Social security

Social Security Facts: A Quick Reference for Advisors and Clients

April 26, 2023 /by todd carmack

Counselors of Social Security should be knowledgeable about the program’s benefits, as it will provide a large percentage of retirees’ income in the future.

When clients reach the age when they may begin receiving Social Security payments, they should be ready to point out important information. They should also direct them to the right person or area for additional information.

Following is a guide sheet for advisers to use when clients are approaching the age of eligibility for Social Security benefits. However, this is merely the initial step. Social Security is a tricky subject with numerous levels and complexities that might have an impact on customers’ financial situations.

Here are ten topics that should be addressed with customers for the time being.

1. Social Security payouts are still subject to taxation in the twelve states of the US

There is a variation between the state’s income level and the tax rate. However, the states that continue to impose some form of tax on Social Security benefits are the following: Colorado, Montana, Kansas, Missouri, Vermont, New Mexico, Utah, West Virginia, Rhode Island, Minnesota, Nebraska, and Connecticut.

2. Every year that Social Security payments are delayed beyond the Full Retirement Age (FRA) results in an increase in payouts of 8%

For instance, for a customer who earns roughly $36,000 yearly at full retirement age (FRA), commencing the payouts at the age of 70 would lead to nearly $49,000 payments annually, demonstrating an increase of 36% in the annual benefits payment. Obtaining a systematic increase in the benefits by 8% is significantly challenging due to current market conditions.

3. Even if the trust fund fails, Social Security will persist

If Congress does not take any action until 2033, the Old-Age and Survivors Trust Fund will deplete. This is why many prospective retirees are concerned about the future of Social Security. Most professionals assume that Congress will surely act at some point, but even if that occurs, about 75% of the regularly scheduled payments will be paid out by the program.

4. Eligibility criteria of the divorced couples to receive benefits from the Social Security of their ex-partner

It is legal if their marriage duration is a minimum of 10 years and the divorce has been finalized for two years. It does not matter whether their ex-spouse remarries. There will also be no changes to the benefits they receive. Remarrying will prevent the receiving spouse from getting the advantages of the prior marriage. However, if the previous or current spouse of the receiver dies, they can claim for the higher payouts.

One-half of the PIA of the ex-spouse is the highest amount that may be granted to the client. The divorce of the client must be inquired about first. However, the client may be eligible to collect on their ex-spouseÃ¢â‚¬â„¢s earnings record, even if the divorce was finalized 30 years ago and there is no contact between them.

5. Make sure not to wait longer than the age of 70 to receive benefits

The bonuses of Social Security will be applied maximum until the age of 70. Waiting beyond this age is a huge financial blunder since the clients are essentially accepting a loss, whether they continue their work or not. Social Security will pay six months’ back pay if a retiree requests it once he reaches FRA. It is a loss of the benefit payment of one and a half years if the client is claiming to receive the amount at 72.

6. Spouses with lower incomes may file a claim on their spouse’s Social Security account

Minimum age of 62 is required for the lower-earning spouse. The marriage duration of the couple must be a minimum of one year to be eligible for Social Security payments.

However, there are a lot of uncertainties in this domain. Deemed filing, for example, requires low-income earners to claim all applicable benefits quickly. They have to obtain their complete payout initially. A spousal top-up is rewarded to the lower earners if the amount is not greater than 50% of the initial benefit of the higher earner. Consequently, the total amount reaches equal to half of the higher earner’s PIA. No additional spousal benefit is paid if the PIA of the lower-earning partner is higher than 50% of the higher-earning partner.

7. The regular retirement age is between 66 and 67 years old

The FRA of anyone born in 1943 or afterward is 66, with additional months based on the date of their birth. FRA is 67 for individuals who were born in the year 1960 or afterward.

This means anybody over the age of 62 may retire and begin receiving Social Security payments. It is necessary to inform the clients that their monthly benefit payment will be lowered up to 30% from their main insurance amount, which is the amount they would get if they filed a claim at FRA. However, this reduction would be permanent.

8. When it comes to marriage and Social Security benefits, gender does not matter

Couples are classified as either lawfully married or not by the agencies.

9. Social Security payouts are subject to taxation if they exceed a particular limit

Inflation is not considered when Social Security benefits are taxed, despite the fact that Congress established an annual cost-of-living adjustment for Social Security payments.

As in 1983, the tax is implemented on the Social Security income above $25,000 or $32,000 if the spouses file jointly. The benefits are taxed at the usual income tax rate. The collective income, calculated using an IRS spreadsheet, determines the real amount.

10. If the benefits of a deceased spouse are more than those of the widow, they will immediately receive the entire amount of the deceased spouse’s benefits

The funeral home registers the death. Assure the buyer that survivor benefits are not available until age 60. Unexpectedly, a surviving spouse only receives one of their own or deceased spouse’s benefits. Thus, family income might decline.

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

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

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

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

April 26, 2023 /by todd carmack

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Seven Aspects In Which Your Financial Literacy Changes Once You Retire

April 26, 2023 /by todd carmack

Financial literacy covers a broad range of topics, including budgeting, saving, investing, and retirement planning. However, your financial literacy broadens to cover circumstances that weren’t as important during your working life once you retire. For example, income declines typically in retirement, while costs may remain constant or even grow, depending on your lifestyle and overall health.

Here are seven crucial subjects to learn if you wish to avoid financial pitfalls in retirement.

Social Security

You’ve been paying into Social Security since your first payday. Still, as you near retirement, you should plan your Social Security withdrawal strategy. Your Social Security benefits partly depend on how much you earned throughout your working lifetime. You should also consult a tax or financial professional to determine if you should start benefits early, at full retirement age (FRA), or even later.

Medicare

Medicare is a complicated system of health insurance for seniors. To use it efficiently, you must understand how it works. Medicare has two fundamental portions, A and B, covering hospital and medical costs. Part B has a monthly premium. If you need prescription medication coverage, you can add Part D. Medicare Advantage (Medicare Part C) is a private company’s version of Original Medicare. You’ll probably need to consult an expert to understand Medicare’s financial implications with so many options. Notably, neither Original Medicare nor Medicare Advantage is likely to cover care outside the US.

Required Minimum Distributions (RMDs)

As you’ve paid Social Security taxes during your working life, you’ve also contributed to your retirement accounts. But you can’t keep your money in them forever. Traditional IRAs and 401(k) plans demand annual distributions beyond a specific age to avoid a 50% penalty tax. Congress has extended the deadline for taking RMDs to April 1 of the year after your 72nd birthday. Since Roth IRAs are funded after-tax, they don’t require you to take minimum distributions.

Taxes

Taxes are easy if you have a paid job. Generally, your company will deduct taxes from your paycheck, while all you need to do is supply your W-2 information when filing your taxes. During retirement, you may get many forms like 1099-Rs and K-1s. Some of these may have different tax implications, so you should familiarize yourself with them before retiring.

Expenses

Even if you’re used to budgeting, your retirement budget is likely to vary dramatically. For instance, many retired people have already paid off their mortgages. However, some expenses, like medical bills, are likely to climb, even with good insurance. Other costs will vary based on your lifestyle. Some retirees increase their travel and dining expenses, while others reduce them instead. Budgets differ significantly from one person to another, but they often shift after retirement. Be prepared and aware that your retirement costs might increase or decrease drastically.

End-of-Life Planning

Nobody wants to talk about the end of their lives, yet it’s a necessary step in financial preparation. First, you should create a will and/or trust to identify who will inherit your assets after you die. You may also consider consulting an estate attorney about optimizing the value of your asset transfers to heirs. Nonfinancial considerations include preparing instructions for end-of-life planning in advance if you become disabled. For example, you might want to sign an advance directive, such as a durable power of attorney for healthcare, which authorizes someone else to make medical choices on your behalf.

Asset Allocation

You’ve probably heard of asset allocation in your pre-retirement years, whether in a 401(k) plan or your personal investing account. However, as you approach retirement, you will almost certainly need to revise your asset allocation, which should have served you well during your working years. You will have fewer years to recover from a slump in your assets in retirement and less money to contribute to your account while markets are down.

As a result, many financial consultants may advise you to adjust your portfolio toward more conservative assets as you become older. As each person’s financial position is unique, you should assess your income, spending, and financial requirements, maybe with the help of a financial counselor, before making any significant changes to your portfolio.

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

Federal vs. Private Sector Retirement Programs

April 26, 2023 /by aaron steele

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

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

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

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

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

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

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

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

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

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

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

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

The Decision Point for Social Security

April 26, 2023 /by todd carmack

Social Security dominates many people’s retirement income. So, when should you start receiving Social Security benefits?

While many individuals successfully retire and start receiving Social Security benefits at 62, the Full Retirement Age (FRA) for anybody born after January 1, 1960, is 67. If you wait until 67, you’ll receive 100% of your earned benefit based on your best 35 years of working. If you choose to work after age 67, your earnings won’t negatively affect your total Social Security income.

The scheme also provides a reduced early retirement payment that begins at 62. Instead of obtaining your entire benefit, you can receive 70% of it. Let’s take a look at some possible monthly benefits for different incomes:

Lower income earner: $1,000 at 62 and $1,430 at 67, with $430 being monthly difference.
Higher income earner: $1,750 at 62 and $2,503 at 67, with $753 being monthly difference.
Maximum income earner: $2,342 at 62 and $3,345 at 67, with $1,003 being montly difference.

The early retirement benefit would pay $1,750 monthly at 62, or $2,503 monthly at the FRA of 67 for the higher income earner. That’s an extra $753 each month for the rest of your life. That’s the moment you must decide: $753 every month is a substantial sum over the length of full retirement. To replace $750 monthly, you’d need a 401(k) balance of $225,000 at a 4% income stream.

Another thing to remember is that the system lets you “double-dip” if you wait until 67 to start receiving your Social Security payment. You may continue to work and earn as much as you like, $25,000, $50,000, or $100,000, while simultaneously receiving your full Social Security payment since you waited until the government’s FRA.

However, if you choose early retirement benefits, you have effectively informed the government that you’re retiring. If you decide to keep working and try to double dip (as you may at age 67), you should be mindful of the “early retirement double-dip penalty.”

If you receive discounted Social Security payments and continue to work, you must return $1 for every $2 earned over the 2022 maximum earning limit of $19,560. You would have to pay back $10,000 of your early (70%) Social Security payment if you made $39,560 on your W-2. Avoid this!

Even if you start getting your money back at 67, you’re still an “early retiree.” You get 70% of what you earned, not 100%.

Finally, if you obtained early Social Security payments and later realized you made a mistake, you can pay back the benefits and seek a “do-over.” Instead of receiving only 70% of your earned benefits at age 62, you can work your way up to 100%.

Knowing your numbers at 62, 67, and 70 will help you plan your retirement. Good luck!

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

What To Do About Social Security

April 26, 2023 /by marvin dutton

A lot of people have retired in the past few years. Many government employees have elected to end their service because of the pandemic, market instability, the shift in pace and workplace culture, and several other factors.

When it comes to deciding when to retire, many factors will go into the decision – one of which is determining what to do with Social Security.

According to Kiplinger, there are more than 500 different ways to determine when and how to apply for Social Security. Around 80 of those are solely for individuals that are married.

What Should a Retiree Do When Deciding on Social Security?

There’s so much misinformation about Social Security, and many people don’t know their choices. Even an SSA agent may not be aware of all your options. They also don’t know you or your lifestyle, so they’re not well-equipped to assist you in making the best decisions.

We won’t be able to cover all of the aspects of the Social Security system in this article, but we’ll discuss some of the most important things to keep in mind when filing for benefits. Learn how to get a free worksheet to help you calculate your Social Security taxes.

Special Retirement Supplement

You can get the special retirement supplement until you reach the age of 62 if you retire under FERS with 30 years at the MRA or 20 years at 60. As a federal employee, this well-known benefit is intended to bridge the gap between your exit from service and the commencement of your Social Security payment.

Waiting For The Perfect Time To File For Social Security.

Simply because you have the option to take Social Security does not mean you should.

You should be aware of the three primary target milestones for Social Security. The first is when you turn 62 and become eligible. The second is your full retirement age (FRA), ranging from 66 to 67 years old, depending on your birth year. The third is your age, which is 70. Between those dates, you can collect your Social Security payment at any time (excluding disability).

While you can start collecting Social Security at age 62 if you meet the requirements, this is the earliest date permitted (non-disability related).

Depending on your birth year, your full retirement age (FRA) is between 66 and 67. This is when you start receiving your full Social Security income (not the maximum amount). You’ll get whatever you’re entitled to based on the calculations.

A third option is to postpone filing until you reach your full retirement age (FRA).

Why would anyone want to wait? Because you received an annual raise of 8% for waiting until you were 70 years old. There’s no point in waiting until you’re 70; the bonus credits stop at 70, so grab it now if you haven’t already.

These aren’t your only options, but they’re just where you start when planning your retirement. Here are other considerations when deciding when to file for Social Security.

Considerations for Your Health

Another thing to consider is that you may have information about your health that leads you to believe you will not live to be extremely old. If this is the case, it might make sense to start taking Social Security before your full retirement age (FRA).

Consider your family.

If a surviving spouse applies for Social Security, they may be eligible to receive benefits from their deceased partner. If theirs is higher, they can keep it, but they also have the option of acquiring their spouse’s. Because of this, they will lose their own money, so it’s essential to plan for a drop in income (this is where a life insurance policy comes in).

You made a mistake in your application.

If you believe you made a mistake when applying for Social Security benefits, you usually have 12 months to withdraw your application and refund the benefits you’ve received. This might help you return to your original choices, which are ideal for you and your family.

Don’t be too hard on yourself. There is relatively little education about the complexity, and many of the rules are illogical.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

What You Should Know About The Changing Full Retirement Age (FRA)

April 26, 2023 /by rick viader

Over the years, there have been significant changes to Social Security benefits. These changes might be an annual increase in benefits; suppose there is a rise in the costs of the consumer price index. Another Social Security change might be a change in the amount of income subject to the benefits taxes.

Recently, a significant change occurred, affecting when workers eligible for benefits can claim their benefits and the amount of Social Security payment they can receive. Although this year (2022) will be the last time such adjustment takes place, it’s crucial for existing and potential retirees to understand the implication of this adjustment.

For Social Security benefits beneficiaries who are currently eligible, the FRA has witnessed several changes over the recent years. You need to note that 2022 is the last year such change will occur. There won’t be changes to the Social Security benefits rule again with the current law.

If you don’t understand the Social Security benefits program intricacies, there is a high probability that you may not know the implication of this FRA change.

Suppose you don’t know much about this current law; below are the crucial things to note:

• If you are a retiree, your first time of becoming eligible for the benefits is when you reach 62 years.

• An early claim is when you claim your benefits before the FRA or at 62.

• Your monthly benefits will reduce due to early filing penalties if you claim your benefits early. These early filing penalties apply to each month of filling before the FRA.

• The full retirement age (FRA) is calculated based on the year you were born. However, the FRA is later moving due to the 1983 amendments to the Social Security rule.

Due to the shift in FRA for newly eligible Social Security benefits beneficiaries, some new beneficiaries may have to wait for some time, even after reaching 62, before they can receive the payment of their standard benefits. Besides, this group of people will have lesser chances of earning delayed retirement benefits.

Impact of full retirement age (FRA) changes on new retirees.

Since the full retirement age depends on your birth year, for federal workers who will be 62 years in 2022 or above, their FRA will be 67. For this class of seniors to avoid penalties, they need to wait until they are 67.

On the other hand, for seniors who turned 62 in 2021, their FRA will be 66 and 10 months. An FRA of 66 and 8 months apply to seniors who are 62 in 2020. These seniors must wait for their respective FRA to avoid paying early filing penalties.

Congress could shift the FRA further for potential retirees by modifying the Social Security rule. Unless this modification occurs, seniors who are eligible for benefits in 2022 or beyond may claim their full benefits at the same time as older seniors.

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

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

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

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

Retirement insecurity Common Among Middle Class

April 26, 2023 /by mack hales

Middle-class households in the United States have limited financial assets. They may experience retirement insecurity, according to a study conducted by the National Institute on Retirement Security, a non-profit, non-partisan research and teaching organization.

Using data from the Federal Reserve’s Survey of Consumer Finances, the research examined financial assets by generation, net worth, and race.

In 2019, middle-class households owned only a small part of their generations’ overall financial assets, with millennial households having a median net worth of $22,630, Generation X having a net worth of $150,500, and Baby Boomers having a net worth of $236,350. That suggests a concentration of wealth among more affluent households.

While middle-class millennials have 14% of their generations’ assets, Gen X and Boomers each have single-digit percentages of wealth.

Furthermore, median middle-class household financial assets, which exclude tangible assets such as homes, demonstrate that each generation’s savings may be insufficient for retirement.

Middle-class Baby Boomers had median assets of $51,700, while Black and Hispanic households had much lower median assets of $30,900 and $22,280, respectively.

Even though middle-class Gen X households have some time left before retirement, the research finds they are not on pace, with median assets of $39,000. With less time in the labor force, millennials have amassed the least wealth, at $7,800.

According to Tyler Bond, research manager at the National Institute on Retirement Security, middle-class Americans are failing to acquire enough financial assets during their working years.

These findings are consistent with earlier statistics demonstrating that most older Americans’ savings fall short of their planned retirement income.

According to a poll conducted by the Insured Retirement Institute, more than half of U.S. workers over the age of 40 have less than $50,000 saved for retirement, and the majority are not increasing their savings to boost their nest eggs.

Furthermore, many Americans do not take advantage of employer retirement programs. According to MagnifyMoney research, 17% of people having access to employer accounts, such as 401(k) plans, donâ€™t contribute to them.

Moreover, among those who join workplace plans, 17.5 million savers fail to take advantage of their employer’s matching contributions.

Most people without a 401(k) or another form of the plan via their employer will simply not save.

However, many workers continue to lack access to corporate retirement programs, said Bond, exacerbating the problem.

The U.S. Bureau of Labor and Statistics found that around 67% of private industry employees have company-provided retirement plans. While individuals without employment plans might save through individual retirement accounts, this is less common.

There’s a lot of evidence that demonstrates that’s not what people do, Bond explained. Most folks without a 401(k) or another form of the plan via their job will simply not save.

While Congress enacted the Secure Act of 2019 to improve the United States’ retirement system, a pair of bipartisan measures in the House and Senate are attempting to expand on that legislation.

Among other proposals, the measures could expand “catch-up” contributions for savers 50 and older and provide 401(k) access to part-time workers.

According to Bond, retirement security appears to be one area where bipartisan collaboration on the Hill may still be found.

Furthermore, he added, state-run individual retirement accounts, such as those in California, Illinois, and Oregon, are gaining support as politicians look for solutions to close retirement savings gaps.

Contact Information:
Email: [email protected]
Phone: 7705402211

Bio:
Mack Hales has spent the past 4 decades helping clients prepare for retirement and manage their finances successfully. He also works with strategies that help clients put away much more money for their retirement than they could in an IRA or even a 401k. We involve the client’s CPA and/or their tax attorney to be sure the programs meet the proper tax codes.

Mack works with Federal Employees to help them establish the right path before and after retirement. The goal is to help the client retire worry-free with as much tax-free income as possible and no worries about money at risk of market loss during retirement.

Mack has resided in Gainesville, GA since 1983, so this is considered home. Mack is married to his wife of 51 years, has two boys and five grandchildren.

What’s the Same or Different About FEHB Plans?

February 8, 2023 /by todd carmack

While searching for health insurance during the annual benefits open season, which ran from November 14 to December 12 this year, remember that even though plan terms might vary, sometimes significantly, all plans have a set of fundamental terms for hospital, surgical, physician, and emergency care.

FEHB’s preventative treatment for kids follows the American Academy of Pediatrics recommendations, while FEHB guidelines for adult preventive care are based on conventional medical practice.

Plans are required to provide unique benefits like prescription drugs (which can have separate coinsurance and deductibles), mental health care with equity of coverage for mental health and general medical care, child immunizations, and limits on an enrollee’s total annual out-of-pocket expenses, known as the catastrophic limit.

The plan typically pays 100 percent of covered medical costs for the rest of the year after an enrollee’s covered out-of-pocket expenses surpass the catastrophic maximum. Additionally, cost-containment clauses, such as providing preferred provider organizational networks in fee-for-service policies and hospital pre-admission certification, must be included in plans.

Nevertheless, deductible, coinsurance, and copayment rates differ amongst plans. Many plans provide customers with two or more alternatives, each with a different premium and level of coverage. If enrollees opt to use services in the plan’s network, such as those from a doctor or hospital provider, they could even be given a lower deductible and coinsurance amount.

Once you have a basic understanding of the phrases used in these sections of the plans you’re reviewing, you can focus on the more technical terms that could be of particular interest to you.

Conclusion

Your FEHB plan will change significantly in 2023, and it’s essential to plan ahead. The premium will most certainly increase, potentially significantly. Numerous plans will cost more; the average rise of 8.7% is simply an average.

The premium, albeit only one aspect of your total plan selection choice, is crucial because it is a fixed cost. You have to look into how yours is changing for 2023 and determine whether another plan would be a better investment for you and your family. 2023’s FEHB Open Season begins on November 14 and closes on December 12.

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

What are the Differences Between Postponed and Deferred Annuities?

January 27, 2023 /by jeff boettcher

Meeting age and service requirements are two necessary conditions for annuities, especially in terms of an immediate and unreduced annuity. However, suppose you are looking to leave the employ of the federal government or were let go due to downsizing. In that case, you may be entitled to a postponed or deferred annuity if you don’t currently qualify for voluntary retirement. Although some agencies currently undergoing reorganization and substantial restructuring, among others, utilize voluntary early retirement to increase the number of eligible employees for retirement, it isn’t always the case.

Proposed annuities are available to FERS employees who meet specific criteria, including service requirements (under the MRA+10 provision) and the age requirement. Unfortunately, CSRS employees are not eligible to receive a proposed annuity. For FERS employees, though, individuals may choose to postpone receiving an annuity to another date to eliminate or reduce the age penalty should they fail to meet unreduced annuity requirements.

Annuities are calculated according to the FERS formula, depending on the length of service, unused sick leave, high-3 of your separation, and the remaining age penalty. Although you are ineligible for SRS, you can receive Social Security benefits and a COLA on FERS civil service benefits starting at 62. However, this does eliminate any FEHB and FEGLI coverage on the date of separation. Once your retirement begins, you may reenroll if you had previously been enrolled for five consecutive years prior to separation.

Deferred annuity eligibility is dependent upon a few circumstances for individuals planning to leave the government before reaching immediate annuity eligibility. Qualifications include a minimum of 5 years of civilian service and refraining from requesting a retirement contributions refund. Plus, individuals under FERS and CSRS are eligible based on your high-3 and length of service (at the point of separation). This case is much unlike voluntary retirement, where unused sick leave will not be used to calculate service time. Finally, those covered by CSRS can begin receiving their deferred annuity upon reaching 62, with an amount that will increase with annual COLAs.

However, more deferred annuity options are made available to those covered by FERS. These options include unreduced deferred annuity eligibility at age 62 with a minimum of 5 years of service, age 60 with a minimum of 20 years of service, or minimum retirement age with a minimum of 30 years of service. Upon meeting your MRA, you will become eligible for a reduced FERS annuity at the ten-year service mark. This reduction includes a 5% penalty for each year you were less than 62 years old at the point of separation. It is important to note that deferred retirees are ineligible to receive FERS SRS (special retirement supplement), which typically approximates the SS benefit earned during employment (paid up to 62).

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients â€“ I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

How to go about ensuring a financially stable retirement

January 11, 2023 /by aaron steele

It’s crucial to have numerous income streams coming into your bank account each month as you prepare for retirement to preserve your peace of mind throughout your golden years. After all, when you should be unwinding after a lifetime of labor, the last thing you want is to worry about your finances! Here are three strategies to ensure you don’t run out of money in retirement.

1. Required Minimum Distributions (RMDs)

You have the choice to take a particular amount of money out of your retirement savings once you reach a certain age. However, you should research because each option has unique benefits and drawbacks.

If you want your investments to grow, you can decide to leave your money in your retirement account before you turn 72. This can be the best option if you don’t need the fund.

When taking money out of several retirement accounts, careful planning is critical. In other words, it’s probably advisable for you to take withdrawals from taxed retirement funds first.

However, you do have many options when it comes to your retirement distributions. For instance, you can opt to remove stocks and bonds rather than actual cash.

This could be a great choice if you already have enough money to maintain yourself because you could invest these financial assets and gradually raise your net worth.

It’s probably a good idea to utilize your right to an RMD reprieve if you are still working at age 72.

The optimal time to retire is by January 1st, so you might want to be strategic about when you make that decision.

RMD withdrawals are understandable if you require income, but it’s probably advisable to leave your money in retirement accounts for as long as possible to benefit from compound interest.

You can contribute to different retirement accounts, which is crucial to keep in mind. There are numerous retirement accounts to pick from, including;

The Solo 401(k) and the Roth IRA,
The Traditional IRA,
The SEP-IRA (for self-employed individuals).

The optimal course of action will once again rely on your goals, financial status, and desired standard of living.

2. Social Security

Most people who have worked for most of their lives will be able to obtain Social Security. However, the amount you will receive will differ depending on several variables.

As you can see, it is preferable to have several sources of income so that you are not entirely dependent on Social Security.

Unless you absolutely need to, it’s generally in your best interest to file for Social Security later rather than immediately.

You could get by on this amount if you want an inexpensive way of life. Still, it could be constraining, especially as you get older and become more accustomed to certain creature comforts, which is understandable.

For this reason, it’s crucial to remember that Social Security is just one source of income.

Your Social Security will be considerably impacted if you have a pension from the public sector. In fact, you might not even be qualified for Social Security.

Unfortunately, not everyone will be eligible for Social Security, making it crucial to avoid being dependent on this specific income source in your later years.

3. Systematic Strategic Withdrawals

Even if you have millions of dollars in your bank account, taking them all out at once and hiding them under your bed is not an intelligent way to maximize or protect your income. Regardless of your nest egg size, the smart move is only to withdraw the money you need and leave the rest to continue working for you.

The core of a systematic withdrawal approach in retirement is calculating your cash-flow requirements and regularly withdrawing only that amount of money. Sure, withdrawing the same amount of money every week or month falls under systematic behavior, but it isn’t strategic if your withdrawals aren’t based on your needs.

Most people use a systematic withdrawal strategy, gradually liquidating their assets in one way or another. Bonds, bank accounts, and other assets should all be considered in addition to equity holdings, which are frequently the highest money sources tapped in this way.

Equity holdings include mutual funds and stock in 401(k) plans. Your revenue stream can last as long as needed if a withdrawal strategy is correctly applied.

In summary, the best retirement plan depends on the demands of the individual, so if you’re unsure of the best path for you, you might want to speak to a financial advisor.

Contact Information:
Email: [email protected]
Phone: 3604642979

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Projected 2023 COLA hits 8.7%

December 27, 2022 /by george learned

The Senior Citizens League predicted that the Social Security retirement benefit cost-of-living adjustment (COLA) for 2023 might be 8.7%. The increase would be the biggest in almost 40 years.

The SCL stated in a press release that a COLA of 8.7% is uncommon and would be the biggest payment ever made to the majority of Social Security recipients still living. Since the introduction of automated adjustments, it has been higher only three previous times (1979-1981). You may read about the history of COLAs here.

The estimate is based on updated Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data through August. The final month of consumer price information has passed. On October 13, following the September CPI-W data publication, the Social Security Administration is anticipated to make the 2023 COLA announcement.

The method for calculating each COLA is laid out in the Social Security Act. The methodology states that rises in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) serve as the foundation for COLAs.

A COLA for December of a given year is equal to the percentage increase in the average CPI-W for the third quarter of that year over the average for the third quarter of the year before, the one in which a COLA went into effect. If there is one, any increase would be rounded to the nearest tenth of 1%. There is no COLA if there is no rise or the rounded increase is zero.

How are the CSRS COLA and FERS COLA differences calculated?

A COLA may impact different federal retirees under the Federal Employee Retirement System (FERS) and the Civil Service Retirement System (CSRS).

The FERS COLA and CSRS COLA are compared in the following table:

Medicare Part B premiums in 2023 may stay around the same.

According to the SCL, Medicare Part B rate increases in 2023 could not be that significant. The Medicare Trustees predicted in their annual report for 2022 that the regular Part B premium would continue at $170.10 per month in 2023. Mid-November is typically when the Medicare Part B premium and other charges are revealed.

When will the Social Security COLA for 2023 be revealed?

There is just one more month’s worth of consumer pricing information before the Social Security Administration releases the COLA for 2023. The Senior Citizens League anticipates the SSA to announce the publication of the September consumer price index statistics on October 13.

Mary Johnson, the league’s Social Security and Medicare policy analyst, says, “A COLA of 8.7% is exceedingly uncommon and would be the largest benefit that most Social Security recipients alive today have ever received.” Only three other instances (1979-1981) were higher since the automatic adjustments began.

“COLAs are designed to support keeping Social Security benefits’ purchasing power when prices rise. The total Social Security income that retirees will receive throughout their retirement will steadily increase due to these permanent increases. According to Johnson, without a COLA that sufficiently keeps pace with inflation, Social Security benefits will gradually buy less over time, which might be difficult for older Americans retiring later in life.

“The COLA for August 2023 has, on average, fallen 48% short of inflation through August. A $1,656 benefit is short by a total of $417.60 year to date, or around $43.80 per month on average.”

The tax implications of the COLA increase

Although Social Security COLAs are intended to provide financial relief, they may increase your tax burden. According to preliminary findings from The Senior Citizens League’s 2022 Retirement Survey, almost 59% of respondents feel they may have to pay more in taxes in 2022 because of the 5.9% COLA they received this year.

Furthermore, according to 21% of respondents, their household income was below the income levels that might subject up to 85% of Social Security benefits to federal income taxes until 2022. This group is concerned that they may have to pay tax on a portion of their Social Security income for the first time during the upcoming tax season.

For the next year, a COLA of 8.7% would result in comparable recurring increases in tax obligations.

Premiums for Medicare

The government typically announces the Medicare Part B premium and other expenditures in the middle of November. In 2023, Johnson predicts that the cost of Medicare Part B won’t likely increase significantly.

In their 2022 annual report, the Medicare Trustees predicted that the regular Part B premium would remain at $170.10 in 2023. The extra Part B premium charges from this year, as decided following a reassessment, will be used by the Centers for Medicare and Medicaid Services to lower the Part B premium in 2023, according to the agency.

Contact Information:
Email: [email protected]
Phone: 3037587400

Life Planning Resources About You That Your Loved Ones Will Need

November 24, 2022 /by bill hoff

Your spouse, partner, or children will appreciate this article if you become incapacitated due to cognitive deterioration or pass away. First and foremost, the information comes from you. Second, the informational sources are all government entities they must become acquainted with to comprehend their position as your advocate, care provider, or beneficiary. Third, these digital resources are updated regularly, ensuring that the material is up to date when needed.

This article is designed to be used as an attachment to be shared with others through email. The idea is that by giving this information, you’re presenting them with several reliable digital resources that can be shared with them now, electronically archived by them, and made available to them when required in the future.

Remind your close ones about the article when you give them specifics about your estate planning instructions, such as your will, advance directives, powers of attorney, etc.

Important Federal Agency Resources

Office of Personnel Management (OPM)

During their retirement, all federal annuitants, regardless of the federal agency they worked for, are subject to the oversight of the Office of Personnel Management (OPM).

Here’s an example of how to collect information using the OPM search box. For example, entering “death” into the OPM’s search box yields 49 results. Each outcome provides a two or three-sentence summary of the associated material, for instance, FAQs on the death of a government employee or annuitant. All the links provide paperwork, extensive descriptions of a procedure, or other relevant information.

Thrift Savings Plan (TSP)

Almost everything a spouse, partner, and children need to know about the Thrift Savings Plan (TSP) may be found in a special section for beneficiaries on their website. The site includes a PDF document entitled “Your TSP Account: A Guide for Beneficiary Participants,” which may be accessed via the website.

Social Security Administration (SSA)

Social Security offers various resources that others close to you may find valuable. The first is about people helping others and how Social Security can help you when a family member dies.

Medicare

Medicare provides information on important Medicare-related matters such as where to sign up for Medicare, how to change plans, the advantages of Medicare drug coverage, and where to get Medicare paperwork for claims and appeals. It offers a searchable database of Medicare-accepting medical providers.

Centers for Disease Control and Prevention (CDC)

The CDC provides an overview of Alzheimer’s disease and offers a wide range of information on the subject and the option to get email updates.

National Library Service for the Blind and Print Disabled (NLS)

The NLS provides a plethora of resources for senior citizens and their families. At least once a year, various organizations, online tools, and publications from government, academic, and nonprofit sources are updated. Connections for caregivers, legal, eyesight, physical health, and psychological health services are a few of the topics covered.

Conclusion

These tools aren’t meant to be a replacement for thorough estate planning. Conversations with the receivers of this article may be just what you need to get started on a personal estate plan.

Contact Information:
Email: [email protected]
Phone: 2178542386

Bio:
Bill and his associates of Faith Financial Advisors have over 30 years’ experience in the financial services industry.
He has been a Federal Employee (FERS) independent advocate and an affiliate of PSRE, Public Sector Retirement Educators, a Federal Contractor and Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.
Bill will help you understand the FERS Benefits and TSP withdrawal options in detail while also helping to guide you in your Social Security choices.
Our primary goal is to guide you into your ment with no regrets; safe, predictable, stable and for life using forward thinking ideas and concepts.

Bullet points:
> Financial Services consultant since 1984
> FERS independent advocate and an affiliate of Public Sector Retirement Educators (PSRE), a Federal Contractor and Registered Vendors to the
Federal Government
> Affiliate of TSP Withdrawal Consultants
> His goal is to guide individuals into retirement with safe, and predictable choices for stability using forward thinking ideas and concepts.

Can You Finance Your Retirement With Social Security?

November 23, 2022 /by jeff boettcher

Most Americans lack confidence in the future of the Social Security program. According to a recent survey, 23% of Americans think the program won’t exist by the time they retire, and 46% think it will offer far fewer benefits than now.

Despite this, most Americans say they will rely on Social Security to pay for at least some portion of their retirement. While 26% said they would use Social Security to cover less than half of their retirement expenses, 51% said it would cover more than half (31%) or all (20%) of their expenses.

However, is this a sure bet? The survey team consulted experts to learn what you should know about relying on Social Security to pay for your retirement. Here is what they said.

Can Americans rely on Social Security to fund their retirement in its current form?

One-fifth of Americans intend to finance their whole retirement with Social Security benefits. Still, even if the program is kept in place, most retirees will probably find it challenging to do so.

Frank Murillo, a partner and managing director at the Snowden Lane Partners, says, “Unless you can actually stick to a budget, which in my experience most people don’t, Social Security is not enough for most retirement needs.”

There are differences in what people expect to spend in retirement and what they do. “Recreating the Dollar is an exercise I undertake with the clients I deal with where we put together sources of income to look like what they had throughout their working years. The findings of how much they can genuinely spend after stretching it over a respectable amount of time are eye-opening.”

According to Wade Pfau, the Retirement Income Center co-director at the American College of Financial Services, Social Security was never intended to be a retiree’s sole source of retirement income.

He said the benefit “is intended to replace around 40% of the typical indexed lifetime income of someone who has worked and earned an average pay over their career.” Many retirees will aim to replace a greater proportion than this.

Most financial gurus advise saving at least 70% of your pre-retirement income for retirement.

Katherine Tierney is a CFA senior retirement strategist at Edward Jones. She said, “Since Social Security is probably only going to make up a percentage of your retirement income, it’s crucial to have a well-rounded approach to satisfy your income demands in retirement.” We advise you to take action right now to learn what you must do to realize your dream retirement. A financial advisor can help outline your objectives, create a plan to achieve them, and track your progress if you are unclear on where to begin.

What to Do If Social Security Is the Only Retirement Income Source You Have.

Although financial experts do not advise relying only on Social Security for retirement income, this is the case for many Americans. According to another poll, 36% of Americans have less than $10,000 saved, and 25% have not yet begun saving for retirement.

Colleen Carcone, head of wealth planning solutions at TIAA, said, “Each scenario is unique. Some people can live wholely on Social Security exclusively.” Continuing to work while delaying your Social Security benefits might help you narrow the gap between the amount you need to retire successfully and the amount you have saved. A delayed start will result in a larger check when you start receiving benefits.

The Future of Social Security: What Will It Look Like?

According to the survey, most Americans think Social Security benefits will be cut or eliminated in the coming years. Are these worries justified since the Social Security trust fund is projected to exhaust in 2035?

Most analysts anticipate that Social Security will endure, but doing so will probably necessitate significant modifications to the current scheme.

A few straightforward fixes will probably be implemented, according to Jeremy Finger, CFP, founder of Riverbend Wealth Management. “First, we can remove the Social Security tax earnings cap, making any income over $147,000 subject to tax. The Social Security trust fund might be extended as a result. The second option is to raise the full retirement age, which would be similar to a salary reduction. For instance, persons born after 1970 could not be eligible for full benefits until they were 68 or 69 years old. Third, they might raise the Social Security payroll tax.”

According to Finger, the Social Security trust fund should be in balance using one or a combination of these remedies. However, Finger does not advise relying on Social Security to finance your retirement because there are enough unknowns.

I wouldn’t suggest that clients base their Social Security decisions, he said, “on what the government might do.”

There is a high possibility that payments will be cut in the upcoming years, regardless of how the Social Security trust is ultimately funded (and most experts think this will happen before it gets emptied).

Carcone says, “Social Security may be cut to match incoming cash from people and their companies.”

When preparing for retirement, Social Security’s uncertain future should be considered.

You will be less dependent on Social Security benefits the more you save over time through pension schemes and portfolio building.

Conclusion

Social Security isn’t going anywhere for the time being, and there are hopes that the government acts to replenish the reserves or pass relevant laws like those advised above.

But before then, you must have other retirement savings since Social Security covers less than 40% of an individual’s retirement income.

Contact Information:
Email: [email protected]
Phone: 8007794183

Which day of the month can you expect your Social Security check?

November 17, 2022 /by mickey elfenbein

Each month, beneficiaries receive Social Security retirement payouts. Benefits are paid the month after the month in which they’re due. For example, a recipient would get June’s benefit in July, but which day of the month does the check arrive?

When a person receives their payment is determined by various factors. These include their birth date and the record on which the benefits are being claimed:

If you have benefits on your record, the exact day you get them is determined by your date of birth.

If you’re getting benefits on someone else’s record, such as for a deceased spouse, the payment date will be determined by their date of birth.

Those getting spousal benefits under their live spouse will also receive benefits based on the date of birth of their spouse.

Schedule of Social Security payments

The following is the payment schedule:

Those who began receiving Social Security payments before May 1997 get them on the third of each month. If the third of the month comes on a Sunday, the payments are made on the preceding Friday. Suppose you receive both Social Security and Supplemental Security Income (SSI). In that case, you receive Social Security payments on the third of each month and your SSI benefits on the first.

Supplemental Security Income (SSI) is a government program that provides supplemental income to handicapped, blind, and elderly individuals and families with limited income. SSI benefits are paid by the Social Security Administration (SSA). However, the program is supported by general tax revenues rather than Social Security taxes.

How will you get your Social Security check?

If you haven’t already, setting up direct deposit is one of the best methods to ensure that you receive your Social Security payment on time. That’s possible when first applying for Social Security benefits. If you haven’t signed up for direct deposit at the time, you can do so now using your mySocialSecurity account.

With a mySocialSecurity account, you may have access to a site where you can manage many of your Social Security needs. You may use mySocialSecurity to seek a new Social Security card and estimate your future benefits, among other things. You may also set up your benefits to be paid by direct deposit using this platform. To create an account, you don’t need to be a retiree or receive Social Security benefits.

Another option for opening an account is to call the Social Security Administration (SSA) toll-free at 1-800-772-1213.

Those who don’t have a bank account can use the Direct Express card program to receive payments. With this program, deposits from federal payments, such as Social Security benefits, can be sent straight to the recipient’s card. To enroll in the program, contact 1-800-333-1795 or visit www.godirect.org.

Can I get my money by check?

When registering for Social Security or SSI benefits, you must choose whether to receive your benefit payments online (through direct deposit or Direct Express). According to the SSA, if you now get your benefit payment by check, you must switch to one of the electronic payment methods.

There are some exceptions, but benefit payments must generally be sent through one of the two electronic modes: direct deposit or Direct Express.

Is Social Security income taxed?

According to the Social Security Administration, approximately 40% of all people receiving Social Security benefits will be required to pay taxes on those payments.

You should expect to pay taxes on your benefit if your income exceeds $25,000 and you submit an individual federal tax return.

You must pay taxes if you submit a joint return and your combined income exceeds $32,000. According to the SSA, if you’re married but filing separately, you’ll likely have to pay taxes on your benefits.

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

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

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

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

10 Strategies for Federal Employees Planning to Retire Before 2030

November 17, 2022 /by jeff boettcher

Thousands of federal personnel have retired since the COVID-19 pandemic began in March 2020. Many more eligible employees plan to retire during the following eight years.

Employees who are eligible to retire must be financially prepared to do so. With enough planning, an employee may do more than fantasize about a pleasant and financially secure retirement.

No one can know what the national economy and investment landscape will be like in 10, 20, 30, or more years. Hence, all employees who plan to retire in the next eight years should know what to expect financially after they retire and what should be done to complete the necessary tasks to prepare better for their retirement years.

Here are three recommendations to help employees who plan to retire within the next eight years:

1. Recognize and comprehend the link between investment risk and investment return and how it applies to TSP investing.

Unfortunately, risk connotes something negative for some TSP members. However, because the TSP is a long-term tax-advantaged savings plan, the “risk/return” ratio cannot be overstated. There is no doubt that investing in the stock market is risky. Investing in the TSP’s three stock funds (the C, S, and I funds) carries a certain amount of investment risk.

However, by taking the risk of investing at least half of a TSP portfolio in the C, S, and I funds, a TSP participant will be rewarded with a better investment return over the long run. Participants in the TSP should also be mindful that inflation may be disastrous to a long-term portfolio like the TSP. Stock investments have proved over the years that they can outperform inflation in the long run.

TSP participants are consequently advised to avoid attempting to dodge the current-year stock decline by investing in the so-called safe US Government Securities G fund. While invested in AAA-rated short-term US Treasury securities, the G fund doesn’t outperform inflation in the long run.

2. Decisions on Social Security.

The majority of government employees are entitled to monthly Social Security retirement benefits. The three most frequently asked questions about Social Security retirement benefits among employees and retirees are:

(1) At what age can I apply for my monthly retirement benefit, and are there any benefits to deferring the commencement of my payments?

(2) Do I qualify for any of my spouse’s, former spouse’s, or deceased spouse’s Social Security payments, and if so, under what conditions?

(3) Will my Social Security monthly income be reduced if I stop working in my late 50s or early 60s and wait until my late 60s to begin receiving Social Security benefits?

Individuals fully insured for Social Security can apply for retirement payments as early as age 62. However, if they choose to begin receiving benefits at age 62, their monthly amount would be permanently reduced. Delaying the start of their monthly Social Security retirement benefit increases the individual’s monthly payment by 7 to 8% each year they postpone their benefits beginning at 62 and continuing until 70.

Employees who will retire within the next eight years and are near their 62nd birthday are advised to delay obtaining Social Security benefits as long as possible (preferably until age 70). A guaranteed 7 to 8% rise in monthly benefits should keep up with the current cost-of-living increases. Married couples where both spouses are eligible for Social Security payments should seek counsel on coordinating their benefits. That covers which spouse should apply for benefits first and the choices available to the surviving spouse if the first spouse dies.

3. Even with the right to maintain FEHB health insurance, out-of-pocket health care costs will continue to rise.

After retirement, federal employees are entitled to maintain their FEHB health insurance coverage, with the federal government continuing to pay, on average, 72 – 75% of the FEHB program health insurance premiums. However, this doesn’t imply that a federal retiree can expect to pay the minimum out-of-pocket for health care during their retirement.

For instance, FEHB health plan rates, like other health insurance premiums, will continue to rise. Retirees are urged to enroll in Medicare Part A (Hospital Insurance) at no cost and Medicare Part B (Medical Insurance) with a monthly payment paid by the retiree (depending on the retiree’s income). If married, a federal retiree and spouse can reduce out-of-pocket health care costs by enrolling in an FEHB health plan and Medicare Parts A and B.

Contact Information:
Email: [email protected]
Phone: 8007794183

Should You Delay Your Social Security?

November 14, 2022 /by mark heinrich

You’ll generally receive more money in retirement if you delay starting your Social Security benefits. The significant cost-of-living adjustment (COLA) for the program scheduled for next year makes the wait much more worthwhile.

So, let’s explain why: The COLA increase, which is 8.7% for 2023, is still considered in determining how much you are eligible to receive until you turn 62, even if you don’t accept benefits. Since interest accrues over time, deferring your distribution until full retirement age (depending on when you were born, is between 66 and 67) will improve your final payout. When you turn 70, the benefits increase comes to an end.

COLAs accentuate the difference between early and late claims. Savvy Social Security Planning for Boomers was written by certified financial adviser Elaine Floyd in 2013 when the COLA was only 1.5%. “One would expect all Social Security recipients to celebrate the announcement of a sizable cost-of-living adjustment (COLA).”

Understanding how to maximize a Social Security income is crucial because it is paid out for the rest of a recipient’s life and adjusted for inflation. For the majority, if not all, other sources of income, the same cannot be stated. Social Security provides approximately half of elderly Americans with at least 50% of their family income. It accounts for at least 90% of the revenue for nearly one-fifth of individuals aged 65 and over.

Understanding how benefits are determined will help retirees better appreciate how much they can save by delaying. The Social Security Administration considers a worker’s 35 years of highest earnings and accounts for inflation when calculating benefits. That gives us a place to start when estimating what a typical monthly payout may be.

The benefit is then calculated using a formula to determine what it would be if received at full retirement age (FRA). When someone turns 62 and becomes eligible to begin receiving benefits, the amount known as the primary insurance amount may be reduced by as much as 30%.

Every year, the primary insurance amount is increased by any COLA change by compounding it. Until age 70, the longer a retiree waits to begin receiving benefits after achieving full retirement age, the more credits would be subtracted from the original insurance sum.

Consider a retiree who is 64 years old and of full retirement age and qualifies for a primary insurance sum of $3,000 per month. If she hadn’t started collecting benefits in 2016, when the COLA was 5.9%, she would have received $3,177. Next year, it will be $3,453 (with the latest COLA increase applied to the higher inflation-adjusted amount). The longer she waits, the more COLAs she will accrue. Any credits will increase the amount for deferring benefits past the age of full retirement to 70. Suppose she waits to begin receiving benefits until she is 70. In that case, her monthly payment (excluding any COLAs for years after this one) will be $4,374.

The tax savings are a further advantage of delaying Social Security, especially with a higher COLA. Yes, many beneficiaries must pay taxes on their Social Security benefits. And up to 85% of Social Security benefits may be taxed for people with additional retirement income sources like 401(k) or IRA accounts. However, delaying payments and ultimately receiving a larger lifetime payout means those retirees won’t need to use their accounts for as much cash. As a result, the taxable portion of Social Security income will decrease.

By delaying filing until age 70, a retiree can reduce the taxable portion of benefits from 85% to 19.5%, according to Bill Reichenstein, Chief of Research at Social Security Solutions. The tax burden will be significantly lower as a result of this than it would be if she began receiving benefits at age 66.

There are some people for whom deferring benefits won’t make sense, even with a greater payout and lower tax burden. Suppose they aren’t married and aren’t worried about their spouse’s benefits. In that case, those with a terminal disease or a lower life expectancy may want to start collecting what they can as soon as possible.

Consider the age at which a retiree’s deferral of payments becomes profitable. According to Reichenstein, you usually have to live to be 82.5 years old to gain from delaying till age 70. Those who have passed away before that point would have been better off claiming benefits when they reached full retirement age. But who knows? Making this estimate is unpleasant and challenging.

Others would counter that delaying taking Social Security benefits would be unwise because the program is in peril. Recent forecasts indicate that the trust fund will no longer be able to provide full benefits beginning in 2035. But based on what has happened in the past, any changes to stabilize finances would probably focus on changing rules for younger people. The reason is that they have a long time to work, unlike people who are about to retire and start getting benefits. Therefore, if you’re in your sixties and can wait, do so.

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

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

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

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

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

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

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

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

Astonishing Data on the Current State of Retirement in the United States

October 24, 2022 /by bill hoff

You may always start saving for retirement. People in the US work hard throughout their careers to retire. Planning requires cognitive abilities and a focus on saving money.

According to a Gallup study, the average retirement age in the US has risen from 60 to 66. With a 78.7-year life expectancy, Americans will have at least 12 years to enjoy retirement.

The average annual income and net worth of the 47.8 million Americans aged 65 and older are $38,515 and $170,516, respectively. That’s a lot of money to save for retirement. Here are some more startling facts concerning the situation of retirement in the United States.

Young people believe they can retire early, which does not happen.

Most respondents aged 18 to 29 who took part in a Gallup poll believed that they would be able to retire early, around the age of 60. However, their optimism may fade as they approach 30 because of the difficulties of making a living and earning income.

Retiring may take longer than anticipated.

The average lifespan in the US is 78.7 years, but many people survive into their 80s or 90s, making it challenging to predict retirement worth. According to the Social Security Administration, a healthy 65-year-old has a good probability of living to 86 or 84. Over 65s should save for a 20-year retirement.

More and more people in the United States are preparing for a longer retirement.

Americans take extended life expectancy seriously. 81% of Americans are moving their assets in anticipation of living longer than their predecessors by minimizing spending, acquiring safe life insurance, and boosting pension payments.

Many Americans are taking money out of their retirement accounts early.

In contrast to those who are saving for longer life, many Americans are taking early withdrawals from their retirement accounts. 44% of Americans between the ages of 40 and 79 have pulled money from their retirement plan. While 46% of those aged 40 to 49 and 53% aged 70 to 79 have done so as well. Financial experts warn against early withdrawals from a retirement account, as doing so might result in hefty fines.

Americans Aren’t All Set for Retirement.

77% of American employees are considering retirement via company plans and other alternatives. People begin saving for retirement on average when they turn 27 years old. Only 33% of Americans have anything set aside for their retirement days.

Americans are falling short of their financial goals.

As many as 77% of Americans are planning for their retirement, but most don’t have quite enough personal savings to maintain their standard of living in retirement. As per a 2017 GAO analysis, the typical retirement funds for Americans aged 55 to 64 were a little over $107,000. Although it may sound like a lot of money, the GAO points out that if it were placed in inflation-protected annuities, it would only provide $310 minimum repayments.

Social Security isn’t a sure thing.

Social Security is only guaranteed to be financed until 2035, when it may be three-quarters financed, citing Business Insider. Those already receiving benefits may see a drop, while freshly retired folks may not receive any. This is partly linked to aging. The number of Americans 65 and older will climb from 56 million to 78 million by 2035. More people will withdraw money from the pool, while fewer will contribute.

Your Retirement Could Be Squeezed Out of You Before You Know It.

It’s helpful to have a retirement plan in place. But occasionally, life has several other intentions. According to a TD Ameritrade survey, health issues and career changes are the two most popular causes for retiring. 50% of persons retired early due to unemployment, parenting duties, a sudden change in their economic standing, and health concerns.

A Larger Amount of Money Is Necessary to Retire comfortably.

Experts recommend that you save between $500,000 and $1 million to maintain your current standard of living in retirement – a considerable sum of money, the accumulation of which may take many years.

Residential Care for the Elderly Is Expensive.

Long-term care is mainly needed by individuals who reach the age of 65. Medicare doesn’t pay assisted living fees. A care facility costs $4,051 per month, whereas a nursing home costs significantly more. Other medical expenses aren’t included. In their 60s, more people buy long-term insurance.

The Time Is Now.

More and more consultants are labeling themselves “complete,” and this trend is expected to continue. The issue is that many individuals we talk to do not incorporate conversations about risk assessment into their line of work. Even if they are joking, it doesn’t change that they aren’t seriously trying to come up with recommendations or answers.

According to our assessment, these professionals are missing out on a fantastic opportunity. The environment of investment planning has changed, and customers now want a more exceptional customer experience, which is why so many advisors are now similarly advertising themselves.

Currently, experts that offer a comprehensive service have most of the financial advantage. Learning about and putting into practice different risk management measures, such as annuities, could be a straightforward first step.

Contact Information:
Email: [email protected]
Phone: 2178542386

6 basics of social security information you should know

October 18, 2022 /by mickey elfenbein

Social Security payments are one of the three parts of the Federal Employees Retirement System (FERS), together with the Thrift Savings Plan (TSP) and the FERS pension. Social Security monthly benefits are essential to a federal employee’s retirement.

Here are six things to think about when it comes to your retirement income.

1. What Determines Your Monthly Benefit Amount?

That depends on various variables, the most important of which is your lifetime income from jobs for which you have paid Social Security taxes. Your “basic” benefit is calculated by Social Security using the average of your 35 highest earning years adjusted for inflation. This average is then entered into an advanced calculation. The age you are when you apply for benefits will also impact the amount. Even though you won’t know for sure until you apply, you can estimate using the AARP Social Security Calculator.

As of June 2022, the typical Social Security benefit (except survivor and disability benefits) was $1,592 gross per month. Remember that a portion of your Social Security may be subject to taxation if your annual income exceeds a specific threshold ($32,000 for a married couple and $25,000 for an individual).

The following factors determine your Social Security amount:

Working experience
Age
Start of benefits
Marital situation

Although it is not factored into the calculation, it is sometimes thought that the IRS life expectancy factor affects one’s Social Security payment.

2. What is Full Retirement Age?

It’s crucial to think carefully before withdrawing your benefits. You become eligible for benefits for the first time at age 62 and a half. Still, if you continue to work, your benefits will be subject to the dreaded earnings test, which results in cutbacks if your earned income exceeds a specific threshold – $19, 560 in 2022. Knowing your full retirement age (FRA), at which point you can still receive your entire pension while working, is a good idea. Depending on when you were born, your FRA will be between the ages of 65 and 67. For instance, your FRA is 67 if you were born in 1960 or after.

3. Medicare and Living Wage Adjustments (COLAs)

Direct Medicare B premium deductions are made from your Social Security check. When hearing about impending COLAs, which are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and come once a year, it is crucial to keep this in mind. Your monthly benefit remains the same if neither inflation nor deflation occurs. If so, your Social Security pension will rise by the same amount as the CPI-W. The COLA for 2022, for instance, was 5.9%. According to estimates, the COLA for the following year will be the highest in about 40 years.

Nevertheless, even though COLAs raise Social Security income, healthcare costs – and hence Medicare premiums – often increase along with inflation, generally offsetting any COLA increase. However, a decrease of 8.6% beats a reduction of nearly 14%. The 2022 Medicare B premium rise was 14.5%, eliminating the 5.9% adjustment.

4. Survivor Benefits

Any surviving children or spouse can be qualified for Social Security survivor payments in the event of your passing. Many government employees may be unaware of this. Even if they are, they may not be aware that the survivor benefits are not the entire amount the original beneficiary would have received.

5. Benefits for ex-spouse

If all five of the following facts about an ex-spouse or ex-husband are accurate, they may be eligible to receive a share of your Social Security benefits:

1. They are 62 years old or older.

2. Neither of them has remarried.

3. At least ten years were spent in the marriage.

4. The benefit they are entitled to is lower than the benefit awarded to them if you were their ex-partner.

5. You must also qualify for Social Security through retirement or disability benefits.

6. What are the maximum benefits one can get per month?

The highest monthly benefit is $3,345 for a worker filing for Social Security at full retirement age in 2022. That’s roughly double the average retirement pension ($1,666 in April 2022). Your earnings must have surpassed Social Security’s maximum taxable income, or the annual adjusted cap on the percentage of your income subject to Social Security taxes, for at least 35 years of your working life to be eligible for the top benefit.

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

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

Understanding The CSRS Hybrid Offset

October 15, 2022 /by rick viader

If you were employed under the CSRS and served the government for at least five years before leaving, returning after a hiatus of more than a year, and doing so after December 31, 1983, you were given an option. The CSRS and Social Security, or the FERS, could provide coverage for you. If you selected option two, you were protected by a brand-new job classification known as CSRS Offset.

Those employed between 1984 and 1986 who had at least five years of service at the time of the official start of FERS on January 1, 1987, are also eligible for the CSRS Offset (the others were put under FERS).

As a CSRS Offset employee, you are qualified for benefits under the CSRS and Social Security programs since both cover you. You will become eligible for the same amount of retirement benefits upon retirement as you would if CSRS solely covered you. However, the funds will come from two distinct sources: the Social Security Administration and the Office of Personnel Management.

Your retirement annuity as a CSRS Offset employee will be determined in the same manner as it is for all CSRS employees:

The sum of .015% x your “high-3” average wage x 5 years of service plus. 0175% x your “high-3” average salary x 5 years of service, and .025% x your “high-3” x all additional years and months of service.

Your predicted retirement annuity will be the total of those three calculations. That estimate will be more precise as you draw closer to retirement.

You will receive a pure CSRS annuity if you retire before age 62. Your annuity will be deducted depending on the same amount of Social Security benefits you received while working as a CSRS Offset employee when you reach the age of 62 and become eligible for them. The offset will still happen automatically whether you apply for a Social Security benefit.

When you are around 62 years old, OPM will request an entitlement decision from the SSA. Two benefit computations – one including all Social Security-covered earnings and the other, excluding earnings related to CSRS Offset service – will be sent by the SSA to OPM. (The offset calculation will be performed if you retire at or after age 62.)

Your gross CSRS annuity will need to be reduced, and OPM will figure this out. According to the law, the lesser of the following two options applies:

1. The difference between your Social Security monthly benefit amount with and without CSRS-Offset service; or

2. The product of your monthly Social Security benefit amount and federal earnings is your total CSRS Offset service, rounded to the closest whole number of years, divided by a fraction, with 40 as the denominator.

The latter computation above appears as a formula as follows:

Social Security Benefit x Offset Service Years in Total / 40

Ensure you file for Social Security benefits a few months before turning 62 if you intend to retire before that age. This will give SSA enough time to handle your case and prevent delays in the full benefits package you are entitled to. If you don’t do that right away, your CSRS annuity will still be reduced; however, you will eventually receive a retroactive payment for the full Social Security benefits you are eligible for.

CSRS Offset and Social security

Employees who have CSRS Offset are eligible for retirement payments under both the CSRS and Social Security programs. These advantages are combined to give employees the same compensation for their government services as CSRS might have provided exclusively. The primary distinction is that funding will come from the Social Security Administration and OPM, two distinct organizations.

The employee’s annuity will be determined during retirement in a manner identical to that of ordinary CSRS employees. People who retire before turning 62 receive a pure CSRS annuity. Suppose they reach the age of 62 and become eligible for Social Security benefits. In that case, OPM will reduce or offset their CSRS benefit by the same amount as the Social Security they would have earned as a CSRS Offset employee. The changes will be made when you retire at or after age 62 and become eligible for Social Security benefits.

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

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

Tag: Social Security

Social security

Social Security Facts: A Quick Reference for Advisors and Clients

1. Social Security payouts are still subject to taxation in the twelve states of the US

2. Every year that Social Security payments are delayed beyond the Full Retirement Age (FRA) results in an increase in payouts of 8%

3. Even if the trust fund fails, Social Security will persist

4. Eligibility criteria of the divorced couples to receive benefits from the Social Security of their ex-partner

5. Make sure not to wait longer than the age of 70 to receive benefits

6. Spouses with lower incomes may file a claim on their spouse’s Social Security account

7. The regular retirement age is between 66 and 67 years old

8. When it comes to marriage and Social Security benefits, gender does not matter

9. Social Security payouts are subject to taxation if they exceed a particular limit

10. If the benefits of a deceased spouse are more than those of the widow, they will immediately receive the entire amount of the deceased spouse’s benefits

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What to Do If Social Security Is the Only Retirement Income Source You Have.

The Future of Social Security: What Will It Look Like?

Which day of the month can you expect your Social Security check?

10 Strategies for Federal Employees Planning to Retire Before 2030

Should You Delay Your Social Security?

Astonishing Data on the Current State of Retirement in the United States

Young people believe they can retire early, which does not happen.

Retiring may take longer than anticipated.

More and more people in the United States are preparing for a longer retirement.

Americans take extended life expectancy seriously. 81% of Americans are moving their assets in anticipation of living longer than their predecessors by minimizing spending, acquiring safe life insurance, and boosting pension payments.

Many Americans are taking money out of their retirement accounts early.

Americans Aren’t All Set for Retirement.

Americans are falling short of their financial goals.

Social Security isn’t a sure thing.

Your Retirement Could Be Squeezed Out of You Before You Know It.

A Larger Amount of Money Is Necessary to Retire comfortably.

Residential Care for the Elderly Is Expensive.

6 basics of social security information you should know

Understanding The CSRS Hybrid Offset

TSP & Retirement