount of your living benefits will be lowered by a minimal amount to compensate for lost income to the fund.

If you want to receive living benefits after retirement, your beneficiaries will not receive any basic life insurance in the event of your death. Your basic life insurance premiums will no longer be deducted from your monthly pension by OPM. If you chose living benefits before retiring, the basic life insurance amount due after you die and the premiums withheld by OPM from your annuity are determined by the amount of the living benefits you chose before retiring.

However, the amount of Optional life insurance accessible to you will be unaffected by your choice of living benefits. Optional insurance premiums will continue to be withheld by OPM.

You won’t have to reimburse the money if you choose a living benefit and don’t die within the projected term. To get the form to elect living benefits, call the FEGLI at 800-633-4542. (Form FE-8). Personnel offices and retirement systems do not have this form on hand.

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:
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 filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

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Open Season Offers Choices

April 26, 2023 /by joe carreno

The annual federal benefits open season, which has begun and will run until December 13, gives a chance to modify FEHB health insurance and FEDVIP vision-dental insurance coverage and choose flexible spending accounts for 2022.

The enrollee share of FEHB premiums will increase by 3.8% on average. However, there is variety across plans, and prices in some are virtually unchanged or somewhat reduced. There will be 275 plan options (down one after a few dropouts and additions), including 18 countrywide plan options accessible to all, four available only to particular groups, with the rest available regionally.

Even subscribers who want to keep their current coverage should look at the options, according to experts, because benefits do change a bit from year to year. Furthermore, “enrollees should carefully evaluate the 2022 rates of their current plan and any other plan alternatives they are contemplating for 2022,” the Office of Personnel Management (OPM) wrote in a communication to agency benefits advisers.

Several smaller plans have withdrawn out, and several HMO plans have limited their coverage regions. Hence, affected participants must choose a new plan or be put by default in the GEHA “Elevate” plan, the lowest-cost countrywide plan alternative.

OPM has also said that in over 100 plan options, self plus one will be more costly than family coverage in 2022. That oddity is a result of how the premium sharing mechanism works and the large share of older employees and retirees in self plus one, for which it’s less probable to have children young enough to be covered.

In many situations, the difference is modest. However, OPM still instructed agencies to remind enrollees that people who want to cover one eligible family member are not required to pick Self Plus One but may choose Family coverage instead.

In addition to changing plans, the open season provides for changes in coverage levels within a plan, for plans providing more than one, and changes in coverage types between Self Only, Self Plus One, and Self and Family. Active workers who havenÃ¢â‚¬â„¢t previously enlisted in either program may do so; retirees may do so in FEDVIP but not in FEHB unless theyÃ¢â‚¬â„¢re working as reemployed annuitants.

Existing enrollment in the FEHB and FEDVIP programs will be carried over to the next year unless changed, subject to the updated premium rates and any modifications in benefits. Premiums in FEDVIP will be virtually flat, with no changes to the plans available. All vision plans are national, but some dental plans are regional, and some are national.

Those who want a dependent care or flexible health care spending account in 2022 must re-enroll during the open season. Maximums for dependent care accounts are $5,000 (individually or jointly) and $2,750 (individually) for health care accounts.

The open season doesnÃ¢â‚¬â„¢t apply to the two other federal insurance schemes, FEGLI and FLTCIP. FEGLI holds open seasons only on rare occasions. However, they only allow new enrollments or coverage adjustments in specific conditions at other times. The FLTCIP accepts new enrollment applications and adjustments to current enrollment at any time, subject to underwriting.

Contact Information:
Email: [email protected]
Phone: 8139269909

What are the Differences Between Postponed and Deferred Annuities?

January 27, 2023 /by jeff boettcher

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

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

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

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

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

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

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

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

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

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

FEGLI Coverage for Federal Retirees

January 26, 2023 /by caine crawford

You have several options if you are enrolled in Federal Employees’ Group Life Insurance (FEGLI) at retirement. It would be best to start by specifying which advantages you wish to maintain. The second consideration is your maximum budget for them.

Basic Insurance

You would have been covered if you hadn’t turned down the basic insurance when you were hired. This benefit is calculated by rounding up your Basic pay (the amount from which retirement deductions are taken) to the nearest $1,000 and adding $2,000. Your insurance premiums will increase proportionally to your income. The government will cover two-thirds of the cost of your premiums.

At retirement, you can choose a 75% reduction in your Basic insurance, a 50% reduction, or no change at all. If you select the 75% discount, your premiums for that coverage remain the same as they were while you were an employee. You’ll keep paying them until you reach age 65. After age 65, you are no longer required to pay premiums. However, your Basic insurance will lose 2% of its value per month until it is only worth 75% of its original cost.

If you go with the 50% discount, you’ll lose 1% of its value each month until it’s worth half as much as it was before. However, your premiums will need to increase to receive this better perk. If you decide against the discount, your premiums will increase significantly.

There are three additional types of life insurance besides the Basic policy. This article will go over them in depth.

Option A: Standard Insurance

Option A is the least expensive life insurance policy accessible to you. It’s an extra $10,000 in coverage, with the cost rising every five years. Assume you have Basic insurance and have spent $10,000 on optional coverage on your own. In that case, your optional coverage will terminate at the end of the calendar month you turn 65. Your Option A insurance will decrease by 2% per month until it reaches 25% of its initial value. Unfortunately, unlike other choices, FEGLI Option A does not allow you to choose a different reduction strategy. It will decrease to $2,500 in coverage at retirement or at age 65.

For instance, assume you are a 45-year-old federal employee with an annual salary of $84,500 and a plan to retire at 60. While you’re working, your BIA and coverage will be $87,000. If you retire before age 65, your coverage and costs will remain the same. However, your coverage will be reduced to $21,750 over the following 50 months once you turn 65, and it becomes free. After retirement, you may get only a fraction of your current life insurance.

Option B: Additional

If you chose Option B, the cost of your coverage would be determined by a multiple of your annual base salary, rounded up to the nearest $1,000. You can keep the coverage you had as an employee after retirement. If you keep that coverage, you’ll be responsible for the total premium, which will only go up as you get older. To cut down on the price, you can either reduce the number of multiples or let the dollar value of the coverage decrease starting at age 65 at a rate of 2% per month for 50 months.

Choice C: Family

With Choice C, you can cover your spouse and qualifying dependent children at your own cost, all under one policy. As with Option B, you can choose as many as five different levels of coverage for your spouse and children, with each level equaling $5,000 in total. How much you pay per month for your premium is based on your age. After age 65, however, coverage automatically decreases by 2% per month for 50 months until it reaches zero, and then it’s free forever.

Final Thoughts

There are other options besides the FEGLI program for those needing affordable life insurance. You can buy different kinds of life insurance in the private sector. You can invest in the Thrift Savings Plan and other ways and buy long-term care insurance through the federal FLTCIP program or other insurers.

You’re free to choose the proportions. Do not put off choosing until the last minute.

Contact Information:
Email: [email protected]
Phone: 3039011337

Bio:
PRESIDENT,
(FRC) FEDERAL RETIREMENT CONSULTANT
Caine Crawford Sr. uses his more than 20 years of experience in the financial services industry to help Federal Employees throughout the United States with their Benefits and retirement needs. Caine is President and Lead Benefits Counselor for the Federal Employee Advocacy Group, based in Denver Colorado.

When Caine’s father sought to retire from CSRS, he came to Caine for help. It was then that Caine discovered a lack of financial resources readily available to federal employees, and he sought to become better informed to help others. Caine met with his first GSA client in 2008, and he was shocked to learn that client truly did not know what to do with a thrift savings plan (TSP) after retirement. Following that meeting, Caine founded Federal Employee Advocacy Group and became laser-focused on helping federal employees maximize income and benefits while minimizing expenses and taxes.

Caine teaches Federal Benefits and Retirement workshops for Federal Agencies, all across the Country. He understands federal benefits can appear somewhat complex and lack clarity. By creating a custom benefit analysis, Caine pinpoints the gaps in clients’ current plans, maps out TSP growth based on historical data and ensures clients have a lifetime of income and a dignified retirement.

Caine has now published his book, The Educated Fed: Your Guide to Understanding & Maximizing Federal Benefits. The Educated Fed is a self-help book for federal employees who want to learn how to maximize their federal benefits for retirement. Inside you’ll find answers you didn’t even know you had questions for…With the help of a retired Department of Defense employee, Caine will walk you through all of the moving parts that are your federal benefits and show you which ones you have control of, which ones will make you money, and which ones could cost you. Even though we’re in the information age, we’ve found out that an “informed” federal employee is not as well positioned as an “educated” federal employee. The Educated Fed aims to address the gap between information and real education that we observed in teaching hundreds of federal benefits workshops across the country for numerous agencies.

Caine graduated from the University of South Carolina with a Bachelor of Science in finance. He then lived in Colorado for 25 years before moving with his family back to South Carolina to live near a lake. He and his wife have four children and enjoy spending time together when they can among their busy schedules. Caine also enjoys coaching lacrosse at the local high school.

What Happens to Your Retirement Application

January 18, 2023 /by marvin dutton

Since you have settled on the decision to retire, what comes next? Your retirement application. It is crucial to remember that it might bring attention to the subsequent procedure and be challenging to comprehend. Be patient and follow the steps below for a stress-free retirement application.

When your personnel office receives your retirement application, it will undertake a series of checks to establish whether or not you are qualified to retire on the day that you have selected and whether or not you will be able to continue receiving your Federal Employees Health Benefits (FEHB) and Federal Employees’ Group Life Insurance (FEGLI) coverage after you leave the workforce. These checks will decide whether or not you are qualified to retire on the date you have chosen. In addition, these checks will indicate whether or not you will be able.

Your personnel office will, presuming that there aren’t any issues, prepare a Certified Summary of Federal Service for you. This document will list your federal civilian and military service, assuming you have any of either. When they send you a copy of the record, you should examine it to ensure that it is accurate and make any necessary adjustments.

Therefore, as the time gets closer to the date you’ve chosen to retire, the personnel office at your company will do the following:

â€¢ Confirm your eligibility to continue receiving FEGLI coverage with the Office of Personnel Management (OPM);

â€¢ Transmit your enrollment in the Federal Employees Health Benefits Program (FEHB) to OPM if you are qualified to continue;

â€¢ Transmit any active beneficiary designations that are currently stored in your OPF;

â€¢ Have a Notification of Personnel Action form, known as an SF 50, processed to terminate your service;

â€¢ Finish and receive approval for the component of your retirement application that deals with the personnel office; and

Then your retirement application and all supporting documents are delivered to your agency’s payroll office.

Payroll Office

The payroll office will approve the last payment of your salary after you have retired and separated from the company.

In addition, it will provide you with the authority to receive any lump-sum compensation due to you for unused annual leave. If you have been given the option of a “buyout,” it will also authorize the price for that option; However, you ensure that;

â€¢Your Individual Retirement Record (IRR), the official record of your current service, pay rates, unused sick leave credit for retirement purposes, etc., are certified and closed off.

The IRR contains a list of your retirement deductions for your final term of employment. It is impossible to close it out until you have received your last salary check;

â€¢ Attest to your basic yearly wage for life insurance if you are planning on maintaining any coverage into retirement; and

â€¢ Send your retirement package to the Office of Personnel Management.

After your agency’s payroll file has been sent to OPM, as a general rule, the payroll office at your agency will notify you of this fact. This notification will include the following information:

The registration number, as well as
Your payroll office identification number.
And dates indicating when the mailing and transmission took happened,

If you need to check on the progress of your case after it has been submitted to OPM, then you will find that the information above is vital. You will be required to follow up with them if it does not.

The amount of time required to complete this procedure is contingent upon various factors, including the amount of work done in your organization’s payroll and personnel departments. The process can take far longer if they have insufficient personnel or are buried beneath a mountain of retirement applications.

The processing done by OPM is also depending on the amount of work being done. It can be overloaded during peak seasons, such as the end of the year and the beginning of the new year. To your good fortune, they will make an effort to pay you back a percentage of your annuity whenever it is feasible to do so.

This payment will be considered temporary until they have finished processing your application. After that, you will start receiving your correct monthly annuity payment and any catch-up monies that were not provided to you while receiving interim pay.

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].

Two FEGLI Features That Are Mutually Exclusive

January 8, 2023 /by rick viader

The Federal Employees’ Group Life Insurance (FEGLI) Program, the most extensive group life insurance program in the world, was established by the Federal Government in 1954 to provide Basic life insurance coverage for Federal employees and retirees.

However, this article will dwell on two features of the Federal Employees Group Life Insurance (FEGLI) program that is not widely known but could be advantageous to the beneficiaries in certain circumstances.

The Two FEGLI Features That Are Mutually Exclusive

The first feature allows you to transfer the ownership and management of your Basic, Standard Optional, and Additional Optional insurance.

While the second feature enables you to claim your Basic insurance policy if your attending physician has informed you that you have a terminal disease.

However, you should know that these features are mutually exclusive by law. So if you choose one feature, you won’t have the option to go with the other.

1. Assignment of Benefits

With this feature, you can designate/transfer the ownership and management of your Basic, Standard, Optional, and Additional Optional insurance benefits to another person, corporation, or irrevocable trust (with one exception).

If you make this irreversible transfer, you will not be able to make any changes to the person who would be the beneficiary of your policy or cancel your policy in the future.

Exception

You can’t transfer ownership if a court has issued a decree of divorce, annulment, or legal separation and stated explicitly that you must pay your FEGLI benefits to someone other than yourself.

2. Living Benefits

A living benefit is an early payout of essential life insurance benefits made directly to the policyholder, as opposed to a beneficiary or survivor of the policyholder’s policy. Individuals can apply for a “living benefit” if they have been diagnosed with a terminal illness and have a life expectancy of nine months or less.

Other points to note about Living Benefits

It is only possible to make one selection for a living benefit, and once that selection has been finalized, you can not alter it in any way. On the other hand, if you want the total living benefit, you will be given all your Basic coverage in cash.
If you select partial payment of your living benefit, the payout you would get from the policy will be proportionately (half) lower than the total amount. The sum is paid in multiples of $1,000.
If you received the maximum amount of your living benefit, you would no longer be responsible for paying any premiums. Therefore, it would reduce your monthly rates if you applied for a partial benefit.
Full living benefits are only available to compensationers and retirees.
If you choose the full living benefit, your survivors will not be entitled to any primary insurance benefit if you die. But a partial benefit leaves them with the remaining.
Be aware that the monetary value of the amount still owed to you will remain unchanged. Therefore, it does not matter how much your salary increases.
The amount you receive from a living benefit will often be higher than that provided by a business specializing in viatical settlements. This is because there is no profit margin involved in a living benefit.
If you are eligible to receive a living benefit under your FEGLI insurance, the amount you will be granted will be less than the face value listed in your policy. This reduction indicates the interest that the life insurance fund will no longer get as a result of the fact that they paid you ahead of time.

These features are essential to maximize the various benefits for both participants and beneficiaries.

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.

Life Insurance for Federal Employees: Advantages and Disadvantages of FEGLI

December 28, 2022 /by jeff boettcher

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

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

FEGLI Advantages

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

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

â€¢ Family coverage Ã¢â‚¬â€ In addition to yourself, Option C allows you to cover your spouse and children. Other plans require you to have individual insurance for each individual.

FEGLI’s Disadvantages

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

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

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

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

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

OPM’s FERS Retirement Timeline: What to Expect

September 8, 2022 /by todd carmack

Are you considering retiring from your federal job? Congratulations! You’ve dedicated yourself to public service for a long time, and now it’s time to reap the advantages of that fantastic benefits package you’ve heard so much about throughout your career.

Unfortunately, to complete the retirement process and earn your pension, you must jump through some hoops. It’s a time-consuming and costly process (if you’re not careful). Since the epidemic, the average processing time for retirees has been around 60-90 days.

Timeline for Retirement Paperwork

The application for FERS retirement is merely the first step. First, your department’s personnel office will ask you to sign a few documents and begin the process of certifying your service, which can take a long time if any paperwork is missing. Your life insurance (FEGLI) and health insurance (FEHB) enrollments are also transferred to the OPM.

Then it’s off to the payroll office. They authorize your final paycheck and the payout of unused yearly leave once they receive your papers from personnel. They also send your salary, retirement contributions, and service history to the Office of Personnel Management (OPM).

When OPM receives all of your papers from these other offices, they provide you with a civil service claim number that you may use to keep track of everything. Then you wait for them to assess your eligibility, compute your annuity, and Ã¢â‚¬â€ at long last! Ã¢â‚¬â€ sending you your check.

So, how long will this all take? Here’s where we are now in terms of the board timeline:

â€¢ Day 1: The date of your retirement. Congratulations! Get rid of your alarm clock and start doing those things you’ve always wanted.

â€¢ TSP monies are available for withdrawal on day 30. The payroll office will notify TSP of your automatic retirement, and you should be able to withdraw your funds without penalty within 30 days of retirement.

â€¢ Day 30-45: A lump amount payment for annual leave is sent. This payout takes at least two full pay periods to complete following your retirement date, and it can take up to six weeks to receive. The payroll department is responsible for this process.

â€¢ Day 45-70: The Office of Personnel Management (OPM) sends out the first retirement letters. OPM will send you the Civilian Service Annuity Number (CSA#) six to ten weeks after your retirement date, which you will need any time you contact them. Later, they’ll send you a letter with an online password to set up future communication.

â€¢ Day 45-70: The Office of Personnel Management (OPM) provides an interim retirement check. You’ll get your first annuity check when you get your first letters, but it’ll only be for 60-80% of your estimated annuity. This is only to keep you afloat while they process your paperwork, which should arrive between six to ten weeks after your retirement date.

â€¢ Day 90-120: The Office of Personnel Management (OPM) delivers your complete retirement check. When OPM has finished processing your papers, they will issue you a check for the entire amount of your annuity. This pays you the balance due from the interim check, minus insurance and taxes. This entire check may take three to six months to appear.

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

Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then 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, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my 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 filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

Defined Benefit Programs of Value, Says Study

August 15, 2022 /by rick viader

A recent study demonstrates the importance of a defined benefit program, like the FERS or CSRS civil service annuity. It shows how much faster those without such benefits deplete their assets after retiring.

According to the Center for Retirement Research, given the erosion of defined benefit plans in the private sector, historical data on drawing down savingsÃ¢â‚¬â€which is used in calculations of how much people should have saved to guarantee enough income in retirementÃ¢â‚¬â€might paint an overly optimistic picture of retirement preparedness.

It discovered that half of the oldest Boomer households, born in the late 1940s, have at least one spouse with a defined benefit. That drops to around a quarter for the generation’s middle, people born in the mid-1950s, and less than a tenth for the youngest, people born in the early 1960s.

Previous studies focused on older generations with significant defined benefit (DB) coverage; the validity of drawdown estimates based on these cohorts for future cohorts with considerably less DB coverage is unknown… Any projections of the speed of drawdown for Baby Boomers based on the sluggish depletion of previous generations would likely underestimate the rate at which retirees pull down their assets, it warned.

For instance, it discovered that retirees with $200,000 of initial wealth (about the midpoint in the data) who are insured by a defined benefit plan lower their financial assets by $28,000 less by 70 than those who arenÃ¢â‚¬â„¢t covered by such a benefit.

It concluded that past generations’ access to a DB pension was related to the delayed depletion of their financial assets. Furthermore, the greater a retiree’s annuity holdings (including DBs, Social Security, and commercial annuities), the slower they drew down their other assets.

Projections for the Baby Boomer generation based on previous generations’ drawdowns are likely to underestimate their downturn speed. The findings show that Baby Boomers without DB plans may be depleting their assets quicker, putting them in greater danger of outliving their savings.

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

Simple Ways to Manage Health Care Costs in Retirement if You Plan Now

July 26, 2022 /by todd carmack

Most people estimate their retirement spending based on food, gas, utilities, and housing bills. They often overlook healthcare costs.

Not considering retirement healthcare costs might be an expensive oversight since medical expenses are a significant retirement expense. They’ve outpaced inflation for years. One severe illness can destroy your savings.

Talk about price shock! Fidelity Investments estimates that a 65-year-old couple will need $300,000 (after taxes) to cover healthcare costs in retirement. Some 80% of RBC Wealth Management study respondents are “worried about funding healthcare.” According to an April IBD/TIPP poll, about half of Americans worry about retirement healthcare expenses.

Know How Healthcare Expenses Change

Still, you shouldn’t worry much about these scary prospects. For example, you don’t have to pay 20 or 30 years of premiums, deductibles, and copays in one lump sum.

Aging increases healthcare costs. RBC Wealth Management estimates that a healthy 65-74-year-old couple will spend $12,000 annually on healthcare. The cost jumps to $21,000 for couples 75-84 and $38,000 for couples 85 and older.

Your early retirement expenses will be more consistent and manageable. That allows the money you save for medical expenses in 401(k)s, IRAs, health savings accounts (HSAs), and other assets to grow before the large bills arrive.

How can you avoid healthcare costs affecting your lifestyle in retirement? Here are some tips:

Budget For Healthcare Costs

You must consider medical expenses in your financial plan. Estimate how much to save and how to pay for it.

Consider your health and family history when estimating expenses. Expect to spend more if you smoke or have a chronic condition like diabetes. Consider your location too. Traditional Medicare costs the same worldwide, but Part D and “Medigap” supplemental plans might vary.

Retirement plans are also vital. You must bridge the insurance gap if you retire before Medicare eligibility at 65. COBRA offers 18 months of coverage after you quit a job. Consider also a state health insurance exchange policy or your spouse’s plan.

Healthcare Expenses: Cover Insurance Gaps

Filling coverage gaps is your greatest protection because it reduces price uncertainty. Knowing your costs makes budgeting easier.

Consider Medicare

Many believe Medicare covers all medical expenditures. Not really. It doesn’t cover eye tests, dental, hearing, or nursing home care. Traditional Medicare requires a monthly premium and copayments for eligible services. There’s no annual limit on what you might pay for hospital and out-of-pocket medical expenses.

Medicare can be expensive. Medicare Part A (hospital insurance) has a $1,556 deductible for each benefit period and no premiums. Part B (doctor visits, lab tests, etc.) premiums start at $170.10 per month and can reach $578.30 based on income. After a $233 deductible, you’ll pay 20% of Medicare-covered services.

Part D (prescription medications) and Medigap (private coverage that helps defray costs for Medicare Part A and B services by paying for out-of-pocket expenses that could cost thousands of dollars a year) require an extra premium and deductible.

Check Your Healthcare Cost Options

Check if a privately managed Medicare Advantage plan (Part C), which bundles Parts A, B, and D, is cheaper. Although you’ll still have to pay the government for your Part B premium and possibly a private plan premium, your copays will likely be lower than the 20% copay for doctor visits under standard Medicare. Medicare Advantage caps out-of-pocket costs annually.

You may face a penalty if you don’t enroll in Medicare when you’re first eligible. So, remember to register on time.

Consider LTC

These insurance expenses don’t include long-term care. That’s the need for home, assisted living, or nursing home care. According to Genworth’s “Cost of Care Survey,” an in-home health aide costs $5,148 a month, assisted living $4,500, and a nursing home private room costs $9,034.

How may long-term care expenditures be reduced? If you can afford it, choose a stand-alone long-term care policy or a hybrid life insurance policy with a cash value. Another option is buying a guaranteed income annuity.

Paying out of pocket can be expensive and make it difficult to pass on assets to heirs.

Carefully Invest For Medical Costs

Roth IRAs, 401(k)s, and HSAs (health savings accounts) are good places to start saving early. The objective is to have adequate assets when needed. Create a healthcare savings bucket precisely as you do for emergencies, short-term needs, and retirement.

You should establish a fixed income stream for health bills that aren’t affected by market volatility or taxed every time you pay.

Use IRAs

Roth IRA and 401(k) withdrawals are tax-free. Another tax-friendly option is using a high-deductible HSA as an investing account since they are triple-tax-free. Money enters, grows, and leaves tax-free. Invest the annual HSA maximum contribution ($7,300 for families in 2022) in growth investments for future usage. In the meantime, pay out-of-pocket costs with other accounts.

You receive tax breaks at every level. It’s great to finance copays and other fees without using your HSA.

If you don’t have a Roth IRA, now’s a good time for conversion. Due to the market drop, the taxes you’ll pay to convert are likely lower than in early January.

A diversified portfolio allows you to use easy-to-access cash when needed and grow money in stocks for future healthcare costs.

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

Life insurance for current employees | What’s to know?

July 14, 2022 /by todd carmack

Life insurance can be described as a contract between two parties; one is the insurance company/ insurance policy provider/insurer, and the other is the insurance policyholder. Employing this contract, the insurance company provides a sum of the money to your beneficiaries in exchange for a premium, on the policyholder’s death or after a set period. Other events, such as illness or critical situations, can trigger the payment.

Current employees may also get life insurance through their employers if they offer coverage, depending on their salary and age. The most common type of life insurance offered is group life insurance, which is provided to employees only and does not apply to spouses and children of the employees.

To calculate the total amount of the life insurance you would get from the electronic file or the binder where you put your personal records. The new employees are already enrolled, and getting the coverage is optional. The basic group life insurance value is your salary rate plus locality pay. This costs 16 cents if your salary is $1000 biweekly, i.e., either twice a week or every two weeks. There are different options apart from basic federal employees group life insurance to increase your coverage, including options A, B, and C. Furthermore, accidental death and living benefits coverage is also available. In option A, you can avail extra $10,000 along with basic FEGLI. Option B involves purchasing multiples of your basic pay (1-5 multiples), rounded to $1.000. Option C provides the coverage for the spouse if you purchase 1-5 multiples of $5,000 for life and the same multiples for $2,500, coverage for a child under age 22 is provided for life. With option A, accidental death and dismemberment coverage with no additional cost can also be provided. The employees who become ill and have nine months or less of life expectancy can be provided with living benefits in exchange for basic insurance.

Current employees can cancel the coverage or change the previous beneficiary with the new one at any time. If you die at 35 or older, the beneficiary will get the double benefit, but the demise of the employee at 45 years or older can decrease the extra amount by 10% each year. In addition, there will be no additional coverage. So you should purchase up to 80% of your life insurance at your youngest age so that you can get covered at all times in older age with more illness expenses.

But for the additional life insurance policies and coverage, you must research about the trusted agents, the type of insurance you are being provided, such as split-dollar, or accidental death, etc., amounts on which it is based like which percentage or multiple of your salary, increments and the flat amount, points before risking your family and money.

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

Avoid the Repercussions of Rejecting FEHB Coverage

June 26, 2022 /by todd carmack

If you are a federal employee, you may be eligible to receive a whole slew of benefits from the first day of employment, including Federal Employee Health Benefits (FEHB) coverage. FEHB coverage is available to federal employees as an employer-sponsored plan unless otherwise excluded via regulation or law. Depending on the agency you are employed by, your overall eligibility depends on various rules. Additionally, the healthcare offered by FEHB plans does meet the minimum value standard of the Affordable Care Act (ACA). Unfortunately, the FEHB program experiences increases in premiums each year, which has many long-term employees considering dropping FEHB late in their careers.

While there are various reasons for opting for another health insurance option, including private sector employment coverage through a spouse, making such a significant change late in the game can carry consequences. The coverage set forth by an FEHB policy extends into retirement years to continue providing health benefits well after your career has come to a close. If you are entitled to retire within the civilian retirement system, a minimum of five years of continuous FEHB plan enrollment is required. In rare cases, a five-year requirement waiver may be deemed acceptable instead of continuous enrollment. Should you opt to bypass enrollment or cancel it, your signature certifies an understanding of the effect this choice will have on your coverage past retirement.

As an annuitant, should you choose to cancel your FEHB plan enrollment, your chances of re-enrollment are slim to none. The only exception would be if your cancellation or suspension were related to Medicare managed care plan (TRICARE, CHAMPVA, etc.) enrollment. Furthermore, your family will face the consequences of your choices, with complete coverage ineligibility should you convert to a private, non-group policy. Ultimately, should you be curious about whether dropping out of an FEHB program is right for you, you should avoid it altogether unless youÃ¢â‚¬â„¢re confident in your ability to re-enroll in the program.

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

Why Veterans Require Life Insurance, Even If They Do Not Believe They Do.

June 20, 2022 /by todd carmack

Although it protects your family financially, life insurance is often overlooked. Many people believe they do not require it.

Regardless of popular assumptions, life insurance is extremely vital, especially if you’re a veteran or a military member. After you die, the insurance provides financial stability to your family and ensures that they have enough money to live comfortably.

Here’s why active and past military personnel need life insurance and the benefits and how to obtain one.

Life Insurance Benefits For Veterans

Here are some of the advantages of life insurance for veterans and active military personnel.

1. The payouts are tax-free in most cases

Your family would get the death benefit if you died during the policy’s term due to a covered peril. They won’t have to pay any taxes because taxable income isn’t considered taxable when they file their tax returns.

2. Your family’s living expenses can sustain with the payout.

Choose an insurance plan that pays out ten times your present annual income. Subsequently, your family will have no trouble meeting their financial obligations, especially if they are financially dependent on you.

3. The claim may cover final expenses.

The average cost of a burial in the United States is more than $7,000, putting a significant financial strain on your family. On the other hand, your family can utilize the claim to cover your burial expenses without divint into their funds or taking out a loan if you have the correct policy.

4. Even if you have a terminal illness, you may qualify for a policy.

Some insurance policies have riders, such as accelerated death benefits, which pay out claims in certain situations. Suppose you have a terminal condition and are anticipated to live for 12 months or fewer. In that case, you may be eligible for this rider, which will pay a lump payment to your family when you die and cover your medical expenditures while you’re still living.

5. Retirement expenses may be covered.

If you choose a cash value policy, the cash value will increase with time. You can use the extra cash to buy a new automobile or put a down payment on a house. In reality, you can use the funds to help you get through life once you retire.

Understanding Life Insurance Types

There are two major life insurance types: (1) term life, which covers you for a specified period, and (2) whole life insurance, which offers lifetime coverage. The insurance company will pay the death benefit to the insured’s family, which can be used to cover funeral costs or consolidate debt.

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

Tag: FEGLI

FEGLI

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