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Public Sector Retirement News

April 18, 2024

Federal Employee Retirement and Benefits News

Tag: LEO

LEO

Do You Know Retirement Savings is Dependent on Your Age Group?

/by aaron steele

The amount required for retirement varies for each individual. Nonetheless, there are milestones to strive for in each decade of life. Making a plan for your career is never too early, but getting started is also never too late.

According to the Federal Reserve’s 2019 Survey of Consumer Finances, only half of American households had some retirement savings. Like most people, you probably need to save more for your retirement. Not unexpectedly, the size of retirement savings varies by generation. According to Retirement Survey by Transamerica in 2019, Baby Boomer workers had the largest median retirement savings of $144,000, compared to Generation X ($64,000) and Millennials ($23,000).

This article will compare the retirement savings of individuals of various ages based on the recommendations of financial experts.

Those in their Twenties

Your salary most likely reflects the reality that you are in your twenties and just beginning your career. Additionally, you probably have a sizable burden from college loans. The Economic Well-Being of U.S. Households Report estimated that the average monthly payment for student loans in 2019 was between $200 and $299. 

However, those in their twenties should have roughly 40 years before they retire, which gives them plenty of time to make up for whatever shortfalls they may have incurred. Contributing to employer-sponsored retirement plans like 401(k) or 403(b) plans is the most crucial thing you can do. According to investment management firm Fidelity, a minimum of 15% of your annual pre-tax income should be set aside for retirement.

Saving 15% of your salary isn’t realistic for most people; if that’s not an option, save as much as possible and use your employer’s matching contribution if available.

Those in their Thirties

If you’re in your thirties, you’ve likely risen through the ranks of your organization or obtained sufficient experience to move out of the entry-level pay grades.

According to data from Transamerica, people in their thirties had a median savings of $68,000. According to financial advisors, by age 30, you should have put away the equivalent of one year’s salary; by age 35, you should have saved twice that much; by age 40, you should have put away three times that much.

To attain these goals, tighten your family budget and save more of your salary if possible. If you have not yet begun to save, you will need to save a greater proportion of your annual income.

For instance, Fidelity advises saving 18% of your income year if you start saving at age 30, while someone starting at age 35 should aim for saving 23% annually.

Those in their Forties

Forty-year-olds are likely at the pinnacle of their careers. Expert advises saving three times your annual wage by the time you are 40. Therefore, if your income is $55,000, you should already have $165,000 in your bank account. It is advised that you have four times your annual wage saved by the time you are 45 and six times that amount by the time you are 50. Contribute as much as possible to your 401(k) if you can. Open an Individual Retirement Account (IRA) if you don’t already have one, and aim to maximize it as well. 

Those in their Fifties

Those in their fifties are nearing retirement age, but there is still time to save for their future. In addition to paying for your children’s schooling, you may also support them with additional costs such as car payments and gas. In addition, while your medical expenses are undoubtedly increasing, the house may be getting older and needing repairs.

According to experts, the ideal retirement savings for those in their fifties is six to eight times their yearly income.

Those in their Sixties

You often start to benefit from decades of saving during this decade. In other words, according to Fidelity, you should have saved eight times your annual salary by the time you’re age 60 and ten times that amount by the time you’re 67.

Experts say the predicted median savings for people in their sixties is $202,000. It’s more difficult to save enough money at this time to cover any deficiency. Examine your assets to determine what might be sold to help make ends meet if you fall behind on your savings.

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:
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.

Lawmakers Unveil Bill to Safeguard Retired Police and Fireman Tax Credits

/by michael crowe

More tax relief may be forthcoming for Washington’s retired police and fire personnel. According to a news release from Rep. Abigail Spanberger on Monday, the bipartisan bill submitted to Congress would make it simpler for public safety retirees to access a tax advantage for their healthcare insurance payments (D-VA).

The bill’s sponsors include former police officer Spanberger and Rep. Steve Chabot (R-OH).

 “America’s law enforcement personnel go above and beyond under tremendous pressure to keep our communities secure. Officers frequently have to leave the police service early owing to the physical and psychological strains of working in these demanding, everyday situations.”

Spanberger shared, “Unfortunately, because of their early departure, they cannot sign up for Medicare or use employer-sponsored health insurance. We can fix this problem by taking practical, reasonable action. This includes ensuring that retired officers, regardless of how their pension payments are distributed, can receive tax-free payments from their pension schemes to pay for health insurance expenditures.”

Spanberger went on to say, “I’m honored to have participated in the bipartisan introduction of this bill, which honors retired police officer and Virginia Seventh District resident Wally Bunker. I thank Congressman Chabot for his cooperation and leadership on this matter. I will always continue to fight to ensure that Virginia’s law enforcement receives the rewards they have earned by donning the badge. “

By amending an existing clause, the Wally Bunker Healthcare Enhancement for Local Public Safety (HELPS) Retirees Improvement Act would make it simpler for public safety retirees to benefit from a tax break. The announcement claims that many seniors struggle to take advantage of the benefit since some pension plans don’t pay insurance companies directly, which is required by the existing policy to withdraw $3,000 tax-free from a pension plan each year. This provision will be updated and eliminated by the bill.

The bill bears Wally Bunker’s name; he is a former police lieutenant in Spanberger’s district who is 77 years old. The direct payment prerequisite has prevented Bunker from utilizing the pre-tax benefit.

According to the congresswoman in a statement, the passage of this legislation “would finally level the playing field for all retired public safety workers who get pensions but don’t have the choice of premiums being paid from the pension fund directly to healthcare providers.”

“I wish to thank Congresswoman Spanberger for her willingness to support this legislation, as well as Congressman Steve Chabot’s bipartisan backing as a cosponsor, and the hard work of the Fraternal Order of Police to support this legislation, which is based on fairness by treating all public safety retirees equally,” said Bunker.

The National Fraternal Order of Police has backed the Wally Bunker HELPS Retirees Improvement Act.

Patrick Yoes, National President of the FOP, asserts that this legislation would eliminate this prerequisite, enable all retired public employees to take advantage of this benefit they earned through their community service, and raise the pre-tax amount from $3,000 to $6,000 annually.

The HELPS Retirees Improvement Act, according to MPs, would implement the following:

• Ensure that health insurance premiums are tax-deductible, whether purchased through a third-party or pension system.

• Increase the tax credit from $3,000 to $6,000 to reflect rising healthcare premiums.

•Check to see if stipends fall under IRS section 402’s income exclusion (I).

•Assist public pension plans in lessening the strain of coordinating with multiple insurance firms on behalf of the associated retirees in public safety.

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!

Are 5000 new TSP Options Too Many?

/by marvin dutton

What if your favorite eating establishment’s menu grew from 15 to over 5,000 new options? Could you deal with it? Do you think it’s a good idea, or do you think it’s a bad idea? Maybe you’ll choke on your options.

Prepare to be surprised.

Starting later in the year, the federal Thrift Savings Plan (TSP) will dramatically boost the number of investment options available to active and retired government and military personnel. TSP participants might have up to 5,000 new investment alternatives by the end of the year.

So, what comes next?

The TSP is the government’s version of a 401(k) plan. It is currently valued at $770 billion. It is one of the world’s largest investment vehicles that private companies and organizations have sought a piece of since Congress established it.

The TSP is the crown jewel of investment alternatives, with a 5% match for most investors and strict control. Members of Congress, ambassadors, and the Supreme Court are all covered by the TSP, encompassing everyone from SEC lawyers to park rangers and even astronauts.

TSP has only five funds at the moment. They include three stock index funds, a bond and treasury securities fund, and ten Life Cycle funds that automatically adjust to your needs.

Environmental, social, and governance (ESG) funds will be included in the new investment possibilities. This will gratify investors who have been clamoring for greater ESG for decades. Investors will transfer up to 25% of their TSP balance to one (or more) of the newly approved funds. They’ll also have to pay more administrative costs than those who adhere to the five essential funds.

At the end of the day, the main question is whether you should invest some (or all) of your retirement savings in new options with higher growth potential.

Alternatively, you may get into the tank! According to some estimates, the TSP will provide a third to half of the income that more federal or military investors will get in retirement, assuming they invest wisely and effectively.

The new alternatives will be a boon to federal employees. They have been trying to time the market by forecasting high and low moments and then investing accordingly, especially if they know to buy low and sell at a higher price, which is more difficult in practice than it appears in principle.

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].

Early Retirement Reality Check

/by mickey elfenbein

Even if you like your work, there are times when alphabetizing the spice cabinet would be preferable to traveling a crowded train with hundreds of sniffling passengers. You could be considering early retirement as you wobble in the car next to a guy who has biked four hours to the station.

Unfortunately, not everyone is suited for early retirement. Indeed, it is not for most people. According to a poll conducted by the Employee Benefit Research Institute (EBRI), just 11% of today’s employees want to retire before 60. The reality of early retirement might be quite different from the dream for many of those who take the jump. Before you decide to retire early, consider a few things.

1. Health care is expensive.

If you were sick as a child, likely, you’ve already been diagnosed with an ailment or two. And if you’re like many people in their 20s and 30s today, those health problems don’t just go away when you turn 65. Believe it or not, most insurance companies won’t cover treatments for conditions present before your policy. And if you get sick after your policy begins, expect to pay extra for your health care.

Medicare doesn’t kick in until you’re 65. You’re on your own for medical expenses unless you buy a private insurance plan that will cover pre-existing conditions or take out an expensive rider to cover that risk after you retire.

2. Tapping your nest egg earlier can be costly.

Depending on how you invest your assets, you could see a significant drop in your portfolio’s value if you begin to liquidate at age 50. For most people, tapping savings represents a large percentage of their net worth, and the loss of that investment can be enough to derail any dreams they have of retiring early. Suppose retirement is still years away, and you’ve got no other sources of income. In that case, the best strategy might be to keep working and investing as usual.

3. Housing expenses don’t retire when you do.

When you retire early, it’s relatively common to move to a less expensive area. But don’t assume that your housing costs will go down as well. It’s pretty common for people to spend more on housing in retirement than they did when working full-time.

How much should you save? A benchmark rule of thumb is to replace 80% of your pre-retirement income. If you’re 35 and earn $70,000 a year now, aim to have about $56,000 saved by age 65 to continue living on about $10,000 per year from then on.

4. Extra income can be hard to come by.

Being your boss and setting your hours can be a great perk of early retirement. But unless you had already planned on working part-time, it’s unlikely that you’ll get the same kind of paycheck after retirement as you do while at work. That extra cash can make paying for health care and housing expenses easier without dipping into savings.

5. There’s a lot of time to kill.

Many people discover that they have a lot more free time as retirees than they ever expected. If you’ve been used to working 10-hour days for the last few decades, spending your days fishing or golfing can feel like an empty experience. As a result, some retirees find themselves longing for the structure of their old work schedules. Working part-time can be an excellent way to fill these hours and provide income at the same time.

What’s more important  not going to work every day or having enough money to pay your bills? Many early retirees find that there are tradeoffs involved in living the life they once dreamed about. Reality is often different from fantasy Ã¢â‚¬â€ but it can still be a rewarding life.

6. You may need to make new friends.

It can feel strange to have all day long to do whatever you want suddenly  and no one else around. But it’s a common experience for retirees who leave behind their co-workers, supervisors, and colleagues when they retire early. And even if you had a solid social network within your work environment, the chances are that most of them will be working still while you’re retired. So if the idea of playing golf every day on your own doesn’t appeal to you, consider starting a new hobby or taking up some volunteer activity in your community so that there’s someone else around during your afternoons and weekends.

7. Retirement can be tough on couples.

Many retirees find that they miss the structure of a work schedule, a shared social network, and a sense of meaning in their lives. If you’re married, your partner could experience similar feelings Ã¢â‚¬â€ even if they are happy to be retired. That can put added stress on your marriage as you both sometimes struggle with competing desires for time alone versus togetherness. In some cases, it might be helpful to take up new activities or hobbies separately so that each person has their own set of friends and social interactions outside the home.

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.

Answers To Your Questions About Social Security Benefits, COLA and Spousal Benefits Rates

/by todd carmack

Did I miss out on Social Security‘s 5.9% COLA for 2022?

Q: Full retirement age (FRA) was in November of last year, but I haven’t filed yet since I want to enhance my benefit by waiting until at least the middle of this year. However, I’ve heard and read that because I didn’t start collecting in January of this year, I missed out on the 5.9% COLA. Is this correct?

A: You don’t need to begin receiving benefits to obtain credit for the cost of living (COLA) raise implemented in January. Your Social Security retirement benefit rate is increased by any Social Security COLAs after age 62, regardless of when you apply for benefits.

In the year you turn 62, Social Security determines your base primary insurance amount (PIA). That PIA is then revised annually to incorporate COLAs, which are compounded. If a person begins taking Social Security benefits at full retirement age (FRA), their PIA equals their Social Security retirement benefit rate.

For example, suppose you reach 62 in 2022, and your base primary insurance amount (PIA) is projected to be $1000. In that example, by the time you achieve your full retirement age (FRA) of 67, your PIA would have climbed to around $1217.10 after rounding.

You would also be compensated for any COLAs after you reach full retirement age (FRA). You could improve your PIA by working and replacing one or more of the years used in your PIA calculation with a higher year of earnings. Also, you might receive delayed retirement credits (DRC) by deferring your benefits until you’re 70 years old.

Will my wife receive half of my benefit if she starts her own benefits at 62 and then switches to spousal benefits?

Q: My husband’s Social Security retirement payment will probably be less than half of mine. Will his spousal benefit be half the amount of my benefit if he claims his benefit at 62 and then changes to his spousal benefit at 67 when I claim my retirement benefit? Or will it be decreased from that level because he started at 62?

A: Your husband cannot move from receiving his retirement benefits to receiving only spousal benefits. Once a person applies for Social Security retirement benefits, the benefits are guaranteed for the rest of their lives. Suppose they become eligible for a greater spousal or survivor benefit. In that case, they can apply for an extra spousal or survivor benefit. Still, they cannot simply move to the other benefit.

So, if he files for his retirement benefit at the age of 62, he’ll receive a lower rate in exchange for commencing her benefits earlier. Once you apply for your retirement benefit, he’ll be eligible to submit for an excess spousal benefit, which will be added to his total reduced spousal benefit and her reduced retirement benefit rate.

His unreduced spousal benefit would be 50% of your PIA, which you would receive at full retirement age (FRA). If he waits until his FRA, her excess spousal benefit won’t be decreased. Still, if he gets spousal benefits before his FRA, his extra spousal benefit will be lowered. His unreduced excess spousal benefit equals 50% of your PIA, less a 100% of his PIA. 

When I become eligible, will I be able to switch to my own benefit?

Q: I recently started receiving my widow’s pension at 61. My retirement benefits at 62 will be more than my widow’s pension. Will I be able to transition to my retirement once I’m eligible?

A: You certainly could, but you probably shouldn’t. The only reason switching to your benefits at 62 would make sense is if you have severe health conditions that will significantly limit your life expectancy. Suppose you begin drawing your benefits at the age of 62. In that case, you’ll get a considerably reduced monthly benefit rate for the rest of your life.

Instead, you should seriously consider receiving only your widow’s benefits until you reach the age of 70. After that, you should transition to your retirement benefit. As long as you haven’t claimed your retirement benefit, it will continue to grow each month following your full retirement age (FRA) until you reach 70.

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

Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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

Federal vs. Private Sector Retirement Programs

/by aaron steele

There are several significant advantages that federal retirement systems have over private-sector plans. In some ways, federal retirement systems (for both military and civilian service) differ from many employer-sponsored retirement plans in the private sector – and that is a good thing.

First, most private-sector retirement plans consist of a 401(k)-style plan. Fewer than 20% of businesses offer a defined benefit plan like the FERS or Blended Retirement System (BRS).

Consider how vulnerable your retirement years would be if you didn’t have the safety net of a FERS or BRS pension. I didn’t include Social Security because it is a given that it covers 96% of American workers, including BRS, FERS, and private sector employees.

Secondly, many private-sector schemes do not guarantee monthly payments for the rest of one’s life. These systems often give retirees the choice of a lump-sum payment or lifetime payments, whereas FERS and BRS only offer a lifetime annuity (pension) with no option for a lump sum.

Both FERS and BRS guarantee lifetime income. However, neither of the two systems allows the retiree the option of receiving a lump-sum payment. 

Although having a choice is a wonderful thing, monthly checks, such as those received by FERS and BRS pensioners, provide financial certainty in the future and insulate the retiree from the adverse effects of bad money decisions. According to a recent MetLife survey, 1/3 of retirees who got a lump payment spent it within five years.

Although the financially smart will lament the lack of options in their defined benefit plan, they are likely to have funds in the TSP and IRAs for future investments. This group would not have been among the one-third of lump-sum winners who spent all of their funds within five years.

Another distinction between the private sector and federal retirement systems (FERS or BRS) is that private-sector employees don’t receive cost-of-living adjustments (COLAs). Many retirees from various levels of government, like the state, local, etc., receive COLAs, but only a tiny percentage of private-sector pensioners do.

It’s easier to take for granted how lucky we are to be a federal employee or a member of the uniformed services. But we have reason to be grateful for our retirement benefits.

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.

Open Season Offers Choices

/by joe carreno

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

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

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

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

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

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

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

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

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

The open season doesn’t apply to the two other federal insurance schemes, FEGLI and FLTCIP. FEGLI holds open seasons only on rare occasions. However, they only allow new enrollments or coverage adjustments in specific conditions at other times. The FLTCIP accepts new enrollment applications and adjustments to current enrollment at any time, subject to underwriting.

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

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.

Avoid These Mistakes While Planning for Retirement

/by mark heinrich

It is terrible that some government employees who have worked for their country for 10 or 20 years will not be able to retire when planned because of unfinished business from their time in the service to the country.

This article focuses on employees’ most common federal retirement planning blunders. It doesn’t matter which retirement system these employees are covered by. They might be covered by CSRS, the FERS, or even a hybrid of the two (known as “TransFERS” employees). As a federal employee, if you plan to retire, you should avoid these mistakes to avoid any trouble.

Not reviewing personnel records.

Form SF 50 (Notice of Personnel Action), which is updated annually, should be reviewed by federal workers regularly to ensure that it is accurate and up to date. Important retirement-related information can be found on Form SF 50, such as: On Form SF 50, the “retirement plan” box 30 shows the retirement plan an employee is covered by, such as the Civil Service Retirement System (CSRS), the CSRS-Offset, or the Federal Employees Retirement System (FERS) (FERS).

It is the responsibility of employees to verify that they are enrolled in the right retirement plan. Federal employees have been mistakenly enrolled in the wrong retirement system when employed, a mistake they didn’t discover until they were about to retire.

Fails to request estimates of unpaid deposits.

By depositing military or non-deduction time, many employees do not realize that this resets their SCD for retirement backward, increasing the amount of their CSRS or FERS gross annuities. They may also find that they may retire earlier than they had anticipated.

It is possible to redeposit withdrawn CSRS or FERS contributions for federal employees who previously worked for the government, left before they were eligible for retirement, and then later returned to work for the government, restoring the years of service that were lost as a result of these withdrawn contributions (usually with interest charges). Some workers are only informed of their deposits or redeposits at the end of their careers, resulting in a higher interest rate and a more significant financial burden.

Not understanding the health benefits.

Federal employees’ health insurance coverage under the Federal Employees Health Benefits (FEHB) program is often misunderstood by those who work for the government. Notably, just 25-28% of total FEHB premiums are paid by workers and annuitants, with the federal government picking up the other 72-75% of the tab.

To depart on a “postponed” retirement under FERS’ Minimum Retirement Age “MRA +10” or “MRA +20” rules, an employee must retire under an immediate retirement (one that commences within 30 days of separation). In addition, the employee must have been enrolled in FEHB for five years immediately before retirement or since the retiring employee’s first chance to enroll in FEHB as a family member (such as a spouse) to be covered by FEHB.

Contact Information:
Email: [email protected]
Phone: 9187441333

Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.

Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.

Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564

Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402

Member FINRA www.finra.org / SIPC www.sipc.org

Broker Check http://brokercheck.finra.org/

Special Category Employees and Retirement Benefit Differences

/by Matt Pierce

Federal Retirement benefits are not always the same for every employee. If you are considered a Special Category employee, there are some distinguishable rules that you should be aware of. The categories that fall in this domain include the firefighters, law enforcement officers, and the air traffic controllers.

Retirement benefits differ for Special Category employees:

The firefighters and the law enforcing officers can retire if they are 50 years old or more. Of course, another condition in this regard would be the completion of 20 years of service. The retirement age that is mandatory for everyone is 57, and it’s only when an agency’s head thinks that it’s wise to continue can the age go up to around 60.

The main reason behind the difference in the retirement benefits is the fact that the careers of these Special Category employees last much shorter than the average employees. For example, the CSRS annuity can be calculated by taking 2.5 percent of the high-3 average pay and multiplying the answer with the 20 years of service. Follow the process by taking 2 percent of the high-3 times if there remain any years of service unaccounted for.

To calculate the FERS annuity, you will have to consider 1.7 percent of the high-3 average pay and whatever answer comes needs to be multiplied by 20 years of service. Similarly, take 1 percent of any of the remaining years of service.

The careers of the special category employees are filled with meeting and tackling situations that normal employees would never have to face, so it’s only natural for them to expect a little more compensation when it comes to getting Retirement benefits. There are other worth mentioning differences too, and they all contribute towards the effort to make the post-retirement lives of special category employees easy and comfortable.

About 30,000 Federal Employees to get better Retirement Benefits

/by Admin

The federal employees who fall under the designation of police series GS-0083 may soon have the ability to retire early and get better retirement benefits. A new bill has been proposed by the Democrats on the same.  This move has been appreciated by many federal unions.

The Bill Impacting Federal Employees’ Retirement BenefitsRetirement Benefits

The bill entitled The Law Enforcement Officers Equity Act was introduced by Senators Barbara Mikulski, D-Md and Cory Booker, D-N.J. It states that all federal employees who have the authority to carry a firearm and who investigate criminals or apprehend them should be given better retirement benefits. It includes all the employees designated in the police series GS-0083 such as Internal Revenue Service officers who are in charge of collecting delinquent taxes, Veterans Affairs Department police officers and U.S. Postal Service Inspection Service employees.

The Retirement Age

If the bill is passed, some of the employees working at the FBI, Defense Department and many such agencies would get the right to retire at age 50 if they have completed 20 years of service. They would also be able to retire at any age after they have completed 25 years on the job. Law enforcement officers get a more generous annuity when they retire and they contribute more from paychecks towards their retirement. Booker said that he wanted to fix that loophole so that all law enforcement officers get the benefits they deserve.

No More Punishments

Mikulski stated that the bill would right the wrong that has been happening with people who defend the nation against terrorists and stop the smuggling of illegal drugs.

The Credit

If the bill is passed, the employees would be able to get credit for the time they have served. They would just need to send a notice to the OPM within 5 years time from the date the bill is enacted or before they have to retire.

The Praise

Many of the federal employees’ union groups praised the bill suggested by the democrats’ senators. The groups stated that the officers deal with the same problems faced by the federal law enforcement so they really deserve the same perks. The President of National Treasury Employees Union, Tony Reardon wrote a letter to Booker and stated that IRS officers deal with critical situations such as assaults, threats, and even gunfire so they must be given the retirement benefits they deserve.

Federal Government Shells Out $18 Million to Destroy Marijuana

/by Admin

The federal government has spent a lot of money on eradicating illegal marijuana in the last year. The eradication efforts even went on in the states that have legalized marijuana for adults. Several lawmakers are asking the government to use the eradication funds towards more productive programs such as domestic violence but there have been no positive developments in this regard.

The Money Spent by the Federal Government

The federal government has spent about $18 million in the cannabis eradication program in the year 2015. The Drug Enforcement Administration’s controversial program details were shared by the administration. It also said that federal, state and local authorities evacuated about 4.1 million cultivated marijuana plants that were present in all 50 states.

In 2014, the number of plants was 4.3 million. The money spent by the federal government in 2014 was about the same. The cost of destroying a plant comes down to $4.42 in 2015 while it was $4.20 in 2014.

The Program

The program allows local and state law enforcement agencies to search, seize, and destroy illegal marijuana plants in the USA. A large amount of money to fund this program is offered from the asset forfeiture fund of the Justice Department. The program money is also used to employ helicopters to scour the countryside areas for the production of marijuana.

The Better Use of Funds

Rep. Ted Lieu, D-Calif. Along with a small group of lawmakers had tried to pass a legislation that aims to redirect the funds involved in marijuana eradication into more productive uses like the domestic violence prevention programs. They were unsuccessful in their efforts and their leader still thinks that marijuana must be removed from Schedule I classification and DEA must not allow the wasteful eradication program to go on for long.

States that have Legalized Marijuana

The eradication operation was also conducted in the states such as Oregon and Washington that have now legalized marijuana use for the recreational purpose by the adults. In Washington only, about 36,000 plants were done away with and the cost of it came ou to about $950,000. It means that the DEA spent about $26 per plant.

States Not Accepting Federal Government Help

There are states like Colorado and Alaska that refused to use the federal government funds to do away with the illegal marijuana plants. They stuck to removing the illegal marijuana plants on their own.

Will Spending Be The Same In Retirement?

/by Dianna Tafazoli

Federal Retirement Spending Habits

Federal Retirement Spending Habits

For Federal Employees, spending will change in retirement.  Some federal retirees will spend more and some will spend less based on their individual financial situation.  It is useful to note that expenses today may not be expenses tomorrow.  Therefore, some projections and forecasting is needed when looking at spending in retirement.

Expenses like transportation and food costs may go down.  If you don’t choose to work or even if you work part-time, you will probably not spend as much money in transportation as you did before.  Your budget for clothing may also decrease.  Entertainment and social activities may go up or down.  Because you are retired, your social calendar may not be as busy.  But, on the other hand, because you are retired, your social calendar might be completely filled because you do have more free time.

Medical Expenses and Life Insurance in Retirement

Let’s take a look at medical expenses in retirement.  Those expenses will probably go up because it seems to follow that as we get older, we require more medical attention.   Conversely, taxes will probably go down because you will no longer have payroll taxes for Social Security and Medicare if you don’t have earned income after retirement.   For instance, someone earning $60,000 in 2009 might have paid $4,590 for Social Security and Medicare Taxes, but will pay zero dollars in retirement if there is no earned income.  The tax savings could also help to replace some of the salary we will need to cover in retirement.  Savings should be aggressive prior to retirement. Your cost for life insurance, FEGLI or private compay life insurance, may also decrease – you should compare your FEGLI coverage and costs again private life insurance to make sure you are getting the best deal.

There are many ways in which our expenses and income may fluctuate in our retirement years.  But knowing what we know, it is prudent to aggressively save prior to retirement and even more prudent to aggressively pay down debt prior to retirement.  Carrying heavy debt into retirement is a disaster waiting to happen.  Reducing your debt lowers interest and increases your net worth.  If you have a very high debt: income ratio you will have to spend a lot of money just paying interest.

I know you are still thinking about your vision for retirement.  What about insinuating “some magic dust” into your vision —- living debt free before you reach retirement?  Imagine how much bigger and fantastic your vision could be if you had no heavy debt to carry around with you.  A rule of thumb is to lay out your entire debt ranking the order in which they should be paid.  You pay off debt with the highest interest first and then you put off the debt with the lowest interest last until you have paid everything off.

You don’t want to pay off your mortgage unless you have a lot of disposal income because you may need the tax advantages from the mortgage payment.  If I had enough money to pay off my mortgage, I would do a very careful analysis of the pros and cons before taking the next step of paying off the mortgage.  Paying off a mortgage might be the right thing to do for some and not for others.  Each person’s financial circumstances is uniquely different.  Try living by this “mantra” – What I cannot pay for in cash, I cannot afford, mortgages aside.  You will be amazed how living by this mantra will curtail spending. Decision-making strategies must always be utilized when spending your money.  Sometimes credit gives us too much flight to fantasy.  We all need credit, but how we handle it will be key to our retirement success.

Remember when it was assumed when one retired the mortgage would also be retired.  That is not always the case now-a-day.   Having to make large debt payments out of a limited retirement income can easily sour one’s financial picture in retirement.  Every effort must be made to leave debt behind as you move into retirement.  Having a vision and dreams for retirement has associated costs.  If you pay down your debt then you will have money that is not obligated for expenses to spend the way you want.  It is called your vision and dream cache. The more savvy you are at managing your finances, the better that cache will look and feel.  Most retirees talk about being able to travel.  That is an expense that is outside of the normal day-to-day expenses especially if the travel is extensive.  So we have to be very careful in planning our trip and making sure we are comparison shopping.

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

RELATED TSP ARTICLES

Thrift Savings Plan (TSP) Withdrawal Options

For Postal Employees – LiteBlue and the TSP

Federal and Postal Employees – Choosing a Financial Professional

The Thrift Savings Plan (TSP)

Is All ‘Your’ TSP Money Actually Yours?

Federal Retirement Benefit Analysis

How To Best Fund Your TSP

Retiring In Less Than One Year

/by Dianna Tafazoli
Retiring In Less Than One Year

Consider the following if your retirement plans are less than one year away.

  • Is there any way that I could be indebted to my employer?
  1. If you have outstanding travel advances.
  2. Overpayment of salary that has not been resolved.
  3. Indebtedness for failure to return government property or for damage to government property.
  4. Advanced leave.

When and how do I waive my military retired pay?

If you would like to waive your military retired pay to receive credit for military service in the computation of your benefit, you can write to the Retired Pay Operations Center at least 60 days before your planned retirement.  Send your waiver to:

Defense Finance and Accounting Service

U.S. Military Retirement Pay

P.O. Box 7130

London, KY  40742-7130 or you can “fax” your request to (888) 469-6559

What Is The Maximum Federal Retirement Benefit I Can Receive?

The basic civil service retirement annuity cannot exceed 80% of your high-3 average salary, excluding your unused sick leave.  The 80% limitation is typically reached when you have 41 years and 11 months of service, not including accumulated sick leave. 

Law Enforcement Officer (LEOs) Retirement Annuities

Law Enforcement Officers (LEOs) may under special computation provisions receive the 80% limit with fewer years of service.

Service beyond the years which provides the maximum benefit will not be used to compute your Law Enforment Officer annuity.  The retirement contributions you made during those years will be automatically refunded to you with interest at the rate of three percent per year, compounded annually.  You have the option of using the refund to purchase additional annuities as if the contributions and interest are voluntary contributions.

However, if you have federal civilian employment periods when you did not contribute to either  or FERS, excess contributions are automatically applied toward any deposit due for those employment periods.

How do I find out if I am eligible for Medicare coverage?

It is recommended that you contact the Social Security Administration at least three months before you reach your 65th birthday to apply for Medicare Benefits.  The Social Security Administration will have the records pertaining to your eligibility for Medicare coverage.  If there is a problem locating your records either you or your employer can obtain a statement of your earnings by writing to:

General Services Administration

National Personnel Records Center

Civilian Personnel Records

111 Winnebago Street

St. Louis, Missouri 63118

Your request should include:

  1. Your name as shown on your payroll records;
  2. Your date of birth;
  3. Your Social Security Number;
  4. Your complete mailing address;
  5. The years for which earnings are needed;
  6. The name and location of employer for each year;
  7. State clearly the reason for the request;
  8. Affix your written signature; and,
  9. Write a statement declaring that all other sources of information have been exhausted.
  • When should I choose my exact retirement date?

If you have not already done so, start thinking about choosing your exact retirement date.  Your benefit can be estimated based on the exact date you choose.  Remember OPM cannot give you the best estimate until you have actually applied for retirement.

  • When should I complete my application?

You should carefully read all of the information in the application package and submit the forms.  You do not need to submit a resignation letter.  Your completed and signed application is equivalent to a resignation.  However, if you are eligible for benefits, you should not resign with the intent of retiring at some later date.  If you were to expire after separation but before filing your retirement application no life insurance, no survivor benefit and no survivor health insurance coverage would be available to your survivors.  All other exit procedures required by the agency should be followed and completed.

  • Should I check on my military service deposit?

Your human capital office will verify with your payroll office that the deposit to give you credit in your annuity for military service you performed after 1956 has been paid, or that arrangements have been made for complete payment before you leave the agency’s rolls.

  • Should I sign up now to receive my retirement payments by direct deposit?

If your retirement records are electronically transmitted by your employer via the Data Exchange Gateway (DEG), the account information for direct deposit will be sent automatically.  If this is not the case, then you must submit with your retirement package, a request to receive payments by direct deposit.  A letter can be submitted or SF 1199A with the application.  SF 1199A can be obtained from your financial institution.

Direct deposit is generally not available to persons with a permanent address outside of the United States, except for Canada.  Persons with permanent addresses outside the United States may request direct deposit to a financial institution in the United States.

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

TSP ARTICLES

Thrift Savings Plan (TSP) Withdrawal Options

For Postal Employees – LiteBlue and the TSP

Federal and Postal Employees – Choosing a Financial Professional

The Thrift Savings Plan (TSP)

Is All ‘Your’ TSP Money Actually Yours?

Federal Retirement Benefit Analysis

How To Best Fund Your TSP

 

LEO Equity For All – Men and Women in Uniform

/by Dianna Tafazoli

LEO Equity

leoOften when we think of men and women in uniform, our minds drift to our brave men and women who serve in the military.  The highest honor should go to them.  However, we have another cadre of brave men and women in uniform and they are law enforcement officers (LEO) and firefighters.

Because of the nature and danger involved in the work these civilians perform, their retirement provisions are unique.  They are able to retire at an earlier age than most, long before they first become eligible to receive Social Security benefits at age 62.  These fine men and women are able to retire at age 50 with 20 years of service and at any age with 25 years of service and at times have mandatory retirement ages that must be adhered to.  However, age 59 1/2 carries some significance in terms of making withdrawals from their TSP.  You may begin withdrawing from qualified retirement plans at age 59 1/2 if retired or from an IRA without incurring the 10 percent penalty.

Congress recognized in 2006 that 50 year old  state and local public safety officials should be allowed to withdraw from their retirement accounts without suffering a 10% penalty because they had not reached age 59 1/2.   If they could retire early due to the uniqueness of their jobs, then they should be able to reap the benefits thereof.  The passing of that legislation in 2006 unfortunately did not extend to federal LEOs and Firefighters.

Congressmen Bill Pascrell (D-NJ) and Dave Reichert (R-WA) have introduced legislation that would give federal law enforcement officers and firefighters the same withdrawal privileges and access to their retirement accounts as local and state safety officials without suffering a penalty.  This legislation just makes good sense and we commend these Congresmen for putting this very important issue forward.  Law Enforcement Officials and Firefighters are united in their selfless commitment to protect the citizens of this nation and we as citizens support measures to give back to them for putting their lives on the line each and every day.

Many citizens become disenchanted with the slow movement of Congress sometimes and many think they just aren’t doing enough for the average citizen.  However, the legislation introduced by Congressmen Reichert and Pascrell renews our confidence in the men and women we elect to make laws that serve the best interest of our citizens.  Congressmen thank you for thinking of those who protect us all.

P. S.  Always Remember to Share What You Know

Million Dollar LEO (Law Enforcement Officer) Question

/by Dianna Tafazoli

Million Dollar LEO Question

leoWe have dedicated our entire segment to a discussion of law enforcement officers (LEO) and LEO retirement.  Many questions surrounding the retirement system for LEOs come from LEOs as well as non-LEOs.  The topic is termed million dollar LEO question because many law enforcement personnel continue to grapple with understanding why some individuals working in law enforcement are classified as qualified LEOs while others are not.

Let me preface my statement by saying that law enforcement is critically important in maintaining law and order and preventing a state of anarchy.  The answer to the million dollar question rests in the definition given to LEOs for retirement purposes.

There is a commonly accepted concept of law enforcement and there is a restrictive concept of law enforcement that frames how an individual is termed as a qualified LEO.  The fundamental concept that deems an individual a qualified LEO is that the primary duties must involve investigation, apprehension, or detention of individuals suspected or convicted of offenses against the criminal laws of the United States.

The distinction is drawn that other non-LEOs involved in law enforcement are more involved in prevention or detection of violations versus investigating those violations.  Police officers, guards, customs and immigration inspectors and other inspectors do not meet the definition of LEO for retirement purposes.  This definition or exclusion in no way speaks to the unimportance of these personnel, as a matter of fact it is just the opposite.

Qualified LEOs work with many different classifications of law enforcement personnel to perform the very critical duties of protecting the nation from harm and danger.

The argument for integrating LEOs into one retirement system is the difference in basic and premium pay entitlements from one law enforcement group to another.

It is also important to point out that there is a definition of law enforcement officer under CSRS LEOs and FERS LEOs.  The definitions are essentially parallel.  However, CSRS LEOs for retirement purposes include FBI special agents, Secret Service special agents, Border Patrol agents, U. S. marshals, deputy U. S. marshals, and Bureau of Prisons correctional officers.  FERS LEOs include all of the groups in CSRS in addition to Secret Service Uniformed Division officers, Park Police officers and individuals fundamentally engaged in the protection of officials of the U.S. Government against threats to their personal safety.

The groups that are not included in either group (CSRS or FERS) include certain police officers, guards and U.S. Customs and Border officers.

Hopefully this information sheds some light on our Million dollar LEO question.

Related LEO Articles

What Is LEO Retirement

LEO Mandatory Retirement Age

Explanation of FERS Component for LEOs

LEO (Law Enforcement Officer) FERS Supplement

LEO Annuity Component Computations

Federal Law Enforcement (LEO) – Cost of Living Adjustments

Million Dollar LEO Question

Law Enforcement Officers (LEO) – Who Qualifies May Surprise You

/by Dianna Tafazoli

 LEO Qualifiers

leoIn our posts highlighting Law Enforcement, we have talked a lot about QUALIFIED Law Enforcement Officers (LEO).  What does that mean?  Individuals are deemed qualified law enforcement officers (LEOs) as a result of, but not limited to, their government employment status and are authorized to engage in direct crime prevention, conduct investigations, detect illegal activity, prosecute or confine individuals violating the law.

Law Enforcement Officers are in most cases authorized by their agencies to carry a firearm and must also carry on their person photo identification issued by the employing government agency.  But what happens to the privilege and responsibility of carrying a firearm once the LEO retires?

President Obama signed into law October, 2010, the-Law Enforcement Officers Safety Improvement Act amending the National Concealed Carry Law.  The provisions under both Safety Improvement Act and the Concealed Carry Law identify two classes of individuals: qualified law enforcement officers and qualified retired law enforcement officers.

The Act allows these qualified individuals to carry concealed weapons while off duty in any jurisdiction in the United States, including across states lines irrespective of state and local laws that make differ from the Act.  The exception to this broad provision is that private citizens have the right to forbid concealed weapons on their property.  States also have the right to forbid concealed weapons on its property.

To meet the standard for a qualified retired law enforcement officer, individuals must have separated from their employing agency in good standing whose duties and responsibilities were clearly outlined and encompassed the full range of duties as defined by what constitutes a law enforcement officer.  The individuals must have met within the most recent 12-month period firearm certification requirements from their employing agency and have also met the standards set by the State in which he/she resides. The individuals must also carry photo identification issued from the separating issue of which they were employed attesting to their status as a law enforcement officer (retired) with authorization to possess and carry a concealed firearm.  Fitness analysis of LEOs must not indicate any mental or emotional impairment.

Retirement planning is a signifcant item on the -To-Do-List.  Understanding the parameters in which LEOs can operate once in retirement is a very important aspect of the law to understand.  The Act is detailed, many of the amendments may require some extra review and evaluation.  There will also be many questions left in the minds of LEOs facing retirement and those already in retirement.  I am a strong advocate of educating and sharing information with as many people as I can.  My mantra has always been – Knowledge unshared is knowledge lost.

Utilize your human resources office often during your tenure as a federal employee, engage with LEO organizations, individuals and colleagues to discuss and share information and concerns.  If you are pondering as to how you are going to fill your time schedule when you retire, think about how much knowledge you have as a Law Enforcement Officer. You are a valued member of our nation. You might want to attach teacher, instructor, professor or consultant to your profile.

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

Related LEO Articles

What Is LEO Retirement

LEO Mandatory Retirement Age

Explanation of FERS Component for LEOs

LEO (Law Enforcement Officer) FERS Supplement

LEO Annuity Component Computations

Federal Law Enforcement (LEO) – Cost of Living Adjustments

Million Dollar LEO Question

Law Enforcement Officer: Explanation of FERS Components for LEOs

/by Dianna Tafazoli

Law Enforcement Officer FERS Explanation

law enforcement officerWe have focused on the Law Enforcement Officer, but let’s take a brief moment to explain the 3 legs of the Federal Employees Retirement System (FERS).  This post was prompted by an email question from a FERS employee.

The question:  I would like a simple and clear explanation of the FERS retirement system.  Can you help?

The answer is – we are going to give it our best shot.  If more clarity is needed after the publication of this post, just tell us and we will use a different approach to get you to where you want to be.

The Federal Employees Retirement System (FERS) is made up of 3 parts:  A Basic Benefit, the Thrift Savings Plan (TSP) and Social Security.

The FERS Basic Benefit is a defined benefit plan determined by two factors; the average high-3 annual earnings of an employee that represent the highest earnings during 36 consecutive months of federal service that would produce the highest average.  In most cases, the highest average salary comes towards the end of the work career.  However, that is not always the case.

The second factor in the FERS Basic Benefit is the employee’s length of creditable service.  The calculation for the FERS Basic Benefit is different for LEOs than for regular FERS employees.  An explanation of the formula can be viewed in previous posts on LEOs (LEO-FERS Basic Annuity and LEO Component Computation).

The next component of the 3 leg stool representing FERS retirement is Social Security.  Earning 40 credits, approximately 4 per year over a 10 year period with a minimum age of 62 qualifies individuals for the Social Security benefit.

The last leg of the stool and potentially the largest component is the Thrift Savings Plan (TSP).  The TSP is structured to build financial stability in retirement.  TSP is portable and allows participants a wide-range of passive investment options.  The agency contributes 1% of salary automatically whether the employee makes a contribution or not.  The contributions become vested after 3 years of employment.  Your TSP balance is yours to keep when you leave service.

Additionally the government will contribute from 1% to 5% in matching funds based on your level of contributions.  The maximum TSP cap changes annually based on the rate of inflation.  If inflation is flat, then there will be no change in the cap.  It is important that employees maximize their contributions to the TSP in order to realize the greatest benefit from FERS retirement.  Instead of only drawing a pension, FERS employees have the combination of a Basic Benefit, Social Security and TSP contributions.

Make certain that you speak with the TSP representative in your Human Resources Office to ensure your contributions are spread out over the 26 pay periods in order to receive maximum contributions from the government.  If you max out contributions too quickly, you miss out on the government match.  FERS is structured to provide employees with a retirement profile that will help them retire well.

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

To check your TSP balance check here

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LEO (Law Enforcement Officer) FERS Supplement

/by Dianna Tafazoli

Law Enforcement Officer FERS Supplement

law enforcement officer

Law Enforcement Officers (LEOs) who retire before reaching age 62, the age of first eligibility for Social Security benefits, are qualified for what is commonly called a FERS supplement.  It is better explained as a gap filler.  Through the FERS Supplement, LEOs essentially receive what they would get from Social Security if they had reached the age of Social Security eligibility.

LEOs are eligible to receive the FERS Supplement until reaching the age of 62.  The FERS Supplement is generally less than  the actual Social Security benefit payment, it is an approximation of the benefit.  For LEOs, the FERS Supplement is adjusted annually to reflect the change in the consumer price index (CPI), the same as regular Social Security benefits.

The earnings limitation due to the supplement are not applicable until Social Security eligibility is reached.  Retired persons who receive Social Security benefits and are not LEOs may be subject to the earnings limitation if they have not reached full retirement age.

Earnings are reduced by $1 for every $2 earned and by $2 for every $3 earned.  Individuals born between approximately 1945 and 1971 will reach full retirement age at 66.  At that time there is no limitation on the amount of money that can be earned.  I know you cannot wait to turn 66.

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

For more information on FERS eligibility click HERE

Do you know your Best Day To Retire?

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LEO (Law Enforcement Officer) Mandatory Retirement Age

/by Dianna Tafazoli

Law Enforcement Officer Mandatory Retirement Age

law enforcement officerLaw Enforcement Officers (LEOs) have a mandatory retirement age and must retire from their covered positions at age 57.  If the LEO does not have 20 years of service he/she may continue to work until the last day of the month in which the 20 years is reached.  However, the absolute, mandatory retirement age is 60 whether the 20 years have been reached or not.

Further, in order to work until age 60 in a covered position, permission must be granted by the agency head.  LEOs contribute 7.5% of pay to the federal retirement fund as opposed to the 7.0% required under regular FERS guidelines.

The extra contribution of .5% allows for the early mandatory retirement of LEOs with full retirement benefits.  LEOs are also eligible to continue their life and FEHB (health insurance) into retirement as long as they have been enrolled 5 years prior to retirement and are eligible to retire on an immediate annuity.

Let’s reiterate the fact that mandatory retirement age is for covered positions under LEO guidelines.  LEOs must retire from their classification as Law Enforcement Officers at age 57.  The mandatory retirement provision does not preclude these employees from seeking employment outside of their LEO classification.

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

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/by Dianna Tafazoli

What is LEO Retirement?

leo retirementWhen it comes to has ‘earned’ their LEO retirement Federal Law Enforcement Officers (LEOs) are at the top of the list.  I believe it is more than fair to say that law enforcement is hazardous duty.  LEO retirement, therefore, is an reward for navigating hazards that are much more dangerous than your typical 9-5 job.  Law enforcement because of the nature of the work also requires physical vigor normally associated with adults between the ages of 21 years of age and those who have not yet reached age 37 upon employment in law enforcement.

Since LEOs must meet some rather stringent requirements for employment, they are also entitled to retire early as a normal part of the provisions of the LEO retirement guidelines.  LEO retirement; at age 50 with 20 years of service LEOs can retire with full benefits.  They can retire at any age with 25 years of service..  Only 20 of those years must be in a covered position.  In summary as long as an LEO has 20 years of covered service, he/she only needs to work an additional 5 years in any federal position to retire with a full, unreduced annuity.

For calculation purposes, all years worked will be covered under special LEO retirement provisions.  Individuals in law enforcement who do not qualify as LEOs for retirement purposes, will have their annuity benefits calculated under regular FERS guidelines.

The concern for individuals working in law enforcement who do not qualify as LEOs is that they do not reap the same retirement benefits as qualifying LEOs who have the advantage of a more generous calculation profile.

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

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