Tag: Postal benefits

Federal and Postal Employees – Choosing a Financial Professional

TSP Withdrawals and using IRAs correctly in TSP Rollovers

September 23, 2014 /by Dianna Tafazoli

TSP, IRA Rollovers and other Options

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There are three common types of IRAs – Traditional, Roth and Rollover. Finding the right IRA for you requires being educated about what each one offers. All IRAs are designed to help you for retirement but each has its unique features.

An IRA is an Individual Retirement Account (IRA) that provides either a tax-free or tax- deferred way for you to save for retirement. IRAs allow you to invest in just about any investment and these investments can grow tax deferred. Each IRA has unique eligibility requirements and benefits.

IRAs rely primarily on the power of long term, tax-deferred compounding to provide your retirement savings the opportunity to grow faster than in an account that is taxable. When you earn interest, receive dividends or sell an investment for gain, you are not obligated to pay taxes that year on the earnings. All taxes are deferred until you withdraw those earnings in retirement. Your money continues working for you while building your nest egg for year after year.

Roth IRA

Unique Benefits, Eligibility Requirements

Any earnings are tax-free if withdrawn after age 59.5 and the account has been open five years or more
Contributions (not earnings) can be withdrawn tax and penalty free at any time
Contributions are not tax-deductible
There is a single 5 year holding period when determining whether earnings can be withdrawn federally tax-free. The period begins January 1 of the first contribution to any Roth IRA account.
Regular contributions are allowed up to age 50
Catch-up contributions are allowed age 50 +
Up to age 50 – 2009 contribution limit $5,000
Over age 50 – 2009 contribution limit $6,000
Modified adjusted gross income and tax filing status determine how much you can contribute
For 2009, single tax-filers with $120,000 or less in annual income and joint-tax filers with $176,000 or less are eligible. For 2010, single tax-filers with $120,000 or less in annual income and joint tax-filers with $177,000 or less are eligible.

Traditional IRA

Unique Benefits, Eligibility Requirements

Any earnings grow tax-deferred until withdrawn after 59.5 at which time they are taxed at your current rate
Contributions and earnings can be withdrawn penalty free after age 59.5
Contributions may be tax-deductible
Allows investment earnings the opportunity to grow tax deferred until withdrawn
Your age and tax filing status (joint or single) determine how much you can contribute annually
Contributions may be tax-deferred depending on your tax filing status, modified adjusted gross income, and participation in employer-sponsored plans.
Maybe opened by anyone with taxable compensation or a spouse (if you file jointly) with earned income and who was not 70.5 years old by the end of the current year
Up to age 50 2009 contribution limit $5,000
Age 50 – 70.5 contribution limit $6,000
Over age 70.5 2009 contribution limit (not allowed)

**Rollover IRAs (TSP 70 and TSP Withdrawal)**

Rollover IRAs allow you to consolidate your TSP, possible 401(k) and 403(b) accounts along with any other employer-sponsored retirement accounts into one account maintaining the assets’ tax deferred status. Using form TSP 70, a TSP withdrawal can be a good decision because of the limited TSP investment options that exist and the much larger array of options available through Rollover IRAs.

There are a few outside companies that specialize in helping Federal employees with their TSP funds after retirement or once an employee has reached 59 1/2. Two of those companies that you may want to consider can be found at TSP-70.com and TSP-withdrawal.com.

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

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Will Spending Be The Same In Retirement?

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.

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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?

If you have outstanding travel advances.
Overpayment of salary that has not been resolved.
Indebtedness for failure to return government property or for damage to government property.
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 65^th 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:

Your name as shown on your payroll records;
Your date of birth;
Your Social Security Number;
Your complete mailing address;
The years for which earnings are needed;
The name and location of employer for each year;
State clearly the reason for the request;
Affix your written signature; and,
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.

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Federal and Postal Employees – Choosing a Financial Professional

Records To Check Before Retirement

For Postal Employees – LiteBlue and the TSP

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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:

Your widow or widower.
Your children in equal shares.
Your parents in equal shares.
Your appointed executor or administrator of your estate.
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.

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

For Federal Employees – Tips To Creating A Retirement Budget

Federal Employees and Retirement Budgets

You 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.

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Federal and Postal Employees – Choosing a Financial Professional

Once Your Federal & Postal Retirement Plan Is In Place

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

Federal and Postal Retirement Planning

After 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?

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

For Postal Employees – LiteBlue and the TSP

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.

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Federal Employees – Building Your Financial Plan

TSP (Thrift Savings Plan)

As 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

FEGLI (Federal Employees Life Insurance)

FEHB

‘High-3’ Income

Retirement Annuity Calculations

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

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Buy-Outs Are On The Rise

Phased Retirement’s Debut

Mandatory Reduction of Workforce

There 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.

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Determining If A Trust Is Right For You

July 29, 2014 /by Dianna Tafazoli

It 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.

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What Is A TransFERS

July 21, 2014 /by Dianna Tafazoli

TransFERS

There 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.

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Can You Participate In The TSP After Retirement?

July 19, 2014 /by Dianna Tafazoli

Your Thrift Savings Plan (TSP) is funded via payroll deductions. Therefore, once you are no longer an employee your participation in the TSP stops as far as being able to make contributions. However, you don’t have to take your money out of the TSP, you just cannot put money into it.

TSP After Leaving Federal Employment – TSP Withdrawals

If you leave service and decide to make a TSP withdrawal, you may do so in two ways. You may make a partial TSP withdrawal or a full-withdrawal. You can make a partial withdrawal of $1,000 or more. You can make a request for a partial withdrawal online or use Form TSP-77. If you make a full withdrawal you can request a single payment withdrawal of your entire TSP balance. You may also request a series of monthly payments. In this way you can choose a specific dollar amount to receive each month or you can receive a monthly amount based on your age and your account balance. If you are requesting a specific dollar amounts, the monthly payment must be a minimum of $25.00.

TSP-77 Form

TSP Annuity

You may also elect a TSP life annuity. The TSP life annuity pays you a monthly benefit for life. The TSP will purchase an annuity for you from their provider (Currently Metropolitan Life Insurance Company – MetLife). Make sure that you read up on the pros and cons of purchasing a TSP annuity directly through the TSP (We at PSRetirement.com suggest to strongly consider NOT taking this option). You may also mix up your withdrawals. You may use the methods outlined in the TSP Full Withdrawal option in a number of combinations – single payment, TSP monthly payments or the life annuity. You can combine two options or all three, which ever fits into the plans you have made for you and your family and always make sure to speak with a trust Financial Professional before making any decisions.

Read over your TSP account(s) and make sure you understand how your TSP works in retirement and how to maximize your federal retirement benefits. If you have put a retirement action plan in place, then you want to gain as much information as possible to help you live in retirement on your own terms. FERS employees have to be especially cautious, yet assertive, by fully funding their TSP whenever possible because the TSP is the larget monetary component of the FERS retirement system.

How you manage your financial affairs is an individual matter. However, just like any good work, it takes time to examine and analyze to choose the best options that fit your situation. No two situations are alike, so don’t take a position because it sounds good. Use your planning tools and take a position because it works for you.

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

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Impacts of Voluntary Early Retirement (VERA)

July 18, 2014 /by Dianna Tafazoli

Impacts of Voluntary Early Retirement (VERA)

Retirement 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.

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Not a Question of Demand, But a Question of Why

July 13, 2014 /by Dianna Tafazoli

Director of the Office of Personnel Management (OPM), Katherine Archuleta stated that increasing the population of younger workers in the Federal sector is a challenge with part of the problem being demand. Consultant groups support Director Archuleta’s assertion by stating that students’ interest in working for the federal government has declined over the last four years. That being said removes us from the issue of supply and demand. The demand for young people particularly in the digital field is high. I have not read any literature to suggest the contrary for supply. Students continue to major in information technology and all things digital. Therefore, the demand for such jobs is there and the supply is there. The jobs are not being created which is quite different from the demand for jobs.

Therefore, we come back to the question of why jobs are not being created when we have such a need to stay current and competitive on the world stage with digital technology. Jobs are there but they are housed in other countries. If you contact a Call Center for tech support, the 1-800 number may be anywhere but within the continental United States. Students are not adverse to working in the Federal government. Young students need jobs when they come out of school. They cannot find them because they are on the other side of the moon and not available to them. The few positions that are available in America are somehow given to young people from other countries, many who do not intend to reside in America.

The United States should be the leader in promoting diversity across all venues. That diversity should not exclude American-born and raised young adults and graduates. There is something devastatingly wrong and it has to do with business enterprises refusing to share the profits with the workforce. It is not hard to see what is happening in America and it is to the detriment of the country’s forward movement as a model for other nations. There are a number of business concerns where there is no person in the day-to-day establishment who can speak translatable English. You cannot communicate with the persons you are doing business with. That is abuse on both ends.

The customer is being abused by the business because they cannot communicate with the persons representing the business. It is abuse of the person representing the business because they cannot adequately communicate with their customers. The entire discourse becomes frustrating and counterproductive. It is solely my opinion that these workers are being employed because they are being paid far less than what they should be paid. If they cannot understand and communicate the official language of the United States (English) then they cannot understand the pay protocol in the country. That is just common sense. Our country should not be in a position where we seemingly support taking advantage of a person’s inability to communicate sufficiently in the language of a nation.

When I travel to other countries, I have never expected for that country to change their language to accommodate me. I had to learn to communicate in the language of my host country. Luckily, I was always able to find someone who spoke fluent English. I also made certain I knew enough of the language to distinguish what was being said through a translator. The bottom line is that no person who cannot speak the official language of a nation should be put in the position of serving customers they cannot adequately serve. The basis of serving any customer is to be able to communicate. Unfortunately, although our nation looks like the United Nations (UN) and we are proud of that part of our embracing diversity, we do not on a day-to-day basis have the technology of the UN to translate language to the benefit of the whole assembly.

Once again, the question to Director Archuleta is not one of Demand but one of Why.

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

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Federal Retirees Are Leaving the U.S. for Central America

July 13, 2014 /by Dianna Tafazoli

The American economy is not improving for many citizens, including federal retirees. Because affordability is a key phenomenon for many retirees, they choose different paths to living out their retirement years. Many retirees are looking towards Central America for homes and lifestyles they can afford. They are finding living expenses are just too high to maintain the kind of lifestyle they desire to live in their retirement years.

Central American countries, like Ecuador still place them within reach of their families back in America within a day’s flight. Retirees who have moved to Ecuador report paying on average $400 for a 3 bedroom apartment that might cost them $900 or more per month in some parts of the United States. They also report spending much less for health care expenses and can spend the equivalent of $2.00 per person on a high-end lunch. These attractive economic features have many retirees looking to other shores to enjoy their fixed-income status in retirement.

Retirees report missing their friends and families when living abroad, but are comforted knowing an airplane reservation will help them make that connection relatively easy. With retirees leaving the United States, will that be yet another drain on the American economy? Dollars that could be spent in the USA are being spent other places not benefiting the U.S. economy at all. It is time that the USA started looking into ways to not only retain workers in the workforce but retain its citizens in the country after retirement.

The statement alone that retirees are leaving the U.S. for other shores that offer a more affordable lifestyle on a fixed income is more than food for thought. The US should be strategizing and finding solution-driven ways to create more home affordability for American citizens. Why should an American citizen have to leave the country of his/her birth to find affordability? If leaving the country is simply a matter of choice, then that it one thing. However, to leave because you cannot afford to live in your own country is an eye-opener and a call to action that something needs to be done without delay.

After spending 30 to 40 years on a job, the expectation should be that one can choose to live out the last years in comfort and relative security. It is terribly disturbing that a move is made because of the inability to afford the basic needs of life – a place to live, food to eat, transportation, medical care and a little something left over to do whatever you will. If that cannot be accomplished, then why spend the majority of your life working only to find out that after retirement you must hitch up your wagon and stake out a new place because your retirement money can’t pay for you stay within U.S.. borders.

We’ve got a lot of work to do to make America work for its people. As you age and have paid your dues by working long and hard, you should not have to bare the burden of looking for a place you can afford to live in. Places in the States designed for senior living are basically for high-income individuals. Let’s not forget about low-medium-high. There are people, retirees in every category. Let’s work towards accommodating them.

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

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