Tag: Postal benefits

postal benefits

 

TSP Roth Withdrawals by DAVID FIELDER

A few years ago federal and postal employees were given a Roth option within their Thrift Savings Plan (TSP); the employee cannot contribute to the TSP Roth (TSPR) unless they are contributing the full 5% that is matched by the government.  Employees that are saving more than 5% in their TSP can put any amount over 5% into their TSPR.

In this article I would like to cover the unique way the government crafted its plan for withdrawal of TSPR funds.  Obviously, the benefit of the TSPR is that you can contribute after-tax dollars and have those funds grow tax-free over your career, and then withdraw those funds tax free in retirement.    If you ask anyone these days, most will tell you that they expect tax rates to rise in the future.  This makes a strong argument for investing in the TSPR.

Let’s look at a hypothetical example of an employee who wants to withdraw funds from their TSPR in retirement from 62-66 to get their full social security check.   This is a smart plan for any federal retiree in that you can defer your SSI and get the larger amount without any taxable distributions coming out of your TSP.  Unfortunately, the way the government has the TSPR set up this cannot be done.

It is important to remember that you work for the government.   We always say in our retirement seminars “The good news is you work for the government.   The bad news if you work for the government.”  The government is in the tax business so there are policies and procedures they impose on federal employees that are advantageous to them.

Let’s look at our example again.  Let’s assume Fred wants to pull $20,000.00 out of his TSPR for 4 years to get him to 66.  Any normal Roth IRA outside the government will allow you to take all the money from your Roth and incur zero tax liability.  The TSP forces employees to take money from their normal TSP every time they take money from their TSPR because they are in the tax business, therefore if Fred wants $20,000.00, the TSP forces him to take $10,000.00 from the TSPR and the other $10,000.00 from the normal TSP which is taxed at 20%.  Now instead of Fred getting $20,000.00, he will get $18,000.00 because of the taxes he has to pay.

This is surprising to most federal employees, and most of them don’t find out until they make the withdrawal request.

I want you to know this information ahead of time so you can make plans that benefit you and your family in retirement.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

[email protected]

Other David Fielder Articles

Delaying Social Security by David FielderPostal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group, possibly the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. Mr. Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David Fielder has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David Fielder to present retirement seminars and he has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

Postal Benefits Group: Delaying Social Security

Delaying Social Security by David Fielder of Postal Benefits Group

postal benefitWhen you’re considering your Postal Benefits – The choice of when to start drawing Social Security is significant, and Postal employees have to take several factors into consideration.  In this article I will illustrate a popular method many employees are using to get the most out of their postal retirement benefits.

Let’s look at some basics before we get into making any choices.  As a postal employee, if you draw your Social Security at 62, you are penalized for drawing it early.   Social Security considers full retirement age as 66.  Social Security raises your benefit 8% per year for each year over 62 you wait.  We get questions all the time asking how to calculate your SSI benefit if you choose to draw between 62 and 66.  If your SSI statement says you will draw $1250 at age 62 and you are looking at drawing at age 64 you would calculate:

$1,250 x 1.08% = $1,350 at age 63

$1,350 x 1.08% = $1,458 at age 64

Now lets look at the choice to delay Social Security.  After counseling thousands of Postal employees we know that if you wait until 66 to draw Social Security, it will mean approximately $500 more a month in benefit.   Let’s use that number to evaluate our options.

If Joe chooses to draw SSI at 62 and their benefit at 62 is $1,250 he will draw 4 years of income more than if he started at 66.   The total amount he would draw over this period would be $60,000.

Now let’s look at Sue who waited until 66 to draw her SSI.  She will get $500/more a month than Joe.  This means that Sue will need to live to at least 76 to match what Joe has drawn out.  However, every year that Sue lives past 76 will be profit over what Joe will draw the rest of his life.

Let’s put a couple of things in perspective here.  Five hundred dollars a month is a lot of money.  For the average postal employee this is the equivalent of working 10 years more for the Post office.  Most will agree that waiting until 66 is a good choice.  However, life happens and most people have to start drawing at 62 out of necessity.

As a postal employee you have some tools at your disposal you can use to increase your overall retirement income.  One of these tools is your TSP and if used correctly can dramatically increase your retirement income.

Joe is retiring at 62 and needs $1,200 a month on top of his FERS pension to live comfortably.    He has $150,000 in his TSP at retirement.   Our suggestion to Joe at 62 is to draw the $1,200/month from the TSP and wait to draw his SSI at 66.  Joe will draw $57,600 from his TSP from 62-66.  As long as Joe lives to 76 any income he will draw past 76 will be pure profit from deferring his SSI.   Because people are living longer these days. ;if Joe lives to age 90 he will profit $84,000 on his SSI.

Not only does delaying SSI to 66 help the employee but, when the employee passes away the Survivor Benefit is higher as well.  All things considered, the difference is almost always over $100,000.

The decision to delay SSI is a big decision.  In order for you to make the right choice we encourage you to let us conduct a benefit review.  We will calculate your pension, estimate deductions from your check-stub and advise you on the retirement process and what to expect.  The review is free and in most cases done over the phone.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

[email protected]

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars.  David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

Postal Benefits: The Good The Bad and The Ugly of the TSP

David Fielder

There couldn’t be a better title for this article.  There are aspects of the TSP that are Good, Bad and downright Ugly.  As the President of Postal Benefits Group our goal today, as it is every day, is to educate you on these issues so you can draw your own conclusions and do what’s best for you and your family as you look to maximize your Postal Benefits.

TSP – THE GOOD

TSP has Low Fees:  The .29% you are charged is the lowest of any employer sponsored plan in the US.

Matching TSP Funds for FERS employees:  Let’s face it, it is free money, so everyone should  take advantage of it by putting at least 5% in your TSP.

TSP Withdrawals after separation but before age 59.5:  This is somewhat unknown by but it is a very large postal benefit if you are retiring before age 59.5.  If you are retiring at an age over 55, you can pull money from your TSP without a 10% penalty.  If you have already rolled your TSP money over, you will have to wait until age 59.5 to avoid the penalty.  Only withdrawals from the TSP after age 55 and after separation are exempt from the 10% penalty.

TSP – THE BAD

TSP has Limited Access:  Once you retire, you have a total of two opportunities to withdraw anything but a monthly payment.  To reiterate, once you retire you have two opportunities (over your entire retirement) to draw any sum of money not a set monthly payment.  The TSP has millions of “customers,” and in order to keep the cost low, they have to limit your access.  If you establish a monthly payment, those are permanent for one year.  Again, they don’t want to give you too many options because of the number of “customers” they have.

TSP Annuities:  Many postal employees know this is an undesirable option.  This option involves converting your TSP into a second pension that is paid by Met Life.  The downside of taking the TSP annuity is that you lose access to your cash, your money no longer grows, and in most cases you disinherit your children.  I’ve been advising postal employees for over eight years and I’ve never found a situation where the TSP annuity made sense.

TSP – THE UGLY

In every retirement seminar, I always make the comment: “The good news is that you work for the government, the bad news is that you work for the government.”    The government is in the tax business and that’s the “bad” of the TSP.

Let’s take a look at an example to make the point: Joe who is a retired postal employee, is married to Sally and has $200,000.00 in his TSP.  Both Joe and Sally take a vacation together and tragically die in a car crash.  Joe and Sally had two kids, Scott and Lisa.  Under the TSP rules, Scott and Lisa get their money but not before the entire amount is taxed as if Scott and Lisa had made all the money this year.  Scott and Lisa will see 20-39.6% of the money taken in federal taxes.

Now let’s look at the same example but if the money was outside the TSP and with a private company in an IRA.   The money would transfer to the children, but, the money would be spread out or “stretched” over their life expectancy.  This would result in only $2,000.00 or $3,000.00 of the $100,000.00 being taxable for each child.  People ask me all the time why the TSP would have such a rule.  Again, remember the government is in the tax business.  This one rule makes them hundreds of millions in tax revenue each year.

There are a lot of moving parts when it comes to your retirement and benefits.   Deciding where to move your TSP is a big decision.  Your local financial advisor probably does not know how the TSP works.  Even worse, financial planners can be incapable of putting their clients into programs that are safe.  If you would like assistance in finding a plan that is guaranteed, and at the same time provide you the access you need please don’t hesitate to contact us.

David Fielder

President

Postal Benefits Group

Phone:  636-875-5306

[email protected]

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

Delaying Social Security by David FielderPostal Benefits Group

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

Postal Benefits Group: Postponed/Deferred Retirement

Postponed / Deferred Retirement – DAVID FIELDER of Postal Benefits Group

postal benefitsWe get questions all the time about postal benefits and from postal employees wanting to retire early but do not have either the years of service or the age requirements.  You can retire without having the years of service or age requirements but it depends on your specific situation.  In this article I will cover the differences and help some of you determine which option is best for you.

Postal Benefits and Postponed Retirement:  The better option of the Two

If you have reached your minimum retirement age but do not have your thirty years of service, you can request a Postponed Retirement.    In a Postponed Retirement you “postpone” your pension until you reach the age of sixty (as long as you have at least twenty years of service.  If you have less than twenty years of service, you have to wait until age sixty-two to draw your pension).  By postponing your pension you avoid the five percent penalty for each year you are under age sixty-two.  For example, if an employee was fifty-eight years old, had twenty-five years of service and decided to take an optional early retirement, but did not elect to postpone his pension he would see a 20% penalty off of his pension permanently.

If this same employee elected the postponed retirement, he could avoid the penalty. In our example, the postponement involves retiring at age fifty-eight and not drawing any pension or benefits from age fifty-eight through sixty.   Once he turns sixty, he can start his pension and enroll in the federal health program like everyone else.

Deferred Retirement – using the ‘David Fielder’ method:

Deferred retirement is for those employees who have not reached their MRA.   As long as you have at least five years of service, you can “defer” your pension until age sixty-two and not pay a penalty.    The unfortunate part of the deferred retirement is that you are not able to continue the federal health plan into retirement.  I recently spoke with an employee who is fifty-four years old and has twenty-two years worth of experience.  He had found another job outside the Post Office where he would rather work, and wanted to know if he could retire.  The answer is yes he can retire, but he will not be able to draw his pension until age sixty (he had twenty-two years of experience, so he can draw at age sixty versus age sixty-two) and won’t have access to the federal health plan.

It is critically important that postal employees receive guidance about their postal benefits and work toward maximizing these types of decisions.  One mistake can cost thousands of dollars in retirement.  Each postal employee is different and must evaluate decisions such as these, independent of what anyone else might have done in the same situation.  When we conduct retirement seminars across the country, we always tell employees there is no “one size fits all” when it comes to your benefits.  Each employee will evaluate the same situation differently.  If you would like help or direction on how to navigate the retirement process please feel free to contact me.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

[email protected]

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

Delaying Social Security by David FielderPostal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

USPS Has Fallen On Hard Times – Can LiteBlue Save It

USPS Has Fallen On Hard Times – Can LiteBlue Save It

 

The United States Postal Service is one of the largest semi-independent federal agencies in the United States, only being partially supported by tax dollars. However, just like every other staple agency in the country USPS has fallen onto difficult times, and are implementing plenty of changes and contemplating more dramatic changes for the near future.

USPSLiteBlue and the Retire website:

Let’s start with the positive, USPS employees are now able to use LiteBlue and “eRetire.” The new streamlined service allows employees to navigate their way through different retirement plans available through LiteBlue from the comfort of their home.  Using LiteBlue, the electronic process is applicable for employees who are within five years of retirement eligibility, and employees who are eligible for retirement immediately.

The simple LiteBlue / eRetire process allows full-time USPS employees login to the LiteBlue site and decide their retirement path step by step on the easy-to-use LiteBlue webpage. Full-time employees who meet the required eligibility specification can receive Federal Annuity estimates. Part-time employees and postal inspectors must still do manual inputs and contact the Human Resources Services Center to receive their annuity estimates in the mail.

USPS employees that are presently eligible for retirement, or at least within six months of retirement can perform the following tasks. Request, view and print their own annuity estimation based on employee retirement effect times and dates within 180 days. Additionally, employees within 180 days of retiring can order, print and download the Retirement Application Package.  Prospective retirees can either perform this task on the LiteBlue webpage, or request the application package to be delivered to their home within seven to ten business days.

Furthermore, LiteBlue offers the opportunities transitioning employees to attend counseling sessions. Group sessions are also available for employees to exchange information; group sessions are available to employees who will enter into retirement within 90 days. The LiteBlue webpage displays all appointments dates, times and locations available for employees to choose from.

 

LiteBlue – Change is on the Horizon:

After a decade of consecutive years of operating underneath a mounting deficit in excess of $47 billion, the United States Postal Service is proposing some monumental changes that will greatly impact its 536,000 employees. The Postal Service is seeking congressional approval for dramatic cutback and changes to its current system. The USPS is proposing to implement its own and much cheaper health benefits program, administer its own retirement system and significantly reduce its workforce by 120,000 employees. In addition, USPS is also seeking the flexibility to adjust the mail delivery schedule; meaning that Saturday deliveries would be a thing of the past. Curbside and central pick up locations are also on the docket to become standard versus current door-to-door delivery.

But how did the Postal Service get to this point? There are a couple of key elements that have led USPS to the point it is at now. First, is USPS is legally tied to Congress. Since 2006, USPS has been required to prefund $5.5 billion for future retirees. Initially, the payment was not an issue because the Postal Service was strong and the recession had not hit. Secondly, the volume of mail which USPS services has dropped more than 20% with modern-day technology, and companies like FedEx and UPS gaining momentum.

Keeping the Postal Service’s economic hurdles in mind, there are plenty of potential sources for revenue are being tossed around the discussion board. Re-implementing the Postal Savings Program, allowing lower-class families who don’t utilize a private bank to cash their checks at much less inflated rate. The Postal Service is also considering offering email and/or internet service at a comparable rate to competitors. Other ideas include ending restrictions on shipment of wine and beer, sales of fishing and hunting licenses and notary services.

In addition, the White House has mandated that the $5.5 billion healthcare payments for 2015 and 2016 are deferred until 2017 and USPS being reimbursed $1.5 billion in over over-costs to the Office of Personal Management.

The proposed changes are a second-round of “fat trimming,” to the entity. Previously, the Postal Service has reduced its employee base by 212,000 and was able to bring operational costs down by $12 billion. In addition to the cutbacks, the Postal Service also raised the price of the stamp .03¢ in January of 2014 to offset the devastating blow of the recession. The new plan, proposed by President Obama for the 2016 fiscal budget is projected to save $36 billion over the next 11 years.

While all of the proposed changes make economic sense, the union adamantly opposes all suggested changes to policy and workforce, stating that it will violate contractual obligations and harm collective bargaining. But with the U.S. Postal Service seeing a $569 million revenue increase for the 2014 fiscal year, it shows that innovative ideas will make a difference in an acute situation. In the meantime, the Postal Service will await an answer from Congress to see if the proposed changes will come to fruition

 

Other LiteBlue Related Links

Changing Your LiteBlue / PostalEase Password through ssp.USPS.Gov

LiteBlue; Online Access to More Than Just Your USPS Earnings Statement

Everything About LiteBlue (liteblue.usps.gov)

Postal LiteBlue and Open Season

Postal LiteBluePostal Service employees should visit LiteBlue to download their FEHB (health benefits) guides for this year’s open season.  Open season is the annual period when employees can make changes to their health coverage or choose a new plan – this year Open Season begins on November 10th.

 

Postal Employee guides have been mailed to employees in the past, however, the USPS has determined that making the guides available online through LiteBlue employees will find it easier to evaluate their choices as well as reduce the cost of delivery.

 

Postal Employees can find the following guides on LiteBlue:

         RI70-2 – The 2015 Guide to Benefits for Career United States Postal Service Employees.

         RI 70-8PS – The 2015 Guide to Benefits for Certain Temporary (Non-career) United States Postal Service Employees.

         FEDVIP BK-1 – The 2015 Guide to the Federal Employees Dental and Vision Insurance Program.

         NCEHP BK1 – The 2015 Guide to USPS Non-career Employee Health Benefits Plan.

 

LiteBlue also makes available additional Federal Employees Health Benefits (FEHB) and Federal Employees Dental and Vision Insurance Program (FEDVIP) information.  Postal Employees can find checklists, fact sheets, FAQs and a health plan comparison tools all through LiteBlue.

If you are unable to log into LiteBlue you can also request paper copies of these guides by calling the Human Resources Shared Services Center at 877-477-3273 (press option 5) or TTY 866-260-7507.

 

 

 

LiteBlue Articles and Related Content

What Postal employees should do on LiteBlue Before Retirement

LiteBlue; Online Access to More Than Just Your USPS Earnings Statement

Other LiteBlue Related Pages

– What Is LiteBlue?

– What Postal Employees Should Do On LiteBlue Before Retirement

– eRetire for Postal Employees – Retirement Applications on LiteBlue

– Use LiteBlue to Manage your FEHB

– You can use LiteBlue and PostalEase to manage your Allotments

– Requesting Duplicate Postal Employee W-2 Forms Using LiteBlue

Click here to be directed to LiteBlue.

Will Spending Be The Same In Retirement?

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

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

 

Records To Check Before Retirement

It is best to make certain all of your records are in place when anticipating retirement.  Tips to get in shape for retirement.

-Review your designation of beneficiary for the lump sum payment of retirement contributions when no one is eligible for monthly payments.

– If a copy is not in your folder, file a new designation. The designation is made on

Standard Form 2808 for CSRS and Standard Form 3102 for FERS.  Make sure

the form shows very clearly the person(s) you want designated.

FERS transfers and any prior designation made for CSRS is cancelled.  You may want

to file a FERS designation.  Automatic transfers to FERS from CSRS,- the designation

will remain in force.

If there is no designation of beneficiary, benefits will be paid as follows:

  1.  Your widow or widower.
  2.  Your children in equal shares.
  3.  Your parents in equal shares.
  4.  Your appointed executor or administrator of your estate.
  5.  Your next of kin under the laws of the state you reside in when you die.
  • What records are needed for my health benefits?

Inside of your OPF should be a record of all of your health benefit registration forms (Standard Form 2809) and where appropriate Standard Form 2810, Notice of Change in Health Benefits.  When you retire be absolutely certain that your official records show a complete history of your health insurance enrollment for the last five years.  Your records should include your current Federal life insurance coverage on a Standard Form 2817, “Life Insurance election”, and where appropriate, a current life insurance designation of beneficiary (Standard Form 2823).

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

TSP ARTICLES

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

Is Your Thrift Savings Plan (TSP) Working For You?

 

For Federal Employees – Tips To Creating A Retirement Budget

Federal Employees and Retirement Budgets

A Retirement BudgetYou don’t have to follow any particular format for creating a budget except to measure income against expenses.  The tips below might help you get started.

  • Determine a time horizon for tracking your income and expenses.
  • Outline all of your sources of income and then total the sources.
  • Outline all of your expenses, everything you spend money on.  Break down your expenses into variable and fixed income so that you can really see where there is room to make adjustments if needed. Total all of your expenses.  Remember “savings” are a fixed expense; therefore you must pay yourself first (PYF).
  • Subtract your expenses from your income.  If expenses outweigh income, you have some work to do in the ‘adjustments’ arena.  If income outweighs expenses, then you should consider paying yourself a little more so that your financial goals might be achieved earlier than planned.  Plans are made to be flexible and this is good flexibility.
  • Now that you have the tools necessary to develop both a financial plan and a budget, take sometime to compare one to the other and see how they mesh and if any refurbishing  needs to be done.  Your spending plan should be in harmony with your financial goals. Do this often throughout your life.

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

LiteBlue and TSP RELATED 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

Once Your Federal & Postal Retirement Plan Is In Place

Federal and Postal Retirement Planning

Federal and Postal Retirement PlanningAfter you put your federal retirement plan in place, the biggest challenge is implemnting it.  It takes discipline to stick to your retirement plan.  It is not a bad idea to find a person you trust to encourage you to stay the course.  Handling money responsibly and respectfully can be a challenge.  However, it is a lot easier when you do.  When money is involved, you have a choice.  Staying on track to meet your financial retirement goals can be achieved by following these tips:  

Federal / Postal Retirement Plan Tips

  • Write down your goals and place your written reminder where you can see it everyday.
  • Tell somebody you trust about your retirement goals and who understands what you are doing. Ask them to check in with you about your progress.  Knowing that someone will be inquiring about your progress can be a good source of motivation.
  • Review your financial plan regularly so that you can gauge where and when you need to make adjustments.  Keep working to stay on track.

Monitor Your Federal / Postal Retirement Plan

After putting your federal retirement plan in place then you must be ready to monitor and modify the plan.  This is a very critical step in the financial planning process.  Once you have developed a retirement plan, you will need to monitor it closely at regular intervals to stay on track.  A financial plan is meant to be a living document that evolves over time with changes in our lives.  You will inevitably run into unexpected obstacles and roadblocks, but the strategies you employ to over come those hurdles will help you to stay the course.

Your goals may change and your resources may deviate.  You might have to spend money you didn’t expect to spend.  Conversely, you may receive money you did not expect to receive.  Life is a work in progress and unexpected changes are a part of life.  Because of this very dynamic, it is always prudent to closely monitor and review your plan whenever there are major changes in your life.

When you reach a goal, applaud yourself and cross it off your list.  Now is the time to revisit your list of goals and query yourself:

  • Is it still valuable to achieve my existing goals?
  • Are there any new goals to be added to the list?
  • Do I need to delete or amend an existing goal?

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

LiteBlue Related Pages

What Is LiteBlue?

LiteBlue; Online Access to More Than Just Your USPS Earnings Statement

Postal LiteBlue and Open Season

What Postal Employees Should Do On LiteBlue Before Retirement

Changing Your LiteBlue / PostalEase Password Through ssp.USPS.gov

eRetire for Postal Employees – Retirement Applications on LiteBlue

 

Do You Have a Federal Retirement Individual Action Plan

Retirement Individual Action Plan

Building your Federal Retirement Individual Action Plan (IAP) starts first with building your Financial Plan – the key element to your retirement future.  In order to achieve our collective goal of retiring with comfort and security, we must underscore the inescapable urgency of identifying and setting goals.  Without setting SMART goals we cannot develop a workable financial plan, a sensible budget or an Individual Action Plan (IAP).

Federal Employee Retirement Priorities 

We all philosophically know the difference between ‘WANT’ and ‘NEED’.  Prioritizing need over want is the age old challenge.  There is nothing wrong with ‘wants’.  As a matter of fact, wants often push us to succeeding.  The challenge is being able to know the difference between want and need and utilizing that knowledge to choose options and decision-making strategies that are critical to the SMART goals we set in our lives.

The Federal Employee Financial Plan

One of the most important components of financial planning is the decision-making process.  As we think about retirement, it is imperative that we make choices that maximize our capacity to accomplish SMART goals with perhaps a different level of income.  Decision-making, like goal setting may need to be modified depending on changing circumstances and other factors.  However, there is a process of effective decision-making used by most of us without ever consciously thinking about it.  We are constantly setting goals consciously or subconsciously.  We must analyze data when determining what we can afford and what we cannot.  We create plans to turn thoughts into action, the implementation process. Lastly, we monitor how things are working which often calls for modifying the original plan we put in place.  Are you ready to put your retirement plan in action.

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

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Thrift Savings Plan (TSP) Withdrawal Options

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

 

Federal Employees – Building Your Financial Plan

Building Your Financial PlanAs a Federal Employee you may seek the advice of a Financial Planner, you need to do some homework towards building your financial plan.  The Financial Plan is a key component of your overall Retirement Planning strategy, so you can retire well and live in comfort and security.

Some key items of what your Financial Plan should consist of:

  • – One SMART Short Term Goal (0 – 3 months)
  • – One SMART Intermediate Term Goal (3 months – 1 year)
  • – One SMART Long Term Goal (1 year plus)
  • – A quarterly record of how you get and use your money (you may choose to use a weekly or monthly record)
  • – A process of allocating your money by using the decision-making process
  • – Identification of at least 3 factors that might potentially impact your financial plan (factors may change from time to time)
  • – At least four strategies that will keep you firmly on your plan
  • – Process by which you can easily and clearly articulate how you will monitor and modify your plan.

Building your retirement plan in your mind is the first step to getting started, commiting it to paper (electronic or otherwise) is the first step to implementation.  Your plan does not need to be anything technical, but a plan that you can work with; a plan that is not tossed outside but becomes the roadmap to securing your financial future in retirement.

 

Federal Employee Retirement

TSP (Thrift Savings Plan)

FEGLI (Federal Employees Life Insurance)

FEHB

‘High-3’ Income

Retirement Annuity Calculations

 

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

 

 

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan

Buy-Outs Are On The Rise

Mandatory Reduction of Workforce

Reduction of WorkforceThere has been a lot of conversation around the Federal and Private sectors about strategies to reduce payroll by cutting down the number of employees on the rolls.  The Federal sector has a mandate to reduce the rolls by 20% and a number of incentives have been put on the table to accomplish that goal.  The Department of Defense has taken the lead in responding to the President’s mandate.  The number of employees expected to sign on for retirement did not happen because too many Federal employees are ill-prepared to retire.

Federal Employee Buy-Outs and Incentives

 

The Post Office started out by asking individuals eligible to retire to do so.  That didn’t get much leverage therefore a monetary incentive of $25,000 was offered to sweeten the pie.  It got a little mileage but not enough to make the kind of dent the Federal Government is so desperately seeking.  There is a new bird afloat that other organizations might be interested in if they can afford it.  A few years back Continental and United Airlines merged.  There were so many differences between the airlines that it has been difficult to impossible to come up with a contract to the mutual benefit of both sides.  Continental had a pension plan, United did not – representing the biggest nut to crack.

If the airlines are going to merge into one entity then they must have the appearance of parity and equity.  That is easier said than done.  The airline could have a conversation with the Feds.  Afterall, thus the birth of the Federal Employees Retirement System out of the old Civil Service Retirement System.  Bring in the new and work towards phasing out the old.  It is not easy, but the Office of Personnel Management (OPM) proved that it can be done.

Continental and United have set an agenda to shave 1,000 workers from both airlines.  The initial push to ask eligible retirees to exercise that right without an incentive fell on deaf ears, the same response from Federal workers.  The management at Continental and United have pulled out the big guns.  The Airline is offering $100,000 for retirement eligible individuals to leave the rolls.  As of this writing, there is a whole lot of conversation, but not enough takers.

A recent conversation with an employee of Continental said he was simply not ready to retire and that he was not interested in the $100,000 although it sounds good and is the biggest incentive the Airline has offered, he is declining for more time in the sky.

Individuals who have put in years of service are often conflicted in two ways about retirement.  First, many are not financially able to retire and second, work has become the largest part of their lives.  Cutting the umbilical cord from work to retirement is a process where early planning is the key remedy.

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

Related Articles

Phased Retirement’s Debut

The Military Wants To Buy You Out

The Aging Federal Workforce

Federal Employee – Do You Really Want to Retire?

The New Federal And Postal Retirement

Determining If A Trust Is Right For You

TrustIt seems to be the general concensus that a Last Will and Testament is an essential part of a good estate plan but Living Trusts are not as widely used nor understood.  Although many may think that probate is a negative of the Last Will and Testament, a great many individuals remain comfortable with it.  There are a number of ways to pass your wealth onto family members.  But whatever method or tool you choose, taking action is pivotal.  Don’t spend so much time thinking about what to do that you simply do nothing.

Planning a strategy to pass on your wealth to family members, charities or friends must be a highly personal and individual decision.  It is good to consult with individuals skilled in a number of arenas concerning making plans to secure the integrity of your estate.  In the final analysis, you must make the decision as to how your assets will be handled.  This requires researching and educating yourself so that you can participate intelligently in the conversation and oftentimes requires working with a knowledgeable financial professional.

It is never a good idea to be in a position to listen and listen without the benefit of having some knowledge under your belt.  You don’t have to be an expert, but you surely need to have enough information so you can determine which direction you want to take.  Summarily, you don’t want anyone making critically important decisions for you.  You want to make those decisions yourself.

More and more individuals are turning to Trusts in managing the transfer of their wealth to their loved-ones.  As the grantor or the trustor of the trust, you may make changes, additions or transfer assets.   You may even terminate the trust altogether.  A trust can be changed and so can a will.  Both instruments require being informed.  By comparing Wills and Trusts side-by-side and of course having a decision with someone you trust will help you decide if a Trust is right for you.

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

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan

What Is A TransFERS

TransFERS

TransFERS retireThere was a FERS open season held back in 1987-88 and 1998, allowing employees with at least five years of Civil Service Retirement System (CSRS) service to voluntarily transfer to FERS during one of the two open seasons.  When these individuals, called TransFERS retire, they receive both a CSRS annuity and a FERS annuity.  These individuals also are guided by FERS retirement eligibility policies, although they receive a CSRS annuity.

According to a number of federal employees, they did not fully understand the move from CSRS to FERS.  Is there an advantage to move from CSRS to FERS?  That is a hard question and it is also a highly individual question.  The best way to answer the question is to line up the two benefits side-by-side and list what each offers.  For instance, is the annuity payment higher for CSRS than FERS?  Can you participate in TSP for both systems?  What about agency contributions to the TSP?  These are just a few questions one could use to evaluate each system.

I have always found it more useful for the questioner to evaluate two things and determine which one is better, rather than me saying what you should and should not do.  Often times when I am asked a question and I see that the the person asking the question is really missing the bull’s eye on something that is critically important to their well-being, then I will offer a series of questions and or scenarios to get them to review the situation again.

I find that people appreciate a resolution much better when they can see how they got to the resolution.  It is just like solving a problem for a kid and he gets an A on the homework without ever knowing what steps were taken to solve the problem.

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

 

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan

Impacts of Voluntary Early Retirement (VERA)

Impacts of Voluntary Early Retirement (VERA)

Voluntary Early RetirementRetirement isn’t always voluntary.  Microsoft announced recently that it was laying off 18,000 workers.  When the Information Technology Industry (IT)  begins to lay-off workers, then the country has to get pretty scared.  IT is the industry to be in.  We know that Silicon Valley at one time was almost overkill, but colleges and universities are still getting an extraordinarily large amount of students majoring in Computer and Information Technology.  There seems to be a lot of early-outs and lay-offs recently.  That might suggest the country is in great need of creating jobs.  If we are laying off people, I gather all of those people are not retirement age, then where will they go for work?  We know that layoffs mean increasing the unemployment rolls in many instances.  There is not in reality a job waiting for every person who has been laid off.

Does Industry follow Government or does Government follow Industry?  It matters not, but more that the layoffs are layoffs and the economy continues to hurt.   When the economy hurts, families hurt   There are a number of agencies offering voluntary early retirement (VERA).  The Transportation Security Administration (TSA), the Environmental Protection Agency (EPA), and the Social Security Administration SSA) to name a few.

The Federal Government is working fervently to cut the size of government in order to minimize cost and streamline the budget.  TSA employees qualify for VERA if they have completed at least 25 years of service at any age and 20 years of service at age 50.  Employees meeting these qualifications are under a special category of retirement.  The TSA employees are classified as Law Enforcement Officers (LEOs).  However, air marshals and specialists working in intelligence do not qualify for VERA at TSA.

Employees at the National Geological Survey are also being offered voluntary early retirement.  There are many other federal agencies that are either planning or have already begun sending out VERA notices.  The Federal Government needs agencies to think seriously about trimming staff, hopefully avoiding a reduction-in-force (RIF) that is always a morale killer in any agency.

The Office of Personnel Management (OPM) is quickly approving agencies’ requests to offer VERA in order to help them create efficiency in their organizations.   Employees participating in VERA must be very careful to analyze their retirement action plans.  They must evaluate the impact VERA might have on their plans to live well in retirement.  VERA offerings might help agencies create efficiency and balance the budget, but those same results might not be achieved for the federal retiree.

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

Recommended Articles

For Postal Employees – LiteBlue and the TSP

Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan