Not affiliated with The United States Office of Personnel Management or any government agency

January 19, 2022

Federal Employee Retirement and Benefits News

Category: Articles

Articles

All the latest articles covering the information that you will be craving to devour will be available via this category. From getting to know how indebted our company is to reading about the presidential elections; from knowing about new retirement plans to finding out how security breaches can affect your life; you can browse it all!

For more articles, visit our articles’ section.

Public Sector Retirement, LLC (‘PSR,’ ‘PSRetirement.com’ or the ‘Site’) is a news channel focusing on federal and postal retirement information.  Although PSR publishes information believed to be accurate and from authors that have proclaimed themselves as experts in their given field of endeavor but PSR cannot guarantee the accuracy of any such information not can PSR independently verify such professional claims for accuracy.  Expressly, PSR disclaims any liability for any inaccuracies written by authors on the Site, makes no claims to the validity of such information.  By reading any information provided by June Kirby or other Authors you acknowledge that you have read and agree to be bound by the Terms of Use

Coming in 2022! A Mobile App for Federal Employees Sponsored By Todd Carmack

Mobile App to Track Federal Employees' Retirement Transactions To Be Launched In 2022

On Tuesday, officials from the federal government's 401(k)-style retirement savings program highlighted several new features that the Thrift Savings Plan (TSP) would offer when it completes its transfer to a new recordkeeper next year.

Officials announced during a meeting on October 26 that a mobile app for the TSP would be available in mid-2022. The app is part of the Converge Program of the Federal Retirement Thrift Investment Board, which aims to improve the TSP's retirement services under the agency's unified recordkeeping contract.

Program manager Tanner Nohe stated at the Federal Retirement Thrift Investment Board's monthly meeting, which manages the TSP that by the middle of 2022, the TSP will provide participants new options that would make it easier to manage and secure their funds.

According to Nohe, the program will launch with an app that will allow consumers fast access to account features. "It will enable us to offer retirement services on the go, as well as provide a new avenue for two-way communication with our participants," he added.

Members will be able to effectively manage their accounts via their smartphones. In addition to the existing customer service alternatives, there will be a range of different ways for participants to receive help.

"For all participants, we're also adding a virtual assistant and a virtual chat," Nohe stated. "The AI-powered assistant will be available 24 hours a day, seven days a week…" A virtual chat with a live representative will also be available."

The TSP will enhance the number of services and transactions available "on the move" with the launch of the mobile app, according to Nohe. Electronic signatures, additional online forms, and a new "concierge" service to help consumers move money from any other retirement accounts into the TSP are all part of the plan.

"Once people are enrolled in the Thrift Savings Plan, it will be easier for them to manage their money, and when it comes to rollovers, we'll provide a concierge service to assist those who wish to roll funds into the plan throughout the process," Nohe added. "Along with that, they'll be able to scan their checks instead of mailing them in." We'll also offer an address locator tool for withdrawals to make the procedure go more smoothly."

According to Nohe, the new structure will also provide more flexibility in terms of TSP loans. Participants can currently have two loans open with the agency: one general purpose and one principal residence loan. Beginning next year, both outstanding loans will be able to be used for general purposes, and there will be more alternatives for repaying loans if a participant has already left government service.

Tee Ramos, Federal Retirement Thrift Investment Board's (FRTIB) director of participant services, said the program is on pace to launch in mid-2022.

Most Important Points Guiding Military Service and Federal Annuity

Retired military pay is the monthly annuity payment for veterans who meet certain requirements. It is also known as High 36 or military retired pay. To qualify for this, service members have to stay in service for a minimum of twenty years. Since the minimum years of service is twenty years, some people choose to return to federal employment as a civilian while still receiving their retired military pay. People who choose this option will have reduced annuities upon retirement from civilian service. 

However, there is also the option of waiving the pay and having the years spent in military service count towards the federal annuity computation for the period of civilian service. 

In two rare cases, federal employees can keep both payments. They can continue receiving their retired military pay and still be eligible for their federal annuity payments without any deductions. These cases are: 

• Former service members who retire from a reserve component of the United States Armed Forces. 

• Former service members who are receiving retired pay as a result of a service-connected disability. The pay can be granted in connection to two forms of service-connected disabilities. The first is one gotten from a combat situation with an enemy of the US, and the other is a disability obtained while discharged from one’s duties during a war. 

The law allows people in either of these categories to continue receiving their retired military pay while still in federal employment and both the pay and annuity upon their second retirement. 

More details about this are contained in the retirement application form. When you fill out the form, you have to read through and carefully check the appropriate boxes in the Schedule B ̶  Military Retired Pay section. If you already receive or wish to apply to start receiving the military retired pay or retainer pay, you should check the appropriate boxes.

Also, suppose you fall in either of the two categories stated above and are eligible to keep receiving your retired military pay plus your annuity. In that case, you should also check the appropriate boxes for your category. You would also need to attach proof of the legitimacy of your claim. This is a copy of your notice of award.

The Office of Personnel Management (OPM) needs this proof to process your application for retirement. Though the issue can be cleared if your branch of service sends verifies your claim with the OPM. However, this takes time and can delay you from receiving your annuity payments at the right time. 

To avoid all unpleasantness when filing for retirement, ensure you have all appropriate documents sorted out months before you will need them. If you fall in the first category and have a reservist notification of entitlement for retired pay, make a copy of the document. When it is time to fill out your civilian retirement application, you have it handy to attach. 

In the same vein, if you retired based on a service-connected disability, get copies of all relevant documents ready to be attached to your retirement application.  If you are having problems with the required documents, you can contact your agency’s personnel office for help. It would point you in the right direction to get the required documents for your situation. 

It is much easier to deal with your agency than the OPM when you are facing the issue of dual credit for previous military service. Your agency will not require any proof of entitlement to estimate your civilian retirement annuity. It already has all it needs to process your retirement application form as soon as you file it. The case is different for the OPM, so get all documents ready to avoid any unpleasant delays in the process. 

Bottom Line

Many factors come to play when it comes to getting a previous military service to count towards your civilian annuity computation. For some veterans, it is only possible to receive a portion of the annuity while still receiving the retired military pay. For others, reservists and those with service-connected disabilities, the law gives room for dual credit. People in this category get credited for both military and civilian service and can live out their lives receiving monthly payments for both. 

As such, you must understand the intricacies of both situations and know that which applies to you. This would help speed up things when you are applying for retirement from civilian service and save from unnecessary stress. It would also help you know which documents you would need while filling out your retirement form.

 If anything still looks unclear, you can contact your agency’s personnel office for help.

The Right Age to Start Receiving Social Security for a Bigger Payment

Like all retirement benefit plans, Social Security rewards the one who’s patient. Though you can start receiving the payment earlier, it is best to wait until your full retirement age before you start receiving the benefit. People who wait could receive between 5 to 8 percent more money than those who do not. That’s more money to enjoy your retirement years without doing anything other than just waiting. However, it is not without risk. 

The full retirement age is not the same for everyone, but it is between 66 years to 67 years for most people. Here is a complete breakdown for more clarity: 

• For people born before 1938, the full retirement age is 65. 

• For people born in 1938, it is 65 years and two months. 

• For people born in 1939, it is 65 years and four months. 

• For people born in 1940, it is 65 years and six months. 

• For people born in 1941, it is 65 years and eight months. 

• For people born in 1942, it is 65 years and ten months.

• For people born between 1943 and 1954, the FRA is 66 years. 

• For people born in 1955, it is 66 years and two months. 

• For people born in 1956, it is 66 years and four months. 

• For people born in 1957, it is 66 years and six months. 

• For people born in 1958, it is 66 years and eight months. 

• For people born in 1959, it is 66 years and ten months. 

• For people born in 1960 and later, the FRA is 67 years. 

As you can see from the chart, the FRA for most people is between ages 66 and 67. Only very old people will fall in the categories before that. 

If you retire at 62 or even before that, you can start receiving your Social Security benefits immediately after you are 62. However, you won’t be eligible for the same monthly payments as you would have if you had waited until your FRA or age 70. While you can get more if you wait till 70, not waiting until your full retirement age will mean a reduction in your benefits. 

For the first thirty-six months that you start receiving the benefits before your FRA, there will be a 5/9 of 1% deductions in your benefits. The deductions amount to 6 2/3% every year for those first three years. After the initial thirty-six months, the deductions become 5/12 of 1%  for every month until you attain your full retirement age. The deductions amount to 5% deductions every year until your full retirement age. 

For further clarity, here is a quick breakdown of deductions if your full retirement age is 67 and you opt to start receiving your benefits before you 67: 

• If you take your benefits at 62, it would be reduced by 30%. 

• If you take it at 63, it would be reduced by 25%. 

• If you take it at 64, it would be reduced by 20%. 

• If you take it at 65, it would be reduced by 13.3%. 

• If you take it at 66, it would be 6.67%. 

The more you delay receiving your Social Security, the more money you will receive. 

It is best to wait until your full retirement to make the best of your Social Security benefits. Doing this can earn you delayed retirement credits of 8% every year from your full retirement age until 70. For instance, if your FRA is 70, you would have three years until you are 70. If you wait till then, Social Security will multiply the 8% by three, giving you a 24% increase on your benefits. 

However, like all investment strategies, there are risks attached to this strategy. Waiting comes with the risk of dying before you collect as much as you have contributed to the plan or before you even start receiving the payments altogether. There are different percentages used to determine the break-even point, but many experts agree it takes around 12 years. So, everyone who wants to wait until after their FRA or 70 should factor in the 12-year yardstick. 

Unfortunately, the risk of death is universal, and there is no way to estimate how long one would live. But the decision to take the risk or not is totally in your hands. If you think you will have much more time after your FRA to receive what you put into the welfare plan or more, then go for it. Wait until your FRA or longer to make the best of your Social Security. However, if your think you will not have that much time, you should start receiving your monthly benefits as soon as the law permits. 

Before you make your decision, you should note that you need another source of income that can supplement whatever you receive from your TSP and federal annuity while you delay receipt of your Social Security. 

10 Ways to Boost Your Retirement Savings – Regardless of Your Age

Whether you’ve just begun or are towards the end of your career, you may still potentially increase the size of your nest egg.

When it comes to retirement planning, the reality is that the earlier you begin saving, the better off you may be, owing to the magic of compound interest. Even if you started saving late or have yet to start, it’s essential to know that you’re not alone and that there’re actions you can take to increase your retirement savings. “It’s never too late to begin,” says Debra Greenberg, Director of Retirement and Personal Wealth Solutions at Bank of America.

Consider the following suggestions to help you increase your savings—regardless of your current life stage—and seek the retirement you desire.

1. Focus on starting now

Start saving as much as you can now, especially if you’re just starting to save for retirement, and give compound interest—the capacity of your assets to generate profits, which are reinvested to generate their own earnings—a chance to work to your advantage. The sooner you begin, the better off you’ll be.

Starting early can help with the end result, even if investing a modest amount.

By starting to save money early, a 25-year-old investing $75 each month acquires greater assets by the age of 65 than a 35-year-old investing $100 per month—despite investing less each period. Investing a modest amount over a longer time framework could have a more significant impact on investment results than investing a larger amount over a shorter time horizon.

*PICTURE*

2. Make 401(k) contributions

If your workplace provides a traditional 401(k) plan and you’re eligible, you may be able to contribute pre-tax funds, which can be a considerable benefit. Assume that you are in the 12% tax rate and intend to allocate $100 every pay period. Since that money is deducted from your paycheck before federal income taxes are calculated, your take-home pay will be reduced by just $88 (plus the amount of applicable state and local income tax and Social Security and Medicare tax). That means you could invest more of your income without it affecting your monthly budget much. If your employer provides a Roth 401(k) plan, which uses after-tax funds rather than pre-tax income, you should consider your income tax bracket in retirement to determine whether this is the best option for you. Even if you quit that company, you have options on what to do with the 401(k) account.

3. Meet your employer’s 401(k) match

If your firm offers to match your 401(k) plan contributions, make sure you contribute enough to take full advantage of the bonus. A company, for example, may offer to match 50% of employee contributions up to 5% of your wage. That is, if you make $50,000 per year and pay $2,500 to your retirement plan, your employer will contribute an additional $1,250. It’s basically free money. Don’t just leave it there.

4. Open an IRA

Think about opening an individual retirement account (IRA) to supplement your retirement savings. Based on your income, and if you and/or your spouse have an employer retirement plan, a Traditional IRA may be a good choice for you. Traditional IRA contributions can be tax-deductible, and investment gains may grow tax-deferred until withdrawals are made during retirement. However, if you satisfy the phased-out income restrictions based on your federal tax filing status, a Roth IRA might be a smart option for you. Since they’re funded with after-tax contributions, so after you turn 59½, qualified distributions, including profits, are federally tax-free (and might be state-tax-free) if certain holding period criteria are met. Find out which IRA is best for you and check the most recent 401(k) and IRA contribution limitations.

5. If you’re 50 or older, you can take advantage of catch-up contributions

One of the reasons it’s critical to start saving as soon as possible is because annual contributions to IRAs and 401(k) plans are restricted. The good news? When you reach the age of 50 in a calendar year, you are entitled to make catch-up contributions to IRAs and 401(k)s that exceed the regular limitations. So, if you haven’t been able to save as much as you would have wanted over the years, catch-up contributions can help increase your retirement funds.

6. Make your savings automatic

You’ve most likely heard the expression “pay yourself first.” Make your monthly retirement payments automated, and you’ll have the chance to potentially increase your nest egg without having to worry about it. You can use the Merrill Automated Funding Service to make recurring contributions to your Merrill IRA from another Merrill, Bank of America, or other financial institution accounts. The Merrill Automatic Investment Plan, which invests money automatically in specified funds, can also help you automate your investment selection.

7. Cut back on spending

Examine your financial situation. You might negotiate a lower auto insurance rate or save money by taking your lunch to work instead of buying it. Merrill offers a cash flow calculator that may help you figure out where your money is going—and where you might cut back, so you have more money for saving or investing.

Your contribution rate: a little extra can go a long way.

The sum you contribute to your retirement plan now can have a significant impact on how much money you have when you’re ready to retire. Simply boosting your contribution rate from 4% to 6% may contribute more than $101,000 to your nest egg over 30 years (assumption: a $50,000 salary).

*PICTURE*

8. Set a goal

Knowing how much you could need might help you not only comprehend why you’re saving, but it can also make it more rewarding. Set milestones along the way to obtain satisfaction as you work toward your retirement goal. Use the Personal Retirement Calculator to see when you might be able to retire and how much you’ll need to invest and save to get there.

9. Stash extra money

Got extra money? Don’t just spend it away. Increase your contribution percentage every time you get a raise. Allocate at least half of the new funds to your retirement account. Although it might be tempting to spend a tax refund or salary bonus on a new designer piece or a vacation, financial planners advise not to regard those extra dollars as found money. They suggest that you treat yourself to something modest and use the rest of your money to help you make larger strides toward your retirement goal.

10. As you are nearing retirement, consider deferring Social Security

“This is a huge one,” says Greenberg. “For every year you postpone receiving a Social Security benefit before reaching 70, you can raise the amount you receive in the future.” The earliest you may start receiving Social Security retirement benefits is at the age of 62. However, for each year you wait (until the age of 70), your monthly payment increases, and the extra income adds up rapidly. Even a one-year delay in retiring may make a huge impact. Furthermore, it may also boost your spouse’s future survivor benefits.

The first step is to recognize the need to save money for retirement. Decide how much you want to save for retirement and come up with creative ways to boost your contributions. A typical regret among retirees is starting too late and saving too little. Making an effort now will allow you to look forward to retirement.

Can Bad Debt Affect Your Social Security? Sponsored By:Rick Viader

Many circumstances can leave workers unable to pay their debts until they retire. For some people, it may be an illness. For others, it may be a sudden job loss. These circumstances can send retirees into dire financial situations. If this applies to you and you want to know how the debts will affect your Social Security benefits, please read the article till the end. 

Debt Garnishment and Social Security

The first question we must ask is if Social Security can be garnished for debt? The answer is yes, but not in all situations can this occur. Recipients that owe money to the government and those ordered by the courts to pay money to family members or fines to the courts can expect their Social Security to be garnished by the Social Security Administration (SSA). 

Here are some other situations where the SSA can garnish your benefits to fulfill a debt obligation: 

• You have defaulted in the repayment of your federal student loans: Social Security can reduce up to 15% of your benefits if you have defaulted on federal student loans. However, the 15% can only come from everything you receive above $750. This means that if your total monthly benefit is $750 or less, there would be no garnishment. Therefore you don't need to worry.

• You owe the Internal Revenue Service (IRS): It is allowed to come for your benefits if you owe the IRS. Likewise, for student loans, the agency can deduct up to 15% of your benefits. This time, nothing is protected. All of your benefits are fair game. 

• You flouted a court order for alimony or child support: Pending payments on court-ordered alimony and child support can also lead to the garnishment of your benefits. This time, the deduction can go as high as 50% if you are catering for another child or spouse or 60% if you are not catering for another child or spouse. In addition, if the payment deadline has been over twelve weeks, an extra 5% of your benefits can be garnished. 

• You owe court-ordered restitution in a criminal case: In this situation, you stand to lose up to 25% of your benefits. 

Note: garnishment of debt only comes when you miss payments and not just for owing the debts. If you owe debts and you pay at the appropriate time, there will be no garnishments. Also, garnishments do not affect whatever you have received from Social Security, but only your present and future benefits will be affected.

Debts that are Free from Garnishment

Debts owed to private establishments cannot be deducted from your Social Security. Credit card debts, mortgages, private student loans, auto loans, and other similar loans do not affect Social Security benefits. However, there are other serious effects of owing these debts. Not only will the debts affect your credit score and stop your future loans, but you could also lose your car or home, which will ultimately affect you after your retirement.

Suppose you are still employed and cannot fulfill your debt obligations to private establishments. Then such establishments or private debt collectors can sue you to court and get an order to garnish part of your salary. However, your federal retirement benefits are completely protected by law. 

Retired and Unable to Pay Debts? 

Some lucky people are able to pay off their debts completely before retirement. However, this is not the story for all. Some retirees take debts into their retirement years, and the loss of their paychecks makes it difficult to pay them off. This makes debt repayment challenging and remains for a long time.

Whether you are still working or retired, there are a few options open to those having difficulties paying off their debts, especially when the debts are federal debts. If your debts are taxes, the IRS has an online payment plan form. You can apply and get approved within a few minutes. If your debts are federal student loans, even Parent PLUS loans, you can opt for an income-driven payment plan. The plan uses your income to ascertain what you pay. You can also turn to the courts to adjust the amount of money you have to pay. 

The most crucial step to protecting your Social Security from garnishment is prompt action. As soon as you know you will miss a payment, contact the right authorities for help.

Tax Basics for Investors Sponsored By:Marvin Dutton

This article delves into tax choices such as dividend tax, interest tax, capital gains tax, and how harvesting tax losses can minimize capital gains tax.

Dividend tax

You are undoubtedly aware that firms pay dividends after paying tax on their original profits as business owners. This is why on "qualified dividends," owners in the United States or nations with which the United States has a double-taxation treaty receive a preferential maximum tax rate of 20%.

On the other hand, foreign corporations and companies that get non-qualified income pay conventional income tax rates, which are typically higher.

According to the Internal Revenue Service (IRS), shareholders can only profit from the preferred tax rate if they have held shares for at least 61 days during the 121 days beginning 60 days before the ex-dividend date. Those days do not count against the minimum holding time when the shareholder's risk of loss is decreased,

In the case of an investor who pays a marginal federal income tax rate of 35% and has a taxable account with a tax liability of $100, he receives a $500 dividend on stock. The tax rises to $175 if the necessary holding rate is not attained or the dividend is not qualified.

Investors that have assets in a deferred account such as taxable bonds, overseas stocks, and a conventional brokerage account where they keep domestic stock have decreased their tax burden.

Interest tax

Most interests are taxed by the federal government as ordinary income, depending on the investor's marginal rate.

Interest bonds issued by states and municipalities in the United States are tax-free. Investors may also be exempt from state income taxes on interest. Most states do not charge interest on municipal bonds issued by in-state entities.

Municipal bonds are preferred by investors subject to higher tax brackets over other bonds in their taxable accounts. Municipalities with lower nominal interest rates typically give investors a larger after-tax return on tax-exempt bonds than firms with similar credit ratings.

Consider an investor who pays a marginal federal income tax rate of 32% and receives $1,000 in semi-annual interest on a $40,000 principal amount of a 5% corporate bond but owes $320 in taxes. If an investor receives $800 in interest on a $40,000 principal amount of a 4% tax-exempt municipal bond, then no federal tax is due on the $800.

 

Tax on Capital Gains

Investors cannot avoid paying taxes by investing in mutual funds, exchange-traded funds, real estate investment trusts, or limited partnerships. Because of the tax character of dividends, investors are still subject to capital gains tax when they sell.

Research shows that the tax on realized capital gains is based on how long the investor has owned the security. Long-term gains (greater than a year) are taxed at a rate of 0%, 15%, or 20%, depending on your taxable income and filing status. Days do not count if the investor has minimized risk by using options or short sales, just as they do for eligible dividends. Short-term capital gains (those held for less than a year) are taxed at ordinary income tax rates, often higher.

In the case of a 24% tax bracket, an investor selling 100 shares of XYZ stock for $80 each after obtaining them for $50 each—if they owned the stock for more than a year and are in the 15% capital gains bracket, the tax due would be $450 (15 percent of ($80 – $50) x 100), compared to $720 if they only held it for a year.

Wash Sales and Tax Losses

Investors can lower their capital gains tax liability by harvesting tax losses. For instance, if one or more stocks in an investor's portfolio fall below their cost basis, the investor can sell and realize a tax loss.

Capital gains can be offset by capital losses incurred in the same tax year or carried over from previous years. Individuals can deduct up to $3,000 in net capital losses from their other taxable income each year. Any losses that exceed the tolerance can be used to offset gains in the future.

The federal income tax brackets for 2020 and 2021 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, dependent on the annual income.

However, there is a catch. The IRS considers a "wash sale" when a "substantially similar" security is sold and repurchased within 30 days, and the capital loss is forgiven for the current tax year. Instead, the loss improves the tax basis of the new position, deferring the tax payment until the stock is sold in a non-wash sale. The same stock, in-the-money call options, and short put options on the same stock are all deemed substantially comparable securities but not shares in another company in the same industry.

An investor in the 35% tax bracket, for example, sells 100 shares of XYZ stock purchased at $60 per share for $40 per share, a $2,000 loss, and sells 100 shares of ABC stock purchased at $30 per share for $100 per share, a $7,000 profit. Taxation is due on the $5,000 net gain. The rate is decided by how long ABC has been held—$750 for a long-term gain (if taxed at 15%) or $1,750 for a short-term gain (if taxed at 15%).

If the investor buys back 100 shares of XYZ within 30 days of the original transaction, the capital loss on the wash sale is rejected, and the investor must pay tax on the entire $7,000 gain.

Conclusion

Taxes are subject to change and can have a significant impact on an investor's net return. Dividends, capital gains, and wash sales are all covered in detail on the IRS' website. Given the intricacy of these rules, investors should seek the guidance of their own financial and tax advisors to determine the best strategy for their investment goals and ensure that they are properly reporting their taxes.

How To Quickly Prepare for Retirement Sponsored By:Leslie Kathryn Hollingsworth

Retirement from service takes a lot of work. Most retirement experts advocate that pre-retirees should start making serious plans for the big day at least a year before they retire. However, retirement jumps on some people. This process comes in different forms. For some, it comes in the form of a reduction-in-force (RIF). For others, it is something more benign. 

Agencies sometimes offer employees the chance to retire earlier than expected. These offers often come with a “buyout.” Personal reasons, such as sudden health crises for workers or their loved ones, could also inform the decision to retire early from their work. Whatever the reason for early retirement is, it may drastically reduce the preparation time for retirement. 

If you have only a few months or less before retirement, prudent use of your time will save you a lot of stress. Here are ways to make the best use of this short time: 

• Invest in pre-retirement seminars: Some agencies offer pre-retirement seminars at no cost to workers, but others do not. If your agency does not offer such a seminar, ensure you invest in one yourself. You can choose a reputable private counseling firm that offers such seminars. Some agencies even pay for these private seminars. 

• Visit your agency’s benefits counselor: Your Official Personnel Folder (OPF) will contain all the information about your service, which will influence the benefits you get after retirement from your work. Check for years of federal employment, including military service where applicable, pay-adjustment dates, beneficiaries, health benefits, and life insurance coverage. If you find any inaccuracies, take them up, and discuss them with your agency immediately. 

• Ensure that the intended retirement date is right for you: If you retire too early, you might lose out on some benefits. So it is essential to make sure that you meet all age and service requirements for retirement before you do so. Also, ensure that you will not lose out on health benefits or life insurance coverage if you choose to leave service early. 

• Check out your retirement annuity: You might not be able to get an exact amount, but you will receive a close estimate. This estimate will allow you to plan your post-retirement finances properly. FERS employees also need to check an estimate of their Special Retirement Supplement. 

Additional Information: There are some factors that can impact your annuity. One such factor is deposits owed for a prior period of service (military or civilian). The other is redeposits for civilian service for employees who left federal service and received a refund for their retirement deductions. Employees who wish to make deposits or redeposits can download Standard Form 2803 (for CSRS employees) or Standard Form 3108 (for FERS employees) at www.opm.gov. Both forms are available under Standard Forms on the Forms page on the website.  

Another factor that can impact employees’ annuities is military retired pay. The rule is that ex-service members have to waive the payment and make the required deposit to reflect the period in their civilian service annuity calculation. However, some employees can receive the military retired pay and their civilian annuity without each affecting the other, though this is very rare. This process also requires a deposit. In addition, employees eligible for or already receiving reserve retired pay shouldn't worry about reductions. They will automatically receive both payments. 

Debts owed to an agency can also impact your annuity. If this applies to your situation, ensure you agree on a repayment schedule. If you do not do so, your annuity will be used to offset the debt, and this may affect you in the long run.

Lastly, if you have a court order to pay a part of your annuity to a former spouse, you should find out how the payment will affect your retirement benefits. 

As soon as you have cleared everything mentioned above, the next step is to fill out the retirement application form. These forms, SF 2801 (for CSRS employees) and SF 3107 (for FERS employees), are also available on www.opm.gov. After filling out the form, make a copy that you would keep for yourself while the original goes to your benefits counselor. Now, you are ready to retire. 

There are some steps your agency has to take too. These steps will be detailed in a future article. 

Best Ten Ways to Prepare for Retirement Sponsored By:Aaron Steele

Financial stability in retirement does not simply happen. It requires planning, dedication, and, of course, money.

Facts 

  • Only 40% of Americans have estimated how much money theyll need to save for retirement.
  • In 2018, almost 30% of private-sector workers who had access to a defined contribution plan (like a 401(k) plan) didn’t participate.
  • The average American spends around twenty years in retirement.

We can all make a habit out of putting money aside for retirement.

Remember: Saving is Important!

  1.  Start saving, continue saving, and stick to your goals

Continue to save if youre already doing so, whether for retirement or another purpose. Youre aware that saving is a rewarding habit. If you aren't already saving, now is the time to start. Start small if necessary, and gradually raise the amount you save each month. The earlier you start saving, the longer your funds can grow (see the chart below). Make retirement saving a top priority. Create a strategy, adhere to it, and set goals. It can never be too soon or too late to start saving.

  1. Determine your retirement needs

Retirement is not cheap. Experts estimate that when you quit working, youll need 70 to 90 percent of your preretirement income to keep the same living standard. Take control of your financial situation. Preparation is the key to a secure retirement. Begin by obtaining Savings Fitness: A Guide to Your Money and Your Financial Future, as well as Taking the Mystery Out of Retirement Planning for those nearing retirement. (If you’re interested in a copy, see the back panel.)

  1. Contribute to the retirement savings plan offered by your employer

Sign up for and contribute as much as you can to any retirement savings plan offered by your employer (like a 401(k) plan). Not only you'll lower your taxes, but your employer may contribute more. Also, automated deductions will make it simple. Compound interest and tax deferrals make a significant impact on the amount you will amass over time. Learn more about your strategy. For example, how much would you have to contribute to receive the total employer contribution, and how long would you have to participate in the plan to receive that money.

  1. Inform yourself about your employer’s pension plan

If your employer offers a traditional pension plan, check whether you’re covered by it and understand how it operates. Request an individual benefit statement to estimate your benefit's value. Before changing jobs, find out what will happen to your pension benefit. Learn about any perks you may have from previous employment. Find out if youre eligible for benefits under your spouse's plan. If you want to learn more, check What You Should Know About Your Retirement Plan. (For further details, see the back panel.)

  1. Consider fundamental investment principles

The way you’re saving can be as important as the amount you’re saving. Inflation and the types of investments you make will significantly impact the amount of money you'll have saved when you retire. Understand how your funds or pension plan is invested. Learn about the investment options of your plan and ask questions. Put your funds in a variety of investments. Youre more likely to decrease risk and increase return by diversifying in this way. Your investment mix might change over time depending on a variety of factors like your age, aspirations, and financial situation. Financial stability and knowledge are strongly intertwined.

  1. Don’t tap into your retirement savings

If you take from your retirement funds now, you will lose principal and interest, and you may forfeit tax advantages or face withdrawal penalties. If you change employment, keep your savings invested in the current retirement plan. You can also roll them over to an IRA or your new employer's plan.

  1. Ask your employer to start a retirement plan

If your employer doesn’t have a retirement plan, recommend that it establish one. There are several retirement savings plans available. Your company may be able to devise a simplified plan that will benefit both you and your employer. Read Choosing a Retirement Solution for Your Small Business for more information. (For further details, see the back panel.)

  1. Contribute to an Individual Retirement Account (IRA)

The maximum contribution per year to an IRA is up to $6,000; and, if youre 50 or older, you can contribute even more. You can even begin with much less. IRAs also offer tax benefits. When you open an IRA, you can choose between a traditional IRA and a Roth IRA. Your contributions and withdrawals will be taxed differently depending on the plan you choose. Also, inflation and the type of IRA you select will determine the after-tax value of your withdrawal. IRAs are an easy and straightforward way to save. You can have it set up to automatically withdraw money from your checking or savings account and placed it into your IRA.

  1. Learn about your Social Security benefits

After retirement, Social Security retirement benefits replace around 40% of a median wage earner's income. You might be able to estimate your benefit by visiting the Social Security Administration's website and using the retirement estimator. Visit their website or contact 1-800-772-1213 for additional information.

  1. Ask Questions

While these suggestions are intended to guide you in the right direction, youll require more information. Check out our publications, which are listed on the back panel. Speak with your employer, bank, union, or financial consultant. Ask questions and make sure to understand the answers. Get practical advice and take action right away.

 

Approaching Retirement? Here are Seven Steps That Will Help You Prepare Sponsored By:Brad Furges

Are you planning to retire within the next ten years?

Taking these steps now might help you strengthen your portfolio as you near target your retirement date.

After decades of working and saving, you're finally getting close to retirement. But this is not the time to relax. If you want to retire within the next ten years or so, consider taking these steps now to ensure that you have all you need to live a pleasant retirement lifestyle. Assessing your income sources well in advance of your planned retirement date allows you to make any necessary modifications quickly.

Start by imagining the retirement kind you want. Will you be working part-time, volunteering, or traveling? Next, create a realistic image of the financial resources you may require, and then determine whether your current ones will be enough to fund your plan. If you discover a gap, consider acquiring the additional assets you need or adapting your vision to meet your resources. By reviewing your existing costs, you may be able to find discretionary things that could be removed or decreased. If you look at everything you bought over the course of one month, you might be shocked at how much you can cut down to have more money to invest for your retirement.

Here're some things to think about when you're around ten years away from retirement.

1. Ensure that youre diversifying your investments and investing for growth

While it may be tempting to avoid stocks in order to decrease risk, the growth that stocks may bring is still significant at this period of your life. Consider keeping a healthy mix of stocks, bonds, mutual funds, and other assets that correspond to your risk tolerance, investment time framework, and liquidity needs.

Examining your income sources well before retirement allows you to make any necessary adjustments to your plans.

A well-balanced portfolio can help you weather market downturns and perhaps create the type of income you'll need to cover costs in a retirement that might last more than three decades. To ensure that your portfolio is in accordance with your investment goals for your retirement plan, use the Merrill Edge Asset AllocatorTM. Please keep in mind that diversification doesn’t guarantee a profit or protect against loss in weak markets.

2. Maximize the use of retirement accounts, particularly catch-up contributions

Increase your retirement contributions whenever possible, up to the maximum allowed in your 401(k), IRAs, or other retirement programs. Aim to contribute enough to your 401(k) to be eligible for any maximum matching contribution your employer offers. If you're 50 or older at any point throughout the calendar year, regulations for catch-up contribution allow you to set aside more than the standard contribution.

Consider account consolidation as you approach retirement, including merging IRAs of the same kind with one institution. That could simplify your investment management and provide you a better picture of your total retirement assets. Also, check any 401(k) accounts you may still have with past employers and learn more about 401(k) distribution options and other job-related consolidations. Evaluate the benefits and drawbacks before deciding. It may also be beneficial to consult with a tax specialist. View the latest recent contribution limitations for 401(k)s and IRAs.

3. Reduce your debt

Think about increasing your mortgage payments so that you can pay off the loan before you retire. Paying cash for significant purchases might help you avoid incurring additional credit card debt. You can reduce the amount of retirement income spent on interest payments by limiting new debt and decreasing existing debt. "Paying off a credit card that has a 15% interest rate is like getting 15% on a risk-free investment," says Anil Suri, managing director in Bank of America's Chief Investment Office.

4. Determine your likely retirement income

Calculate your predictable income from sources like Social Security and employee pensions. The remainder of your retirement funds will most likely have to come from your earnings, savings and investment accounts, and any salary earned in retirement. The old rule of thumb for ensuring your assets last your lifetime was that you could afford to spend 4% of your portfolio yearly in retirement. So, if you have $1 million in retirement funds, you may expect to afford to spend around $40,000 of that amount each year when you retire. When combined with your other assets, Social Security, and pensions, is it enough to fund the retirement you desire? "Four percent is a reasonable starting point," Suri adds, "but it may also be too simple." "Your individual withdrawal rate should be tailored and based on a number of criteria, like age, gender, and risk tolerance."

The benefit of considering these income sources far in advance of retirement is that it’ll give you more time to alter your plans if required. Some options for increasing your retirement savings are:

  • Putting off retirement and working longer
  • Lowering your discretionary spending
  • Delaying Social Security payments (each year you defer, your monthly benefits grow by 8 percent, until age 70)

The longer you wait to tap into your retirement nest egg, the longer your savings will likely last.

5. Calculate your retirement expenses

Some costs, like health care, may rise later in life, while others, like transportation and clothes, may fall. What you spend will be determined by how you live in retirement. For example, if you want to travel a lot, your estimated expenses may be higher than they are now while you are still working.

6. Think about future medical expenses

If you retire at 65 or older, Medicare will cover most of your routine healthcare expenses; but, you might want to consider supplementary coverage to help pay for your nonroutine healthcare costs, which are expected to grow as you age. Furthermore, Medicare doesn’t cover the majority of long-term care expenses. Learn more about how to plan for healthcare expenses in retirement.

Consider getting long-term care insurance to help preserve your retirement nest egg. This insurance can help with some expenses, like home health aides. If you get coverage now, your rates will be lower than if you wait several years, and youll be less likely to be turned down by insurers.

If you have a health savings account, think about contributing the maximum amount. Although the money is tax-advantaged, payouts may be subject to income tax and penalties if not used for qualifying medical expenditures. Money that you don't spend can grow tax-free compounding until you need it in retirement.

7. Plan where you’ll live

The location of your retirement might have a significant impact on your costs. For instance, if you sell your house in a high-priced area and relocate to a condo in a low-tax state, your costs may fall sharply, potentially freeing up cash for other purposes. You might also consider staying in your town or city but moving to a smaller home that’s easier to manage financially. On the other hand, you may want to reside in an area with high living expenses and taxes in order to be close to grandkids or move to a cosmopolitan metropolis – a decision that may need cost-cutting measures.

It's never too late to start

When your projected retirement date is a decade away, it may seem very far. However, its critical to plan properly and establish reasonable objectives so that time works in your favor and you have the resources to enjoy the retirement you have always desired.

Even if you began saving and investing for retirement late or haven’t begun yet, it’s essential to know that you’re not alone and that therere actions you can take to boost your retirement savings. "It's never too late to start," adds Greenberg.

Five Steps to a Comfortable, Secure, and Enjoyable Retirement, by Rick Viader

Retirement planning is a multi-step process that develops over time. For a comfortable, secure, and enjoyable retirement, you must first establish the financial cushion that will cover all that. The enjoyable part is why its essential to pay attention to the serious, and maybe dull, part: figuring out how to get there.

The first step in retirement planning is thinking about your retirement objectives and how long you have to accomplish them. Then you should look into the many sorts of retirement accounts that could help you raise funds to support your future. You must invest the money you save for it to grow. The last surprise is taxes: If youve got tax deductions for the money youve contributed to retirement accounts over the years, youll face a significant tax charge when you start taking those funds. There are ways to reduce the retirement tax impact while saving for the futureand to continue the process after that day arrives and you do retire.

Well go through all of these issues here. But first, understand the five steps that everyone, regardless of age, should follow to create a good retirement plan.

KEY TAKEAWAYS

  • Retirement planning should include establishing time horizons, estimating costs, calculating necessary after-tax returns, assessing risk tolerance, and preparing an estate plan.
  • Begin preparing for retirement as soon as possible to capitalize on the power of compounding.
  • Younger investors can afford to take more significant risks with their assets, while those nearing retirement should be more careful.
  • As retirement plans develop over time, portfolios should be rebalanced, and estate plans should be revised as appropriate.

1. Understand Your Time Frame

Your present age and projected retirement age lay the basis for a successful retirement strategy. The more the time elapsed between now and retirement, the greater the degree of risk your portfolio can tolerate. If youre young and have more than thirty years until retirement, you should put the majority of your money into riskier investments like stocks. Despite volatility, stocks have historically outperformed alternative assets, like bonds, over extended periods. The keyword here is long, which means at least ten years.

You also need returns that outperform inflation to keep your purchasing power in retirement. Think of inflation as an acorn. It starts tiny, but with enough time, it may grow into a massive oak tree. Weve all heard about, and desire, compound growth on our money. On the other hand, inflation is a form of compound anti-growth, as it erodes your moneys value. For 24 years, a relatively low inflation rate of 3% will destroy the value of your savings by 50%. It may not appear to be much each year, but over time, it has a significant impact, according to a financial advisor.

You may not think that saving a few dollars here and there in your twenties means a lot, but the power of compounding will make it much more valuable by the time you need it.

Generally, the older you are, the more your portfolio should be geared toward income and capital preservation. That means a greater allocation to assets such as bonds, which may not produce the same returns as stocks but have less volatility and generate income that can be used to live on. Inflation will also be less of a concern for you. A 64-year-old who plans to retire next year doesnt have the same concerns about rising living costs as a much younger professional who has recently entered the field.

You should divide your retirement strategy into several components. Assume a parent wishes to retire in two years, pay for a childs schooling at 18, and relocate to California. From the standpoint of developing a retirement plan, the investing approach would be divided into three phases: two years until retirement (contributions are still made to the plan), saving and paying for college, and living in California (regular withdrawals to cover living costs). To establish the best allocation approach, a multi-stage retirement plan must consider multiple time horizons and the corresponding liquidity needs. You should also rebalance your portfolio when your time horizon changes.

2. Determine Your Retirement Spending Needs

Having realistic expectations regarding post-retirement spending patterns will help you determine the appropriate size of a retirement portfolio. Most individuals assume that after retirement, their annual spending will be just 70% to 80% of what they spent before. Such an assumption is usually unrealistic, particularly if the mortgage has not been paid off or unexpected medical costs. Retirees may also spend their initial years of retirement spending on travel or other bucket-list items.

I think that the ratio should be closer to 100 percent for retirees to have enough funds for retirement, says David G. Niggel, the CEO of Key Wealth Partners, LLC. Each year, the cost of living rises, particularly health-care costs. People are living longer lives and wish to thrive in their golden years. Retirees require higher income for a longer time; therefore, they must save and invest accordingly.

Since retirees dont work for eight or more hours per day anymore, they have more time to travel, go sightseeing, shop, and indulge in other costly hobbies. Accurate retirement expenditure targets help in the planning process since more spending in the future requires extra savings today.

Your withdrawal rate is one of the most important factors in the longevity of your retirement portfolio. Its critical to estimate your retirement expenses accurately since itll impact how much you withdraw each year and how you invest your account. If you understate your costs, youll easily outlive your portfolio; or if you overstate your expenses, you may not be able to enjoy the sort of retirement lifestyle you desire, says Kevin Michels, a financial planner and president of Medicus Wealth Planning. When planning for retirement, you should also consider your longevity to dont outlive your funds. The average life expectancy is increasing.

Individuals and couples longevity rates can be estimated using actuarial life tables (referred to as longevity risk).

Furthermore, if you plan to buy a home or support your childrens education after retirement, you may need more money than you think. These expenses must be incorporated into the overall retirement plan. Remember to revise your plan at least once a year to ensure youre on track with your savings. You can improve retirement-planning accuracy by specifying and estimating early retirement activities, accounting for unexpected costs in middle retirement, and considering what-if late-retirement medical expenses, says Alex Whitehouse, president and CEO of Whitehouse Wealth Management.

3. Determine the After-Tax Rate of Return on Investments

After determining the projected time horizons and spending requirements, the real after-tax rate of return must be computed to evaluate the feasibility of the portfolio providing the required income. A required rate of return of more than 10% (before taxes) is usually an unreasonable goal, even for long-term investing. As you get older, your return threshold decreases since low-risk retirement portfolios are mostly made up of low-yielding fixed-income assets.

If, for instance, a person has a $400,000 retirement portfolio and income needs of $50,000, assuming no taxes and portfolio balance preservation, they are relying on an excessive 12.5 percent return to get by. The significant benefit of retirement planning at a young age is that someone may develop the portfolio to provide a reasonable rate of return. Using a $1 million gross retirement investment account, the expected return is a much more realistic 5%.

Investment returns are generally taxed depending on the sort of retirement account you have. Thus, the actual rate of return must be calculated after taxes. However, knowing your tax position when you start withdrawing assets is essential for the retirement-planning process.

4. Compare Risk Tolerance to Investment Goals

Whether youre in charge of the investment decisions or a professional money manager, a reasonable portfolio allocation that balances the issues of risk aversion and returns targets is perhaps the essential stage in retirement planning. How much risk are you prepared to accept to achieve your goals? Should part of the income be put away in risk-free Treasury bonds to cover necessary expenses?

You must ensure that youre comfortable with the risks in your portfolio and understand what a necessity is and what is a luxury. That should be discussed carefully, not just with your financial counselor but also with your family members. Dont be a micro-manager who reacts to everyday market noise, advises Craig L. Israelsen, a designer at 7Twelve Portfolio. Helicopter investors tend to over-manage their investments. When several mutual funds in your portfolio have a terrible year, increase your investment in them. Its similar to parenting: the child that requires your affection the most usually deserves it the least. Portfolios are comparable. Dont give up on the mutual fund youre upset with this year; it may be the greatest performer in the next one.

Markets go through long up and down cycles, and if youre investing money you wont need to tap into for 40 years, you can afford to see your portfolio value increase and decrease with those cycles, says John R. Frye, CIO, and co-founder of Crane Asset Management, LLC. When the market falls, buy rather than sell. Refuse to succumb to the panic. Youd want to buy clothes if they were on sale for 20% off, right? Why not stocks if they were on 20% off sale?

5. Stay on Top of Estate Planning

Another critical stage in a well-rounded retirement plan is estate planning, and each part needs the knowledge of experts, like attorneys and accountants, in that specialized sector. Life insurance is also an essential component of estate planning and retirement planning. Having a comprehensive estate plan in place, as well as life insurance coverage, guarantees that your assets are dispersed in the way of your choosing and that your loved ones wont face financial difficulty after your death. A well-thought-out strategy also assists in avoiding a costly and often time-consuming probate process.

Another important aspect of estate planning is tax planning. If a person intends to leave assets to family members or a charity, the tax consequences of either gifting or transferring them through the estate process must be weighed.

A typical retirement-plan investing strategy provides returns that cover annual inflation-adjusted living costs while protecting the portfolios value. The portfolio is subsequently passed to the deceaseds beneficiaries. You should contact a tax advisor to establish the best approach for the individual.

Estate planning will change over the course of an investors lifetime. Powers of attorney and wills must be established early on. When you start a family, a trust may become an essential part of your financial plan. How you want your money distributed later in life will be critical in terms of cost and taxes, says Mark T. Hebner, founder and president of Index Fund Advisors, Inc. Collaborating with a fee-only estate planning lawyer can help you prepare and maintain this element of your overall financial plan.

The Bottom Line

Individuals are bearing a more significant burden of retirement preparation than ever before. Few employees, particularly in the private sector, can rely on an employer-provided defined-benefit pension. The transition to defined contribution plans, like 401(k)s, also implies that investment management becomes your responsibility rather than your employers.

One of the most challenging parts of developing a comprehensive retirement plan is balancing reasonable return expectations with the desired life standard. The ideal option is to create a flexible portfolio that can be adjusted regularly to reflect changing market circumstances and retirement goals.

Ways to Catch Up on Retirement

A recent study determined that on average, Baby Boomers have an average of $152,000 in retirement accounts. Yet even though that is a nice-sized sum, the reality is that it could be far from adequate when it comes to generating a livable income in retirement particularly given that life expectancy is so much longer these days.

Further, with an average 5-year CD rate standing at less than 0.4%, investing $150,000 would only generate an annual return of $600 which is far less than most people need to live on, even combined with income from other sources like Social Security. So, what can you do to catch up if you’ve fallen behind on your retirement savings?

The good news is that you have options. Strategies for Catching Up on Retirement Savings With low savings rates in the U.S., it is no wonder that the EBRI (Employee Benefit Research Institute) 2020 Retirement Confidence Survey reported that only 27% of individuals feel very confident in having enough for a comfortable retirement.

There are several reasons for this. One has to do with the near disappearance of the traditional employer-sponsored defined benefit pension plan. These plans would typically continue to generate income for the remainder of a worker/retirees lifetime and in some cases, for the lifetime of the individuals surviving spouse, too.

Today, however, most companies offer defined contribution plans such as the 401(k) where the responsibility for generating enough income in retirement falls to the employee, not the employer.

Social Security provides another potential source of retirement income for those who qualify (either though their work record and/or that of their spouse). According to the Social Security Administration, an average wage-earner can typically replace about 40% of his or her pre-retirement earnings with Social Security retirement income benefits.

However, if you wait to file until after you have reached your full retirement age (FRA), you could increase the amount of income from Social Security by up to 32%. Thats because each year that you wait to file (between your FRA and age 70), you can earn an 8% delayed income credit. You can also initiate some strategies for reducing or eliminating taxes on both Social Security and other retirement income sources.

This, in turn, will provide you with more net spendable income in retirement. For example, in some cases, Social Security retirement benefits may be taxable. This is true if you are receiving Social Security before your full retirement age and you are also receiving income from various other sources.

For instance, you may be taxed on Social Security if: You file a federal tax return as an individual and your combined income is: Between $25,000 and $34,000 (up to 50% of your benefits may be taxable) More than $34,000 (up to 85% of your benefits may be taxable) You file a joint tax return, and you and your spouse have a combined income that is: Between $32,000 and $44,000 (up to 50% of your benefits may be taxable) More than $44,000 (up to 85% of your benefits may be taxable) You are married, and you file a separate tax return. Your combined income equals your adjusted gross income plus any non-taxable interest earned, plus one-half of your Social Security benefits. By making sure that you receive Social Security tax-free, spendable income can increase.

You could also take advantage of the Roth IRA. With these accounts, contributions go in after-tax. But the earnings as well as the withdrawals are tax-free, regardless of what the then-current income tax rates are.

While those who qualify for a Roth IRA can contribute up to $6,000 if age 49 or younger, and up to $7,000 if age 50 or older, there are ways that you could boost the amount you have in a Roth account by rolling over money from a traditional IRA and/or retirement plan.

Which Strategies for Increasing Retirement Savings and Income are Right for You?

Everyones financial picture is different. So, it is recommended that you discuss your particular needs with a retirement income planning specialist.

The Top Five Investments for Military Families. By: Rick Viader

Since serving in the military doesnt allow for much spare time, it might be challenging to research and select the best investments. The good news is that there are several savings and investing options available to help you prepare for a comfortable future without adding a lot of time or worry to your already hectic schedule. Here are five of the most significant investments for service members to consider.

KEY TAKEAWAYS

  • Service members have access to various savings and investing options, including some that are unavailable to civilians.
  • The federal Thrift Savings Plan (TSP) is comparable with a 401(k) plan, and it offers automatic paycheck deductions and matching contributions.
  • Both Traditional and Roth IRAs offer a diverse variety of investment options and can be an excellent complement to a TSP.
  • The Savings Deposit Program, 529 college savings programs, and real estate are examples of other investments.

Federal Thrift Savings Plan (TSP)

The TSP is a qualified retirement plan that offers federal employees and military members a low-cost, tax-advantaged investment. You may create your investment portfolio, ranging from a short-term US T-bond to index funds to a life-cycle fund, which automatically rebalances your assets as you approach retirement.

For your TSP contributions, you have two options for tax treatment:

Traditional TSPWith this pre-tax plan, you receive a tax break the year you contribute and pay taxes when you take out funds in retirement.

Roth TSPThis after-tax plan doesnt provide immediate tax benefits, but eligible withdrawals are tax-free in retirement.

If youre not sure which choice is best for you, use TSP.govs contribution comparison tool.

The maximum contribution to a TSP in 2021 is $19,500, or $26,000 for those 50 or older. If youre a member of the Federal Employee Retirement System (FERS) or the Blended Retirement System (BRS), you can earn up to 5% extra from the militarys matching contributions. Youll receive a dollar-for-dollar match on the first three percent of your salary that you put to the TSP, followed by a 50 cents-on-the-dollar match on the following two percent. The more you save, the higher the match, so it pays to contribute as much as possible.

You may set up automatic installments that come directly out of your paycheck, similar to a 401(k), making it simple to set it and forget it. Itll be wise to set up automatic deposits before receiving your first check; that way, you wont lose out on any money.

Individual Retirement Accounts (IRAs)

Even if you max out your TSP contributions, you may still save money in an individual retirement account (IRA). An IRA can be an excellent way to complement your TSP and ensure a comfortable retirement.

IRAs, like the TSP, are available in traditional (pre-tax) or Roth (after-tax) forms. Due to the wide range of investment options, IRAs provide more flexibility than TSPs. The contributions limitations, on the other hand, are significantly lower. The maximum contribution to IRAs in 2021 is $6,000 ($7,000 for those 50 or older).

529 College Savings Plans

A 529 plan might be a tax-advantaged method to save if you have children and anticipate future education costs. Tax legislation approved in 2017 and 2019 allows you to use a 529 plan to pay for K-12 expenses rather than simply college and other post-secondary education. While contributions arent tax-deductible at a federal level, more than 30 states provide a full or partial tax deduction or credit. A 529 plan grows tax-free and allows for tax-free withdrawals if used for eligible education costs.

You can contribute any amount you want to a 529 plan, but anything more than $15,000 per individual (the yearly gift tax exclusion) would result in federal gift taxes. Most plans allow you to set up automatic investments, making it simple to keep on track.

Savings Deposit Program

The Department of Defense Savings Deposit Program (SDP) guarantees a 10% annual return on deposits of up to $10,000 to deployed military personnel serving in specified conflict zones. To qualify, you must be receiving Hostile Fire Pay and to have been deployed for at least 30 days in a row or at least one day per month for three months in a row. If you redeploy your house, you will continue to receive 10% interest for 90 days unless you request a withdrawal sooner.

While an additional $1,000 might be helpful, remember that SDP income is reported on a 1099-INT form the year you withdraw money, which means you may owe taxes on the earnings.

Real Estate

Real estate may be a great strategy to diversify and increase your earnings. The trade-off is that its riskier (and requires more work) than lower-risk investments. Nonetheless, real estate investments provide several benefits, like tax benefits and continuous passive income. Buying a house and converting it into a rental property is a typical strategy to invest in real estate (some service members purchase a property close to their bases to manage the rentals easier).

Another common alternative is real estate investment trusts (REITs). A real estate investment trust (REIT) is a corporation that owns, operates, or funds income-generating properties. Investors buy shares of publicly listed REITs through a taxable brokerage account or an IRA. REITs are required by law to distribute 90% of their earnings in the form of dividends each year, resulting in substantial dividend yields for investors.

Investing Help From the SEC

The Securities and Exchange Commission (SEC) urges service members to contact them if they have questions concerning investing or want to know how to verify an individuals or a firms license or registration. To do it, call the SECs toll-free investor helpline at 800-732-0330 (dial 1-202-551-6551 if youre calling from outside the U.S.) or send an email to [email protected] The SEC is a member of the Department of Defenses Financial Readiness Network and regularly holds investor education briefings on military facilities. If youre interested, email [email protected]

The Bottom Line

Remember that there are several other options to save and invest, including U.S. Savings Bonds (Series I Savings Bonds are paying 3.54 percent throughout October 2021) and Servicemembers Group Life Insurance.

Service members can also take advantage of programs that, while not investments, can help you save money. The VA Home Loan program, for example, provides mortgages with no down payment, low interest rates, cheap closing costs, and no requirement for private mortgage insurance (PMI).

Additionally, the Post-9/11 GI Bill covers the entire cost of in-state tuition and fees at public institutions for up to 36 months and $26,042.81 a year at private colleges and foreign schools. If you come from a rural area to attend school, you can also obtain money for accommodation (if you attend more than half-time), books, supplies, and moving expenses. Long-term service members have the option of transferring their benefits to a spouse or child.

Where Can Service Members Invest Their Money?

Military families can make the same investments as civilians and a few that are only available to federal government employees and military members.

Can Military Members Invest in Stocks?

Service members can create taxable brokerage accounts to purchase and sell stocks, ETFs, and other securities.

How Long Do I Have to Serve to Be Eligible for a Military Pension?

To be eligible for the lifelong monthly annuity, you must have served for at least 20 years. Your benefit is determined by the number of years you served and the amount you earned. The precise method for calculating benefits is determined by when you first joined the service.

FEGLI Insurance for Federal Employees. Sponsored By: Todd Carmack

Life insurance coverage can help you to better ensure that your loved ones won’t have to struggle financially in case of the unexpected – especially during an already difficult time in their lives.

Unfortunately, unanticipated accidents and illnesses can – and do – occur. So, if you are faced with this type of scenario, it is good to already have a plan in place that can keep those you care about secure financially. This, in turn, can allow them to maintain their current lifestyle rather than uproot and/or cut back on the items and services they need. 

Suppose you are an employee of the Federal government. In that case, you have the Federal Employees Group Life Insurance, or FEGLI, program. This financial “safety net” could help your survivors to wipe away debt (such as a home mortgage or credit card balance(s), pay for your final expenses, and/or replace lost income. 

It is essential to know how this coverage works, though, as well as whether or not you will have enough financial protection for your loved ones. Otherwise, you, and they, could be relying on a false sense of financial security.

 

Who is Eligible for FEGLI Life Insurance Coverage?

Most full- and part-time federal government employees are eligible for FEGLI life insurance coverage. However, participating in the FEGLI program is completely voluntary, and if you choose to cancel your FEGLI coverage, you may do so at any time.

However, unless your position is specifically excluded from FEGLI coverage by law or regulation, though, you will be automatically enrolled in the Basic life insurance. This Basic insurance coverage will become effective on the first day that you are in a pay and duty status in an eligible position. 

As a new Federal employee, you will automatically be covered for Basic life insurance through FEGLI – unless you elect to waive your enrollment. Note, however, that if you do waive FEGLI coverage – and you later wish to re-enroll in the program, you will have to wait for one year until after you have waived the coverage. In addition, it will also be necessary for you to undergo a physical exam (at your own expense) in order to qualify. 

 

Coverage Options with the Federal Employees Group Life Insurance Program

The Federal Employees Group Life Insurance, or FEGLI, coverage is designed as a group term life insurance plan. That means that it provides death benefit only protection, without any cash value or investment built up inside the policy. FEGLI coverage is currently offered through this plan by Metropolitan Life Insurance Company (Met Life). 

There are two types of coverage that are offered through the FEGLI program. These include Basic and Optional. Unless you specifically waive your FEGLI basic coverage benefit, most Federal employees are automatically enrolled in the Basic coverage. 

 

FEGLI Basic Life Insurance Coverage

This Basic FEGLI coverage provides either a flat $10,000 of death benefit, or an amount that is equal to the rate of the employee’s annual basic pay, rounded to the next $1,000, plus an additional $2,000 – whichever dollar amount is greater.

FEGLI enrollees who are age 35 and younger are also covered by an additional Basic life insurance provision, at no added premium cost. This is referred to as the Extra Benefit, which doubles the amount of Basic life insurance benefit that is payable. 

Starting on the enrollee’s 36th birthday, however, the amount of the Extra Benefit will decrease by 10% each year until the employee reaches age 45. At that time, the Extra Benefit coverage will disappear altogether. 

In addition to Basic FEGLI coverage, Federal employees may also choose to have additional Optional life insurance coverage. You must, however, be enrolled in the Basic life insurance in order to elect any Optional FEGLI coverage. 

 

Optional FEGLI Coverage

There are three different choices for the Optional FEGLI coverage. These include:

  • Option A – Option A is the Standard Optional Insurance. This equals a flat $10,000 in additional, optional life insurance coverage.

 

  • Option B – Option B is Additional Optional Insurance. This coverage comes in 1, 2, 3, 4, or 5 multiples of your annual pay, after the pay has been rounded to the next higher thousand. It is important to note that this coverage does not include the extra $2,000 that is added for Basic insurance. 

 

  • Option C – Option C is Family Optional Insurance. This FEGLI option provides coverage for your spouse and/or your eligible dependent children. If you elect Option C, all of your eligible family members will automatically be covered. You can elect 1, 2, 3, 4 or 5 multiples of coverage. Each multiple is equal to $5,000 for a spouse, and $2,500 for each eligible child. 

 

The death benefit proceeds from any of these FEGLI life insurance plans are received income-tax-free by the plan’s beneficiary (or beneficiaries). Therefore, 100% of the proceeds may be used for the survivors’ current and/or future needs. 

 

Additional Coverage Options Through FEGLI

In addition to the Basic and Optional FEGLI coverage, there are some other life insurance protection alternatives, too, through the Federal Employees Group Life Insurance program. These include:

  • Accidental Death and Dismemberment (AD&D) coverage
  • Living Benefits

Accidental Death and Dismemberment coverage is an automatic component of the Basic FEGLI insurance plan (as well as FEGLI Option A). The AD&D benefits are payable if an insured individual sustains an injury, by accidental means, and within 90 days of that injury, the insured individual either dies or loses his or her eyesight and / or a limb. 

The accidental dismemberment benefit is based on the amount for which you are insured on the date that the accident actually occurs, as well as the extent of the loss of the dismemberment. 

Living benefits refer to options for using life insurance proceeds while the insured is still alive. For instance, you could be eligible for these benefits if you have been diagnosed with a terminal illness and you have a life expectancy of nine months or less. 

Federal employees are allowed to elect a full benefit, which refers to all of your Basic insurance coverage, or you could alternatively elect to receive just a partial living benefit. (These benefits are typically paid out in multiples of $1,000). It is also important to note that only the Basic FEGLI life insurance is available for payment as a living benefit.

 

How Much Does FEGLI Life Insurance Coverage Cost?

The cost of the Federal Employees Group Life Insurance coverage is split between you and your employer, with you paying two-thirds of the premium, and the government paying for the remaining one-third. 

The FEGLI Basic insurance premium is a level rate that is based on each $1,000 of coverage. Level premiums refer to the rate that is charged for the duration of the coverage period. Also, unlike many individual term life insurance plans, the cost of FEGLI coverage will not rise as the employee gets older. (Although overall rate increases may occur for the FEGLI group plan as a whole). 

 

Selecting Your FEGLI Coverage Beneficiary

Choosing your beneficiary (or beneficiaries) can be an important step, as this person or entity will receive the FEGLI insurance proceeds if you should pass away while you are covered by this plan. 

The beneficiary that you select does not have to be an individual. Rather, it may be an entity, such as a trust or a charity, and / or a business. 

You will be required to designate a beneficiary if:

  • You want benefits to be paid to a person, firm, organization, or other legal entity not listed in the order of precedence
  • You want benefits to be paid in a different order than the order of precedence, or
  • You want your FEGLI benefits to be paid to a trust that you have established for your minor children. 

When a covered individual passes away, the Office of Federal Employees’ Group Life Insurance, or OFEGLI, will pay benefits in a particular order. This order of benefit payment is set by law, and not by the insurance plan itself. 

The order of benefit payout is as follows:

  • If you assigned ownership of your life insurance, benefits will first be paid out to the beneficiary or beneficiaries that were designated by your assignee, if any. Second, if there is no such beneficiary, then the benefits will be paid to your assignee.
  • If you did not assign ownership and there is a valid court order, then benefits will be paid in accordance with that court order.
  • If you did not assign ownership and there is no valid court order on file, then the benefits will be paid out in this order:

 

  • First, to the beneficiary or beneficiaries that you validly designated.
  • Second, if no such beneficiary exists, then benefits are paid out to your widow or widower.
  • Third, if there are none of the above, the benefits will be paid to your child or children, in equal shares, and the descendants of any deceased children.
  • Fourth, if none of the above, then the payout will go to your parents in equal shares, or the entire amount to the surviving parent.
  • Fifth, if none of the above are available, then benefits will go to the court-appointed executor or administrator of your estate.
  • Sixth, if none of the above, then benefits will go to your other next of kin entitled under the laws of the state where you lived.

 

FEGLI Option C benefits are paid to you, the insured, upon the death of your spouse and / or your eligible children. 

 

How Much Life Insurance Coverage Do You Need?

In some cases, FEGLI life insurance coverage is not enough to protect the financial needs of your loved ones. Because of that, it is important that you discuss all of your current and potential future financial objectives with an insurance and retirement planning specialist.

 

How to Maximize Your Social Security Benefits. By: Rick Viader

As you approach retirement, you may wonder how much you’ll have available to spend on the goods and services that you need. One of the primary sources of income in retirement for many people is their Social Security benefits. 

There are literally thousands of ways that people can take their Social Security retirement benefits. Often, the difference between a good decision and a not-so-good decision about Social Security can amount to a difference of $100,000 or more in benefits received (or not received) over a lifetime.

 

When are You Eligible for Social Security Retirement Income Benefits?

Qualifying for Social Security retirement benefits depends on several factors. One is whether or not you have earned income in a job that pays into the Social Security system. In addition, you need to compile a total of 40 work credits over your lifetime. You can earn up to four of these credits per year. In 2020, you received one credit for each $1,410 of earnings you have.

You also have to be at least age 62 to be eligible for Social Security retirement benefits. However, claiming your benefits before you have reached your “full retirement age,” or FRA, will result in a permanently reduced dollar amount.

When the Social Security program was initially created, those who had reached age 65 were considered to have reached their full retirement age, and were, therefore, eligible to receive their full amount of retirement benefit from the system – provided that they qualified. 

In order to ease some of the funding strain on the Social Security system, the full retirement age was later changed in 1983, gradually raising to age 67, depending on the year of the recipient's birth. 

 

Social Security Full Retirement Age

Year of Birth

Minimum Retirement Age for Full Benefits

1937 or Before

65

1938

65 + 2 months

1939

65 + 4 months

1940

65 + 6 months

1941

65 + 8 months

1942

65 + 10 months

1943 to 1954

66

1955

66 + 2 months

1956

66 + 4 months

1957

66 + 6 months

1958

66 + 8 months

1959

66 + 10 months

1960 or Later

67

Source: Social Security Administration

 

Instead of filing for your Social Security retirement benefits at your FRA or before, you could instead opt to wait. By delaying the receipt of your benefits, you can permanently increase the dollar amount you receive going forward.

In this case, the longer you wait to receive your benefits, the more "delayed retirement credits" you will receive – until you reach age 70. (You can continue to delay the receipt of your benefits beyond age 70, but you will not be able to build up any more delayed retirement credits). The amount of this benefit increase is 8% per year for anyone who was born in 1943 or later.

 

Social Security Spouse’s Benefits

Spouses of Social Security recipients may also be eligible to receive retirement benefits, as long as they are at least age 62 and the worker-spouse is either currently receiving Social Security, or is eligible to receive it (but has not yet filed). 

If a spouse waits until his or her own full retirement age to start receiving their Social Security spousal benefits, then the benefit amount that they receive will be equal to one-half of his or her worker-spouse's full benefit amount. (Otherwise, if the spouse files early, the dollar amount of their benefits will be reduced permanently).

In addition, even though most people are aware that spouses of Social Security recipients may receive benefits based on their husband or wife's earning record, few are familiar with the fact that you can also obtain benefits based on a former spouse's record. But you can.

If you're divorced, you may be able to receive benefits based on your ex-spouse’s record – even if he or she has remarried – provided that the following factors apply:

  • Your marriage to your ex-spouse lasted at least 10 years
  • You are age 62 or older
  • You are unmarried
  • Your ex-spouse is entitled to Social Security benefits (although, they do not have to actually be receiving those benefits yet), and
  • The benefits that you are entitled to receive based on your own work record are less than the benefits you would receive based on your ex-spouse's record.

 

Social Security Survivor's Benefits

When someone receiving Social Security income passes away, his or her surviving dependents may be eligible to receive survivor's benefits – as long as the original benefit recipient had at least the minimum amount of work credits.

The amount that can be received as survivor's benefits is based on the amount of retirement benefit that the deceased individual is either receiving in retirement benefits, or the amount that they would have received in retirement benefits if he or she had reached their full retirement age. 

 

Taxation of Social Security Retirement Income

In some cases, Social Security retirement benefits may be taxable. This is true if you are receiving Social Security before your full retirement age and you are also receiving income from various other sources.

For instance, you may be taxed on Social Security if:

  • You file a federal tax return as an individual and your combined income is:
  • Between $25,000 and $34,000 (up to 50% of your benefits may be taxable)
  • More than $34,000 (up to 85% of your benefits may be taxable)
  • You file a joint tax return, and you and your spouse have a combined income that is:
  • Between $32,000 and $44,000 (up to 50% of your benefits may be taxable)
  • More than $44,000 (up to 85% of your benefits may be taxable)
  • You are married, and you file a separate tax return.

Your combined income equals your adjusted gross income plus any non-taxable interest earned, plus one-half of your Social Security benefits. 

 

When Should You Start Taking Your Social Security Retirement Income Benefits?

There is no single best answer for when to start receiving Social Security benefits. What works for one person or couple may not be the right strategy for another. Because of that, before you move forward with filing for these benefits, it is recommended that you first discuss your objectives, as well as your income options, with a financial advisor who understands the Social Security system.

 

Common Retirement Mistakes Made by Federal Employees. Sponsored By: Aaron Steele

If you and/or your spouse are an employee of the federal government, you have access to a wide array of benefits – including a retirement savings plan, life insurance protection, and health insurance coverage.

But even though these benefits can equate to financial security – both now and in the future – they can also be somewhat confusing. So, it is important that you have a good understanding of what you have access to, and that you maximize all of your coverage options.

 

Understanding Your Federal Employee Insurance and Retirement Benefits

Among your government benefits are programs that can directly affect your – and possibly even your spouse and other loved ones’ – financial future. These include the Federal Employees Retirement System (FERS) and/or the Civil Service Retirement Service (CSRS).

 

Federal Employees Retirement System(FERS)

Congress created the Federal Employees Retirement System in 1986 and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.

FERS provides retirement benefits from three different sources. These include:

These three components of FERS can all work together in order to provide you with a strong financial foundation for your retirement years. 

Both the Basic Benefit plan and Social Security will require that you pay into the system each payday. Agencies withhold the cost of these plans as payroll deductions, plus your agency pays its share, too. After you retire, you are entitled to a monthly annuity income for life. 

If you leave Federal service before you reach your full retirement age and you have a minimum of five years of FERS service, you can elect to take a deferred retirement. Two of the three parts of FERS – Social Security and the TSP – can remain with you if you leave your federal government job before you retire. 

In other words, while FERS is offered through your government employer, many of the features of this plan are “portable,” meaning that even if you leave federal employment, you may still be able to qualify for these benefits. 

Employees who are enrolled in FERS and who were first hired before 2013 contribute 0.8 percent of their pay to the CSRDF. Employees who were enrolled in FERS and who were first hired in 2013 or later contribute 3.1 percent of pay to the CSRDF. Also, all employees who are enrolled in FERS contribute 6.2 percent of wages – up to the Social Security taxable wage base – to the Social Security Trust Fund. 

The Minimum Retirement Age, or MRA, for FERS participants who were born before 1948 is age 55. The MRA for employees who were born between 1953 and 1964, is 56. The MRA increases to the age of 57 for those who were born in 1970 or later. 

FERS allows retirement with an unreduced pension at the age of 60 for employees who have 20 or more years of service, and at the age of 62 for employees with at least five years of service. 

 

When FERS Participants Can Retire

When you were born:

Your MRA is:

Before 1948

55

Between 1953 and 1964

56

In 1970 or Later

57

Source: OPM.gov

 

Civil Service Retirement Service (CSRS)

The Civil Service Retirement Act became effective on August 1, 1920. Through this act, a retirement system for certain federal employees was established – the Civil Service Retirement System, or CSRS. This plan was later replaced by the Federal Employees Retirement System, or FERS, for federal employees who initially entered into their covered service either on or after January 1, 1987. 

When FERS was first created, all federal workers at that time had the option to convert from CSRS to FERS. Now, all federal employees are automatically enrolled in FERS and they do not have the option to choose CSRS. Therefore, CSRS is only available to federal workers who were in the plan before 1987, and who choose to remain with CSRS in lieu of switching over to FERS. 

The Civil Service Retirement System, or CSRS, is a defined benefit, contributory system. This means that the amount of retirement benefit you receive is a set, known amount, and also that employees share in the expense of the retirement annuities to which they will become entitled. 

Those who are participants in this classic pension plan contribute a percentage of their pay, and when they retire, they can receive an annuity that may help to maintain a certain standard of living throughout their retirement years. 

Several different types of retirement may trigger the need for CSRS benefits. The U.S. Office of Personnel Management will work with your specific agency's personnel to process your annuity claim. To help in reducing or eliminating delays, it is important to ensure that your Official Personnel Folder is complete. You can also submit your paperwork early, if applicable. 

Overall, the types of retirement may include:

  • Early Retirement
  • Voluntary Retirement, or 
  • Deferred Retirement

You may also be able to receive CSRS benefits due to a qualifying disability.

 

The Most Common Retirement Mistakes that are Made by Federal Employees

Even though federal retirement benefits are fairly comprehensive, employee participants may still make mistakes – both before and after retirement – that can impact what is received through these plans.

Some of the most common mistakes that are made by federal employees include:

 

Not Regularly Reviewing Your Personnel File

Knowing what is in your personnel file can help you to better ensure that you’re prepared for retirement – especially if it is determined that there are some mistakes. Although the Office of Personnel Management (OPM) handles a lot of data regularly, it is never a good idea to simply assume that yours is correct.

With that in mind, make sure that you regularly review your Official Personnel Folder, or OPF, and in particular Form SF 50 (the Notice of Personnel Action) to make sure that everything matches up. 

This information can include details regarding which retirement plan(s) you are enrolled in, as well as important dates like when you officially began employment with the federal government. 

 

Not Maximizing Contributions to the Thrift Savings Plan (TSP)

The Thrift Savings Plan can encompass a large portion of your retirement savings. So, it makes sense to maximize these benefits. You can do so by contributing as much money as possible – up to the annual maximum limit – each year.

This can give you a bigger “base” from which to generate tax-deferred growth. In addition, because your government agency may offer a matching program, you will want to make sure that you are eligible to receive this “free money.” 

 

Not Keeping Track of and Managing Health Insurance Coverage

As we get older, one of the biggest expenses that can be faced is healthcare. As a government employee, you (and your spouse and children, if applicable) will have access to a comprehensive health insurance program. This coverage can also remain after you have retired.

With that in mind, make sure that you meet all of the eligibility criteria for taking the coverage with you when you retire. Otherwise, you may miss out on keeping this protection and in turn, having to pay a much larger out-of-pocket sum when you require healthcare in retirement. 

 

 Not Updating the Beneficiary Information

While most people do not like to think about the unexpected, it is still essential to plan for it. Therefore, you should name one or more beneficiaries on your government retirement plan, as well as on your government-provided life insurance coverage. 

It is also important to make sure that your beneficiary information is always up-to-date – especially if you have had any major changes take place in your life, such as marriage or divorce, death of a spouse, and/or the birth or adoption of a child. 

Regularly reviewing your beneficiary(ies) means that funds won’t be paid out to someone for whom they are no longer intended.It can also help you to ensure that you aren’t unintentionally disinheriting someone who you want to provide these funds to. 

 

Is Your Retirement Plan Up-to-Date?

Making sure that your retirement plan and other related benefits are up-to-date is essential for living a worry-free future. That’s because when you know that you’re covered financially, you can spend your time focusing on other things, like doing things you enjoy with the people you love and care about.

If you would like to make sure that your federal retirement plan is on track with your objectives – or if you’d simply like to get a second opinion – feel free to reach out to us. Our retirement income professionals are well-versed in designing cash flow plans for retirees – in particular, those who are FERS and CSRS participants.

 

Is Your Income Strategy on the Right Track? By: Flavio “Joe” Carreno

While saving and investing are certainly big parts of planning a successful retirement, the reality is that retirees live on income, not assets. With that in mind, is your income strategy on the right track?

If not, there are some retirement income strategies that you could consider.

 

The Key Components of a Retirement Income Plan

To retire comfortably, you will have to evaluate your expenses, as well as the income sources that you’ll have available to you in the future. Some other parameters can dictate how and when you implement your retirement income plan. These can include your:

  • Time frame until retirement
  • Risk tolerance
  • Marital status 
  • Health
  • Anticipated life expectancy

 

Although some financial advisors believe you can live on  70% or 80% of your pre-retirement earnings in the future, this is not necessarily the case. In fact, depending on how you plan to spend your retirement, it is possible that your expenses may be more than they are now.

Given that, it is important to create a retirement budget that outlines your essential and your non-essential expenses. For example, essential costs will typically include the following:

  • Housing 
  • Utilities (electric, natural gas, water, sewer, trash)
  • Transportation and fuel
  • Insurance
  • Maintenance 
  • Food 
  • Healthcare and prescriptions

Non-essential expenses may encompass some or all of the following items:

  • Travel
  • Entertainment
  • Property and/or vehicles (such as a second home, RV, boat, etc.)
  • Dining out 

 

Once you have added up your estimated expenses, you should determine where your retirement income will be generated from, as well as project the amount(s) from each. Typically, retirees generate income from more than just one source. These could include:

  • Employer-sponsored pension plan
  • Social Security
  • Interest / Dividends from personal savings or investments
  • Annuity
  • Reverse mortgage
  • Rental property income 

 

After you have added up the total amount of your estimated expenses, as well as the total amount of monthly income being generated, you will be able to determine whether there will be enough, or alternatively, if there will be an income “gap.” 

If it appears that your future costs will exceed your estimated income, you may need to revise your retirement income plan. There are several options for doing so, such as:

  • Working for a longer period of time (which can help to increase the amount of money you have saved, as well as the amount you could generate from Social Security)
  • Reduce your expenses (such as doing away with some or all of the non-essential items)

 

Other Items to Consider with Your Retirement Income Strategy

There are some other important items to consider when it comes to your retirement income strategy. For instance, today’s life expectancy is longer than it was in the past. This means that your retirement income must last for a longer period of time.

Because of this, not only can you require income to keep paying out, but you must also ensure that you have protected this income from various risks, such as:

  • Stock market volatility 
  • Low interest rates
  • Inflation
  • Sequence (or order) or returns risk

 

One of the biggest risks to your retirement income – and to your retirement lifestyle – is longevity. In fact, because people are living longer now, you can face more financial risks. One of the biggest fears on the minds of many retirees is that of running out of income while it is still needed.

There are, however, some financial tools that can help you to alleviate this fear. One such option is an annuity. These financial vehicles are designed for paying out income for a specified period of time, such as ten or twenty years, or even for the remainder of your lifetime – regardless of how long that may be. 

 

Is Your Retirement Income Strategy on the Right Track?

There are many components that need to be addressed when it comes to creating a good, solid retirement income strategy. Because of this, it is recommended that you discuss your specific short- and long-term financial objectives with a retirement income specialist who can offer you suggestions and strategies.

 

Creating a Retirement Safety Net for More Financial Security. By: Brad Furges

Have you built a “safety net” around your portfolio so that you can better ensure your current and future financial security?

If not, this should likely be on your To-Do list – particularly if you are getting closer to retirement. Otherwise, even a slight market “correction” could end up reducing your funds, and your lifestyle, in the future.

 

What is a Financial Safety Net and Why Do You Need One?

Most anything of value should be protected. This includes the funds that you have built up over time for retirement. In fact, the closer you are to your ideal retirement date, the more important it is to make sure that nothing can reduce or eliminate your savings because it could have a significant impact on your future lifestyle. 

A financial safety net has the goal of protecting you and your loved ones – at least in part – from losing financial security and/or derailing your long-term financial goals due to an unexpected event such as a(n):

  • Stock market/investment loss
  • Catastrophic illness or injury
  • Need for long-term care services 
  • Personal tragedy 
  • Costly emergency 

 

What are the Key Elements of a Strong Retirement Safety Net?

There can be several key components that are needed for building a strong financial safety net. These should ideally include the following items:

  • Building an emergency fund
  • Protecting loved ones 
  • Keeping income safe
  • Preparing for retirement
  • Insuring against large financial losses 

 

Building an Emergency Fund

One of the most important elements of a financial and retirement safety net is to build an emergency fund that may be used for paying the cost of uninsured medical needs, costly car or home repairs, and/or income in the event of a job loss.

Many financial advisors recommend that you have at least six to twelve months of living expenses in your emergency fund. In addition, these funds should be placed in low-risk, highly-liquid financial vehicles like a bank savings or money market account. 

Using the money in your emergency fund for unexpected financial-related events can prevent you from having to dip into your retirement funds and/or put these expenses on a high-interest credit card.  

 

Protecting Loved Ones

Another primary component of your financial safety net is to protect your loved ones from financial hardship. For instance, if a family income-earner suddenly dies or becomes disabled, his or her income will disappear – but funds are still needed for paying housing costs, as well as for utilities, transportation, food, and other needs. 

Life insurance coverage can help. If the insured passes away, the proceeds from a life insurance policy are received income tax-free to the beneficiary(ies). This money may be used for paying off debts, replacing income, and various other needs of the survivors. 

 

Keeping Income Safe

Becoming ill or injured is much more common than most people believe – even if you are currently young and in good health. According to statistics from the Council for Disability Awareness, more than one in four 20-year-olds can expect to be out of work for at least a year before reaching retirement age due to a disabling condition.

What would happen to your income and lifestyle if you were suddenly unable to work?

Nearly half of American adults would be unable to pay an unexpected bill for $400 or more without having to take out a loan or sell something to generate the money. Some of the most common reasons for long-term disability claims include:

  • Musculoskeletal disorders
  • Cancer
  • Pregnancy
  • Mental health issues (such as depression or anxiety)
  • Injuries like sprains, fractures, and strains of ligaments and muscles 

Unfortunately, many people assume that they will be automatically covered by Social Security or workers’ compensation if they are unable to work and earn an income. But this is not necessarily the case. 

This program has a strict set of requirements for benefit qualification that includes being unable to perform any job, based on your education and skills – regardless of whether or not it is in your current industry. 

To determine whether or not you would qualify for Social Security disability benefits, you can visit the website for the Social Security Administration at: https://ssa.gov/benefits/disability/qualify-html

Disability insurance could be a viable solution. A disability insurance policy can pay a regular income stream to an insured who is unable to work due to a qualifying illness or injury. This incoming cash flow can help with the continued payment of bills in the household. This type of coverage may be offered through an employer’s benefit package and/or bought directly by the insured individual. 

 

Preparing for Retirement 

A financial safety net should also include a good solid retirement plan that ideally includes a method of generating one or more streams of ongoing, lifetime income that will continue to flow in regardless of what happens in the stock market, or even in the economy overall. 

If you qualify for Social Security retirement benefits, this could provide you with at least some of the income you will need. However, based on information from the Social Security Administration, an average wage earner will only replace about 40% of his or her pre-retirement earnings from these benefits.

So, where will the rest come from? 

One option is through an annuity. These financial vehicles are designed to pay out income for either a set period of time – such as ten or twenty years – or even for the remainder of your lifetime, no matter how long that may be. 

Annuities can also provide you with other benefits, too, depending on the type you own. For instance, the funds that are inside of an annuity are allowed to grow on a tax-deferred basis. An annuity could also include a death benefit, as well as waivers for accessing funds in the event of an illness and/or the need for long-term care. 

All annuities are not exactly the same, though. So, it is essential that you have a good understanding of how annuities work before you make a long-term commitment to purchasing one.  

As we age, we also tend to require more healthcare and long-term care services. These can be expensive – even with health insurance or Medicare coverage. Based on a survey from Fidelity Investments, an average 65-year-old couple who retired in 2020 will require approximately $295,000 in out-of-pocket healthcare costs throughout their remaining lifetime. 

This figure does not include the cost of a long-term care need, though – and this could add a significant amount of expense…one that could quickly deplete even a nice sized retirement portfolio.

In 2020, the average monthly expense of a private room at a skilled nursing facility was over $8,800. This equates to more than $105,000 per year. Receiving care at home could cost less, but this really is dependent on the type and the duration of the services received. 

 

Monthly Median Cost of Long-Term Care Services (in 2020)

Homemaker Services – $4,481

Adult Day Health Care – $1,603

Nursing Home Facility – Semi-Private Room – $7,756

Home Health Aide – $4,576

Assisted Living Facility – $4,300

Nursing Home Facility – Private Room – $8,821

Source: Genworth Cost of Care Survey 2020 

https://www.genworth.com/aging-and-you/finances/cost-of-care.html

 

Medicare pays very little for long-term care needs. This program also has strict criteria regarding how to qualify for the benefits. Therefore, many people must find other ways to pay these expenses. 

One option is to purchase a long-term care insurance policy. Alternatively, a combination life insurance/long-term care plan or annuity/long-term care plan could provide the necessary safety net for the cost of care. But, if care is never required, the policy would still pay benefits for other needs. 

 

Insuring Against Large Financial Losses

Because accidents can and do occur, another key part of your financial safety net should include insuring against potentially large financial losses. Just some of the coverage that can help to prevent losses to your savings, investments, and/or other assets include:

  • Homeowners insurance
  • Auto coverage
  • Liability insurance
  • Business insurance (if you are the owner or partner in a company)
  • Identity theft protection 

 

Are You Ready to Build a Safety Net for Your Financial Security?

Given all of the potential threats to your savings and retirement assets, it is imperative to have some protection in place. Not all asset safety measures will be right for all investors and retirees across the board. Therefore, it is best to discuss your specific needs with a retirement income specialist. That way, the plan that you ultimately choose can be more custom-designed for your objectives.

 

Let’s Talk: Generational Habits and Conversations About Money and Retirement Planning. By: Kathy Hollingsworth

The famed song, My Generation, by the WHO was named the 11th greatest song by Rolling Stone magazine on its list of the 500 greatest songs of all time. It was also inducted into the Grammy Hall of Fame for “historical, artistic and significant” value – and rightly so.

Different generations of people have differing viewpoints on a whole host of matters – including money. Because the people who encompass different generations in the United States have been shaped by a wide range of social, economic, and financial events throughout their lives, individuals in the various groups have differing thoughts, opinions, and concerns about retirement.  

 

Understanding Each Generation and Their Concerns

To more clearly understand why each generation in the U.S. doesn’t always agree on how to prepare for retirement, as well as how to live during that time, it can help to take a closer look at the age and demographics of each of the following groups:

  • Silent Generation
  • Baby Boomers
  • Generation X
  • Millennials

 

Many in the Silent Generation formed conservative financial opinions, as they learned from their parents who lived through the depression and struggled to provide for their families. In addition, a fair percentage of the Silent Generation lost their fathers and/or older siblings who fought in the Second World War. 

Similar to their parents before them, many in the Silent Generation married and started families at younger ages. The majority of this group is already retired. It is the children of the Silent Generation that make up a significant percentage of the 70+ million Baby Boomers.   

The Baby Boomers encompass those who were born between 1946 and 1964. Touted as the largest generation in U.S. history, the Boomers have changed the face of the country in many ways. 

For example, as more Boomers were born in the late 1940s and throughout the 1950s, the country saw a significant need for additional housing, transportation options, and educational institutions. Most members of the Boomer cohort came of age during the Vietnam war and the Reagan eras. 

As of 2011, the older Baby Boomers started turning age 65, and in turn, became eligible for Medicare. Shortly thereafter, these individuals began to reach their full retirement age for Social Security

 

U.S. Living Adult Generations (in 2020)

Source: Pew Research Center (2020) (https://en.wikipedia.org/wiki/Silent_Generation#

*Note: Some of the cohort sizes are greater than the number born due to immigration.

 

Generation X, or the Gen Xers, were born between 1965 and 1980. This group comes directly after the Baby Boomers and its members are currently (in 2020) between the ages of 40 and 55. The earning power and savings of the Gen Xers have been challenged by many events, including the:

  • Dot.com bust
  • Financial crisis of 2008
  • Great Recession 

These financial debacles have led more than 50% of Generation Xers to carry credit card debt. Given these hurdles, many in the Generation X group feel that they will have a more difficult time attaining financial security – especially as compared to their Baby Boomer parents. 

The Millennial generation encompasses roughly 62 million people who were born between 1981 and 1996. This generation is continuing to grow, especially as young immigrants make their way to the U.S. and it is expected to peak in the year 2033, at just under 75 million. Many of the Millennials came of age during the era of Barack Obama’s presidency. 

According to the United States Census Bureau (as of July 2019), as the Baby Boomer generation continues to reach the end of its lifespan, the Millennials have surpassed this group as the largest living adult generation in the United States. 

 

Current Living Generations in the United States (in 2020)

Generation

Born In

Age in 2020

Silent Generation

1928 – 1945

75 – 92

Baby Boomers

1946 – 1964

56 – 74

Generation X

1965 – 1980

40 – 55

Millennials

1981 – 1996

24 – 39

Source: Pew Research Center

 

Getting the Right Financial Plan for Your Specific Needs

Regardless of which generation you are a part of, having a plan in place to ensure that you’re on track financially is essential. This plan should ideally encompass your short- and long-term financial objectives, as well as your age and risk tolerance.

Avoid a Retirement Nightmare with Proper Planning. By: Marvin Dutton

Most strong and stable structures should have a solid foundation. Think about the story of the three little pigs. They each built a house, but only the one with the strongest base withstood the risk of the Big Bad Wolf. 

The same holds true with retirement planning. While you may be saving and investing for the future, without a specific plan in place, your money – and your retirement income – could be at risk of running out at a time when you still need it. 

Then what?

 

The Difference Between Investing and Actual Retirement Planning

People often wonder how much money they need to save for retirement. That is a difficult question to answer, though, at least without knowing the parameters and goals that you’re trying to accomplish. In addition, everyone’s objectives can differ. So, what might work well for someone else may not be the ideal plan for you.

Unfortunately, many financial advisors simply sell “products” to their clients, without any particular objective in mind. So, even if a particular financial vehicle has a good track record, it may or may not be the right tool for the goals you are hoping to accomplish. This is the difference between simply investing and having an actual retirement plan in place.

With that in mind, a well-thought-out retirement plan should have a variety of financial “tools” that work together in moving you towards your short- and long-term goals. For example, if you have a goal of saving $5,000 for the down payment on a new car, placing these funds in a low-risk and liquid account – such as a money market – will typically make more sense than investing in high-risk small-cap stocks that could result in losing all your money. 

As it pertains to longer-term plans, there are several components that should be considered when you’re developing a strategy for your retirement. These can include your:

  • Age
  • Time frame until retirement
  • Risk tolerance
  • Income generation sources 
  • Health
  • Life expectancy

For instance, investors who are in their 20s or 30s may be able to take on a bit more risk – and in turn, attain the opportunity for growth – than someone who is in their 50s or 60s and would have little time to recoup any losses. 

 

Why Your Financial Plan Should Differ Before and After Retirement

Even with the best saving and investment plan(s) in place, everything is different once you have retired. That’s because you will have to convert some or all of the assets you’ve built up into a reliable, ongoing stream of income that will ideally continue for as long as you need it to. 

In other words, when you retire, you will be moving from the “accumulation” phase to the “distribution,” or income, phase of your financial planning. These steps are oftentimes referred to as climbing up and down a mountain.

For example, during your working and saving years, you are essentially “climbing up the mountain.” Many financial advisors stop you there, though, once you have reached your “number,” or your goal.

But this is really just part of the overall “journey,” because a successful retirement also represents climbing back down the mountain – and this can require a whole different set of “tools” and strategies. This is why it is important to work with a retirement income planner – who may or may not necessarily be the same person or firm that helped you during the accumulation phase.  

 

What Should Your Money Be Doing?

Retirement income expert Tom Hegna says that there are two questions you need to ask yourself as you plan ahead for your retirement income. These are: 

  1. What do you need your money to do?
  2. What do you want your money to do?

Regarding the first question, it is important that you have enough retirement income being generated so you can pay your essential living expenses. These will usually include housing, utilities, transportation, food, and healthcare. This could be considered your “income floor.” 

There are strategies that you could put in place that guarantee you a set amount of income on a regular basis so that you know you have the essentials covered. Knowing that you will still be able to pay your necessary expenses – regardless of what happens in the stock market or with interest rates – can lead to a less stressful retirement that allows you to focus more on the things you want to do. 

Once you have the essential expenses covered, you can then determine how much more income you would need for non-essential items, like travel, entertainment, and fun. In this case, it may be possible to place a portion of your assets into higher-risk, but higher-return financial vehicles. 

Then, if the investments perform well, you can use these funds. But if they do not perform well, even though it may be disappointing, it won’t prevent you from paying your necessary living expenses.

 

Where Will Your Retirement Income Come From?

Many retirees have income that is generated from more than just one source. For instance, you may receive income that comes from:

  • Employer-sponsored pension plan
  • Social Security
  • Interest and/or dividends from personal savings and investments
  • Reverse mortgage
  • Rental income 
  • Annuity

While all of these are viable sources of retirement income can also require the proper timing in terms of when to receive them, as well as various maximization strategies so that you generate the most income possible for the longest period of time. 

 

Will Your Current Retirement Plan Withstand the Test of Time?

A truly successful and worry-free retirement will require you to have a plan in place that leads you towards your desired destination yet is flexible enough to revise as your needs change over time.

 

When Planning for Retirement, Expect the Unexpected. Sponsored By: Todd Carmack

It has often been said that “the only constant is change” – and this is true in many areas of life, including when you are planning for retirement. After you retire, you may not have to set your alarm clock every night. But you can still be exposed to a variety of potential risks to your savings and future income. Therefore, you have to be prepared. Otherwise, you could have an unwanted wake-up call!

Unexpected financial incidents in retirement can be particularly detrimental, because if you lose some (or all) of your income generation sources, or if your portfolio is decimated by a correction in the stock market, it can have a substantial impact on how – and how well – you are able to live the remainder of your life. 

With that in mind, it is essential that you determine where the various risks may be lurking and how you can protect yourself, your portfolio, and your financial future if one (or more) of them appears. 

 

How to Prepare for the Unexpected in Retirement

While nobody has a crystal ball to see into the future, there are some common risks that could have an impact on your retirement. So, it is important to be prepared for them…just in case. Just some of these risks can include:

  • Volatility in the stock market
  • Low interest rates
  • Inflation
  • Emergencies
  • Healthcare needs
  • Long-term care 
  • Increased taxes
  • Longevity

 

Volatility in the Stock Market

Although the stock market offers the opportunity to generate a substantial gain, it can also pose the risk of loss – and the closer you are to retirement, the more a loss in the stock market can impact your future lifestyle. Further, the more you lose in an investment, the more future return it will require just to get back to even.

 

Gain Required to Get Back to Even Following a Loss

Amount of Loss

Gain Required to Get Back to Even

10%

11.1%

20%

25%

30%

42.9%

40%

66.7%

50%

100%

60%

150%

70%

233.3%

80%

400%

90%

900%

100%

Broke

 

One way to reduce your risk in an unexpected market drop is to allocate more of your overall assets to non-equity financial vehicles. While fixed and fixed indexed financial tools might not offer the allure of exponential gains like equities do, they can also allow you to sleep much better at night, knowing that you’ll have no future losses to make up for. 

 

Low Interest Rates

Ever since the economic recession in 2008, the United States has languished in a historically-low interest rate environment – which has made it difficult for those who are trying to keep their money safe while at the same time allowing it to grow.

As an example, a fixed investment with a 2% return would only generate $20,000 per year in income on an investment of $1 million. Is that enough for you to live comfortably for the rest of your life in retirement?

That’s why over the past decade or so, many individuals and couples have turned to financial vehicles like fixed indexed annuities. These annuities offer the opportunity to earn a higher return that fixed products, while keeping principal safe in any type of market or economic environment. They will also generate an ongoing, reliable income stream for the remainder of your life.

 

Inflation

Inflation is a risk that can be somewhat sneaky. For example, with some items and services, an increase in price can be gradual over time. Therefore, it is barely noticeable. But it is still necessary to keep your income on pace with rising prices. Otherwise, you may find that you’ll have to cut back on your purchases. 

 

Average Prices in 2000 versus 2020

 

2000

2020

Gallon of gas

$1.26

$1.84

U.S. postage stamp

33 cents

55 cents

Loaf of bread

$1.72

$2.08

Dozen eggs

89 cents

$1.58

Sources: https://thepeoplehistory.com/2000.html / https://thepeoplehistory.com/pricebasket.html / 

 

Using an average inflation rate of just 3.2%, your income would have to double in 20 years in order to just maintain the same lifestyle that you have today. For instance, if you are currently generating $4,000 per month in income right now, that amount would have to increase to $8,000 per month in 20 years in order to keep up with the very same lifestyle you have today. So, in order to prepare for inflation risk, you’ll need to incorporate a way to increase your retirement income on a regular basis in the future.  

 

Emergencies

At any point in life, whether you’re in retirement or you are still entrenched in the working world, you are at risk of costly emergencies. These could include an uninsured car repair, a leaky roof, or an unexpected trip to help a family member in need. 

Because you won’t likely want to dip into your retirement savings or put these costs on a high-interest credit card, having an emergency fund in place is a recommended solution. Ideally, you should have approximately six months of living expenses in your emergency fund – but any amount is better than being completely unprepared. This money should be kept in a safe, highly liquid, and easily accessible place, such as a savings or money market account at a bank or credit union.

 

Healthcare Needs

As we age, the need for more healthcare services tends to rise. According to a recent study by Fidelity Investments, a 65-year-old couple who retired in 2020 can expect to spend approximately $295,000 in out-of-pocket healthcare costs – not including long-term care services. 

One way to help combat these expenses is to ensure that you have a good health insurance and/or Medicare plan that provides you with adequate financial protection. It is also recommended that you have a good understanding of where your costs will come from, such as any deductibles, coinsurance, and/or copayment responsibilities. 

 

Long-Term Care

Another “unexpected” expense in retirement could be the need for long-term care services. While nobody likes to think about it, the reality is that many of us will require assistance – whether it is full-time, around-the-clock care or help with basic daily living activities like bathing and dressing.

According to U.S. government statistics, when someone reaches age 65, they have a 70% chance of requiring long-term care services at some point in their remaining life – and this care can be expensive. 

Based on the Genworth 2020 Cost of Care Survey, the price for just one month in a private room in a skilled nursing home facility was more than $8,800 in 2020. This equates to over $100,000 per year. A semi-private room is less – but at $7,756 per month (on average), it is still extremely costly. 

How long would your savings last if you had a need for long-term care services? Worse yet, what if both you and your spouse required care?

In any case, long-term care services are expensive. So, it is important that you have a plan in place to cover some or all of these potential costs. This could include having a stand-alone long-term care insurance policy, a life insurance policy or annuity with a long-term care rider, and/or other type of payment alternative. 

 

Increased Taxes

For most people, taxes are a part of everyday life – and this won’t change when you retire. But, while paying taxes isn’t necessarily a big surprise to most people, the amount of tax that is due might be. For example, the top federal income tax rate in the United States over the past 108 years has been as low as just 7%, and as high as 94%. 

 

Top Federal Income Tax Rates 1913 – 2021

Year

Rate

Year

Rate

2018-2021

37

1950

84.36

2013-2017

39.6

1948-1949

82.13

2003-2012

35

1946-1947

86.45

2002

38.6

1944-1945

94

2001

39.1

1942-1943

88

1993-2000

39.6

1941

81

1991-1992

31

1940

81.1

1988-1990

28

1936-1939

79

1987

38.5

1932-1935

63

1982-1986

50

1930-1931

25

1981

69.125

1929

24

1971-1980

70

1925-1928

25

1970

71.75

1924

46

1969

77

1923

43.5

1968

75.25

1922

58

1965-1967

70

1919-1921

73

1964

77

1918

77

1954-1963

91

1917

67

1952-1953

92

1916

15

1951

91

1913-1915

7

Source: Inside Gov (http://federal-tax-rates.insidegov.com/)

 

While there will likely always be taxes to pay, there are some strategies that you could use to reduce – or even to eliminate – your share. One option is to take advantage of Roth IRAs and retirement plans. 

With these accounts, the contributions that you make have already been subject to income tax. So, unlike with traditional IRAs and retirement plans, you are not able to make pre-tax deposits. However, the growth in a Roth account takes place tax-free, as do the withdrawals. Therefore, no matter how high the income tax rates are in the future, a Roth account will allow you to access – and spend – 100% of your withdrawals. 

 

Longevity

Yet another “unexpected” risk is longevity. Although nobody knows exactly how long they will live, the overall average life expectancy in the United States has risen significantly over time. Because of this, it is not uncommon for retirement to last for 20 or more years.

Although that may be positive in many ways, it will require your savings and your retirement income to last for a much longer period of time. Given that, you must take advantage of financial vehicles like annuities that can guarantee an income stream for the remainder of your lifetime – regardless of how long that may be. 

Otherwise, without at least one or more guaranteed streams of income to rely on, you could run the very real risk of depleting your assets, as well as your incoming cash flow, while it is still needed. 

 

Are You Ready for the Unexpected in Retirement?

There can be a long list of unexpected financial pitfalls in retirement – and without proper preparation, even a seemingly “small” emergency could have a significant impact on your finances, and your lifestyle, going forward.

That being said, are you ready for the unexpected in retirement?

If not – or if you have a plan in place but would like to get a second opinion – feel free to contact us and set up a time to chat with a retirement income specialist. 

 

Not affiliated with The United States Office of Personnel Management or any government agency

©2021 Public Sector Retirement News. All rights reserved. Terms of Use | Privacy Policy
Powered By :  FMM Financial Media & Marketing, LLC, The Best Financial Advisor Websites