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June 25, 2018

Public Sector Retirement News

Federal Employee Retirement and Benefits News

Tag: financial planning

Financial Planning

Federal Government’s Uncertainty on Health Care May Ruin the Financial Planning of Californians

Federal Government’s Uncertainty on Health Care May Ruin the Financial Planning of Californians

The federal government is still uncertain about whether it wants to continue vital health care insurance subsidy for the next year or not. If a decision is not made soon, the cost of health insurance may rise considerably for Californians, harming their financial plans.

financial planning

 When Will the Financial Planning Fate of Californians Be Decided?

If the federal government has not calcified its stance on a vital health insurance subsidy by mid-August for consumers next year, the California’s state-run exchange plans to instruct its insurers to sell the plans that have significantly higher premiums in order to cover the loss of the money.

Potentially Higher Rates

Amy Palmer who currently serves as the Director of Communications for Covered California, the official health care marketplace of California, recently shared her opinion on the matter. She mentioned in an email that the organization has come to the conclusion that if the federal government fails to fund the subsidies by mid-August, the organization will presume that it will not be funded by the government anymore and use higher rates for the year 2018.

These cost-sharing subsidies reduce the out-of-pocket costs for medical expenses including hospital stays, prescription drugs, physician visits, etc. These reduced rates are only available to the enrollees of Covered California who opt for silver-level plans. It is the second-least expensive among the four tiers of the exchange. These subsidies mainly benefit those who earn an annual income between 139 percent and 250 percent of federal poverty level (or $34,200 USD to  $61,500USD) for a family of four.

As of last summer, about half of the enrollees of the exchange benefitted from the cost-sharing reductions, said Palmer. Half of the enrollees come around to around 1.4 million people.

The Challenges

One must know that these subsidies are quite different from the federal health law’s tax credits that reduce monthly premiums for qualified consumers. These subsidies are currently being challenged in a pending lawsuit filed by the House Republicans, and the President has already threatened to stop making the payments.


An analysis by Covered California has recently estimated that the premiums for silver plans would most likely increase by 16.6 percent if federal funding for cost-sharing subsidies were lost.

A few days back, Covered California had instructed all the participating insurers to submit alternative premium hike proposals for the year 2018 in case they lose the federal payments. They were also told to apply the hikes only to silver-tier plans as those would be affected most.

The rate proposed by insurers were due to Covered California by June 30, 2017. The exchange couldn’t afford to wait too long for deciding which rates will be faced by customers in 2018, stated Palmer.  State regulators would still need to review the rates and Covered California and health plans will also need some time to prepare for open enrollment that is expected in the fall.

Working Toward Stability

In another email written by Covered California Executive Director Peter Lee, it was stated that the agency is working hard to create the vital market stability while learning about health plans exiting some markets. The agency is also waiting for a clear guidance by the federal government on whether the subsidy is available or not.

Lee also mentioned that if Covered California adopts the higher premiums in order to cover the cost of subsidies, numerous consumers would nevertheless be protected from them because as premiums rise to make up for the loss of the cost-sharing subsidies, the federal tax credits would grow to offset those higher premiums. As a result, the financial planning of most enrollees would remain the same.

In another email from Lee to Seema Verma, who currently serves as  Head of the Centers for Medicare & Medicaid Services, it was mentioned that if the federal government continues to pay subsidies on health care insurance to keep the financial planning right for millions of people, the costs would be significantly more than the amount the federal government would pay if it continues to make direct payments for the subsidy.

Late Medicare Enrollees May Not Receive Penalties

Late Medicare Enrollees May Not Receive Penalties

If you’re worried that you missed the deadline for Medicare Part B, you still have a chance to avoid penalties. This is especially important for those who have yet to work out their financial planning in this regard.

retirement rate

Medicare Changes the Rules

Thousands of Americans miss their chance to enroll in Medicare each year. Consumer advocates and federal officials worry that many of them mistakenly believe that they do not need to sign up as they have bought insurance on the health law’s marketplaces. This mistake can bring on a lifetime of enrollment penalties. Because of this, Medicare has temporarily changed its rules to provide a reprieve from penalties for those who have kept the Affordable Care Act even after becoming eligible for Medicare. Now people have until September 30, 2017, to request a waiver of the usual penalty.

 Explaining the Change

Elaborating on the change in policy, a spokesperson from enrollment stated that many of these people didn’t receive proper information when they became eligible for Medicare, or when they initially enrolled in coverage via the marketplace. This information is vital in making informed decisions regarding Medicare enrollment.

These people can now request a waiver to avoid the penalty that Medicare would typically assess if they were delayed in signing up for Medicare Part B, which covers outpatient care and visits to the doctor among other things. Beneficiaries who already pay the penalty because they had a marketplace plan can now request a reduction or elimination of the fee. It also enforces a waiting period that offers coverage to people who don’t sign up when they become eligible first. If they meet the waiver requirements now, they can request it to be lifted.

To qualify you must be 65 or older with a marketplace plan or have had one that was previously canceled or lost. It also includes those with disabilities that qualified for Medicare but opted for using a marketplace plan instead.


Bonnie Burns, a consultant for the consumer group California Health Advocates, has stated that the government has failed to understand that people won’t know when they need to sign up for Medicare. Once people have insurance, it relieves all the stress of not having coverage. When they are eligible for Medicare, they are typically not informed that they needed to make the appropriate changes.

The Requirements

As a standard rule, a person needs to sign up for Part B within three months before or after turning 65 if they are not receiving job-based insurance, or when their job-based insurance has ended. Most people that are under 65 and receiving Social Security disability benefits also qualify for Part B after 24 months of benefits.

Per the health law, people who qualify for Medicare would lose subsidies when they opt for the online exchange plans, and enrolling in one of those plans doesn’t protect them from a permanent late enrollment penalty.

Burns said that marketplace insurers can usually spot when a member is turning 65 but they are barred under the health law from canceling coverage because that member may qualify for Medicare. They are required to cancel subsidies of a Medicare-eligible member.

More Efforts Needed

Stacy Sanders, Federal Policy Director at the Medicare Rights Center, has stated that the rules are very complex, and a lack of good notification led people down a dangerous path where they had to deal with declining or delaying Part B.

People who enroll in Part B 12 months or more after becoming eligible can face a permanent penalty of 10 percent. This penalty is added to the Part B premium for each full 12-month period. This year, the Part B average monthly premium was $109 USD.

Last summer, the Medicare officials sent emails each month to around 15,000 people with subsidized coverage via the federally run marketplace. These notices targeted those approaching their 65th birthday to tell them how they can avoid an unwanted overlap in Medicare coverage and Marketplace coverage. Officials had also begun to contact the people who already had both Medicare and subsidized marketplace coverage. They urged such people to discontinue the latter. But still, the warnings missed some people.

Medicare began emailing letters regarding a temporary waiver in March to some people who are 65 or older and are enrolled in plans which are sold on the marketplaces. However, the federal government has failed to reach out to others who might be eligible.

How To Apply

If you need more information regarding application, visit the Medicare Rights Center’s Interactive web page. You may also call the center’s help line at 800-333-4114.

Raising awareness is the best way to prevent future complications. However, this waiver should hopefully aid in putting those at ease who were originally at risk of long term penalties.

How Much Money Could You Have in Your TSP Retirement? By Tyson Lamm

How Much Money Could You Have in Your TSP Retirement?

By Tyson Lamm

Tyson Lamm has traveled the country as a speaker at large retirement seminars, personally educating thousands of federal employees to help them understand their complex FERS or CSRS pension systems. His focus is maximizing social security benefits, pensions, Life & Health insurance options, and protecting the Thrift Savings Plan.

Have you ever wondered how much money a person can expect from their Thrift Savings Plan or TSP Retirement? Do you believe that calculating it will improve financial planning for retirement? If so, this article may be for you.

TSP Withdrawal

 The TSP retirement amount highly depends on the following:

  • Your contribution to your TSP until now.
  • Your contribution to TSP from now to the time you start withdrawing money.
  • The growth of money in your TSP during the time it was invested.
  • The choices you make when you are withdrawing the money.

How to Calculate TSP Retirement

Though there are many ways to calculate the amounts for TSP retirement, the calculator made available on the TSP website is one reliable tool. It lets you estimate not only how much money you will have in your accounts in the future, it will also let you know about the stream of income that your money will generate.

It is wise to start by estimating your future TSP balance, and for that, you need to know about your current account balance. You should calculate expected future contributions, the duration of these expected contributions, how long you will leave your money in the TSP, and the rate of return expected by you.

Here is an example of how to estimate the future for a FERS employee who had a salary of $80,000 USD annually that increased at a rate of 1 percent per year. This person had 10 years until retirement and had $200,000 USD in the TSP account. The person contributed 10 percent of the salary, didn’t make any catch-up contributions and earned a rate of return of 5 percent per year. The total of this person was  $486,809.54 USD.

Now we try to see what kind of monthly income this person can reasonably expect. Before that, you should know that the retirement income calculator allows you to compare different TSP withdrawal strategies, like the results of choosing monthly payments versus buying a TSP annuity.

Using the same employee as above, we are now assuming that the employee began making withdrawals at age 57. The spouse of that employee was also at age 57 and both of them until the golden age of 90 years. It is also being assumed that the couple earned 5 percent on money that was left in TSP and the annuity interest rate index was 1.5 percent.

After the calculations, the employee and the spouse opt for elected level monthly payments of  $2,400 USD per month without increasing or decreasing the amount. If they did that, they would have $41,590.89 USD at the time of their death.

One Drawback

A shortcoming of the TSP retirement calculator that you might come across is that it doesn’t allow the user to change the monthly payment amount, which is unfortunate since most people, especially retirees, may want to change the payment amount.

If the couple chooses monthly payments on the basis of the IRS life expectancy table, the payments would begin at $1,454 USD per month at the age of 57 and they would reach $3,476.28 USD per month when the couple dies at 90. In this option, the payment will be lowered at age seventy-and-a-half in order to ensure compliance with the RS required minimum distribution rules. The couple ended up with $430,232.22 USD  by their death at age 90.

Here the TSP annuity figures were computed with 1.5 percent annuity interest rate index, that was in effect in October 2016. As the rate is quite low, the annuity amount was also low. Because the person in this example lives till the age of 90, there will be no money left until the person’s death.

A level payment joint annuity would pay  $1,844 USD per month for life. The payment joint annuity would start at  $1,053 USD per month at age 57. It would have reached  $2,792 USD per month by the time one reaches age 90.

If the couple were to use the 4 percent rule, they would start monthly payments at  $1,622 USD per month at the age of 57 and would be able to take annual inflation increases. The odds are quite good that the couple would have money left when they die at age 90.


All these calculations for Thrift Savings Plan ( TSP) retirement show that you can potentially end up with even more money in your account if you plan just right, which can lead to a happier and financially secure life in retirement. If you still haven’t begun making plans regarding financial planning for retirement yet, then it’s not a bad idea to get started.

Reach out to a financial professional today.

Tyson Lamm
Tyson Lamm of Federal Retirement Guidance

Contact Tyson Lamm

[email protected]

More from Tyson Lamm:

Article: Increase Individual Wealth with TSP by Tyson Lamm

Americans Need Better Financial Planning…Here’s Why

Data has revealed time and again that Americans need better financial planning to ensure that they live well, not only in the present but the future as well. Estate planning should not be the only aim of accumulating money for the golden years, maintaining a good standard of living is more important. Americans need to cut down on expenses by making some lifestyle changes. They should also ensure that they have enough retirement benefits savings avoid any debt such as TSP as it relates to the federal employee workforce.

financial planning

Data Says Americans Need Better Financial Planning

In a recent study conducted by GoBankingRates, 69 percent of adults admitted that they have less than $1000 USD  in a bank account and 34 percent said that they do not have any savings at all. In another study by National Bureau of Economic Research, it was revealed that almost half of Americans are nearly broke when they die. Of the general population, about 46 percent of retirees die with savings of about $10,000 USD  or less. If you are single, that number is 57 percent.  This situation is serious because it means that Americans do not have the money to pay unexpected expenses in the last few years of life.

The Solutions:

Though many Americans do not have the means to immediately cover a sudden expense, those who do have a job have an advantage over retirees (i.e., they can earn more to cover the costs incurred during an unexpected expense). Retirees do not have that option so one of the best solutions to avoid getting stuck in a financial fix when you’re older is to start saving now. The sooner you do that, the better your finances will be when you are no longer earning.

Limitations of Seniors

Many of the seniors who are 65 or older carry credit card debt of more than an average of $6,300 USD. This is primarily because they do not have many liquid assets so when they have to deal with any unforeseen expense, they resort to credit cards for help. Working Americans and retirees should both stash at least three to six month’s worth of living expenses aside as an emergency fund.

Start Saving Now

Start saving for retirement now! You can do so by mapping your current expenses and find new ways to cut corners in an attempt to set aside some extra cash. Some ideas include reducing luxury spending or cutting out a few restaurant meals each month.

If those changes do not increase your emergency funds enough, you can start thinking bigger and opt for changes like selling your car or moving somewhere less expensive. If drastically changing your lifestyle is not an option then you can earn extra money by taking additional side jobs on weekends or for a few nights every week.

Stay away from credit card debt by ensuring that your bills are always paid on time. Avoiding credit card debt might not increase your savings by much, but it will surely help you keep more money in the bank by avoiding interest charges.


If you feel that you have not done enough, seek out a professional. A professional financial planner will help in accumulating retirement benefits savings as well as an emergency fund. This also removes some of the worries from trying to plan it out yourself. No matter what it takes, your aim should be to live a comfortable life in your retirement years.

Church-Affiliated Hospitals May Be Exempt from Demands of Federal Retirement Income Law

The United States Supreme Court has decreed that a few church-affiliated hospitals can be exempt from the demands of the federal retirement income law. This decision was taken to ensure better religious freedom but critics believe that this ruling is not in favor of employees who may never get the retirement benefits they deserve and this decision could ruin their financial planning.

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 The Unanimous Decision on Applicability of Demands of Federal Retirement Income Law

The unanimous decision on the applicability of demands of federal retirement income law was taken by the US Supreme Court recently in which it highlighted that a group of three church-affiliated hospitals can be exempted from the demands of a federal retirement income law.

In an 8-0 decision released recently, the high court ruled that church agencies such as hospitals can qualify for the religious exemption in the Employee Retirement Income Security Act. The case regarding the ruling was Advocate Health Care Network et al. v. Stapleton et al.

The case has consolidated three detached lawsuits, Dignity Health v. Rollins, Saint Peter’s Healthcare System v. Kaplan and Advocate Health Care Network v. Stapleton. All these cases involved the hospitals that are losing at the circuit court level.

Authoring the Opinion for the Court

Justice Elena Kagan authored the opinion for the Court regarding federal retirement income law.  Justice Neil Gorsuch was not included in the ruling since he was not involved in the proceedings. Kagan wrote that ERISA provides that a church plan means a plan that is established and maintained by a church is to include a plan maintained by a principal purpose organization.

Under the best reading of the statute, a plan that is maintained by a principal purpose organization, therefore, qualifies as a church plan not considering of who established it. The court opted for reversing the judgments of the Courts of Appeals.

Concurring Opinion

Justice Sonia Sotomayor has written a concurring opinion regarding the decision on federal retirement income law in which she explained that while she agreed with the opinion of the majority, she was still troubled by the result of the ERISA law exemption. She appreciated the court’s opinion by saying that she was persuaded that it correctly interprets the pertinent statutory text. However, she was nevertheless troubled by the outcome of these cases because she thinks such decisions may lead to denial of ERISA’s protections for scores of employees who work for organizations which look and operate similarly to secular businesses.

Multiple Lawsuits

In the last few years, there have been many lawsuits directed at various religiously-affiliated hospitals concerning the accusation of underfunding employee pension plans. As per an article by Bloomberg BNA in 2016, many of these suits resulted in settlements in which the hospitals have provided hundreds of millions of dollars to plaintiffs.

Bloomberg also reported that in May 2016 Connecticut’s Saint Francis Hospital doled out USD 107 million as a settlement. In August 2017, the Trinity Health Corp. made a USD 75 million deal with the workers. Alabama’s Baptist Health System Inc. also offered USD 11 million to its workers in August after making USD 89 million worth of pension contributions. Ascension Health settled claims for USD 8 million in 2015. The last two rulings are as per court filings.

Even in last October, Providence Health & Services had to pay USD 350 million in a settlement. It was the largest settlement in cases of this nature.

Critics’ Opinion

Americans United for Separation of Church and State also echoed the concerns of Sotomayor by releasing the statement regarding the Court rulings. It stated that the hospitals must not be allowed to drain the employee pension funds just because they have a religious affiliation. After all, religious freedom is an elementary American value with pensions and retirement as an elementary part of the American dream.

Appreciating the Court Ruling

The First Liberty Institute has celebrated the high court ruling regarding federal retirement income law as FLI Senior Counsel Justin Butterfield stated that the decision was in line with the country’s history of religious freedom. The ruling of the Supreme Court respects great history and tradition allowing mosques, churches, synagogues and other religious ministries to follow their religious mission without having to deal with the weight of government bureaucracy and regulation hampering their efforts or intruding upon their mission.


It is quite clear that the ruling of the US Supreme Court regarding federal retirement income law has created quite a stir as some people appreciate it while some are criticizing it. However, it is quite clear that the employees working for Church-Affiliated Hospitals might be hit hard by it because they may lose their retirement benefits and their financial planning for retirement may be ruined.

Retirement Assets Reach Over $19 Trillion in 2016

Per recent data shared by the Federal Reserve, retirement assets reach over $19 trillion. This data demonstrates the seriousness that people are approaching their retirement financial planning. Have a look at the numbers and see how the assets are doing when they are classified into various categories.

Retirement Benefits

Retirement Benefits Fund Assets for DB and DC Plan Also Grew

The data shared by Federal Reserve also states that retirement fund assets for Defined Benefit Plan and Defined Contribution Plans (like 401(k)s and the Federal Government’s Thrift Savings Plan) have also grown a lot in the last year. The total assets across the public and private defined contribution (DC) and defined benefit (DB) plans grew by 8 percent. It was $17.6 trillion in 2014, and retirement assets reach over $19 trillion in 2016.

Total financial assets available in private and public DB pension plans were $12.4 billion in 2016. It has increased by 8 percent as it was just 11.5 trillion in 2014. Similarly, the total financial assets in DC plans were $6.7 trillion in 2016. It is up by 10 percent from $6.1 trillion in 2014.

Private DB pension plan assets in 2014 were $3.2 trillion. They were at $3.3 trillion in 2016 which shows an increase of 3 percent. Private DC plan assets in 2014 were $5.2 trillion, and they grew by 9.6 percent in 2016 to stand at $5.7 trillion.

Pension Funds’ Biggest Asset Class Holding

When discussing the performance of retirement benefits fund assets, it is vital to consider pension funds’ largest asset class holding. The largest asset class held by pension funds was corporate equities as it was $4.8 trillion. It is closely followed by debt securities and mutual funds which stand at $3.9 trillion for both of the asset classes. The fourth biggest holding of pension funds in 2016 was Treasury Securities that stood at $2.3 trillion.

Government’s Assets

When reviewing the performance of retirement benefits fund assets, it is essential to see how the assets of the federal government have performed. The DB plan assets of the federal government were $3.4 trillion, and DC plan assets in 2016 were much less than that as they were just $466 billion. DB plan assets of state and local governments were just $5.6 trillion in 2016 while DC plan assets of state and local governments were just $490 billion.

Looking at the Flows

Debt securities were the biggest purchase of private and public DB plans in 2016 as they were around $190 billion, followed by Treasury Securities that were $120 billion and Corporate and Foreign Bonds at $61 billion.

For all the private DC plans, the highest numbers of inflows in 2016 were to mutual funds, at $24 billion. It was followed by debt securities at $22 billion and corporate and foreign bonds at $12 billion.

For the DC plans of federal government, the biggest purchasers in 2016 were debt and treasury securities as both were at $16 billion. They were followed by assets in the Thrift Savings Plan that were about $12 billion.

The biggest purchases of local and state DC plans in 2016 were unallocated insurance contracts at $8 billion and miscellaneous assets at $7 billion.


The data shared by the Federal Reserve regarding retirement benefits fund assets is a good source of information for investors who wish to understand how these large plans are investing their asset, which may lead to an understanding of how these money managers perceive the economy and the potential investment risks that lie ahead.

Firing Federal Employees Becomes Easy

Most federal employees seek to know the best date to retire so that they can do the financial planning well. But it seems that they will need to plan ahead as firing federal employees has become easy thanks to a newly approved legislation. The employees of the Veterans Affairs Department are the ones being more affected by this change. Democrats tried very hard to halt this bill which they think is unfairly targeting the rank-and-file employees.

firing federal employeesit seems that they will need to plan ahead as firing federal employees has become easy thanks to a newly approved legislation.

Legislation that Makes Firing Federal Employees Easy

The legislation that makes firing federal employees easy was approved by a House committee. It will now hasten the disciplinary process going on at the Veterans Affairs Department. This legislation was pushed back by the Democrats, and they opined that this legislation is unfairly targeting all the rank-and-file employees.

Republicans vs. Democrats

This legislation is the latest effort made by Republicans to make firing federal employees easy and boost the accountability at the VA. The Republicans have tried to expedite the firings and suspensions at the department since an initial reform effort initiated in the year 2014 ran into legal trouble. Democrats, on the other hand, insisted that they were for getting rid of problem employees in VA, but they thought that the Republicans led plan would not address the root of the issue in a proper manner.

Hurting a Few Employees

The author of VA Accountability First Act and the Chairman of the House Veterans Affairs Committee, Rep. Phil Roe, R-Tenn. started off the markup by addressing the expected criticisms. He stated that the measure was not an attack on the rights of the workers, but it was an effort to grant the request made by VA Secretary David Shulkin. Shulkin had sought to dismiss employees when he comes across very few bad employees.

Roe stated that he did not agree with the argument that the bill would impact recruiting and retention in a negative manner as bad employees usually hurt the morale of the rest of the workforce. While noting a common refrain from detractors of firing reform, Roe mentioned that the measure would not hurt a large number of veterans who work at the department.

Roe is a veteran himself, and he opined that veterans don’t agree to serve in any role because they put special employee protections ahead of a mission as the mission always comes first.

Eliminating the Grievance Process

The main sticking point of the legislation that makes firing federal employees easy was the elimination of the union grievance process that is available to all the represented employees as a way to appeal adverse personnel actions. Roe highlighted that the unions represent 76 percent of the VA workforce and his intention was to reform the process for more than just a quarter of employees of the department. Roe added that leaving the grievance process open would create a gigantic loophole for increased accountability. He also pointed out that the completion of the grievance process takes up to 350 days to complete.

Another ranking member of the committee, Rep. Tim Walz, D-Minn, stated that VA must follow the laws that were put in place after collective bargaining agreements.

The Amendments

Democrats had proposed some amendments to reform the legislation that makes firing federal employees easy, but all those efforts failed. Walz has cautioned that the latest accountability legislation would fail to pass in the Senate. He even offered a compromise bill that was championed in the Senate Veterans Affairs Committee last year and had got bipartisan support. Among the other amendments that failed, there was a plan from Rep. Mark Takano, D-Calif. He proposed allowing the VA Secretary to suspend troublesome employees without pay while an investigation into alleged misconduct was done.

Scandals of the Past

Roe did not hesitate in pointing out that anyone who was standing against this bill that makes firing federal employees easy was supporting an antiquated system that was mainly responsible for the scandals that occurred in the past.

The Expedited Removal Authority

Roe’s bill would give expedited removal authority to the VA secretary which means that any employee fired by the Secretary would be out of the job and off the rolls of the department that day. Any employee who is facing removal or suspension of at least 14 days or a demotion would get a notice of 10 days, and the secretary would have five days to rebut any response an employee comes up with during that time. Those employees would maintain appeal rights to the U.S. Court of Federal Claims and the Merit Systems Protection Board.

Reduced Pensions

Apart from making firing federal employees easier, this bill would also allow VA to reduce the pensions of employees if the employee is convicted of a felony that affected the job and it will also let VA recoup bonuses and relocation expenses in a few cases. Federal employees facing these kinds of penalties would also be entitled to an appeal so that they can retire when it is the best date to retire for them, and they can meet their financial planning goals rather than being chucked out unceremoniously.

Men and Women have a different approach to Retirement Benefits: Survey

The perception of men and women towards retirement and retirement benefits is totally different from one another. It was revealed in a report released on the basis of the Voices of Experience Survey. The survey also revealed that women plan to invest in the retirement plans at a later age and they plan to spend their retirement time by doing socializing, taking care of family and looking after their personal interests.

retirement benefitsRetirement Benefits Aspect of the Survey

The Survey was conducted by TIAA (formerly TIAA-CREF). The aim of the survey was to find out how people prepare for retirement, how soon they start investing for retirement benefits and to get an idea about the changing attitudes of people on life in retirement. The survey highlighted how men and women plan for their retirement financially and how they want to spend their retirement time.

The survey revealed that 22 percent of men started investing towards retirement benefits funds before the age of 30. Only 12 percent women did the same.

Satisfaction with Finances

The survey also revealed that men would be happier with their financial health when they retire. 58 percent men admitted to the same. Women, on the other hand, were less sure of it. About 46 percent agreed to it.

Spending Retirement Time

80 percent women would prefer to spend their retirement time for personal interest while just 70 percent men want to spend time in such a manner. 80 percent women also planned to spend time with family and just 67 percent men want it. 75 percent women want to socialize when they have taken retirement while only 52 percent of men want socializing after retirement.

58 percent women want to volunteer when compared to men as only 42 percent men are interested in volunteering after retirement. 43 percent women wish to care for their family members and just 26 percent men want to take on that responsibility. 36 percent women were inclined to participate in religious activities after retirement while only 25 percent men have planned to do the same.

Craving Company but not Dependency

Men and women have the same perception about having enough retirement benefits so that they don’t become a burden on others. Women also had more fear that they would be a burden on others by having no money when compared to men. 29 percent women fear it while just 14 percent men fear it. 19 percent of women were very concerned about being lonely and about 11 percent men think the same.

Half of American Population Opts for Retirement by 63: Survey

Retirement is not an easy choice for people. Some people prefer to work as long as they can to keep their finances in a good position while others prefer to retire early even when it means losing out on some benefits. A personal finance technology company, SmartAsset recently tried to decipher how the average retirement age is varying across America and revealed some interesting fact about retirement in America.


The Method of Retirement Study

SmartAsset tried to find the average retirement age in every state by using the microdata on labor force participation. This data was made available by the U.S. Census Bureau. The organization focused on the labor force participation rates for people who were between the ages of 40 and 80 years.

It is vital to mention here that the labor force participation rate shows the percentage of people who are unemployed or employed. During the analysis, SmartAsset controlled for the percentage of people who were not a part of the labor force.

Similar Results

In this years’ survey, SmartAsset found that the national retirement age in the US hasn’t changed much as compared to the survey results of the year 2015. By the time people reach the age of 63, nearly half of them had opted for retirement. It was the same in 2015.

The survey also exposed the fact that the youngest age for retirement across all the US states was 62 while 65 was found to be the oldest average retirement age. This was also the same in the last years’ survey.

Late Retirement

The results of the survey also highlighted that retirement comes late in New England as four states in this region have the oldest average retirement age, i.e., 65. It was also mentioned that the average resident in New Jersey retires at 65 too.

Fewer Late Retirees

The useful survey also found that people in America don’t like to go on working after they hit the 80 years mark. Only 6 percent of Americans didn’t take retirement after they hit the age of 80 while a vast majority of them were retired. This percentage has also not changed since last year.

The Upcoming Change

Experts believe that the number of people who did not opt for retirement in their 80s is bound to increase in the next few years. It has also been predicted that the average retirement age would also increase.

Poor Financial Planning Will Force Millennials in Phoenix to Work Post Retirement Age

A survey conducted by a financial firm has stated that poor financial planning will force Millennials in Phoenix to work post retirement age. Experts believe that Millennials should get over the self-taught financial planning and should seek advice from an investment expert to make the right investment decisions. They should also seriously consider plans like 401(k).

financial planning

Survey Says Poor Financial Planning Will Force Millennials in Phoenix to Work Post Retirement Age

The survey that says poor financial planning will force Millennials in phoenix to work post retirement age was conducted by Merrill Edge. It is a biannual survey. The results of the survey highlight that about 82 percent of the workforce in Phoenix expects to work past the retirement age. Three factors were mentioned. One is the poor financial planning done by this generation and the second is the zeal to follow a passion. The third reason is the need to keep busy.

Experts Opinion

Tom Gustafson, a spokesperson for Merrill Edge stated that he was shocked to see the number. He believes that lack of planning is the key reason for why the millennial generation is lagging behind. He believes that proper financial planning is not as hard as they think it is. Though most of the Millennials want to retire with money in the bank, many fo them are going about it in the wrong way. They are self-taught investors who have learned to invest by using the internet which makes them invest in those funds that have a higher risk and the same financial returns.

The Advice

Gustafson says that if Millennials put in the time to learn all the things about investment, they would probably do okay but when they try to do the investments without looking at all the angles, it causes them problems.

If Millennials want to contradict the assumption that poor financial planning will force Millennials in phoenix to work post retirement age, they should just check the investments with a financial advisor every once in a while to ensure that the things are running as expected, believes Gustafson. He also adds that Millennials particularly need to be realistic about a so-called magic number or the amount of money they would require to live the way they want to post retirement. They should also think about investing in plans like 401(k) and stay away from debt whenever possible.

Survey says Student Loans are a Financial Planning Threat as they Impact Retirement Savings

A new survey has highlighted that rising amounts of student loans and the time taken to get rid of them is taking a toll on the retirement savings of Americans. People with a student loan to pay often need to save less towards retirement which is a financial planning threat. It was recommended that the HR of companies should help the employees in this situation by hosting workshops that assist in better management of finances.

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The Survey on Student Loans as a Threat to Good Financial Planning and Retirement Savings

The survey that states that student loans are impacting the financial planning abilities and the retirement savings of Americans was conducted by a renowned benefit consulting firm known as Aon Hewitt. It found out that the employees who have student loans that need years to be paid off can make people feel the strain even in their retirement years.

This survey was conducted on over 2,000 U.S. workers. It found that about 28 percent of the respondents had an outstanding student loan at the moment. It’s not the workers of the younger generations that are impacted. About 44 percent of the Millennials, 26 percent of respondents from the Generation X and about 13 percent of respondents from the baby boomers’ age group have a student loan debt. It is being estimated that about half must pay $3000 per year as a payback.

The Low Savings

It was also made clear by the survey that about 71 percent of respondents who had a student loan to deal with saved less money on a retirement plan provided by the employer. In contrast, respondents who had no student debts, about 77 percent saved more towards the employer-provided retirement plans.

Savings Percentage

About 51 percent of the Americans who had a student loan just contributed 5 percent of the total pay to the plan. Aon Hewitt says that saving less than 6 percent of pay towards the retirement savings can hinder retirement readiness as most workers miss out on the full matching contributions by the company.

The Advice

Aon Hewitt also said that the HR of a company can help people in better financial planning by offering workshops. People should also be given advice on participating in retirement savings plans. Some employers already offer benefits that are designed in a way that helps employees to pay the student loans quickly.

Over Half of Washingtonians Anxious About Retirement Benefits

A new survey has highlighted the fact that more than half of the people living in Washington are anxious about their retirement benefits and financial security. To help the situation, a campaign has been organized which will help people to learn the better methods of saving. The campaign would also encourage the people of Washington to increase the amounts of their retirement benefits savings.

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Financial Security and Retirement Benefits are a Major Worry

The survey was conducted by AARP. It highlighted that about 55 percent of people in Washington have confessed to being worried about their retirement benefits and their financial security post retirement. There are many groups that got concerned about the survey results and they have decided to initiate a campaign to help people save more and be less anxious.

Useful Campaign

The campaign that is supposed to help people of Washington to save more is organized by BECU, AARP and the FINRA Investor Education Foundation. This campaign is called the MoneySmarts campaign. It was launched at the Museum of Flight in Seattle. It will go to the road across Washington too.

People Haven’t Recovered from Recession

The financial editor for NBC’s Today show and the AARP financial ambassador Jean Chatzky recently stated that people are yet to recover from the recent economic recession. She said that the markets have already done so. She stated that the S&P and Dow are up 180 that is more than 200 percent in some cases. They hit the bottom in the year 2009. But people have been sitting on the sidelines and hence they have not capitalized on that.

Chatzky further stated that about two-thirds of people still need to recover from the great recession. It is pertinent to add that she was the keynote speaker at the kickoff of the MoneySmarts campaign.

Fewer Savings

The survey also highlighted that almost half of the adults living in Washington have saved less than $25000 for their retirement benefits savings. It also discovered that two-thirds of Washington people have even not calculated how much money they need for retirement. Chatzky said that Fidelity Investments recommends that people should save 10 times their annual income if they plan to retire at 67. She suggested methods like putting off taking social security, starting saving earlier and retiring a little later are some simple ways to achieve the number that may seem gigantic but isn’t so.

Free Retirement Benefits Planning Advice to be offered across the US

Many people often feel that they need the assistance of a financial planner to ensure that they do their retirement benefits planning right or manage their finances in a correct manner. Unfortunately, not all people can afford it. To help such people out, a program is being organized across the US which will offer free financial advice to people. This program would cover various US cities and would be organized in the month of October only.

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Program Offering Free Retirement Benefits Planning Advice

The program that lets people get free advice on retirement benefits planning and personal finance will be sponsored by the Financial Planning Organization, the Certified Financial Planner Board of Standards, the U.S. Conference of Mayors and the Foundation for Financial Planning. As a part of the program, hundreds of financial planners will provide free financial advice to the area residents.

The financial planning days will be organized across various US cities and the cooperation from the local city governments will be sought. The program is now in its seventh year. The events regarding the program will be organized in schools, libraries, and municipal buildings depending on the city.

Core Mission

The mission of the program is to offer free and ethical financial planning advice to the people by various means. The means include group workshops and even one-on-one advising sessions. All the financial advisors would provide the attendees with no-strings-attached advice and they are not allowed to sell any financial products/ services, take names or offer business cards.

The Process

During the financial planning days, the financial planners would be seated at tables and they will meet privately with the individuals as well as couples to answer their questions. The topics of the discussion can vary from getting out of debt to managing credit, budgeting to income taxes, planning & paying for college to home ownership and from insurance to estate planning. Free classroom-style workshop presentations will also be conducted that would cover the key areas of personal finance.

Financial Planning in Local Communities

Pamela Sandy, who serves as the President of FPA stated that people often think that financial planning is something the wealthy people can afford but this is not true. The members of the Financial Planning Association constantly work to ensure that financial planning is accessible within the local communities too.

Vital Details

People who wish to attend the sessions for attaining some financial planning or retirement benefits planning advice in their cities need to visit for free registration. Walk-ins are allowed too. A person can also call a toll free number 1-877-861-7826.

Nevada People Pessimistic About Retirement Savings

The people of Nevada are quite pessimistic about the retirement savings according to a new study. Some sections of society were more stressed about retirement than the others. The survey also highlighted that very few Nevada people felt that there were some opportunities to get financial security. These people also seemed positive about the economic conditions of the state.

Majority Leans Toward Fewer Retirement Savingsretirement savings

Slightly more than 50 percent Nevada people have accepted that they don’t think they have enough income to have good retirement savings that would allow them to have an ideal retirement. This was revealed in a poll which was conducted by Wells Fargo and USA Today. The same poll also highlighted that about 38 percent Nevadans were confident that they would have enough savings for retirement.

Different Confidence Level

The survey has also highlighted that some people in the society, especially senior citizens, women and the poor were more concerned about the retirement. About 60 percent of women and people who were over 55 years of age or older were not confident that they would enjoy an ideal standard of living in retirement. About 59 percent of people belonging to the low-income category also lacked the confidence.

All in all, only 1 in 5 Nevadans believed that there are opportunities to have financial security during retirement within the community.

Confidence in the Economy

While the respondents were not so confident about whether they would be able to save for retirement or not, they seemed confident that the economic conditions are and will be better. About 44 percent of the respondents said that the economic conditions in the state were fair while 38 percent stated that it was good or very good. Let’s see what the Nevadans think of the national economy. Just 19 percent of Nevadans had a positive impression of the national economy and about 39 percent termed it to be poor or very poor.

Positive Financial Situation in the Future

Nevadans also think that their financial situation is not better at the moment when compared to the national average. But they expressed hope that it would improve in a year from now. About 47 percent respondents acknowledged it. This optimism for the future is higher than the optimism expressed by the country as a whole.

Brian Bonnenfant who serves as the Project Manager at the University of Nevada stated that the pessimism about now and optimism about the future is not a new thing. It speaks to the extremely transient nature of the people of Nevada. He added that it is the typical Nevada demographic.

All in all, it can be said that the survey reveals that Nevadans need to ensure that they have better retirement savings and a positive approach towards their current financial situation.

U.S. Workers Feeling Better About Retirement

A new survey has revealed that many of the U.S. workers are feeling great about retirement and the U.S. economy in general. The survey also revealed the fact that U.S. workers are now relying on robo advisors to guide them on investment decisions. It is expected that their dependence on robo advisors would increase in the future too as more and more people are becoming aware of it.

retirementThe Survey Showing Better Feelings about Retirement

The survey that revealed that the U.S. workers are considering the U.S. economy and the retirement prospects to be moderately better was conducted by Wells Fargo/Gallup. It was entitled the Investor and Retirement Optimism Index survey. The survey was done by tracking 1,019 investors who had an investment or savings of over $10,000.

The Increase

The survey also showed that the index rose by 22 points only in the second quarter of 2016. It is the highest level the index has achieved since the second half of 2015. The Wells Fargo Index for non-retirees rose by 27 points and the index for actual retirees rose by 25 points across the board.

The Bullish Strategy

The survey found out that many respondents were bullish on the U.S. stock market which boosted their prospects of a higher household income.

Robo Advisors

The survey highlighted the crucial fact that there are several people who are depending on robo advisors. In simple terms, robo advisors are digital advisory services that make use of several computer algorithms to select the suitable investment options like stocks for people. The robo advisors make use of the information provided by people with regard to their risk tolerance and goals.

The Awareness

In the survey, it was also pointed out that about 45 percent of retirement investors now have an awareness of robo advisors. Currently, only 5 percent of these investors have admitted to using it. It is being expected that the awareness levels and the usage would increase in the future.

The Opinion

The Head of Digital for Wells Fargo Advisors, Mr. Devon McConnell stated that the automated infancy tools are still in the infancy stages but it is expected that the awareness of these tools will grow quickly. He correlated these tools with online shopping and said that there is an adoption curve that happened with online shopping and it is expected that a similar curve will be repeated with regard to robo investment advisors when people become comfortable with this new method of investing. People planning their retirement are also expected to trust this method in the future.

Philadelphia Residents Contributing Least Towards Retirement Benefits

A new research has proven that Philadelphia residents contribute the least amount of money towards their retirement benefits. They are hence less prepared for the retirement and may struggle financially in their senior years. The major reason behind the fewer contributions is that most employers don’t provide a provision of retirement savings to the employees. Officials agree that this issue needs to be solved as soon as possible.

Retirement Benefits

The Need to contribute more to Retirement Benefits

The research that says that most Philadelphia residents are less prepared for retirement as compared to the Americans living in other states was done for a city council committee. The committee aims to know how to improve retirement savings. The study was conducted and released by the Schwartz Center for Economic Policy Analysis on Wednesday. It was divulged during a hearing conducted by Council’s Committee. The hearing was on Labor and Civil Service.

The Current Situation

During the hearing, several witnesses testified to the fact that there is a retirement crisis in the U.S. The witnesses also stressed that the retirement crisis in Philadelphia is particularly troublesome. The study exposed that about 20 percent of retirees in Philadelphia are poor and about 30 percent have incomes between 100 & 200 percent of the federal poverty level.

The Reason

Anthony Webb who works at the Schwartz Center for Policy Analysis stated that the reason behind the Philadelphia’s people saving less for retirement is that the employers who offer retirement plans are very few. Even those who offer a plan don’t always participate in the plans. He also added that a high proportion of seniors are nearing closer to poverty and the people who are working right now are also at a high risk of retiring in poverty.

Need For Action

Webb also stressed on the need to offering a retirement plan to people who don’t have any yet. He stated that offering a retirement plan may not help them to have a retirement of their dreams but it will definitely help them to get away from the poverty and near poverty situation they are facing right now. He insisted that the sooner an action is taken in this regard, the higher would be the number of households that get help. When a swift action is taken, they will be able to save a bit more money towards retirement benefits.

Finding Financial Advisors for Federal Employees by Nelson Secretario

Advice for Federal Employees about Financial Advisors by Nelson Secretario

Nelson SecretarioNelson Secretario – CLU, ChFC, LUTCF, ChFEBC, NSSA

Federal employees have a special set of benefits that are available to them in terms of retirement income. While this can provide a nice advantage for these individuals, it can sometimes make it difficult when working with a general financial planner – especially when that planner is unfamiliar with how the federal retirement system operates.

While there are many well qualified financial professionals who can offer general retirement planning advice, when it comes to providing information that is specific to federal employees, it is therefore best to work with someone who is specifically focused in this particular area.

Where to Find an Advisor with a Focus on Federal Employees?

When searching for an advisor who has a focus on federal employees, you will want to ensure that he or she meets certain criteria. For example, in most instances, the advisor will advertise either on their website and / or other materials that they work with employees of the federal government.

In addition to having a “Fed” focus, you will also want to be sure that the advisor has an ample amount of overall experience – a minimum of ten years, as well as proper licensure. In this case, possessing a Series 7 securities license is a must. You can typically tell if a professional is securities licensed by noting whether or not they have “FINRA / SIPC” noted on their marketing materials.

Once you have found a good potential candidate for your needs, the next step is to contact the advisor and set up a meeting with them. As you will likely be working with the advisor for many years – and turning over a bulk of your life savings to them – it is essential that you are able to work together, and that you have trust in him or her as a professional.

You may even want to bring along some questions to ask the advisor, such as:

  • What services to you offer?
  • What are your professional qualifications?
  • How are you compensated?
  • Do you work alone or with a team?
  • What licenses do you hold?
  • Do you possess any additional professional designations?

While the process of finding the ideal financial advisor may take some time, once you have found one who is well qualified to work with you, and who you are comfortable working with, you will be able to successfully move forward towards your retirement goals.

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Obama Wants Better Retirement Benefits Plans for Americans

President Obama and the Democrats are working hard to ensure that the common American citizens are not cheated by the financial brokers when they are seeking a good retirement benefits plan. The Republicans argue that the financial brokers already deal with so many rules and the new rules would force them to get rid of main clients and small businesses.

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Obama to use Veto for Retirement Benefits

It is also being speculated that the President may use his veto power to ensure that the Labor Department rule on retirement benefits advice is passed. He may be forced to use the veto power because the U.S senate has voted against the bill. The debate on the passing of this bill stretched over the entire day on Tuesday.

The Rule

The rule that is proposed by the Obama government aims to set a fiduciary standard for financial brokers who are involved in selling retirement products. The new rule would make it mandatory for them to put clients’ best interests ahead of their own need to achieve the bottom lines. The arguments in the session mostly focused on whether the new bill would be in the best interests of the lower and middle-income workers or not.

Republicans’ Stand

The Republicans are against the bill because they think that the government is not taking into account the fact that there are already so many rules in place that need to be abided by the financial advisors. The Republicans also think that this rule would be very expensive for brokers. If this rule is imposed upon them, it may force them to let go of the small businesses that offer 401(k) plans and the Main Street clients.

Democrats’ Viewpoint

The Democrats are of the opinion that imposing this new rule is vital for ensuring that the profit-hungry financial advisers don’t exploit middle- and lower-class workers anymore. They do that currently by recommending those retirement products that are profitable for them rather than their clients.

The Statements

Johnny Isakson, a Georgia Senator stated that the rule is a solution which is seeking a problem. His fellow, Lamar Alexander, a Tennessee Senator added that the rule should be renamed as only the rich retire rule.

Democrats were not behind in making statements too. New Jersey Senator, Cory Booker said that the new rule will help people to retire with dignity. It will also ensure that people don’t worry whether their financial adviser offering advice on retirement benefits would lead to exploitation or not.

New Retirement Saving Tool that can Improve Your Retirement Benefits

Almost all individuals who are planning to have a comfortable retirement often seek the help of tools that can direct them. Principal, a financial planning company has made things easier for such people by recently launching Move to the Green Challenge. Any person, who is planning to retire, can participate in this challenge by using a financial wellness tool. It tells you whether you are saving enough for your retirement benefits or not.

Retirement Benefits

How the Retirement Saving Tool helps in deciding the Retirement Benefits?

The retirement saving tool works by using a real-time savings graph, interactive sliders, and intuitive prompts. They will let you know how making a few simple changes can help you to have more financial security and a steady flow of retirement benefits.

The tool would also offer every user a personalized score that tells them whether they are on the right path or not. It also has red, yellow and green indicators. Everyone should aim for the green indicator as it means that you will get 70 to 85 percent of our current income after retirement.

The Previous Attempt

The company issued a statement that stated that a similar initiative was started last year and people liked it too. About one-third of people who participated last year increased the retirement plan deferral amount by 3.75% points to get 10% of pay. The statement also announced that there has been about 30% increase in the number of participants who made use of the plan and increased the deferrals since the launch of the Retirement Wellness Planner of the company.

Personalized Experience Helps

The Senior Vice President of Retirement and Income Solutions at Principal, Mr. Jerry Patterson recently stated that the idea of offering a personalized as well as interactive online experience plays a vital role in helping users understand how and where they can make better saving decisions. They are making use of the suggestions. He also added that saving more and earlier is the best thing all people can do to be well prepared for retirement.

The Benefits

People who take part in the Move to the Green Challenge would not only boost their retirement benefits, they have also got a shot at winning a few Plantronics BackBeat FIT wireless stereo headphones. If a person plans to try the challenge, it is not mandatory to have an existing retirement account with Principal.

How the retirement gap can be closed by help from small businesses

The retirement gap has been inhabiting our country for quite some time now. There are some solutions in this regard and the multiple employer plans might help us in this regard.

post-RetirementClosing the retirement gap possible?

In this regard, there is always space for putting some background information in: It’s not news for anybody that the experts have always considered the US retirement gap to be higher than what it should be. The money that Americans have to additionally spend to secure their retirements and their post-retiring life is a lot, to say the least. The Employee benefit Research Institute has estimated that this gap is around 4 trillion dollars of American citizen money.

We all are pretty much aware that this gap isn’t going to close itself and unless we can provide a lot more access to the retirement plans it’s going to stay this way. Companies and individuals that don’t have workspace retirement plans can go on and fund IRAs for all their employees. According to a study, if a retirement plan is available to people that earn around 30 to 50 thousand dollars a year, 70 percent of the employees opt for it. Only 5 percent will still fund an IRA even if it isn’t imposed on them by their workspace.

It’s worth mentioning that there are many small and large companies that do offer proper retirement plans but there is still a shortage of them. In order to close the retirement gap once and for all, collective effort of all the small and large workspaces is required. If companies provide their employees the insight that they require then they are more than likely to spend the small amount of money in the urge of securing their future. Here’s hoping that this can happen in the coming years.