FEHB
FEHB or the Federal Employee Health Benefits is a program that covers the health insurance and benefits of the federal employees.
Federal Employee Health Benefits and FEGLI at Retirement by Bob Wiener
Federal Employee Health Benefits and FEGLI at Retirement by Bob Weiner
Bob Weiner believes that if you’re a federal employee who is considering retirement and you should know that you are covered by both the FEHB (Federal Employee Health Benefits) program for health insurance and the FEGLI (Federal Employee Group Life Insurance) plan for life insurance coverage, then you may need to factor in what your options are in terms of taking these benefits with you when you go. This is because, while there are ways of maintaining this protection, there are distinct criteria that you will need to meet in order to continue the coverage after you become a retiree.
How to Continue FEHB Coverage After Retirement
In order to be eligible for continuation of your FEHB coverage after retirement from service, there are two primary criteria that you must meet. First, you will need to have retired on an immediate annuity. This means that you will have to have a retirement annuity that starts accruing no later than one month following the date of your final separation from service.
In addition, you will also have to have been either continuously enrolled as an employee or as an eligible covered family member in any of the FEHB plans during the five years of service that immediately preceded your retirement. (It is important to note that it is not required that you be enrolled in the same plan for each of these five years).
If, however, you have less than five total years of service leading up to your retirement, then you will need to have been enrolled in a FEHB plan during all of your time of service since the first opportunity that you had to enroll.
Continuing Your FEGLI Benefits
In order to keep your basic FEGLI coverage in retirement, you will also need to have five years of service. If so, you will have three options in how you may retain these benefits. These include the following:
- 75% Reduction – With this option, a reduction in coverage will begin the second month following your 65th birthday, or the second month following your retirement, whichever occurs later. Then, the coverage will decrease by 2% every month until it reaches 25% of its original amount, where it will then level out.
- 50% Reduction – With this option, you can retain 50% of your original amount of coverage. The reduction also starts during the second month after your 65th birthday, or the second month after retiring – whichever occurs later. With this option, the coverage will decrease by 1% every month until it gets to 50% of its original amount.
- No Reduction – With the no reduction option, you may retain the full amount of your FEGLI benefit.
Options for Those Not Eligible to Keep Their Benefits
If you are not eligible to continue your FEHB or FEGLI benefits, then you may still have various options. For example, with the FEHB plan, you will have an extension of 31 days of coverage at no cost to you. Following that time, you can either drop the plan altogether or convert it over to an individual contract. You may also request a Temporary Continuation of Coverage. This will allow you to continue the FEHB benefits for up to 18 months at a premium cost of 102%.
For the FEGLI plan, you will also have a no-cost 31-day coverage extension. However, after that time period has elapsed, you will only be able to either drop the coverage completely or to convert some or all of the benefit over to an individual policy and likewise pay the premium out-of-pocket.
About Bob Wiener:
Bob Wiener believes in “Working hard and always being there for (his) clients.” Working with the employees and partners of a major accounting firm for over twenty years, Bob has learned how to help even the most discerning clients work their insurance and retirement planning needs.
Getting Started Early for a Successful Retirement by Kevin Wirth
Kevin Wirth Explains How to Get Started Early for a Successful Retirement
Nearly everyone dreams about the day they can retire. Regardless of whether you plan to hike in the mountains, relax on the beach, or volunteer in a faraway place, one thing is for certain, and that is in order to have a successful retirement, a good plan should ideally be in place.
Unfortunately, though, not everyone has the opportunity to do an ample amount of long-term planning. That may be due to an unexpected health situation, an offer of early retirement, or some other event that has moved up the clock on your leaving the world of employment.
In any case, the good news is that you still have some options on your side for making the most of your finances, as well as your insurance benefits, for your retirement years. The best way that you can ensure success beforehand, then, is to start by taking a good inventory of what you’ve got.
Getting All of Your Retirement Ducks in a Row
As you plan for this next phase of your life, the most important aspects from a planning standpoint will include the following:
- Insurance – Because health care can be a retiree’s biggest expense, you will want to make sure that you have good coverage here. If you won’t be eligible for Medicare yet, and if being added to a spouse or partner’s employer-sponsored health plan also isn’t an option, then there are ways that you can take your FEHB (Federal Employees’ Health Benefits) with you – provided that you meet certain criteria. You will also want to ensure that you don’t leave your loved ones vulnerable to financial hardship when it comes to life insurance. So, be sure that you check into either an individual plan of coverage, or consider taking your FEGLI (Federal Employees’ Group Life Insurance) coverage with you in retirement.
- Financial – A good, solid financial plan is also an essential aspect of a successful retirement. This is because in order to live the lifestyle that you desire, you will need a way to replace your current income. Therefore, you should start by obtaining an approximation of how much you will be receiving from your retirement annuity when that time comes. If you’re covered by FERS, inquire as to how much income you’ll get from Social Security benefits, too. Because this income won’t likely be enough to completely replace your employer’s salary, you will also want to give yourself a boost by maxing your contributions while you still can to the TSP (Thrift Savings Plan). This will help you to obtain a larger amount of payout when the time comes to convert your savings into income down the road.
Once you have actually decided when the big day will be, you will want to get your retirement paperwork filled out in plenty of time. Typically, you should do so approximately two months prior to your actual date of retiring. This will help to ensure that all goes well – and just in case there are any glitches, you will have some time to get things straightened out and back on track.
More from the Author: Kevin Wirth
Kevin D. Wirth and Associates – Federal Retirement Experts
Federal Government Sued by Sioux Tribe
The federal government is being sued by the Sioux tribe because it has failed to provide emergency health care to the local residents. There was an emergency room that was shut down by claiming that it put the lives of people at risk. The only other emergency room is 50 miles away which is causing problems for the residents.
How Federal Government Was Involved?
The Rosebud Sioux Tribe of South Dakota has decided to sue the federal government because it failed to maintain The Rosebud Hospital’s ER. The ER was closed in December 2015 as a genuine inspection done by federal inspectors pointed out that the ER posed a risk to people’s life.
The responsibility of managing the ER was with a division of the US Department of Health and Human Services, named as Indian Health Service (IHS).
The Reason Behind the Closure
Though IHS claims that the closure was done because of limited resources and staffing changes, it is clear that the closure was done because IHS failed to maintain the ER properly.
The Plans
IHS also plans to privatize the entire hospital along with several other reservation hospitals situated at South Dakota and Nebraska.
Lawsuit Details
The lawsuit filed by the tribe states that IHS failed to comply with the Indian Health Care Improvement Act by not evaluating the impact of the closure of the ER. The impact needs to be evaluated at least one year before closing off the facility and it was not done.
Evaluation Requirements
The evaluation should have included the fact that there is barely accessibility to an alternative health care resources for the local residents. The evaluation should also include the cost effectiveness of closing such a service, the feelings of the local community about the closure as well as the quality of care provided after the closure.
The need of the Sioux tribe for the ER facility can be judged by the fact that about 35,000 people visited the 35-bed facility in the last fiscal year only.
The Current Scenario
Now, the patients need to travel 50 miles to Winner, South Dakota to get emergency medical service. In some cases, they need to visit an out-of-state hospital in Valentine, Nebraska too.
The lawsuit mentions that five patients died due to the current scenario and two babies were born in the ambulances that were on the way to the hospital just after a few weeks since the ER was closed. These facts certainly give the Sioux tribe an edge over the federal government.
OPM Sets New Standards for FEHB Carriers
The FEHB carriers would now have to give a better proof of their performance. OPM is planning to add in several new evaluation measures. This was announced by Beth Cobert, who is the acting OPM Director. The agency also wants to ensure that the FEHB is available to all employees, its costs are kept minimal and the FEHB carriers ensure adequate cyber security.
Why is OPM increasing the Evaluation Measures?
OPM is will start using 19 new measures to evaluate the performance of carriers that are related to the Federal Employee Health Benefits Program. The agency is boosting up the evaluation metrics as a vital part of its Performance Assessment Plan for FEHBP carriers. It is worthy to mention that this new plan will be implemented for the first time. The Announcement was made by Cobert when she was addressing the annual FEHB Carrier Conference in Arlington, Virginia on Thursday.
The Interrelated Success
Cobert also pointed out that the performance of the carrier would be judged by how they perform on the measures and their margins would also be directly affected by it. The agency also aims to judge its own performance on the basis of the success achieved by the carriers. The report regarding these new steps would be submitted to the Office of Management and Budget and the results of the report would be made available on Performance.gov.
The Key Metrics
The key metrics that measures the performance of a carrier are the optimum utilization of resources by a carrier, quality of the clinics and the customer service. OPM focuses on three other measures, blood pressure control, prenatal care and reduction in hospital re-admissions.
The Targets
The key targets that need to be focused upon by the OPM are to ensure that FEHB is made inclusive, the carriers have enough cyber security and the carriers keep the costs low. The first target is vital for the agency as it helps in attracting more people to federal jobs and retaining them. A 2015 Federal Employee Viewpoint Survey has revealed that nearly 78 percent of employees think that the FEHB availability impacts their decision to keep their federal job.
The second target will help OPM to get away from the bad publicity earned by two cyber breaches that occurred last year and made that data of millions of people vulnerable. The third target would assist the OPM to attain short term and long term savings for the FEHB Program.
FEDERAL EMPLOYEES – ARE YOU READY FOR OPEN SEASON
There are two Open Seasons going on almost simultaneously – Medicare and Federal Employees Health Benefits. Don’t get refused – Medicare Open Season runs from October 15 – December 7, 2015. Federal Health Benefits Open Season run from November 9 – December 14, 2015. Many Federal employees will participate in both Open Seasons. They will need to know what their plans offer and what they are looking for to satisfy their health care needs.
While a Federal employee is still working the FEHB plan will generally be their primary coverage until they retire. If there is spousal coverage on a job, then the spousal plan will generally be the primary until both spouses are retired. In essence, Medicare generally becomes the primary after retirement. If you miss applying for Medicare at the first opportunity for eligibility and you are not still employed you might suffer a 10 percent penalty when you do apply.
There are many types of Medicare plans available. However, many Federal employees will automatically be enrolled in Medicare if they were Federal employees in 1983. All other applicants will generally have to apply for Medicare. Medicare Part A is available at no cost if you or your spouse have worked under a Medicare covered employment. If you don’t qualify for what is termed ‘Free Medicare – Part A’ you can still contact Medicare to see what the cost might be to you and how to apply.
Medicare Part B carries a premium and the premium varies based on income with an adjustment being made to the premium annually. It is recommended to Federal employees when enrolling in Medicare to keep their Federal Employees Health Benefits (FEHB) plans because the coverage, including prescription drug coverage, is basically equal to or better than any other coverage available. If you suspend your FEHB to enroll in a Medicare Advantage Plan (Part C), you can always go back and pick up your FEHB. Whether you are participating in Medicare Open Season or Open Season for Federal health plans, be sure to review your plans and examine what your plan covers and what it does not. Chances are if you are covered under a FEHB plan you are satisfied with, there might be little reason for you to make any changes. Know what coverage your plan offers and know what your health priorities are and make a decision that best fits the needs of you and your family.
P. S. Always Remember to Share What You Know.
Dianna Tafazoli
Unions Seek to Prevent Fed Employees Health Benefits Premium Hike
A few days ago, the U.S. Office of Personnel Management (OPM) today announced premiums for the 2016 Federal Employees Health Benefits (FEHB) Program will rise by an average of 6.4 percent.
OPM is offering a new Self Plus One enrollment type in the FEHB Program that will provide coverage for an enrollee and one designated eligible family member. All FEHB plans will offer a Self Only, Self Plus One, and Self and Family enrollment type beginning in 2016.
On average, enrollees with Self Only coverage will pay $5.50 more each pay period; enrollees with Self and Family coverage will pay $19.61 more per pay period. Those who opt for Self Plus One coverage will pay $8.92 more per pay period than they previously paid for Self and Family coverage. The Government contributes approximately 70 percent of the total cost of a plan’s premium.
“I am pleased that OPM has implemented the new Self Plus One choice for the 2016 plan year. This will give enrollees an opportunity to select coverage just for themselves and their spouse or child,” said OPM Acting Director Beth Cobert.
Federal employee unions including NARFE and NTEU were obviously not as pleased as Director Cobert at the hike in premiums for the health benefits program.
NTEU Seeks Congressional Action to Prevent FEHB Premium Hike
The National Treasury Employees Union (NTEU) issued a statement noting that this 6.4 percent increase in premiums further underscores the need for Congress to act on cost-saving prescription drug contracting and benefit management reforms for FEHB.
OPM attributed the higher rate of increase in large part to increased prescription drug utilization.
“NTEU views prescription drug reforms as an essential way to better control drug spending in FEHBP, which would reduce costs for federal employees and retirees,” NTEU National President Tony Reardon said. “FEHBP enrollees are paying more than they should.”
Specifically, what the NTEU is asking for is support for Rep. Stephen Lynch’s (D-Mass.) legislation—H.R. 2175. The bill would provide OPM with enhanced oversight and contracting authority to ensure that FEHB participants are receiving the best possible drug prices.
The bill also requires that Pharmacy Benefit Managers (PBMs) operate as middlemen to negotiate prescription drug prices with drug companies and pharmacies on behalf of individual FEHB plans, and return any rebates, incentives, and other price discounts obtained from drug manufacturers to FEHB.
Will Insurance Premiums Rise For Federal Employees?
Health Insurance Premiums and Federal Employees
There has been plenty of talk about health insurance premiums being on the rise with more of the financial responsibility being placed on the employee. The premiums on health insurance for Federal and Postal employees will slightly increase but with no real impact on the average employee because of the size of the Federal workforce. Some other employees outside of the Federal government might not fair as well. Much depends on the size of the organization and the strength of the company’s revenue stream.
Many Federal employees have spouses who work in jobs outside of the Federal service and have chosen to use the non-Federal benefits to cover health care costs for their families. As Open Season approaches, it is good time to evaluate the Federal health care benefits (FEHB) available to you and your family. If you are in the position of deciding between Federal benefits and non-Federal benefits just line up the offerings side-by-side and carefully assess what is offered for each and what your family is more likely to need.
Except for what is termed -Golden Handcuff- benefits, it will be hard to find benefits that out rival those offered by the Federal government because of shear numbers. Federal benefits cover over 10 million active and retired employees and their families. Therefore, before waiving your rights to Federal health benefits coverage make sure you are sitting down with your family and your benefits specialist to make certain you are not making a decision that will cause anxiety in the future.
Another thing to remember, don’t be embarrassed by asking a benefits specialist or some other professional with an in-depth knowledge of benefits to help you sort out your situation. I think it would be too presumptuous to say that no other benefits package can compare to what is offered to Federal employees. However, it is relatively safe to say that it will be hard to find a benefits package more comprehensive than what is offered to Federal employees at a highly affordable cost.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
Open Season and Other Benefits
Enrollment For Federal Employee Benefits
The Thrift Savings Plan (TSP) no longer has an Open Season. Employees may start, stop or change their TSP contributions or participation in the TSP at any time.
The Fe
deral Long Term Care Insurance Program (FLTCIP) also does not conduct an annual Open Season. Employees can apply anytime for FLTCIP. There is a full-underwriting whenever you make the decision to participate in FLTCIP. Remember, the cost of long-term care insurance rises with age. The best time to enroll in a plan is prior to turning 50.
The Federal Employees Group Life Insurance (FEGLI) also does not have an Open Season. I can only remember two Open Seasons conducted by FEGLI (MetLife). However, employees may make changes in FEGLI at any time. Coverage can be decreased or waived by completing SF-2817 and forwarding it to your agency Benefits Office.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
What Federal Employees Need Prior to Open Season
What Federal Employees Need Prior To Open Season
Open Season Requirements
Open Season can be a very tense time for federal employees because of the many decisions to be made. Circumstances and conditions in families change and employees need to be ready to address those changes. Having information available prior to the beginning of the Open Season assists employees with making critical decisions. Personnel charged with facilitating the Open Season and who work with Federal Benefits are responsible for providing the employees within their agency with certain materials both in hard copy and on the agency’s internal mechanism for agency-wide communication.
It is recommended that a Check List be provided so that employees will have the benefit of checking off what they need in order to get prepared for the changes that might take place for them individually in Open Season.
A list of resources is also recommended to be available for employees and the specific benefits they are interested in or are seeking relevant and additional information.
An easy to understand explanation of how the benefits offered to Federal employees work in tandem to cover the entire health care needs of employees and their families – FEHB, FEDVIP and FSAFEDS is also recommended.
It is very important that employees take advantage of this pre-preparation time and talk to the benefits office to make certain they have all the information needed to make critical and sound decisions about their health care needs. Making changes involving health care needs are simplest during Open Season. However, if an employee needs to make changes after the Open Season period ends, there are circumstances by which this can happen so classified as a Life Event.
Work with your Benefits Office so that you understand what your options are for you and your family. Write down a list of questions and check them against your Open Season Checklist to make certain you are ready to protect the most important asset you and your family will ever own – Your Good Health.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
Benefits Specialists / Programs
What Specialists Are Available To Help Federal Employees With Benefit Selections
Individuals charged with overseeing benefits and helping to organize benefits and health-care fairs receive information needed each year from OPM in order to make Open Season happen in their individual agencies. These personnel receive from the Office of Health Care and Insurance:
Guides on Rider Information
Information booklets and materials- how to order the materials and distribute them during Open Season.
Information and directions on how to conduct the Open Season both in general and agency specific.
Significant event information is also distributed to agency personnel tasked with conducting the Open Season and
Information impacting specific plans in FEDVIP and FEHB.
Often times employees not tasked with Open Season responsibilities do not appreciate the tremendous amount of time and preparation that goes into making the Open Season happen. The personnel under the guidance of the Office of Health Care and Insurance must be able to answer a series of questions and inquiries to include contact information about participating carriers.
The Office of Health Care and Insurance provides FastFacts on Federal Benefits and so many other factors relevant to helping Federal employees make wise and cost conscious decisions about what is best for them and their families.
P. S. Always Remember to Share What You Know.
Open Season Related Articles
What You Can Do In Open Season
Open Season is an annual event for Federal employees. During Open Season, employees may do the following:
Enroll in a flexible spending account program (FSAFEDS) which is a health care and/or dependent care account. Participation in the program requires enrollment each year. The program does not continue like FEHB and FEGLI without re-enrollment. The maximum annual election for the Health Care Flexible Spencing Account and the Limited Expense Health Care Flexible Spending Account is $2,500 for 2015.
The maximum annual election for 2015 is $5,000 for a Dependent Care Flexible Spending Account. Also the minimum election for the flexible spending account has changed from $250 to $100 for 2015.
Employees can also enroll, change, of cancel an existing enrollment in their dental and/or vision plans under FEDVIP. The same holds true for the health plans under FEHB. There is no Open Season for life insurance under FEGLI.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
What Federal Employees Need Prior to Open Season
2014 Open Season
2014 Open Season for Federal Employees
Active Federal & Postal employees, retirees and their families should be on the look-out for Open Season which starts Monday, November 10, 2014 and continues through Monday, December 8, 2014. Open Season allows Federal Employees to make changes and add a qualified family member to their plan among other things. It is also a time to speak with your carrier and the FEHB representatives in your agency to ask questions and seek counsel about your benefits plan.
The Open Season covers health benefits (FEHB), dental and vision (FEDVIP), the flexible spending account (FSAFEDS). In order to help the process of choosing a suitable plan for you and your family, OPM has compiled a Summary of Benefits and Coverage (SBC). The SBC allows employees to make comparisons in costs, coverage, deductibles, co-pays, and out of pocket limits. The SBC also outlines for employees what services are available and covered and what services are not available and therefore not covered under a particular plan.
OPM offers the SBC for ease of comparison and a short-hand version of the many plans offered to Federal employees. However, in order to get a more detailed understanding of the plans and what they offer, it is always recommended that employees review and evaluate the plan brochure of the provider they are interested in.
There will most likely be a number of health fairs employees can attend in order to gain additional information. Also don’t forget about the use of the website to see what your plan covers. All FEHB plans are on OPM’s website for the convenience of all Federal employees, active and retired.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
What Federal Employees Need Prior to Open Season
Will Insurance Premiums Rise For Federal Employees?
How Are My Benefits Handled If I Transfer Systems
TransFERS
Federal employees under the old civil service system – CSRS and the interim plan CSRS Offset had the option during two open seasons (1987 and 1998) to transfer to the new retirement system – FERS. Another condition was also possible to make the transfer – reemployment. If you were rehired under CSRS or CSRS Offset within 6 you could transfer to FERS; however, making the election would involve doing some administrative housekeeping where the following rules would apply:
Federal Employees: Rules for Transferring to FERS
-All survivor and disability benefits would be paid under the rules governing FERS.
-When you enroll in FERS you will have Social Security coverage.
-The combined service credits for both CSRS and FERS will count towards the years needed to qualify for retirement, disability, survivor benefits and the Thrift Savings Plan benefits under the Federal Employees Retirement System.
-The credit you earned in CSRS will be effectively frozen. Your combined CSRS and FERS annuity will still be based on the average of the highest three consecutive years of earnings.
-Now that you are covered under FERS you will receive Government contributions to your TSP account.
-A full Civil Service Retirement System (CSRS) COLA will be received on the CSRS’s portion of your annuity.
-Unused sick leave is credited under CSRS rules based on the accrued amount of sick leave at the date of transfer or at retirement. The lesser number will be used.
-Once you have transferred to FERS from CSRS or CSRS Offset your service will be treated under the FERS plan
In addition, when you transfer to FERS with 5 years or less of non-Offset CSRS service all of your service will be treated under the rules governing FERS.
When you convert from an appointment that is excluded from FERS coverage to an appointment that is covered under FERS you will automatically be covered by the Federal Employees Retirement System. If you are not automatically covered you will have a 6-month window to transfer to the retirement system.
P. S. Always Remember to Share What You Know.
Open Season Articles
Time To Gear Up For Open Season
Postal LiteBlue and Open Season
What Federal Employees Need Prior to Open Season
Will Insurance Premiums Rise For Federal Employees?
Getting In Shape For Retirement
How you spend your retirement years may have as much to do with your physical plan as your financial
plan. Here are a few ideas that could help you enjoy your golden years just a bit more.
1. Get A Comprehensive Medical Check-Up
To get an idea of what a comprehensive exam can include, visit the Mayo Clinic’s Executive Health Program, the Duke Executive Health program, or the Johns Hopkins Executive Health Program.
2. Choose a Fitness Regimen
If you can afford it, consider hiring a personal trainer or hire a personal trainer for your group, even if it’s just for five to ten sessions to get you into the swing of things.
3. Select Your Anti-Aging Strategies to Live Longer and Look Younger from Head-to-Toe
It’s time to pay attention to nutrition and supplements, weight loss, teeth, eyes, skin and, yes even a makeover if you choose.
4. Get a Comprehensive Financial Assessment
Play around with many of the financial calculators available online to get an estimate. Each individual’s situation is different, and our advice is to sit down with all of your information and analyze and decide if you need to speak with a financial planner.
5. Maximize Your Savings
You’ll probably need more money than you think to retire, and you never know ….”things happen”. It’s never too late to increase your savings.
6. Understand Your Insurance and Benefit Options
Many people ignore this area until it is too late. Even if you are still in your fifties, start with an understanding of what your Medicare and Social Security benefits will be.
7. Decide Where You Will Live
This is going to be a big decision, however most people actually stay where they are.
8. Do a Career Evaluation
Now is the time for a career check-up. A career evaluation could also be useful if you decide you want to work after retirement.
9. Do a Personal and Relationship Evaluation
Is this the time in your life when you will begin to spend more time with your family? Are you ready to look inward and decide what you want the rest of your life to be about?
10. Make Sure Your Parents are Taken Care Of
Baby Boomers are the first generation whose parents may live 20 to 30 years beyond their retirement age. That adds a whole new level of complexity, cost, and worry for 50-plus adults.
11. Pick and Prioritize Your Dream Trips
Where do you want to go? Where should you go before everyone else discovers it? Is there a place that could be quite different ten years from now that you should consider sooner like the Galapagos or Great Barrier Reef?
12. Plan Your Leisure Time Lifestyle
Consider what you’ll do when you stop working …. or how to have more fun while you are still working.
13. Give Something Back
Do you plan to give something back to society through volunteering or mentoring within your area of expertise?
14. Get Your Estate Planning in Order
Departing this world without having your affairs in order might leave your surviving family members and loved ones in a really bad situation.. Now is the time to ensure you have a solid will, estate plan, and a “living-will.”
15. Start Taking Advantage of Age-Based Deals (like Medicare)
Many of us don’t want to accept that we are “over 50” or “over 60”. But there is one big advantage: Many companies and services offer meaningful discounts to people as young as 50.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Critical Ages For Federal Retirement
There are Critical Ages that Federal Employees should be aware of. These ages represent opportunities for Federal Employees who might want to maximize their retirement benefits.
Federal Employee ~~ Age 50
• Begin age-based catch-up to defined contribution plans and individual retirement accounts (IRA). Beginning with the year you reach age 50, Federal law allows you to defer a certain dollar amount per year to a qualified defined retirement plan. The catch-up amount is $5,000, indexed in $500 increments. The age-based catch-up amount for IRA contributions is $1,000.
Federal Employee ~~ Age 55
• After separation from service, you may begin withdrawing from your TSP or another qualified plan without paying a 10 percent penalty tax.
Federal Employee ~~ Age 59.5
• You may begin withdrawing from qualified retirement plans, if retired, or from an IRA without incurring the 10 percent penalty. At 59.5 Federal employees can also take an in-service distribution – rolling their TSP account balance into an IRA with a private company and giving themselves more investment options.
Federal Employee ~~ Age 62
• You can begin receiving your Social Security benefits; however, the amount may be reduced by as much as 30 percent, depending on the date of your birth.
Federal Employee ~~ Age 63.5
• The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law makes health insurance in most employers’ group health plans available for at least 18 months after separation; however, you bear the full cost, including the portion previously paid by your employer (plus a small administrative fee). Upon age 65 and your enrollment in Medicare Part B, Federal law requires access to Medigap health insurance at standard rates. Combining COBRA and Medigap effectively ensures access to health insurance beginning at age 63.5
Federal Employee ~~ Age 65 – 67
• Depending on your date of birth, you may begin unreduced Social Security benefits at some point during this age range. Further, you may earn any amount without reducing this benefit.
Federal Employee ~~ Age 65
• You may enroll in Medicare, if eligible, and purchase Medigap insurance at standard rates. Your Medigap open enrollment period lasts for six months starting on the first day of the month in which you are 1) at least age 65 and enrolled in Medicare Part B. During this period, an insurance company cannot deny you a Medigap policy, make you wait for coverage, or charge you more for a Medigap policy because of your health.
Federal Employee ~~ Age 70
• You may begin maximum Social Security benefits, if the starting date was delayed to this age. There is no advantage to delaying benefits past this age.
Federal Employee ~~ Age 70.5
• Required minimum distributions from qualified plans, IRAs, and deferred compensation plans begin the year after you turn 70.5.
P. S. Always Remember to Share What You Know.
RELATED TSP ARTICLES
Thrift Savings Plan (TSP) Withdrawal Options
For Postal Employees – LiteBlue and the TSP
Federal and Postal Employees – Choosing a Financial Professional
Is All ‘Your’ TSP Money Actually Yours?
Statements to Answer and Get You Thinking
Sometime we need a little nudge, some motivation to get our engines pointed towards painting a picture of our retirement future. The following statements can assist in setting the parameters for both our plan and individual action plan.
- I have a definite strategy to SAVE. ___
- I have clearly written down all of my financial goals for retirement. ___
- I have a spending plan for all sources of income. ___
- I have a plan for reaching my goals for retirement. ___
- I always review my goals before spending. ___
- I have clear plans as to how I will spend any unobligated funds before I spend impulsively. ___
- I have a budget that I monitor now and will continue monitoring my budget in the future. ____
- I know exactly how much money I can spend on clothing monthly and yearly. ____
- I know how much money I can spend for eating out and entertainment. ____
- I plan ahead for times of big expenses, i.e., replacing the furnace or AC unit, purchasing a new car, major car repairs, home repairs, etc. ____
- I have a plan in place for unexpected expenses. ____
- When I must make a major purchase, I do comparison shopping. I test the market. ____
- All of my purchases are part of my plan for reaching my retirement goals. _____
- I set aside some money to spend as I please, only after paying myself first (PYF). ____
- I have emergency funds set aside equal to at least six months of living expenses. ____
- I have begun a sensible debt reduction plan. ____
- I pay off the entire monthly balance due on my credit cards to avoid paying interest charges. ____
- I know the difference wants and needs and I prioritize needs over wants. ____
- I know the rate of interest I am receiving on all savings accounts. ____
- I follow and monitor the rate of return on my investments. ____
- I understand what my investments mean and the risk associated with them. ___
- I belong to a credit union to reduce transaction costs in conducting my financial affairs. ____
- I determine the amount of money I can spend on a car and secure financial for that amount before selecting a car. ____
Give yourself one point for each item you have already taken action on. Add up your score and see how far you need to go to put your plan of action in motion.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
Federal Employees and Financial Planning
Definition: A financial plan is a thought process based on what each person considers important and necessary in their life.
A financial plan helps to identify what we want, how to get it and how to keep it. The financial plan drives the entire process and is the determing factor as to whether you successfully reach your retirements goals. In devising a financial plan, we must make choices in order to maximize our ability to accomplish our goals with varied resources in our retirement years. We measure our values, those beliefs or ideas we consider important or desirable. Our values have a lot of influence on our goals, choices and decision-making. As we grow older our values will most likely change.
When we make decisions, circumstances and events in our lives often cause us to make other decisions based on decisions we have already made. In essence, one decision can bring about the need to make additional decisions. In the economic world, those decisions are called “Satellite” decisions.
In making decisions we often have to make trade-offs. We give up something now to get something better tomorrow that will ultimately benefit us in the future. We save now so that our retirement years will be spent in comfort and security. The trade-off is defined as an “Opportunity Cost.” Planning for our retirement future requires a basic lesson in finance and economics as demonstrated by some of the terms we will use in our discussion.
There are 3 kinds of people when it comes to spending money. There are those who live from paycheck to paycheck. There are those who never have enough money and then there are those who absolutely ‘Get it.’
The people, who absolutely get it, didn’t just by some click of a pair of ruby slippers suddenly end up in OZ, a stratosphere off-limits to the rest of us; they had a financial plan and they followed the plan. They understand that goals must be Specific, Measurable, Attainable, Realistic and Time related – the Goals must be SMART.
The folks that get it also understand the ‘Reality’ of resources in that they are limited or different at best, specifically in retirement. They exercise self-control and “Restraint’. They are not impulse spenders. They also know the benefit of accepting ‘Responsibility’ in financial planning rather than taking on the consequences of not having a plan.
Equally as important, people who get it, know intimately the value of saving for a rainy day. They spend within or below their means and are not reluctant to share with others. Renowned financier and philanthropist, Warren Buffet, reputed to be one of the richest men in the world once stated on an interview with Larry King, former CNN TV personality, “I don’t need to spend a lot of money on clothes or houses or that kind of stuff, a comfortable pair of jeans and T-shirt is ok.” Eccentric he maybe, but he gets it because he has a plan that evolves as circumstances in his life change.
Building your financial plan must incorporate a high degree of flexibility because changes in your life’s circumstances are inevitable.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
Financial Planning – You Know More Than You Think
Many individuals shy away from talking about financial planning because they think it is too far above their heads. Not so. Families are engaged in financial planning daily. Mothers and Fathers determine what they can spend on groceries, housing, education, transportation, health care and a number of other aspects important to running our lives. The fear sets in when we are asked to formalize our plans. Here are some hints to help you get started.
- Inquiring about what we want and need to know requires an examination of what you already know about financial planning and money management. We each have our own frame of reference about money, spending, saving and just a general attitude about money. We learn about money and spending habits from a number of places and people in our lives. Should we spend a lot of time thinking about money and planning, will it simply take care of itself, is it a skill that we need?
- Gathering and assembling the information we need is where we utilize our investigative and discovery skills. We are able to mesh newly discovered information with information we already know; and build upon our skills to become more educated and informed about managing money into retirement; and ensuring that it lasts as long as we last.
- Processing the Information takes us from theory to reality via integrating and making sense of the two previous concepts by either utilizing or implementing the information.
- Studying and Determining the Right Fit is part of the individual customization of the learning concept. How you plan and manage for your retirement future is not a cookie-cutter phenomenon, but a challenge and an opportunity unique to your own circumstances, needs, values and choices. We will move reciprocally a number of times between all of the steps before moving on to “Applying what we have learned.”
- Applying what we have learned is making it happen, making it real and making it work to shape your best possible Financial and Individual Action Plan for Retirement that provides milestones that are flexible, stable, consistent and doable over the long-term.
You see you have already been involved in financial planning and managing your money. The question is have you planned and managed your resources well enough to live your vision in retirement. Being challenged by questions right before your eyes can be a great motivator to call your attention to things you need to do to secure your retirement future.
P. S. Always Remember to Share What You Know.
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
