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March 28, 2024

Federal Employee Retirement and Benefits News

Tag: FERS

FERS

FERS or the Federal Employee Retirement System is the retirement system applicable to the employees that fall under the US civil service. Its inception can be dated back to January 1, 1987 when it replaced the CSRS.

Converting Money from a TSP Into an Annuity

Even though it’s one of several ways to withdraw money from a Thrift Savings Plan (TSP), the least common choice is to purchase an annuity. The payments can be made in one large sum, every month, or any mix of the two. A little more than 10% of withdrawals from the TSP are used to purchase annuities. You need to be familiar with its characteristics before committing it to paper. The distributions for annuities under the TSP are more adaptable than those under the FERS and CSRS.

TSP provides customers with the following options for annuities:

1. A permanent annuity that pays just you during your whole life is called single life.

2. A combined life with spouse annuity provides you two with payments for as long as either of you is still living. When one spouse passes away, the other will get an income for the rest of their lives.

3. Joint life with a non-spouse, also known as a joint annuity, is an annuity paid to both you and your non-spouse while you are both still alive. This individual must have an interest in you that can be insured. When one of them passes away, the other will get an income for the rest of their lives. Anyone considered to have an insurable interest in you includes your exes, biological or adoptive relatives who are closer to you than your first cousins, and people with whom you have had a common-law marriage in nations that allow such unions. Blood relations are biological and adopted relatives more closely related than first cousins.

Survivors of a joint-life annuity can choose either a full or partial survivor payment. This indicates that either you or your joint annuitant will continue to receive full monthly payments (100%), or those payments will be decreased to half their previous amount (50%). Basic annuities can have additional annuity features added to them. These features include accruing awards, cash returns, and a guarantee that lasts for ten years. If payments are made more consistently, the monthly payment will rise by 2% annually. Your beneficiary will be entitled to a cash return if both you and your partner annuitant pass away before receiving payments equivalent to the account amount used to purchase the annuity. This occurs if you pass away before receiving annuity payments comparable to the sum in your account. If you choose a 10-year definite payout annuity but pass away before the end of the first decade, the remaining payments will be given to the beneficiary of your choice.

Specific types of basic annuities are not allowed to have certain features. After purchasing an annuity, the money is transferred to a private company, and the 401(k) does not deliver the benefit. Rather, the private organization carries it out. You can calculate how a certain amount would convert into income under each of the available options by using the calculator that can be found on the website www.tsp.gov.

If you are married and have a balance of more than $3,500, spouses’ rights will apply to the withdrawal option you choose. Your spouse has the right to a joint and survivor annuity with level payments and no cash return until they waive it if you are a FERS member and you are married. This entitlement is only waived if the member dies. If your spouse does not renounce this right, they will be entitled to it. If you are married and a member of the CSRS and remove money from the TSP, the TSP is required to tell your spouse.

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.

Three Steps to Help You Retire in A Slowing Economy

People who think about retiring soon and early retirees will have to navigate rough waters during these periods. With the stock market in decline, the economy weakening, and the Federal Reserve signaling future interest rate rises to battle inflation, retirees must make prudent decisions to ensure a successful retirement.

Which of the Three Financial Stages Do You Occupy?

That’s where a well-thought-out financial strategy may assist in ensuring a pleasant retirement, even in a tough market. Here are three steps that might help retirees with this significant life transition.

1. Look through your spending history.

Many people do not keep a home budget during their earning years. They also don’t want to live on a fixed budget in retirement. Therefore they should take a different approach: to examine macro trends in spending habits.

We total up all yearly spending over the previous three years. Anyone may gather all credit card and bank statements and calculate average spending.

This exercise aims to see if this spending pattern is sustainable for the following 30 years of retirement. An individual or couple must survive on portfolio savings and guaranteed income sources such as Social Security payments.

Furthermore, most new retirees quickly realize they must fill their days with at least one big activity, which generally comes at a cost. For most retirees, there were two large sums spent: one on house upgrades and another on vacation in a recreational vehicle. Certain hobbies, such as repairing a classic automobile, may quickly cost tens of thousands of dollars and strain the budget.

If spending needs to be cut, there are some simple solutions. These can include reducing monthly automated subscription payments, raising house and vehicle deductibles in return for reduced insurance rates, traveling during off-seasons, and doing some home maintenance jobs rather than hiring specialists.

Some are significant changes. These include deciding to reduce their house or selling extra automobiles to save even more money.

2. Create a plan to survive a stock market drop

It’s natural to be concerned amid uncertain times. On the other hand, those with a detailed financial plan should be able to ride it out without making costly mistakes.

Selling investments at a loss is frequently motivated by fear. Most financial planners know someone who sold their assets in March 2020 when the market fell. However, markets swiftly reversed course and achieved new highs for over two years. A person with millions of dollars in investments who sells their stocks and loses 20% of their value frequently locks in their losses, missing out on the potential benefits of market gains later in the recovery.

Strategies for Investing in a Bear Market

As a prospective recession approaches, one method that might help in planning for retirement income is to construct a bond ladder.

A bond ladder allows someone to buy various individual bonds with different maturity dates, the date an investor receives their bond’s interest payment. A person could, for example, invest $100,000 and purchase ten different bonds, each with a face value of $10,000. Because each bond has a different maturity date, an investor will receive a consistent stream of guaranteed income if held to maturity. High-quality bonds that are held to maturity can offer a regular source of income for a household for the following several years.

3. Acknowledge that you’ll require enough money to last 20-30 years.

Many individuals in their 60s who plan to retire with $1.5 million to $5 million in financial assets may feel at ease. However, people frequently don’t know whether their money will endure at least two decades, if not longer. A retiree can determine their sustainable withdrawal rate, including longevity risks, by developing a strategy based on several statistical models.

Between 1980 and 2010, America’s population of adults aged 90 and up almost tripled to 1.9 million, and this figure is likely to rise dramatically over the following four decades. That implies that new retirees will require enough money to live well for an extended period and may be unable to leave money to their heirs.

Each plan is tailored to the needs of an individual or couple. However, all of them should contribute to determining a sustainable withdrawal rate from a person’s or couple’s portfolio that’ll last a lifetime and meet their financial objectives. Some couples, for example, might want to spend every penny, while others may wish to leave something for their heirs. Each plan is designed to withstand the stress of uncertain events, like a recession or a major geopolitical event.

Remember that a retirement income strategy is essential to reducing emotional fears because the spend-down life phase differs greatly from the accumulation mindset.

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.

First Responder Retirement Fix Passes the House and More

A measure to change the retirement system for first responders who sustain injuries while on duty and must seek out new employment within the federal government was unanimously approved by the House on Tuesday.

First responder federal employees, such as law enforcement and firefighters, participate in an accelerated retirement benefits program, offering to pay more toward their defined benefit pensions with each paycheck in exchange for receiving a full annuity after 20 years of service and turning 50. They must also retire at the age of 57.

Suppose a federal first responder sustains an injury on the job that prevents them from working any longer. In that case, they are not reimbursed for the higher payments they made along the way and thus lose access to that accelerated retirement program.

The First Responder Fair RETIRE Act was proposed by Rep. Jim Langevin, D-R.I., Brian Fitzpatrick, R.-Pa., and Gerry Connolly, D-Va. This act would enable federal first responders who are compelled to seek employment elsewhere in the federal government due to a workplace injury to continue contributing to the accelerated retirement system and retire after 20 years of service and the age of 50.

The measure also allows those workers to get a refund for their prior expedited payments if they leave their federal employment before becoming eligible for an annuity.

Connolly stated on the House floor that we want to motivate our first responders to continue their commitment to this nation. He also stated that we shouldn’t hold them accountable for the harm they caused while protecting communities. And as a reward for their efforts, we ought to keep them enrolled in the retirement plan they chose when they first began their employment.

The bill was moved in July to be considered by the Senate. On August 3, 2022, the Senate Committee advanced the First Responder Fair RETIRE Act. In a letter to the committee on August 2, NARFE stated its support for the legislation.

If passed, the First Responder Fair RETIRE Act will allow federal first responders to continue their service outside their present system while still being a part of the public safety retirement system they contribute to. 

TSP Transition: Lawmaker Requests GAO Probe

The difficulties associated with transitioning the federal government’s 401(k)-style retirement savings program to a new recordkeeper will be the focus of an independent study, Eleanor Holmes Norton, D-D.C., stated last week.

Thrift Savings Plan (TSP) participants have reported difficulties accessing their accounts via the new login system, losing historical account data, and correcting beneficiary information, among other issues. This started when TSP switched to a new recordkeeper and introduced several new services like a mobile app, the capacity to access mutual funds, and sign documents electronically in June.

According to TSP officials, even though they had anticipated that the transition is expected to be “bumpy” and some participants may need to call the customer service “Thrift Line” to resolve problems with beneficiaries or request old documents related to their account, their call center vendor drastically underestimated the number of calls they would receive and was unable to meet demand, resulting in hours-long wait times.

Norton has pushed for details about what went wrong with the changeover since mid-June. She met with the TSP Executive Director Ravindra Deo on June 30, and he pledged to provide her with weekly updates on initiatives to help participants who were having difficulty.

Norton revealed last week that she would request that the Government Accountability Office (GAO) look into the changeover. The Federal Retirement Thrift Investment Board (FRTIB), which oversees the TSP, will have an inspector general, adding that she would draft legislation to that effect.

Norton said she was “profoundly concerned” about the widespread issues with the new TSP online system. She heard from constituents daily regarding the new system’s numerous problems. She said although they need to learn how this fiasco came about and establish new accountability measures at the FRTIB, she will continue to demand prompt repairs to the issues. For this reason, she would ask for a GAO study and drafting legislation to establish an inspector general at the FRTIB.

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].

Protecting Social Security

H.L. Mencken famously noted that the objective of politics is to keep the people alarmed (and hence clamorous to be brought to safety) by threatening them with an infinite series of fictitious hobgoblins.

He was correct, and few things in politics reflect his insight more than Social Security. Currently, the debate around Social Security is dominated by exaggerated scaremongering. Either the Republicans will gut the program, or the Democrats will kill it.

It’s politics as usual, which is unfortunate since politicians from both parties are more than willing to watch the program fail in the future if they can get a few more votes now. The program on which the rest of us rely is essentially a method of shifting voters on the margins from one party to the other on election day.

Most people are troubled by this debate framework since the passage of time is Social Security’s Achilles Heel. Last year, the program created $700 billion in promises that no one expects it to meet since Congress didn’t do anything to change the program’s financial trajectory. In 2022, the cost of doing nothing will be greater-and considerably more the following year. Congressional inactivity is responsible for almost two-thirds of the current crisis.

Politicians are incentivized to keep the status quo as long as people blame the opposition.

The latest round of drama began a few weeks ago when Senator Ron Johnson (R-WI) allegedly stated that Social Security should be evaluated as a discretionary expenditure every year so that Congress may solve faults with the program. According to the Senator, the move would bring accountability to the equation. He explicitly attributes the program’s poor prospects to a lack of oversight and negligence.

It’s uncertain how this modification can help the program recover from a $20 trillion shortfall. Congress now has oversight but chooses not to use it. Year after year, decade after decade, Congress has allowed the program to meander on a well-documented path to disaster.

He wants Congress to continue doing its job. It’s a job in Congress that no one wants. The Senator’s idea sounds a bit like a parent saying that if I make my kids wear coats and ties to dinner, they will stop throwing food at each other.

Pensions may be pretty long-lasting. Our country has recently finished paying off the last of the Civil War pensions. In Social Security’s case, the average beneficiary retires after 20 years. As a result, the goal of Social Security reform should be to create a system that can function for lengthy periods without Congressional action.

Senator Johnson would take reform in the other direction. If he had his way, the program would only be in effect for a year. If you’re 45, the last thing you want to see is Congress slapping legislative duct tape and baling wire around the program every year.

Voters should stop worrying about what the GOP would do to Social Security and instead focus on the fact that they have done nothing by far. During Trump’s presidency, the program amassed around $7 trillion in unfunded obligations. The extent of the deficit has virtually doubled.

The GOP hasn’t come up with a single Social Security proposal in almost a decade. The last major proposal was in 2016, only weeks before the final recess of the 114th Congress, when a  retiring Congressman presented the “Saving Boomers’ Social Security at the Expense of Everyone Else” Act.

The name is a joke, but it’s hard not to notice that the idea would have retained benefits for people born in 1960 or earlier while decreasing benefits for the rest by more than 25% on average.

While the Republican Study Committee has included this plan in its yearly budget, no one knows if it would make the program sustainable or how much benefits would be decreased since no one has checked with the Social Security Administration to see if it’s effective.

The GOP’s strategy for Social Security is simple: assure voters that the party would safeguard benefits and hope that no one questions how they intend to uphold that promise. So far, that method has proven incredibly effective because no one will ask a disrespectful question.

The Democrats’ plan for Social Security is to pretend that the GOP is a hobgoblin and to take up righteous anger with everyone who doubts the folly of the proposition.

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!

Why you can’t rely solely on dividends to fund your retirement

It’s common knowledge that it is crucial to hold various retirement investments that enable income generation. After all, Social Security may be forced to make benefit adjustments in the future, which could mean a lower monthly payout for you.

Even if Social Security benefits aren’t reduced, those benefits will only replace roughly 40% of your pre-retirement income if you make an average salary. You will receive a lower replacement income if you earn more than average. Furthermore, while retirees can frequently get by with less than 100% of their prior income, they typically require more than 40% to live comfortably.

Because of this, you might be tempted to invest money in dividend stocks before retiring and hold them throughout your senior years. This way, you can then utilize those continuous contributions to pay for your retirement expenses.

Holding dividend-paying equities is indeed a fantastic method to increase your Social Security income. But you should venture outside of that.

Limit your reliance on dividend stocks

Keeping dividend stocks in your portfolio throughout retirement is unquestionably a good strategy. However, they should be one of several items you invest in at that time.

One factor is the general volatility of stocks. Additionally, as a senior, it’s wise to preserve some of your money in securities whose value is less likely to fluctuate dramatically, like bonds. That is but one argument against investing excessively in dividend stocks.

Another factor is that dividend payments are not assured to be made to you. When you invest in bonds, the organizations that issue your bonds are legally required to pay you interest at predetermined periods. This does not imply that individuals entitled to the interest payments can or will default on them. But when you make that investment, they are at least mentioned in terms of your bonds.

On the other hand, businesses that distribute dividends to stockholders are not compelled to do so. Furthermore, they are in no way required to maintain a specific dividend. As a result, you can fill your portfolio with dividend-producing stocks only to discover that, over time, some or all of those companies reduce or stop paying dividends altogether.

As such, dividend stocks ought to be one of the numerous income sources you set up for yourself during retirement. Your goal should be to diversify your holdings so you can earn income from various investments, including bonds, index funds, and possibly real estate, if you have the appetite for it.

Diversification is always a good idea.

When you’re younger, it’s crucial to keep a broad financial portfolio; as you age, it’s essential to continue. This entails not becoming unduly dependent on dividend stocks but instead using them as one of several resources to augment your Social Security payments and guarantee you have enough money for a pleasant retirement.

You probably need a million-dollar portfolio to live off your dividends right now, but that number will only increase.

If you’re currently saving for retirement, remember that a current retiree would need about $1 million to live off the dividends. You most likely will need 22% more if you are ten years away from retirement, and 49% more if you will retire 20 years from now. And most likely twice as much if you’re 35 years away.

These increases are to cover inflation. Of course, this quick calculation ignores factors like a downsized home, an inheritance, a decline in expenditures in your later years, etc. It also ignores the possibility that your dividends won’t keep up with inflation.

Stocks usually gain value in addition to the dividends they pay over time. You should consider increasing your capital during retirement if you intend to only rely on your dividend income.

Conclusion

Living off dividends may be possible depending on your expenses, required amount of income, and assets. It’s crucial to avoid letting dividends determine your entire asset allocation plan. This can put your income stream in danger and potentially your entire portfolio. (Re)think about the significance of living off dividends in your financial strategy as you contemplate how to retire comfortably or gain financial flexibility. It might not be as crucial as you believe.

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!

An Open Season Checklist for Federal Employees

Federal employees can review and make changes to their health insurance plans annually during the Open Season. It can be daunting, with many plans and premium increases to consider. This year’s Open Season will take place from Friday, November 14 to December 12, 2022. The changes will take effect on January 1, 2023. And it’s the best time for federal employees to switch health plans and alter their existing plans. So, ensure your health plan is the most excellent fit for your family’s needs. Let’s look at the open Season checklist to guide you through the process.

High Premium Increases

Employee premium share will rise by 8.7% next year. It’s the highest increase in a decade, making this year preferable for many employees to contemplate switching FEHB plans. Premiums will go down in 56 programs, remain the same in nine goals, rise below the usual in 119 plans, and rise slightly above the standard in 78 projects throughout the upcoming year.

For instance, Self-only registrants will have to pay an additional $6,510 due to a decrease in premiums of 36.5% in Nevada, a rise in premiums of 49.5% in New Mexico, and a 34.2% rise in Illinois plans. It’s crucial to check how the premium for your FEHB plan has changed. So, here is how you can select the best health plan for 2023. 

Selecting New Health Plans

Shopping for a new health plan can be daunting, but selecting the option that offers the best value is worth the effort. Total cost should be the primary factor in your selection process. It includes your premiums and the likely out-of-pocket expenses based on your family’s age, size, and expected healthcare usage.

For federal employees, Checkbook’s Guide to Health Plans ranks plan options based on total cost estimates. The differences in 2023 can be striking. For instance, a family of four living in Washington, D.C., could save more than $4,000 in estimated costs by switching from BCBS Standard to Kaiser Standard. Alternatively, this same family could keep their PPO coverage and save $3,500 by switching from BCBS Standard to GEHA Elevate.

Hence, the goal is to ensure that you select the plan that offers the best value for you and your family. Let’s see how you can do it effectively because savings can be huge. 

Flexible Spending Accounts

Flexible Spending Accounts (FSAs) are a great way to save money on out-of-pocket healthcare expenses. With FSAs, you can set aside pre-tax dollars to cover eligible healthcare costs. Unfortunately, only 20% of federal employees are taking advantage of this program.

Considering setting up an FSA, it’s essential to know critical details. You can contribute anywhere from $100 to $3,050 in 2023. This money is taken out of your paycheck in equal installments, avoiding payroll taxes, which means you get an adequate 30% savings on qualified healthcare expenses!

Plan Benefit Changes

As health insurance plans prepare for significant changes across the board in 2023, it’s essential to be aware of the changes to your current FEHB plan and any plan you may be considering. These changes can significantly affect the benefits you’re entitled to and how much you’ll pay for them. It’s crucial to look at the official FEHB plan brochure and closely at Section II – How Your Plan Will Change in 2023. 

You’ll find detailed information on any additions or changes in your plan benefits and an overview of the cost increases you could be facing in the year ahead. Please ensure you’re prepared for a very different FEHB experience in 2023 before it’s too late.

The same goes for your provider directory, formulary updates, and dental benefits for 2023. Make sure you check your doctor’s coverage and dental needs to ensure that you are making the best decisions for yourself and your family. Updating these lists and aligning them with your needs and goals is essential in managing your health insurance. 

Final words

Less than 2.5% of federal employees switched health insurance during Open Season, despite the highest premium rise in the past decade. However, professionals should check to see if their current FEHB plan is still the best option. They should look for changes in 2023 to the significant benefits, provider networks, and prescription drug coverage.

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.

Why Aren’t Annuities Popular Among Retirees?

Could a defined-contribution retirement savings plan introduced in 1918 provide answers to one of the most perplexing 401(k) questions?

Yes, is the quick answer. Teachers Insurance and Annuity Association (TIAA) is a retirement savings plan that attracts members from colleges, universities, and other non-profit organizations.

The complex personal finance subject concerns how employees with 401(k) plans can convert their accumulated savings into a retirement income.

The fundamental problem is that if retirees spend too much quickly, they may have to reduce their living standards later in life substantially. Moreover, retirees who are overly cautious with their money risk regret missed opportunities and die rich. The uncertainty about life expectancy adds to the difficulty. 

Investing in an annuity contract is a great way to ensure consistent income in retirement. But most retirees don’t seem interested in annuities.

Why Annuities Are not popular 

Annuities aren’t particularly popular among retirees for several reasons. 

Firstly, annuities are complicated contracts. When household circumstances change, annuities are rigid. 

Second, many participants are deferring withdrawals from their TIAA retirement accounts until their Required Minimum Distribution (RMD) date. The RMD is the percentage of assets that individuals must withdraw beginning at a certain age. The percentage of TIAA participants who waited until their RMD climbed from 10% in 2000 to 52% in 2018. During the study period, the RMD was 70 years old. However, in late 2019, the secure act upped it to 72 years, and if the Secure Act 2.0 passes, the RMD age will eventually grow to 75 years.

Research shows that the IRS‘s RMD table is a more effective technique than other well-known guidelines, such as the 4% rule of thumb. RMD is a great way to figure out how much you can spend.”

Thirdly, retirees value their freedom. Yes, annuities protect against the risk of living longer than planned, but retirees still face additional risks, such as health concerns and unforeseen bills.

Retirees may need their money if a spouse unexpectedly needs medical assistance or an adult child returns home with grandkids after divorce. For individuals with adequate funds to wait, the RMD option is a viable option.

Aside from purchasing a private annuity, other options for reducing longevity risk are other options. For one reason, inflation-adjusted spending falls throughout retirement (with a healthcare-driven increase later in life). 

It’s possible that the rise in the average retirement age among TIAA participants coincided with the rise in popularity of the RMD option. The average retirement age increased by 1.3 years for women and 2 years for men among participants.

From a public policy standpoint, politicians are correct in encouraging corporations to sell annuities to their future retirees. Unless the product is significantly enhanced, few retirees will take advantage of the offer. According to the TIAA study, retirees would like to preserve control of their savings just in case.

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 Employee Health Benefits (FEHB) Fast Facts

OPM’s lowest-cost countrywide plan choice will be automatically selected for you if you don’t switch plans.
The number of providers and their makeup under the Federal Employees Health Benefits program is changing more this year than in prior years.

In light of this, OPM recently released a Federal Benefits Fast Facts bulletin that started by listing the four factors that might impact your current FEHB plan enrolment:
1. Terminating the program completely
2. Narrowing the scope of its services and removing its enrolment code
3. Narrowing the service area while maintaining the enrolment code
4. Removing an alternative (such as Standard or High)
Then it offered some questions for you to think about, which are included below.

How will I know whether this will influence my enrolment?

You will get a letter from your insurance provider informing you that it is either ceasing to offer coverage in your region, ceasing to participate in the FEHB program, or removing an option.

What should I do if something affects my enrolment?

You can switch your enrolment to a different plan during Open Season or a time frame that OPM specifies.

I plan to leave the FEHB program. What occurs if I don’t switch to a different plan?
If you don’t switch plans, OPM’s lowest-cost countrywide plan choice will be automatically selected for you.

My enrolment code is no longer valid, and my plan is expanding its coverage region. What occurs if I don’t switch to a different plan?
If you don’t switch plans, OPM will automatically enroll you in the most affordable countrywide program.

My plan’s coverage region is shrinking where I live or work, but my enrolment code is staying the same. So what occurs if I don’t switch to a different plan?
You’ll only have access to emergency care services in the new plan year; to get complete coverage, you’ll need to travel to the plan’s remaining service region.

My strategy obviates my choice. What will happen if I don’t choose another plan or one of the other options?
You’ll be enrolled automatically in one of the remaining alternatives in the plan. For example, if a High Deductible Health Plan is the only choice left, OPM will automatically enroll you in the option with the lowest-priced countrywide program.

What happens to my Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) if my High Deductible Health Plan (HDHP) discontinues coverage in my service region or withdraws from the FEHB program?
You must sign up for another HDHP if you want to keep making contributions to your HSA. If you don’t do that, you won’t be able to contribute to your HSA, but you will still be able to withdraw money for allowed medical costs. If you don’t utilize your HRA credits before the plan you choose takes effect, you’ll lose them.

How can I switch my enrolment to a different plan?

If you work for an agency and are a FERS employee, you can use online self-service tools like Employee Express, MyPay, Employee Personal Pages, EBIS, etc. Call your HR department if you need further assistance. Also, call Open Season Express at 1-800-332-9798 if you are a CSRS or FERS retiree.

When does my old plan or option stop offering coverage and my new one start?

Your current plan will continue to provide benefits. There won’t be any voids in protection. Until the start date of the new plan you choose during Open Season or for another period specified by OPM. The first day of your first full pay period in January 2023 will mark the start of the Open Season enrolment adjustments.

What are my rights if I’m expecting or suffering from a chronic or incapacitating condition?

Enrolees who are receiving treatment from a specialist for a chronic or disabling condition or who are pregnant in the second or third trimester have the right to carry on with their care for up to 90 days or until the end of post-partum care after receiving notice that a plan is leaving the FEHB program.

How can I compare the many health plans I have access to?

There are numerous tools at your disposal to compare plans: you can use the Plan Comparison Tool or the Consult Consumer’s Checkbook to review and compare the various available programs.

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.

Investing In An Annuity With TSP

An annuity is one of several withdrawal arrangements available in the Thrift Savings Plan (TSP). 

While only a tiny percentage of TSP withdrawals allow annuity purchases, ensure that you understand the benefits of investing in annuities before discarding them as a possibility.

For one point, the TSP’s annuity payout offers more flexibility compared to the standard FERS or CSRS retirement benefits.

The TSP offers three basic annuity options:

• Single life annuity – a one-time payment made only to you during your lifetime.

• Joint life with spouse annuity – a payment made to you and your spouse while both of you are alive. When either one of you dies, the surviving partner will get an annuity for the rest of their life.

• An annuity granted to you while you and another person (not your spouse) are still living while you and someone else (not your spouse) are still alive. This person must have a strong desire to help you. The survivor will receive an annuity for the remainder of their life if one of them dies. In countries that recognize common-law marriages, a former spouse, blood relatives, adopted relatives who are closer, or a person you are living with or in a relationship that could constitute a common-law marriage are judged to have an insurable interest in you.

Joint Life Annuities can provide a survivor benefit of either 100% or 50%. When either of you dies, your monthly payments will continue in the same amount (100%) or be reduced by half (50%) to you or your joint annuitant.

The basic annuity types can be paired with a variety of annuity characteristics. Increasing payouts, cash refunds, and a 10-year guaranteed payout are among them. 

With the fundamental annuity kinds, a variety of features can be combined. Increasing payments, cash refunds, and a 10-year guaranteed payout are some options. 

Suppose you (and your partner annuitant) die before taking money equal to the balance used to acquire the annuity. In that case, a designated beneficiary will receive a cash refund of the difference between the payments amount and the funds used to purchase the annuity. If you die within ten years after the start of the annuity, the beneficiary will receive the remaining payments.

Not all features are compatible with all types of basic annuities. Also, once an annuity is purchased, the funds are transferred to a private corporation, and that company, rather than the TSP, provides the benefit.

You can visit www.tsp.gov to use the calculator functions to see how a certain sum might translate into income under various scenarios.

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!

The Six Best Ways For Women to Stretch Their Retirement Dollars

When it comes to retirement, women face unique challenges. Women have a five-year advantage over males in terms of expected lifespan, yet they only earn 84 cents for every dollar their male coworkers bring in. Because of this, it’s not surprising that 60% of women in the most recent Merrill Lynch survey on women and money (Women & Financial Wellness) worry about having enough money to last until they die.

Women may expect to make about $1.1 million less than men over their working lives. Just let that number settle in for a second. Women are expected to multitask and complete more tasks in less time, whether they like it or not. To that end, this article outlines six strategies they can implement to make the most of their retirement funds.

Negotiate the Best Salary Offer You Can

The initial payment is an essential factor. The impact of compound interest can be significant over time. Women must pay close attention to their earnings from the beginning of their professions.

If the initial offer needs to be higher, keep looking. Make the most of your bargaining ability by learning the market averages for your position before entering any talks.

Take On Even More Risk

Women are typically more risk-averse investors, but this isn’t sustainable when your income is lower, and your life expectancy is higher. Investors in “target date” funds, prevalent in employer-sponsored 401(k) plans, incur additional risk at the outset of their investment careers since the funds are tailored toward a specified retirement date.

Develop Your Financial Self-Assurance

When making financial plans, there is no such thing as a foolish question. Choose a financial adviser who makes you feel confident about your financial future. Even if you believe you have a good handle on personal finance, there is always more to learn and more confidence to develop.

Put Aside as Much Money as Possible

With the gender pay disparity and increased life expectancy, women must save at least 1.5 times as much as men to meet their financial goals. You can maximize the potential of compound interest if you begin saving early in your career. 

Limit Your Time Away from Work

Although it is not always feasible, continuing to work after retirement might significantly impact your final retirement account balance. Women are disproportionately expected to take on the caretaker role, but this can have a devastating impact on their ability to save money. There is the loss of wages and the forfeiture of the employer’s 401(k) match.

Have The Guts to Ask for Help

Use every resource, including the internet, people you know, accountants, and books. You can’t just take a stab in the dark and hope everything works out for your finances.

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.

Consider Investing Your COLA Increase in These Exciting Stocks for Social Security

The 8.7% cost-of-living adjustment (COLA) published earlier this month will result in a welcome increase in Social Security claimants’ monthly payments in 2023. According to the Social Security Administration, payouts will rise by an average of more than $140 per month in 2023.

While many seniors need the funds to deal with the rising cost of living, others may have the resources to invest in some or all of them. That can be a little nerve-wracking in the present bear market, especially if you’re living on a fixed income. However, some potential equities have lower risk levels than others.

If you’re thinking of investing your COLA raise in the stock market, search for well-established, reliable businesses that distribute dividends regularly. Dividends are particularly significant since they ensure a return of some kind, even during bear markets for stocks.

These five stocks are worth checking out.

Walgreens Boots Alliance (WBA)

According to The Motley Fool, the pharmacy industry has grown its yearly base payout for the previous 47 years and continuously paid a dividend for nearly nine decades.

We will always need prescription pharmaceuticals, healthcare services, and medical equipment. Hence, Walgreens is less vulnerable to market and economic fluctuations because it primarily operates as a healthcare business rather than a retail stock. The corporation has also made significant investments in its direct-to-consumer and online businesses.

Icahn Enterprises (IEP)

Icahn Enterprises is a holding company run by renowned investor Carl Icahn and his son Brett, which focuses on investing in steady performers rather than high flyers.

Pep Boys, a chain of automotive service centers with a long history, is an example of one of its investments. Icahn Enterprises has a “sky high” dividend yield of 14.86% as of October 23, according to Investor Place, and its stock price has managed to post a slight increase in 2022 despite the bear market.

JPMorgan Chase (JPM)

According to The Motley Fool, JPMorgan Chase has been the largest and most dependable performer among major U.S. banks in recent years. Unlike many of its competitors, JPMorgan did not require a bailout during the financial crisis, and it has generally stayed clear of the problems that have dogged Wells Fargo and Citibank.

Even better, JPMorgan has been paying a dividend yearly for the last 50 consecutive years. As of October 23, it offers a dividend yield of 3.5%, but this figure should rise over time.

Central Securities (CET)

Although this closed-end investment company has existed since 1929, it may not be as widely known as the others on this list. According to Investor Place, Central Securities “basically functions as a holding company.” Insurer Plymouth Rock, oil and gas company Hess, and credit card juggernaut American Express are among its interests.

Some of Central Securities’ current investments have been held by the company for 40 years. On October 23, Central Securities announced a dividend yield of 10.6%, which is paid every six months. The payoff at the end of the year is usually the largest.

Target (TGT)

Like many businesses, Target is susceptible to economic fluctuations. This year, as consumer spending has slowed due to consumers’ weariness with inflation, its earnings and stock price have suffered. With a share price that has increased by roughly 170% over the previous five years, Target continues to be a top performer in the long run.

According to The Motley Fool, it also has considerably higher operating margins than competitors like Amazon, Walmart, and Costco. As of October 24, Target had a dividend yield of 2.7% and had increased its payout for 50 consecutive years.

Conclusion

Due to their income distributions, dividend stocks appeal to investors, particularly seniors. However, before purchasing a stock, investors should do their homework to ensure that the dividend payout is sustainable. This is especially true in an unstable financial environment.

All five stocks discussed in this article hold industry leadership positions and have substantial competitive advantages. Additionally, they have solid profitability that can sustain their high dividends, ensuring dividend security even during a recession. These are the best stocks to purchase with your COLA increase.

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.

A Breakdown Of The Basics Of Life Insurance

The industry education organization Life Happens declared September as “Life Insurance Awareness Month” in 2004. The “Life Insurance Awareness” month aims to inform the public about the importance of life insurance and how it may serve as a solid financial foundation for a family.

Reasons People Buy Life Insurance

Life insurance should have a goal or justification, just like purchasing any other financial item. Among the explanations people have for getting life insurance are:

• To ensure the named beneficiaries’ financial security.

• To make provisions for estate liquidity, the heirs’ equitable distribution of inherited assets, and wealth transfer.

• Providing money to pay off a specific debt, like a mortgage.

• Comply with the demands of the divorcing spouse, and

• To invest, such as a life insurance policy with a single premium.

Individual Life Insurance Policy Types

There are two prominent types of life insurance policies: (1) individual or group-sponsored; and (2) term or permanent (cash value). Both are discussed here.

Individual vs. Group-Sponsored Life Insurance Policies

  • Individual life insurance policy

A person can apply for an individual life insurance policy that provides such policies. The person must most likely qualify for insurance since, among other things, the insurance company will scrutinize the person’s medical records, and the person almost certainly needs to undergo a medical exam.

  • Group-sponsored life insurance policy

Permanent employees of an employer are entitled to join a life insurance plan at the time of hire, and the employer sponsors the plan. The Federal Employees Group Life Insurance (FEGLI) program of the federal government is an example of a group-sponsored life insurance plan.

A group-sponsored life insurance plan has the benefit of being a “guaranteed issue,” which means that anyone applying for coverage is not required to provide proof of insurability.

All potential employees, regardless of age, gender, or smoking status, are welcome to apply. There are no medical exams or records of specific patients checked.

Comparison between Term Life Insurance and Permanent Life Insurance with Cash Value

  • Term life insurance

Term life insurance provides complete defense (in the form of a death benefit) against monetary loss brought on by a decedent’s passing during a predetermined period. When a person needs life insurance for a relatively short time – less than 30 years – term life insurance is typically the most suitable option and the best investment. In summary, term life insurance provides the highest level of protection at the lowest cost (premiums). It is not intended to cover a long-term requirement for life insurance.

  • Permanent life insurance with a cash value

The term “permanent” (also known as “cash value”) refers to life insurance that does not expire as long as the payments are paid, and the policy owner does not switch from one cash value life insurance policy to another. Whole life, variable life, and universal life are the three main categories of permanent life insurance plans and are discussed below.

1. Whole life insurance: A whole life insurance policy offers death benefit protection for a fixed premium for only the duration of the insured’s life. Another name for the whole life insurance policy is a “straight line” policy. A portion of the premium is invested at a fixed rate of return, which allows the policy to save money.

2. Universal life insurance: A cash value fund that grows tax-free as long as the insurance is in force is combined with term life insurance to provide death benefit protection with universal life insurance.

In the case of a universal life insurance policy, the insurance provider subtracts certain costs and the first month’s premium payment from the death benefit.

The remainder of the premium is invested in a cash value fund, which is often a high-yielding government securities fund and receives interest at the market rate. The cost of an additional month’s death benefit plus expenditures is taken from the cash value fund each subsequent month.

3. Variable life insurance: Variable life insurance combines the benefits of tax-free deferred savings with the growing potential of stocks (stocks). Like standard life insurance, variable life insurance products provide fixed premiums and a guaranteed death payout.

Contrary to other life insurance policies with cash value, like whole life, the cash value of an insurance policy is not guaranteed and will fluctuate according to the performance of the investment portfolio that the policyholder has chosen.

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 [email protected] 914-302-2300

The TRICARE Fact Sheet Can Help You Choose the Best Dental Plan

Do you want to make the most of your TRICARE dental coverage? Remember that dental coverage differs from TRICARE’S medical care, so it’s essential to understand the difference between plans. To learn more about each dental plan and if you qualify, check out the TRICARE Dental Options Fact Sheet.

This fact sheet is a tool that will help you see which dental coverage plans are available. So, use it to make the best choice for your dental health.

Here’s a breakdown of what the fact sheet highlights.

1. Active Duty Dental Program (ADDP)

ADDP offers civilian dental treatment to active duty service members. United Concordia Companies, Inc. (United Concordia) manages the program both within the continental U.S. (CONUS) and outside (OCONUS). If you’re outside the U.S., you must be remotely situated and registered in TRICARE Prime Remote Overseas. ADSMs in the CONUS are eligible for care under the ADDP if they are either referred by a military dental facility or remotely located. That means you live and work at least 50 miles away from a military dental clinic.

Check out the ADDP part of the fact sheet for more information on eligibility, obtaining care, and other topics.

2. TRICARE Dental Insurance Program

United Concordia administers the TRICARE Dental Program (TDP), a voluntary premium-based coverage. TDP is available both domestically and internationally. TDP is not available to ADSMs. Who qualifies? You can join TDP if you are a family member of:

i. an active-duty military member

ii. a National Guard, or

iii. a Reserve member.

TDP, as described in the TRICARE Dental Options Fact Sheet, provides complete coverage for most dental services. However, to obtain coverage, you must enroll in TDP. Check out the fact sheet for additional information on enrollment choices and prices.

3. Federal Employees Dental and Vision Insurance Program (FEDVIP)

FEDVIP is another optional program. The U.S. Office of Personnel Management (OPM) is in charge of it. FEDVIP is available for the following:

i. Retirees and their eligible dependents
ii. Retirees from the National Guard and Reserve
iii. Certain surviving spouses
iv. Medal of Honor recipients and their qualifying family members

FEDVIP offers a wide range of plan alternatives from various dental carriers.

Contact Information:
Email: [email protected]
Phone: 6122163911

Bio:
Mickey Elfenbein specializes in working with Federal Employees relative to their retirement benefit plans, FEGLI, TSP, Social Security and Medicare, issues and solutions. Mr. Elfenbein’s mission is to help federal employees to understand their benefits, and to maximize their financial retirements while minimizing risk. Many of the federal benefit programs in place are complicated to understand and go through numerous revisions. It is Mr. Elfenbein’s job to be an expert on the various programs and to stay on top of changes.

Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.

He has over 30 years of senior level experience in a variety of public and private enterprises, understands the needs of federal employees, and has expertise built on many years of high-level experience.

Outside-the-Box Ways to Fund Retirement

Here are some unconventional ways to make money in your senior years.

Dividends

You might have invested for years without worrying about cash flow. Regular income paid expenses and created retirement savings.

As a principal source of income, relying on growing stock price rises is a lousy strategy. You may need to sell shares before a slump when it would most damage your investment. Many growth portfolios have plummeted 20% in recent months. The dilemma may be easily resolved by reducing growth and increasing payouts. A solid dividend stock’s payout is dependable even if its price is completely flipped.

As a point of reference, the dividend yield of the typical stock in the S&P 500 that is included in the index is around 2%.

Back to Work

This isn’t what most retirees wanted. Many of us will continue our occupations in our twilight years if we haven’t already. According to the Rand Corporation, 40% of American employees 65 and older have retired and returned to work. That’s around 10 million individuals, or a fifth of the population.

If you’re receiving Social Security and working, know this: Social Security will reduce your monthly income if you work and earn enough. If your monthly income exceeds $19,560 in 2022, your Social Security benefit will be decreased by $1. Working can offset the loss of Social Security income, making retirement more financially manageable.

Reasonable: Real Estate as an Investment

Being a landlord requires owning property the landlord doesn’t need. If you don’t have a second house to rent, skip this money-making retirement technique.

Now is a good moment to buy a second home or half of a duplex. Due to a lack of rental homes, rents have soared. RSM says the U.S. needs 3.5 million extra dwellings to maintain market stability. By 2030, the country will need to build 1.7 million new dwellings yearly. Anyone with rental housing will benefit till the request is fulfilled.

Flipping Sounds Crazy, but it Works

“Flipping” means acquiring an item with the intent of selling it immediately for a profit by charging more than the original purchase price. You can flip virtually any object.

Although it may seem absurd at first, many individuals are generating money by flipping and having a great time doing it. Monthly earnings can be anywhere from a few hundred to several thousand dollars.

The practice depends on the fact that, for many people, convenience is more important than searching around for the lowest price. This is true in many industries, including furniture, toys, consumer electronics, and antiques.

Flipping requires several elements. First, understand the item, and its value. If you don’t know much about power drills, stick to something you know.

Second, the items must be acquired and sold. Yard sales and thrift shops are fantastic places to find inventory, but online marketplaces often fetch the most money. In addition, a seller’s readiness to sell and ship can make or break a deal.

Therefore, it is advisable to begin this hustle on a modest scale to become familiar with its intricacies before expanding into larger endeavors.

Putting your Automobile Up for Rent? It’s a Thing.

Finally, some people would hire your automobile rather than use a traditional car rental service, if you are prepared to allow someone else to drive it. If you join up with one of the many apps that link would-be drivers with vehicle owners who don’t constantly require access to their cars, you may make as much as $9,000 per year, according to HyreCar.

The notion carries with it some obvious dangers and concerns. To begin, even though drivers are required by law to have insurance, your insurance carrier may not be thrilled with the prospect of paying claims for a vehicle that is often used by a wide range of persons for business purposes. Consult an insurance professional before proceeding. Furthermore, it reduces the resale value of your car by causing wear and tear that would not occur under normal circumstances. You should give this some serious thought before you jump in.

However, if you’re willing to accept the terms provided by a trustworthy peer-to-peer automobile rental network, you may make money using this unconventional method of doing business.

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

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

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

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

The Oklahoma City Bill Exempts Veterans From Retirement Taxes.

Republican Reps. Kevin McDugle, Tammy Townley, R-Broken Arrow, Robert Manger, and R-Ardmore of Oklahoma City celebrated the approval of their bill in the House of Representatives. This bill would grant Oklahoma veterans a 100% tax exemption on their retirement benefits due to their service to the country.

The present exemption would be extended until December 31, 2022, under House Bill 3693. Under the new law, veterans in Oklahoma City will be exempt from paying income taxes on their retirement payments beginning January 1, 2023.

Veterans of the United States Armed Forces get tax breaks for about 75% of their retirement payments, or $10,000, from any other part of the United States Armed Forces.

Speaking about the bill, McDugle said, “During the interim study we had, the most common request we received from various business sectors, especially the aerospace industry, was that we do everything we can to keep veterans in Oklahoma.”

“With this bill, we can keep our veterans and their families in Oklahoma, where they may continue contributing to the state’s workforce.”

“We want to motivate folks leaving military duty to stay in Oklahoma at various bases,” Rep. Townley said.

Our veterans are experts in their fields, and many opt to work in the civilian sector after leaving the military. They’ll opt to stay in Oklahoma because of veteran-friendly retirement benefits, filling our workforce shortfalls, and contributing to their community and state.

Rep. Manger, a member of the House Military and Veterans Affairs Committee, said, “The law is just one more way to say thank you to those brave individuals who have served our country. Every little effort helps these heroes, and I’m delighted that we’re doing our part to ensure that our servicemen and women are treated with respect and dignity.”

In late March, H.B. 3693 passed the House by 88-0, making it eligible for consideration in the Senate.

According to a budgetary estimate issued by House staff on March 24, the bill will have no fiscal impact in Fiscal Year 2023. A net drop of $5.677 million in state income tax receipts is expected in the fiscal year 2024. The bill’s primary author in the State Senate is State Senator Julie Daniels, R-Bartlesville.

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.

Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.

How Congress Wants to Curb Early Retirement Withdrawals

Moving a 401(k) from one employer to another might be inconvenient. Still, it’s preferable to cash out the account and possibly lose thousands of dollars by retirement, not to mention the extra taxes and penalties you’d have to pay.

Every year, Americans’ retirement portfolios suffer from “leakage,” defined as early withdrawals from retirement funds for reasons other than retirement. Most retirement plans require investors to reach 59 1/2 before receiving penalty-free withdrawals, although misfortunes such as job loss, disability, or death in the family do occur.

Non-emergency distributions, such as cashing out an account when changing jobs, might unnecessarily jeopardize an American’s future retirement.

During a Senate Committee on Aging hearing on “A Financially Secure Future: Building a Stronger Retirement System for All Americans,” Sen. Tim Scott said that almost $92 billion in retirement funds were lost due to leakage in 2015. Scott, a Republican senator from South Carolina, is the committee’s ranking member.

The significance of that is that when you have that leakage every year, it means fewer funds will be available for you when you need them the most — when you want to retire and live well in the future, Sen. Scott explained. Too many of your resources may have spilled out along the road. Scott stated he took an early withdrawal in his late twenties and didn’t know how significant it was until he had to record the distribution as ordinary income and pay a 10% penalty on top of it.

According to the senator, switching employment is one of the biggest leakage drivers. People no longer work for the same company for decades — it’s not uncommon for the average worker to have between seven and eleven employers during their careers, he says — which opens up more options for people to take their retirement funds with them.

According to a Savings Preservation Working Group research, cash-outs at the time of job switching were more prevalent than hardship withdrawals and loan defaults. The study found that at least one-third of employees, but as many as 47% of plan members, withdraw some or all of their retirement portfolios when switching jobs.

Workers are also more inclined to cash out their retirement accounts when their balances are low, according to J. Spencer Williams, founder and CEO of Retirement Clearinghouse, who testified at the hearing. When savers reach $10,000 in their retirement accounts, their perspectives begin to shift, he said. Moving money from one employer’s retirement plan to another can also be time-consuming. According to him, we need to make it incredibly simple because every time someone switches employment, they have to decide, especially at the lower end.

Americans not only pay ordinary income taxes and a penalty for taking early distributions, but they also miss out on the power of compound interest, which is when invested money accumulates on top of itself and creates returns over time. That might cost savers tens of thousands of dollars, if not more, throughout a lifetime.

Congress is investigating the issue. One proposal, known as the “Portable Retirement and Investment Account Act” (PRIA), would solve the leakage issue by letting Americans relocate their retirement funds throughout their careers. At the time of introducing the measure, Rep. Jim Himes of Connecticut stated that the present system for retirement savings was ineffective.

The alternatives available to American employees vary substantially depending on their field of employment, and the procedures can be too complex. Furthermore, if they quit their work, many Americans lose access to retirement savings vehicles, and gig, contract, and part-time employees are usually ineligible. This changes with PRIA, the lawmaker added in a statement. Under that proposal, workers who leave their employment would be able to continue contributing to the plan in the same way they did previously.

Nontraditional workers, like those in the gig economy, may not participate in an employer-sponsored retirement plan (although many states address this issue by implementing auto-IRA programs). Demand exists despite low access levels among nontraditional workers, said John Scott, project director of the Pew Charitable Trusts’ retirement savings project and a witness at the Senate hearing.

It’s tough to say: well, we have one answer that will match all types of workers, he added. The gig economy encompasses a wide range of arrangements — workers may get paid in various ways or file their taxes in different ways, for example, and may not have the option of a direct deposit from their check to their retirement account. With this workforce section, we need to be more imaginative and innovative.

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.

TSP Premature Withdrawal Consequences: Traditional and Roth

The Internal Revenue Code imposes penalties in specific situations, including a ten percent penalty for premature withdrawals from retirement funds. What is premature? That is debatable. In this post, we will explore the age you’d have to be to escape this consequence.

When IRAs (Individual Retirement Arrangements) were launched in 1974, the consequence was enacted. People who withdrew funds from their IRA at 59 years old were immune from the penalty. Those who take their funds before turning 59 and a half years would pay the consequences and taxes imposed on the funds they withdrew. The penalty’s limit of 59 and a half means the day on which you become 59 and a half. Until 1987, every fund in your IRA account was, in fact, pre-taxed. This means that contributions were made with pre-tax monies and your account matured tax-deferred.

The Roth Individual Retirement Arrangements was first launched in 1997. At that time, all earnings you withdrew before 59 and a half were subject to a premature withdrawal penalty. Early withdrawal penalties do not apply to conversions or contributions you make before reaching that age. Withdrawals from your Roth Individual Retirement Arrangements account are viewed as arriving first from contributions, then conversions, and finally from earnings. That’s not the case with the Roth Thrift Savings Plan (explained below); withdrawals from the Roth Thrift Savings Plan are proportional to earnings and contributions.

The Thrift Savings Plan was established in 1987. Like a standard IRA, it permits tax-deferred earnings and pre-tax contributions. It features a ten percent penalty for premature withdrawals up to 59 years. However, the consequence isn’t always applicable. You are excluded from the penalty if you retire from your government position in the same year you reached 55 (or beyond). 

This exclusion from the consequence will start the same year you turn 55, but on the very day you turn 55. If you split in one year before you turn 55, the ten percent penalty will become applicable until you turn 59 and a half. Suppose you’re a particular class worker (such as a firefighter or a police officer). In that case, you’re free from the consequences after you reach the age of 50. Funds taken from your Roth Thrift Savings Plan are subject to this rule.

If you split between 55 (or 50) and 59 and a half, don’t expect to pay remit taxes upon withdrawing from your Roth Thrift Savings Plan. A Roth Thrift Savings Plan account has two parts: the paid contributions and profits earned from these contributions. You pay taxes as you contribute. Still, part of the profit is only non-taxable if you take funds out of the account five years or more after creating your Roth and for a minimum of 59 and a half years.

Watch out for the “Roth Tax Trap†if you retire before 59 and a half and start withdrawing funds from your Thrift Savings Plan. The withdrawal would be commensurately from your Roth and traditional accounts. You’ll have to make tax payments on parts of your fund’s withdrawal that emerge from the income component of your Roth account until you are 59 and a half years old. 

This is because you may pick which portion of the Thrift Savings Plan your payouts originate from (Roth or traditional). Suppose you are withdrawing funds from your Thrift Savings Plan before age 59. In that case, it is best to withdraw your funds solely from the conventional component of your Thrift Savings Plan.

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 – 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.

Social Security and the Offset for Government Pensions

What if you were employed by the government but did not contribute to Social Security while you were employed? In that case, the Social Security Administration would reduce your Social Security spousal, widow, or widower benefits by two-thirds of any government pension you get. This is known as the Government Pension Offset (GPO).

How does this work?

A spouse who receives an annuity from a job where he or she did not pay Social Security taxes, such as those receiving a CSRS annuity, has their Social Security payment reduced or eliminated by the GPO. If you fall under this category, your CSRS annuity will be decreased by $2 for every $3 you get in your Social Security spousal payment.

Your Social Security spousal benefit will be affected by your CSRS annuity to the full extent of its increase, up to and including its elimination.

For instance, you wouldn’t earn anything from Social Security if your monthly CSRS annuity was $1,500 and you were eligible for a $900 spousal benefit. That’s because $1,000 is equal to two-thirds of $1,500. If you deduct it from $900, you’re left with nothing.

Why would the government treat its workers this way? 

The Social Security System was created to give those who did not work or had little income during their working lives a basic minimum level of financial security. In other words, spousal payments weren’t intended to supplement the Social Security benefits of working couples who were each eligible for one.

If one of them qualifies for both an earned Social Security benefit and a spousal benefit, they can only receive the benefit with the higher amount, not both.

CSRS beneficiaries who were married to Social Security beneficiaries were formerly entitled to both a full CSRS pension and a full Social Security spousal payment. However, Congress determined in 1982 that a worker who was enrolled in a retirement system for which they were not paying Social Security payments was benefiting unfairly. So, the statute was altered.

The Social Security Administration has created two clarifying examples that provide the best justification for the change:

Jude Fred receives a monthly Social Security income of $600. Ana, his wife, may be eligible for a wife’s benefit of up to $300, or 50% of Jude’s.

However, Ana also contributed to Social Security through her employment, making her eligible for a $400 retirement payout. Since her $400 retirement benefit effectively cancels out her $300 spousal benefit, she will not receive any spousal benefits.

Jude’s next-door neighbor, Robert, also receives a monthly Social Security income of $600. However, his wife, Mary, was employed by the federal government and received an $800 monthly civil service pension rather than a job requiring her to pay Social Security taxes.

Mary would have been qualified for both her $800 civil service pension and a $300 spousal benefit on Robert’s Social Security record had the government annuity offset rules not been in place.

With the offset clause in effect, Mary is treated the same as Ana because she is no longer eligible for Social Security benefits as a spouse.

The GPO affected about 11.5% of the 6.25 million spouse or widow(er) beneficiaries in 2020. The average non-covered pension for GPO beneficiaries in 2020 was $2,531, more than $1,000 above the typical Social Security retired worker payment of $1,544. The average non-covered pension for beneficiaries impacted by the GPO was $3,193 per month. Nearly three-quarters of beneficiaries had their entire spouse or widow(er) benefit deducted.

The way forward

It is frequently suggested that the GPO should be repealed since it was some accident or unexpected effect of a poorly thought-out amendment in the legislation during the Social Security reforms of 1980.

Congress consciously implemented the GPO to eliminate what it saw as an unfair advantage. Knowing that is little consolation to those experiencing its effects or who will retire in the future. But until and unless it is changed, it is the law.

It’s best not to hold your breath in hope, despite recent efforts in Congress to repeal or relax both the WEP and the GPO. Those proposals have been circulating since shortly after those provisions were passed nearly forty years ago.

Plan instead as if they will still be in place. Verify that your additional assets and investments, along with your CSRS and Social Security benefits, will be enough to cover your retirement expenses.

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 – 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.

Re-designation of Many Federal Employees for Higher Pay Zones

Many employees have been removed from their positions due to locality-based payments. It was planned and estimated by the evidence provided. According to the report provided by the U.S. Office of Personnel Management (OPM), many employees will be re-designated to an area of high locality for the year 2023.

This may apply to an estimated 32,000 employees. Each year, federal employees receive adjustments for their pay based on the Employment Cost Index for the workers of the private industries subtracting 0.5 percentage points. Therefore, allowance for locality-based pay would be made in areas where the difference in pay between federal and non-federal employees is much more than five percent. 

New areas have been defined where the employees would receive the locality-based payments. Among the list of cities with new regulations, California, Fresno, Nevada, Rochester, New York, Washington, Reno, and Spokane will be the new locality pay areas. Also, many workers would be shifted to existing locality pay areas, the OPM said in the report. 

Press Secretary Viet Tran said while stating to Federal Times that 85 percent of the federal workforce lives outside the area of D.C. Thus, the OPM is working to ensure that locality pay is competitive in every community throughout the country. Also, the Department of Labor and the OPM, has revised the Federal Salary Council recommendation to create four new pay localities, expanding the existing areas. 

The federal Pay Agent has identified the areas with local pay discrepancies. Therefore, they have made some suggestions to the president so he can address them. It was created as a part of an annual review. The Secretary of Labor, along with the White House Office of Management, Budget, and OPM directors, have made up the president’s Pay Agent.

Furthermore, the changes that are in consideration to be made for locality pay areas are tentative and will only be approved once the suitable rule-making is complete to make these changes permanent. The timing for the rule-making has yet to be established. The modifications discussed for the locality pay area should be implemented from January 2024 at the earliest. 

As per the Federal Employees’ Pay Comparability Act of 1990, the U.S. Bureau of Labor and Statistics has been asked to conduct a survey and collect data on salaried workers that are non-federal. The National Compensation Survey estimates the salary difference level of work from the occupational average as said by the reports. The Occupational Employment and Wage Statistics data indicates the average salaries of many occupations in every locality pay area. Moreover, the changes made for 2023 state that federal employees will see a salary rise across the board of 4.1%. Also, the average locality pay would increase to 0.5% from January.

Contact Information:
Email: [email protected]
Phone: 6122163911

Bio:
Mickey Elfenbein specializes in working with Federal Employees relative to their retirement benefit plans, FEGLI, TSP, Social Security and Medicare, issues and solutions. Mr. Elfenbein’s mission is to help federal employees to understand their benefits, and to maximize their financial retirements while minimizing risk. Many of the federal benefit programs in place are complicated to understand and go through numerous revisions. It is Mr. Elfenbein’s job to be an expert on the various programs and to stay on top of changes.

Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.

He has over 30 years of senior level experience in a variety of public and private enterprises, understands the needs of federal employees, and has expertise built on many years of high-level experience.

Going Back To Work Again After Retirement

Federal agencies frequently reach out to federal retirees as a potential source of recruits, particularly for highly specialized positions or when a sudden increase in work necessitates it. They prefer to hire individuals with experience in government services instead of new entrants.

Meanwhile, some federal retirees look for re-employment because they feel they still have more to offer the workforce or because retirement is not going as well as they had hoped financially or in other ways.

However, there are a few unique considerations when returning to work after retirement.

If you willingly retire, you will still be paid your annuity, but your new job’s income will be lower because of that pension. For instance, you would receive just $60,000 ($100,000 – $40,000) if your annuity was $40,000 and your salary was $100,000.

However, if your retirement were forced due to a RIF, job abolition, transfer of function, reorganization, or right-sizing, your annuity would end, and you would start receiving the entire income of your new position. Therefore, you would share the same employment status with any other government employee holding a similar post and a comparable service record.

You will also become eligible for a supplemental annuity if you worked full-time, continuously for at least one year, or its equivalent if you worked part-time.

On the other hand, if you worked for at least five years or the equivalent, you would typically be entitled to a re-determined annuity that would take the place of the one you are presently receiving. To be eligible for those extra benefits in either scenario, you must contribute to the retirement fund while working or until your next retirement.

You would also need to meet the age and service criteria if your annuity ceased when you started your new job to be able to retire again.

In exceptional circumstances, you might be able to get both your annuity and your total wage. Initially, this exception only applied to jobs for which it was difficult to find or keep a qualified employee, where there was an immediate danger to your life or property, or when an emergency situation called for employment.

But over time, several other authorities have increased this payment for additional reemployed annuitants. Limited-time appointments are a government-wide authority, and agency-specific regulations are mostly in DoD. Ask if one of the exceptions applies to you if you are a retiree being considered for re-employment.

Impact of going back to work after retirement.

 1. The Good: Health Insurance

The natural aging process can result in future increases in healthcare expenses. These expenses can deplete your funds, depending on your health benefits.

Health insurance may be the main reason for returning to work for those who retire before they reach 65 (especially considering the costly out-of-pocket costs of private insurance).

Consider returning to work if you’re purchasing pricey private health insurance before turning 65, when you would be eligible for Medicare.

In most circumstances, enrolling in a group health plan through your job could be less expensive than paying for your own health care out of pocket.

2. The Bad: Social Security 

Your Social Security benefits can reduce if you opt to re-enter the workforce, depending on your age at retirement. According to the Social Security Administration, the full retirement age (FRA) is 67 for those born in 1960 or after.

The amount of Social Security payments you might get will reduce if you retire before FRA. If you haven’t reached FRA, there is an offset that, dependent on when you retire, can reduce your Social Security payment.

For every $2 you earn over the annual cap while not at FRA, the Social Security Administration will withhold $1 from your benefit payments. That cap is $19,560 for 2022.

They’ll also take $1 from your benefits for every $3 you earn over $51,960 in the year you attain full retirement age (FRA).

3. Potentially Bad: Pension Suspension 

Your pension from your previous agency may be affected if you start working again. If you re-join the workforce for a different agency, you can still be eligible to receive pension benefits from your previous employer. However, regulations may vary from plan to plan.

 By collecting pension payments from your previous employer while being paid a salary at a new one, you’ll be able to expand your revenue stream further. Payments might halt if you decide to work for your former agency once more.

The agency paying your pension will often stop paying benefits if you work for them again, though regulations may differ based on your employer’s pension plan. If you decide to return to your old job, speak with the firm to learn more about how your pension can be impacted.

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 – 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.

Not affiliated with The United States Office of Personnel Management or any government agency

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