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March 19, 2024

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.

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Don’t Be Deceived When Working On Your Federal Benefits

Employees of the Department of the Navy and the United States Postal Service in Western Washington have been sent a warning that federal retirement counselors don’t conduct house calls. Someone who claims to be a Federal Employee Retirement Specialist (FERS) from the Government Retirement Benefits Platform (GRB) and they come to your home and assist you in filling out your retirement paperwork is not acting on behalf of the federal government. Instead, they are acting as independent contractors. They are there to make a sale to you on insurance or investments.

There are no home visits from the GRB’s benefits counselors in Maine. However, there are home visits from the Office of Civilian Human Resources in Portsmouth, Virginia, which processes the retirement applications of federal employees retiring from the Department of the Navy and the Post Office in this area of the country, but remember that they do not make house calls.

If you require assistance, you should contact the personnel support specialist assigned to your shop or code, or you may call the GRB toll-free phone number 1-888-320-2917 and follow the procedures to talk with a benefits expert. Further resources include the Federal Employee Group Life Insurance (FEGLI) website (www.opm.gov), the Thrift Savings Program (TSP) website (www.tsp.gov), and the Social Security Administration (SSA) website (www.ssa.gov)

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

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

Yes, You Can Lose Your Social Security Payments; Here’s How.

As they prepare to retire, millions of individuals rely on their Social Security income. However, be wary of these four unanticipated methods that can affect your benefits.

1. State and local taxes

You may be required to pay state income taxes during retirement. Your Social Security benefits may be deemed income and subject to state taxes in some instances.

Only 12 states tax Social Security benefits, including:

  • Colorado
  • Connecticut
  • Kanas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

Your benefit will not be taxed in the other 38 states.

2. Federal income taxes

You may be required to pay federal taxes on your benefits if you have other considerable income in addition to your benefits. Your total income is computed by adding your wages/self-employment income, dividends, interest, and other taxable income. The amount of federal taxes you must pay on the benefit is determined by your total income.

3. Debts that have not been paid

The US Treasury can “garnish” your Social Security payments for certain unpaid debts, such as back taxes, spousal or child support, or a defaulted federal school loan.

They don’t need a court order to have your benefits garnished if you owe the IRS money. If you owe federal taxes, you may lose up to 15% of your Social Security payout to cover your debt.

4. Excessive Income

For many people, retirement means relying on Social Security as their primary source of income. You can, however, continue to work while claiming your benefits.

Keep in mind that if you choose this option, your benefits may be reduced by up to $1 for every $3 you earn. When you file your Social Security claim and reach full retirement age (FRA), you will determine how much you get and how much you lose.

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

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

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

Six Reasons Why You Won’t Receive Social Security

Many Americans look forward to receiving Social Security payments at the end of a long career. The Social Security Administration (SSA) says that while you can start receiving benefits at age 62, you get a larger benefit each year you wait to get them until age 70. But this assumes you’ve earned enough credits to qualify.

It’ll be best to know ahead of time if these benefits aren’t available to you so you can create alternative retirement arrangements. In some instances, a worker may not have earned Social Security.

Let’s look at six reasons why you may miss out.

Insufficient S.S.I. Credits

According to the American Association of Retired People (AARP), you must work to earn “credits” that allow you to qualify for Social Security payments.

In 2021, you received one credit for every $1,470 you earned in salary or self-employment. The Social Security Administration (SSA) says you may only receive four credits each year. To qualify for any Social Security payment, a person requires 40 credits. Don’t expect to be eligible for these perks if you haven’t earned all 40 credits.

You’re One of These Types of Government Employees

While the government usually looks after its employees, there are several exceptions for employees who don’t get Social Security benefits at the state, county, or municipal levels. Instead, these employees contribute to and get benefits through state-funded pension programs. These include:

• U.S. government employees hired before 1984 receive pensions under the old Civil Service Retirement System (CSRS)

• Railroad employees, whose pension system dates back to the 1930s 

• Foreign nationals working in the U. S. for their home governments, such as ambassadors or workers for the United Nations or other international organizations

• Most safety personnel/first responders, such as police and firefighters

• Many K-12 teachers

If You Owed Self-Employment Taxes

Many self-employed company owners are unaware that they must now pay into Social Security twice: as an individual and a corporation. You must pay this tax with your federal return. If you don’t file at all or file incorrectly, you may not have enough Social Security credits to retire. Moreover, if you continually don’t pay these taxes, you could get into legal trouble.

Some Divorcees

If you’re divorced and don’t have enough credits to qualify for Social Security on your own, don’t plan on obtaining half of your ex’s benefits. You must be unmarried, 62 or older, and have earned less than your ex-spouse. According to Investopedia, you cannot collect your spouse’s benefits if you are married for less than ten years.

If You Retire in Certain Foreign Countries

If you retire outside of the U.S., DC, Puerto Rico, US Virgin Islands, Guam, Northern Mariana Islands, or American Samoa, you may not qualify for Social Security benefits. Azerbaijan, Belarus, Cuba, Kazakhstan, Kyrgyzstan, Moldova, North Korea, Tajikistan, Turkmenistan, and Uzbekistan are exempt from U.S. contributions. There may be exceptions, but you must use the Social Security Administration’s “Payments Abroad Screening Tool” to evaluate your eligibility.

Certain Immigrants

Immigrants who arrive later in life and have not accrued the 40 labor credits required to qualify for Social Security will be denied these benefits. The solution is to obtain six work credits in the U.S., which entitles the worker to prorated U.S. benefits. A “totalization agreement” combines this with prorated benefits from their former country.

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

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

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

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

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

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

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

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

That’s making a difference.

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

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

There Are New Things Coming for the TSP

Federal employees should keep their eyes fixed on the Thrift Savings Plan (TSP) over the next year.

The agency in charge of the plan is in the middle of an extensive modernization project that will change the back-end technologies that run and protect the TSP.

These changes will add new features that will benefit TSP participants.

Employees and contractors involved in the project’s technical components call it “Converge.”

Participants will remember “Converge” as the project that eventually delivered them a new TSP mobile app, new security functions, a mutual fund window, and a few more things that most people are familiar with from online banking.

Many of these improvements have been in the works for years, especially the technical stuff on the backend. However, the Federal Retirement Thrift Investment Board (FRTIB) has stated that participant feedback is influencing the direction in which some of the new features are being implemented.

According to a recent study of TSP users, 57% of those under the age of 40 prefer a mobile app to access the TSP. 24% of those over 40 also agreed to this.

Participants will be able to log in to their accounts and connect with the TSP via their online accounts, email, and phone line. Starting next summer, they’ll also have access to a new TSP mobile app with a chat feature and an AI-powered virtual assistant.

The chat option will be administered by live TSP customer care professionals, who will be able to transfer participants to other people who can help with more specific inquiries or issues over the phone.

More online forms and electronic signatures will also be added to the TSP, making it easier for participants to manage their money and engage with the plan.

Participants will also be able to scan checks into the TSP using a digital scanner, similar to what most banks offer.

According to the TSP board, there’s also an impending mutual fund window opening somewhere in the summer. The plan’s five core elements will allow participants to access tens of thousands of dollars that would otherwise be unavailable.

The mutual fund window is currently being designed by the administrators. But according to Nohe, it will also have a search engine that will let people filter through the funds and look at their choices based on things that are important to them.

Participants with mutual fund window questions will be able to contact a dedicated contact center, which will be set up as part of the plan.

Once players join the window, there will be no trade limits, although some individual funds may have their own, according to Nohe.

Both participants and members of Congress are interested in the mutual fund window. The TSP will provide further details in the next few months.

Participants will see new security measures, as well as the mobile app and mutual fund window.

For example, participants may receive more prompts for a one-time password (OTP) to perform higher-risk online transactions. More fraud detection and prevention technologies will be added to the online experience as part of the strategy. Participants will also be able to access their TSP accounts using biometric data such as face recognition or fingerprints.

Participants will begin to see these changes this summer, according to the FRTIB. Meanwhile, the Thrift Savings Plan (TSP) will start engaging with its members soon to prepare them for the changes.

Yes, participants will be required to prepare actively.

The most important thing to remember is that participants will need to create new log-in credentials to access their online accounts. They’ll need to create a new login, password, and multi-factor authentication to access their accounts.

Those with several TSP accounts, such as a military or a civilian retirement account, will just need to create one new credential to gain access to all of them, according to Nohe.

Before the big launch, there will be a brief blackout period during which participants will be unable to access their accounts or carry out specific transactions for a limited time.

Once again, the TSP is still ironing out the details. However, keep an eye out for more information on the plan itself.

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

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

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

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

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

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

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

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

That’s making a difference.

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

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

Fund Retirement Needs and Increase Your TSP Contributions

Which of us have attained, or have passed, our career’s “Bon Jovi moment”? What do Bon Jovi moments entail? It’s when you’ve made it midway. In Jon Bon Jovi’s famous track Livin’ on a Prayer, the band declares that the track’s themes (Tommy and Gina) were midway there. Where “there” is everybody’s assumption.

Assuming we take “there” as being a pleasant retirement and think either Gina or Tommy is a full-time government worker, midway there implies Gina or Tommy still has around fifteen years left in their government jobs. If they’ve been fiscally responsible, they are likely to have finished on student loans, have a home on which they are paying rent, and have laid contingency funds for their kids’ future. They put aside 5% of their TSP with these responsibilities to qualify for the state match. They’ve also been pushed to save through FERS contributions and Social Security.

Gina and Tommy have attained the stage where they have to ramp up their TSP payments. The TSP optional deferral sum for 2020 was USD 19,500, and it rose to USD 20,500 in 2021. USD 307,500 is the result of multiplying USD 20,500 by fifteen years. That’s before factoring in the state match or gains from their TSP fund. Also, it ignores the funds they’ve put in over the preceding fifteen years and the interest they’ve earned on it. 

How will they be able to finance their TSP with many of their existing obligations entirely? Below are some ideas:

• If they could get a better mortgage, they should remortgage their home. However, they cannot accept cash out of the account or change the loan duration.
• Let the kids understand the amount of school expenses their parents will cover and the amount that will be their own obligation. There is no requirement that parents pay for their kid’s education in full. They should also talk to their children about college options.
• If they cannot increase their TSP payments to the full instantly, they can devise a strategy for ramping up their retirement savings to get the highest amount as swiftly as possible.
• Recognize that they’re not quite “midway there” and anticipate working for a few more years if necessary.

According to tradition, a person’s life is divided into three key savings goals:

Purchasing a home, funding their kids’ education, and putting money down for retirement are all priorities. And the question has been posed: Which of the products mentioned above will a bank not lend you money for? You shouldn’t ever put your retirement on the back burner in favor of these, undoubtedly vital aspirations; else, you may discover yourself livin’ on a prayer after you retire.

You could use TSP tools to know where you stand today and where you might be in the year. https://www.tsp.gov/calculators is where you’ll find them. There are various calculators accessible, and “How Much Will My Savings Grow?” is the finest one for forecasting your potential bank account. This tool allows you to run various situations to evaluate how modifications in your savings account will affect the sum of money you have set aside for retirement.

Even though you’re midway there, you would not want to end up in your retirement years livin’ on a prayer.

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

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

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

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

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

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

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

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

That’s making a difference.

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

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

Will IRA’s Divesting From Fossil-Fuels Cost You? by, Aaron Steele

Should fossil-fuel firms be divested from retirement savings accounts and pensions? This technique is growing more common across the world. Pension schemes in Scandinavia have revealed divestments from fossil fuel companies in recent years. Moreover, the UK NEST retirement funds, a government-run IRA-resembling fund where employees renege if their companies don’t offer benefits, has revealed that it will also pull its resources out of the Arctic drilling, tar sand production, and coal mining.

In the US, a duo of lawmakers introduced a bill in 2020 to “decarbonize” the Thrift Savings Plan (TSP), a 401(k)-style scheme for federal workers. And several state pension schemes have revealed divestment schemes, the most notable of which is New York. Last December, I pointed out that the scheme did not comply with the region’s constitutional provision that pension investment funds should be focused exclusively on boosting fund remittance for pension attendees.

In the U. S., the Department of Labor decreed during the Donald Trump presidency that the fiducial obligation to augment investor returns disallowed such divestment activities in ERISA-managed retirement funds (i.e., 401(k) schemes for employers in private sectors). Although, they left a gap so that money managers might take climate change into account as a variable in deciding the process of maximizing returns.

At that moment, I expressed admiration for more employee choices, pointing out that there are many IRA services. These services range from those who take an environmentalist perspective to those who take a religious view, like the Catholic Ave Maria Mutual Funds scheme, and that combining 401(k) gains and IRA would give savers more options in their pension savings, allowing them to sacrifice some earnings in exchange for ethical investments. It takes me to the Department of Labor’s planned amendment from 14 October.

According to New York Times, the Department of Labor suggested new policies on Wednesday that make it very easy for retirement schemes to include investment choices predicated on social and environmental considerations — and allow for these options to be the standard option upon enlistment.

The Joe Biden regime’s plan clarifies that aside from retirement scheme admins being authorized to examine such considerations, it could be their obligation, especially if climatic changes’ economic repercussions persist.

“The new guidelines will also allow portfolios with environmentalist and other goals to be the standard investment choice in retirement schemes such as 401(k)s that was previously barred under the last administration’s standards.”

Notwithstanding this shift, according to The New York Times, fund managers will still be prohibited from sacrificing profits to prioritize environmental, social, and governance (ESG) concerns.

Despite this broad definition, other sites shed more light on the Biden government’s goals. According to the Financial Times, the Department of Labor suggested that retirement savings schemes may potentially be actively compelled to include climate change when making their investment.

“It keeps being seen whether the Department of Labor will go one step ahead in final provisions by requiring the attention of particular ESG elements, or if they’ll retain a neutral stance that they’re not distinct than other conventional investment requirements,” R. Sterling Perkinson, an associate at the legal firm Kilpatrick Townsend, told the (SHRM) Society for Human Resources Management.

Are there risks associated with ESG investment? Obviously, a large number of individuals are in favor of the move.

However, there are three areas we need to be concerned about:
To begin with, “ESG” isn’t a singular set of rules that applies to everyone. For instance, the organization Hong Kong Watch criticized the Western-style pension funds that profess to adopt the ideals of ESG-based investment of concentrating solely on environmental problems while casting aside “blind eye” human rights violations in China in the report that was issued at the start of the third quarter of 2021.

Furthermore, the haste to divest from non-renewable energy corporations might have unexpected repercussions. As per the IEA, oil exploration spending almost halved from 2015 to 2020, as published by Bloomberg in an editorial headlined “Shunning Fossil Fuels Too Soon May Prove Catastrophic.” Current investment levels are grossly insufficient to address projected global energy needs in the following years. If I am anywhere half correct, the repercussions of avoiding investment in conventional energy sources would be somewhat short of disastrous without a sane, practical investment plan — and timeframe — for creating green energy.

Governments may be as good as they choose to be. But their deliberate blindness to the repercussions of their efforts — severe recessions, shattered communities, and millions more starving — doesn’t render them perhaps less evil. And besides, the path to hell stands floored with gold.

Here’s a genuine consideration: ESG investment is more expensive, even if advocates claim that earnings are comparable to standard investment. As per a Wall Street Journal column from September 2021,  ESG investments are more costly than other forms of investment.

According to a Morningstar analysis, the asset-weighted mean cost ratio of ESG investments in the United States was 0.61% in 2020, as opposed to 0.41% for all open-end exchange-traded funds and mutual funds in the United States.

With time, even minor changes in expenditure ratios might accumulate. As per my estimates, a $100,000 portfolio with an 8% yearly revenue would grow to around $898,000 with a 0.41% cost ratio over thirty years, versus about $849,000 with a 0.61% expense ratio — a $49,000 gap.

It may appear insignificant. However, as public awareness has grown, 401(k) money managers have come under increasing pressure to lower their charges. It would undoubtedly be highly enticing for them all to increase their profits by persuading companies that they must choose ESG fund alternatives for their workers, despite the increased fund expenditure fees. Workers, of course, will bear the brunt of the consequences.

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

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

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

Beneficiaries Named for Your TSP Supersede Wills and Trusts by, Aaron Steele

Do you know that your beneficiaries now supersede Wills and Trust? 

How are the Thrift Savings Plan (TSP) and most other government benefits similar? The reality is that payouts would not be delivered in line with a trust or a will after your demise.

Besides the TSP, beneficiary forms also control the Federal Employees Group Life Insurance (FEGLI), FERS or CSRS retirement payments, and non-paid wages. There’s a regular sequence of priority for government benefits if there’s no beneficiary application or if the individual(s) designated on the beneficiary document have died. 

Benefits will be distributed in the following manner: 

The first benefit goes to the spouse. The second benefit will go to the children or child in equal portions (for each stirps) (excluding step-kids except if officially adopted). Afterward, the benefit goes to the parents. The one after that goes to the court-assigned administrator or executor of the property. The final benefit goes to the closest family member, contingent on the constitution of inheritance in the region where you lived at the time of your demise.

But hold on! I’m confident that you are not astonished to learn that the typical order has an exception. A legitimate court ruling (e.g., in cases of divorce) would trump the standard protocol of priority and a specified recipient in the event of FEGLI.

You can establish a trust with your TSP recipient if you’d like your TSP to disburse your fund after your demise to people or entities you’ve named in the trust. If you decide to go this route, ensure that you speak with an experienced lawyer with a retirement plan and trust legislation. If you wish to place your TSP account in the care of specific people, the simplest method is to name them on the Thrift Savings Plan-3 form.

If your specified recipient is a government employee or retiree, they can presently roll your TSP fund into their own. Non-federal partners will be awarded a “beneficiary participant account” and can keep their funds in the TSP if their deceased partners identify them as a beneficiary. If your designated recipient is not your partner, they can’t leave the fund in the TSP account, but they can choose an “inherited IRA.” 

It allows them to extend the payouts out depending on the life prediction in some conditions. Except they fulfill specific requirements, most non-partner recipients are not able to choose inherited IRAs and extend payments for the rest of their lives as per the SECURE Legislation. The fund has to be drained in 10 years consistently.

Whenever in doubt, seek the advice of your federal benefits lawyer or counselor. It shouldn’t be too tough if you live in the Washington region. Many people may not be aware of federal perks if they travel further away. Consider having a private conversation with a benefits specialist.

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

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

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

Take Time Now To Consider What You Want In Retirement by, Aaron Steele

It’s essential to work towards maxing your Thrift Savings Plan (TSP) contributions, especially if you plan to retire by the end of the year.

However, The reality is that most federal employees approaching retirement may not have the financial resources required to finance their TSPs adequately, and there are various reasons for it.

Most federal employees who work in a lower-graded position were setting away their $19,500 elective deferral limit, which is impractical. Some still have children to support through college, disabled spouses or children to take care of, or may have started their federal careers with a lot of debt to repay.

There are two conflicting options for anyone who believes they don’t have enough money for retirement:

1. Put in more hours at work; or

2. Make a budget that allows you to live on less.

1. Put In More Hours At Work.

If you don’t have enough money saved away to allow you to retire as you planned, consider delaying your retirement for a few more years to save more money. For instance, if you plan on retiring by the end of the year, you can delay by a year or more to grow your retirement income.

2. Make A Budget That Allows You To Live On Less.

If you don’t want to continue past your retirement age, you’ll have to look for a way to live on your available funds.

It would require creating a budget and sticking to it to ensure you don’t run out of money in retirement.

Neither of these options is particularly enticing. One must either work longer to abbreviate their retirement or live on less to be able to achieve some of the things on the bucket list that they had hoped to do in retirement.

If you face these difficult choices, ask yourself: “Which one is more important to me? Money or time? There’s plenty of time in retirement but no new sources of income.

So, if a person: A) enjoys (or at the very least does not despise) their profession; and B) expects to live a long time after retirement, they might contemplate working longer. Someone like myself (I enjoy what I do, and my family has a lengthy life expectancy) could be inclined to navigate the option of working longer.

You will enhance your CSRS or FERS pension, your Social Security income, and your ability to save more in the Thrift Savings Plan (TSP) for each extra year you work. You would also have one less year of retirement to save for.

On the other hand, if a person dislikes their job and their family’s lifespan isn’t as long, they may choose to take the money and run. What good is money if you don’t have anybody to spend it with? Early retirement allows you to spend more time with those you love â€” your spouse, kids, grandchildren, and others.

Someone like my wife (who had the worst boss in the world and whose family is a decade younger than mine) might go this route.

Another factor to consider is that as people get older, they are less able to participate in some of the more physically demanding retirement activities. So if you planned on taking a hike, traveling around the world, or engaging in some fun activities, it may be best just to quit and start exploring: but again, it requires substantial funds to engage in all of these activities.

One standard route for those in the latter category is quitting their jobs and working part-time. Most engage in coaching and other part-time jobs that allow them to earn some income in retirement.

But again, working in retirement may affect your Social Security benefits.

For every $3 you earn in retirement, the Social Security Administration (SSA) will withhold $1 of your Social Security benefits. So if you earned $3,000, your benefits would reduce by $1,000. This deduction will stop once you reach the full retirement age (FRA).

Conclusion

There is no “one size fits all” option when deciding whether to work longer or spend less in retirement. As you approach the retirement age, it’s best to consider your options based on your unique situation.

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

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

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

Who Will Benefit From Your TSP Account?

When we leave the workforce, the nest egg we meticulously built up throughout our employment becomes one of three things: income, a legacy for loved ones, or tax obligations to Uncle Sam. Ideally, we prefer spending that money ourselves or knowing that the bulk of any leftover money will help our loved ones rather than the IRS.

It’s good to have a strategy in place to properly direct your hard-earned money to your heirs without losing a lion’s share to the IRS, especially since we hear more discussions about taxing inter-generational wealth and enacting higher future tax rates.

“What will happen to my TSP if I don’t use it during retirement?”

Suppose a married TSP participant dies with their spouse as the principal beneficiary. In that case, the account is retitled as a Beneficiary Participant TSP Account in your spouse’s name (as long as it has a minimum residual balance of $200). The TSP also will automatically reallocate the account to the Lifecycle Fund that best matches your spouse’s age. Spousal beneficiaries often have access to the same investment funds and similar payout options as the TSP’s original owner.

A Beneficiary Participant Account lets the spousal beneficiary keep deferring taxes on most of the account for life. It is achieved by basing the Beneficiary Participant account’s Required Minimum Distributions (RMDs) on their own life rather than the (deceased) original owner’s life expectancy. It’s a practice informally known as “stretching” the tax liability.

The ability to “stretch” the tax deferral over a more extended period implies that the money that would have otherwise been lost to taxes can now multiply in your beneficiary’s account for years. It also means that Uncle Sam generates less tax money in the short run.

That delay has become an issue as the national debt approaches $29 trillion, and we approach another run-in with the debt ceiling this autumn. Uncle Sam is no longer willing to wait decades for the tax revenue owing on an inherited IRA. As a result, it should come as no surprise that the SECURE Act of 2019 removed the ability for virtually all non-spousal beneficiaries to extend an inherited IRA for more than ten years (with several exceptions).

Non-spousal beneficiaries do not have the option of extending the tax deferral utilizing a Beneficiary Participant TSP Account under the TSP. Suppose a TSP Death Benefit is bequeathed to a non-spousal beneficiary. In that case, it is given as a single lump-sum payment, which can have significant tax implications if action isn’t done quickly.

“Who will benefit the most from my TSP account when I die?”

Imagine you have a $1,000,000 tax-deferred TSP account that you intend to give to your two children when you die, assuming that you love your children equally and want the proceeds from your TSP balance split 50/50 between them.

If nothing more is done, each of your children will get $500,000 in taxable income. These distributions would push each of them into the 35% marginal tax bracket for that year (assumption: tax rates have not been raised from 2021). If the children have their own jobs, their family income is included in the taxable TSP payout, thus increasing their marginal tax rate even further! Assume they live in a state where income tax is levied at a rate of 5%. That indicates that our aggregate tax rate might be as high as 40% (35% federal, 5% state), resulting in a $400,000 tax bill!

That only leaves $600,000 to divide among the children, leaving each with just $300,000 once the colossal tax burden is deducted. Uncle Sam, the unexpected beneficiary, has reaped the most profit from your decades of hard labor in this unfortunate scenario.

“How can I keep my Legacy tax bill as low as possible?”

If the inherited money were from a regular TSP and the children were correctly identified as beneficiaries, then they usually have a 60-day window to form an Inherited IRA and move the inherited money straight into the new account before the TSP mails out a Death Benefit. Under the new SECURE Act regulations, an eligible recipient can spread the tax burden over up to ten years by opening an Inherited IRA. That may assist keep them out of the higher marginal tax rates, lowering the overall amount of your inheritance lost to taxes.

Important: TSP profits must be transferred directly from the TSP to the Inherited IRA. The Death Benefit funds transferred to the non-spousal recipient will automatically have 20 percent deducted for taxes. The death benefit can’t be indirectly rolled into an Inherited IRA, and the TSP does not allow for a do-over.

Suppose the inherited money originated through a Beneficiary Participant TSP Account. In that case, TSP rules provide that upon the surviving spouse’s death, the entire account balance of a Beneficiary Participant TSP must be transferred straight to the beneficiary and can’t be rolled over into an Inherited IRA. That causes the same tax issue as in the preceding case, prompting many surviving spouses to consider moving their Beneficiary Participant TSP Account into an Inherited IRA. Transferring the funds to an Inherited IRA through your surviving spouse may make sense since it allows the following generation of beneficiaries to extend the tax deferral of their inheritance over ten years utilizing an Inherited IRA.

Consider the advantages of contributing to Roth accounts and using Roth conversions to help manage tax rate risk during your retirement and prevent higher future tax rates from possibly decimating the inheritance your loved ones get. Now, suppose your children inherit a qualified Roth TSP or Roth IRA. In this case, they will get a tax-free distribution of every single cent left in the account, which means that properly constructed and vested Roth accounts won’t produce a tax bill upon your death, even if tax rates rise in the following years.

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

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

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

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

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

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

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

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

Several Resources that Could Help Seniors In-Need – Aaron Steele

Many people in the U.S. enter retirement with little or no savings. As a result, the majority of all of their income comes from their Social Security payment.

The most recent Social Security Administration (SSA) figures reveal that 12% of males and 15% of females rely on the benefit for 90% or more of their income. That can be difficult for a household: the average monthly payment in June 2021 was only $1,555.

Despite a larger-than-usual cost-of-living adjustment (COLA) of almost 6% this year, fast-rising housing and grocery prices have only heightened concerns among financially insecure retirees about managing their expenses and the future.

People are beginning to feel the effect of inflation, particularly on everyday items, says K.H., president and CEO of GreenPath Financial Wellness, a nonprofit debt counseling organization. That’s putting significant pressure on folks on fixed incomes.

Do you rely only on Social Security? Here are some coping tips.

Apply for food benefits

Many seniors aren’t using all of the food aid programs available to them, claim experts. According to a 2015 research, less than half of eligible seniors used the Supplemental Nutrition Assistance Program (SNAP).

For seniors, there’s a lot of misunderstanding about the program and many stigmas, which regrettably prevents individuals from seeking help.

The extra money may go a long way for seniors on a limited income: the maximum monthly benefit for a one-person household is $250. The money is accepted by grocery shops, internet vendors, and farmers’ markets.

SNAP has limitations about how much you may own in assets and earn in income to qualify for aid, and Social Security payments are considered. Still, some costs, such as rent and child care, might be deducted, and experts advise anybody who feels they may qualify to apply.

The USDA also operates the Commodity Supplemental Food Program, allowing certain low-income persons over 60 to receive a monthly food box comprising fruits, vegetables, cheeses, and other items.

Meanwhile, retirees with Medicaid health plan coverage might be eligible for free food through Mom’s Meals. In addition, some Medicare Advantage health plans provide meal benefits under the program for persons who have recently been discharged from the hospital or are suffering from a chronic ailment.

The meals, including Salisbury steak, spaghetti and meatballs, and sweet and sour chicken, are usually delivered every two to three weeks. People may notify the program if they have any allergies, and they can accommodate vegetarian diets and those suffering from diseases such as cancer or diabetes.

A Mom’s Meals spokesperson advised seniors who believe they may be eligible for free meals to contact a Medicaid or Medicare representative. Get assistance with health insurance and medication expenses. Health insurance and prescription expenses can eat away a big part of retirees’ funds. Fortunately, some may be qualified for monthly premium assistance through the Medicare Savings Program, according to Caitlin Donovan, a spokesperson for the National Patient Advocate Foundation. This nonprofit organization assists people in accessing and paying for health care. Donovan stated that your premiums, deductibles, and copays would be paid if you qualify.

Additionally, people enrolled in Medicare Part D, which covers medicines, should check whether they’re eligible for Extra Help. This program may be able to lower your drugs expenses. According to Donovan, the benefit may be worth more than $5,000 per year. There are also a lot of nonprofit groups that help seniors with their medical expenses. Copays.org, for instance, allows you to apply for funding to cover copays, premiums, deductibles, and OTC medications.
The National Patient Advocate Foundation maintains a financial resource list where you may look for local assistance for everything from dental treatment to end-of-life services.

Other options

While you must have a very low income to qualify, some retirees may be eligible for Supplemental Security Income, a means-tested program for people over the age of 65 or with a handicap.

In December 2021, over 2.5 million people received both Social Security and the supplementary payment in December 2021, which may be as much as $841 per month for an individual. You can apply online on the SSA’s website or by contacting 1-800-325-0778.

For additional help, visit the National Council on Aging’s “benefits check-up” website, where you may learn about over 2,000 options accessible to struggling seniors by ZIP code. The council also provides a handbook called “You Gave, Now Save,” which includes information on the most generous benefits that assist seniors with expenditures such as phone bills and property taxes.

Finally, some older individuals might be able to work part-time to supplement their income. According to Teresa Ghilarducci, director of The New School’s Retirement Equity Lab, more than a third of Americans over 65 are now doing so.

Ghilarducci mentioned that the Department of Labor has a program that assists low-income, jobless seniors in finding jobs and receiving specific training. The nonprofit SER and its network of community organizations that provide job training are also good resources.

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

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

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

You Might Be Able To Take Advantage of the Saver’s Tax Credit

If you contribute to an IRA or an employer-sponsored 401(k), you may be eligible for the Saver’s credit, commonly known as the Retirement Savings Contributions Credit.
According to the IRS, beginning in 2018, if you were the intended beneficiary, you may also be eligible for a tax credit for contributions made to your “Achieving a Better Life Experience (ABLE)” account, a kind of savings account.

Benefit Amounts

According to the Internal Revenue Service (IRS), based on your adjusted gross income recorded on your Form 1040, the amount of the credit will be 50%, 20%, or 10% of the amount of the following: contributions made by the taxpayer during the tax year to a 401(k) plan, SEP-IRA plan or SIMPLE IRA plan.

Consider the following scenario: you earned $45,000 in 2020 and made a $2,000 contribution to your IRA. In this situation, you may be able to claim $1,000 of the total amount donated (50%) as a tax deduction on your income tax return. This lowers the amount of money that is taxed on your total tax bill.

The IRS emphasizes that rollover donations are not eligible for the tax credit. You may also be penalized for any recent distributions you received from an employer-sponsored retirement plan or an individual retirement account (IRA). This implies that if you are now in the retirement or distribution phase of the retirement accounts to which you have made contributions, you may be able to claim this tax credit simultaneously.

The highest amount that someone may qualify for with the Saver’s credit is $1,000, which means that the maximum amount you can claim is $2,000 if you qualify for $1,000. It was included in the Balanced Budget Act of 2016 and became effective on January 1st, 2018. The 2017 tax credits were approved as part of that legislation. Additionally, the $2,000 limit is for your combined eligible contributions if you file as married and filing jointly.

Suppose you contributed less than $2,000 to your IRAs or 401k plans in a given tax year. In that case, you typically cannot claim the Saver’s credit because it must exceed a minimum dollar amount based on your adjusted gross income.

Roth IRA Contribution Eligibility

To be eligible for this credit, you must have a traditional or Roth IRA that has been open for at least one year from when you file your taxes. For instance, if you opened an account in mid-December and did not contribute until late February, it would not count towards your eligibility. On the other hand, if the account was opened before December 1st, but contributions continued into 2019, those would qualify toward eligibility even though you purchased them within a full calendar year after its initial opening date.

Limitations on Contributing to IRAs/401(k)s

It would be best to contribute to an IRA or employer-sponsored 401(k) plan to be eligible for this credit. You may not contribute more than the maximum allowed by law (in 2020, it was $2,500, and in 2021 and 2022, it will increase to $3,000). Suppose you have been splitting contributions with your spouse. In that case, you both must have contributed at least that much to be eligible for the credit. For non-working spouses filing taxes jointly to claim this credit, their combined income cannot exceed $62,000. Wherever possible, these limits should be adjusted so that married couples who are filing jointly can use the full amount of whatever their limits allow towards getting a tax credit.

Where to Claim the Saver’s Credit on your Tax Return

You can claim this credit by first looking up your total eligible contributions made to all IRA accounts during the year. Next, multiply this amount by 10%, 20% or 50% depending on what is allowed for your adjusted gross income (refer to the chart above). Finally, enter this amount on line 52 of Form 1040, line 32 of Form 1040A, or line 8 of Form 1040NR. You may want to consult with a tax advisor if you are unsure how much you should be claiming, as it varies based on income levels and specific circumstances.

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

Time is ticking on retirement. – Rick Viader

The 24-second shot clock was invented in 1954 to compel NBA teams to speed up their games. Without it, teams have no sense of urgency and could literally keep the ball for the whole game. Many pre-retirees also lack a feeling of urgency in planning for the day when they will no longer get a paycheck and will be forced to spend decades without their employer depositing a check every two weeks. That is what we call the “retirement shot clock.” It comprises everything you need to prepare to defeat any opponent you might encounter in retirement.

If there’s anything to learn from basketball, it’s that preparation is the way to success. Before every game, you should analyze opponents to give your team a competitive advantage, and this is precisely what you should be doing in retirement to prevent the risk of running out of money. Your opponents in retirement may differ from those on the basketball floor. You won’t come eye to eye with a diesel-like Shaq or have to chase Steph Curry around for 48 minutes, but you’ll face other risks.

The biggest opponents you’ll face in retirement are:

1. Taxes.

2. Market risk.

3. Inflation.

4. The cost of long-term care.

Allow us to present you with the scouting report to overcome these obstacles and get set for success.

  1. Taxes. Well, they are a sneaky opponent. The one thing I can say about this is that it never stops coming at you. In fact, we need to see whether it’s on steroids since it’s sometimes huge and sometimes small. However, I believe taxes will continue to rise in the future. So, if you have a 401(k), keep in mind that you have never previously paid taxes on your account. And after you reach the age of 72, you will be obligated by law to pay them. It’s known as the required minimum distribution (RMD). Consider a Roth conversion, which allows you to pay taxes on your retirement funds now when you know what tax bracket you’re in, rather than later when you have no idea.
  2. Market risk. Market risk is like an old-school basketball legend who has been ballin’ for years and knows how to catch you off guard when you least expect it. Just be careful because it might sweet talk you, make you feel wonderful, and get you to let down your guard, just to turn violent and bring you crashing down. One thing to remember about market risk in retirement is that you can safeguard your account against loss after you reach the age of 59 1/2. Fixed indexed annuities, for example, have no fees and allow you to share in some of the market’s potential while avoiding its downside. Also, if you are still working, you may access more investment possibilities by rolling your savings into an individual retirement account (IRA) at 59 1/2, rather than the restricted funds offered by your 401(k) plan or Thrift Savings Plan (TSP).
  3. Inflation. That’s the player you cannot trust. Basketball requires a high level of reliability, and inflation is not someone you want on your team. Inflation begins with hustling, shooting, rebounding, and doing all things possible to win the game. But every year, it puts in less and less effort for you. As the cost of living rises, you must ensure that your assets do as well. You can no longer go to a bank or credit union and acquire 5% certificates of deposit (CDs). And nowadays, being too careful is just as dangerous as being overly aggressive. You may deposit $10,000 in your bank account today, and guess what? It may still be $10,000 in ten years, but it’ll only be worth half of what it is today. That is the danger you are taking. Investing in stocks or remaining invested in stocks throughout retirement might help you keep up with the rising cost of living. Of course, there’s no guarantee, but equities in a well-diversified portfolio have performed well over time.
  4. The cost of long-term care. In retirement, there is a nearly 70% chance that you’ll require some form of long-term care. Injuries are an essential part of the basketball game, and there’s a strong possibility you won’t feel as good in retirement as you do now. As a result, it’s critical to consider long-term care while you are well to aid with any severe health difficulties in the future. Many individuals have abandoned traditional long-term care insurance because if you have one and do not utilize it, you lose the majority of the money you paid into it. A living benefits rider is a common option for pre-retirees. These are policies that you can use before you die. If you have a life insurance policy with living benefits, you will be covered if you ever develop a terminal, chronic, or acute disease.

Preparation is essential for success in basketball. You’ll confront hostile conditions from the opposing team and referees who never blow their whistles, but you only have power over what you can control. You will be set up for financial success in retirement if you recognize dangers and understand your opponents early on while working with a financial advisor who can create a game plan for your retirement.

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

3 Financial Agencies Are Improving Their Retirement Service Delivery – Robert Wiener

Financial companies are constantly improving, and the latest improvement within the sector is customer service provision. Many agencies now provide efficient customer service to their client, earning them more referrals while maintaining existing client loyalty. Agencies providing service to federal workers and the public also offer customer service to their finance clients.

For example, federal workers nearing retirement will likely work with the Thrift Savings Plan (TSP), Social Security Administration (SSA), or the Office of Personnel Management (OPM). Getting financial services via phone call or online services is the best means for other people. However, any method you choose should provide reliable and prompt assistance whenever you need help.

Unfortunately, several agencies have poor customer service. A 2021 report from the Office of Personnel Management (OPM) shows that most public members and annuitants have complained to the Inspector General’s office about their inability to resolve issues related to retirement. There is a backlog of reported cases due to manual processing and legacy systems, resulting in longer processing times. The report also shows that most of the complaints are related to the interim annuity payment. 

OPM is currently working on its processing system to have a new upgraded system by late 2022. The OPM leaders believed that increased client satisfaction is achievable with enhanced operational services and by employing more customer service staff. Hiring more staff needs Congress support while implementing new processes depends on development efforts and good planning.

Retirees can contact the OPM using their online service, email, or phone call.

Social Security customer service performance was reduced during the pandemic because most services require physical presence. Besides, their toll-free number is always busy during the day. However, the customer service performance increases when they provide an online service, which is still effective till this moment. Social Security’s physical customer service delivery is slated to start in April 2022.

You can contact the Thrift Savings Plan (TSP) through their ThriftLine. Later this year, the TSP will provide more means of contact, like a constant online assistant. With your TSP mobile app, you will be able to engage a representative when you log in to your TSP account. However, you can only do this with the new function during business hours using the live-agent chat.

Contact Information:
Email: [email protected]
Phone: 5167611515

Here Are The States That Don’t Tax Social Security – Robert Wiener

As you approach retirement, chances are you’ll rely on your Social Security benefits to help you afford your expenses once your wages stop coming in. But did you know that where you live impacts whether or not you get to keep all of the money from these entitlement benefits?

What Effect Does Your Retirement Location Have on Your Social Security Payments? 

If you live in one of these 37 states, you wouldn’t need to worry about losing government assistance.

Because 37 states do not tax Social Security payments and 13 states do, some retirees get to keep more of their Social Security checks than their colleagues.

You won’t have to worry about your state government taking a share of your retirement checks in 37 states, including:

  1. Alabama
  2. Alaska
  3. Arizona
  4. Arkansas
  5. California
  6. Delaware
  7. Florida
  8. Georgia
  9. Hawaii
  10. Idaho
  11. Illinois
  12. Indiana
  13. Iowa
  14. Kentucky
  15. Louisiana
  16. Maine
  17. Maryland
  18. Massachusetts
  19. Michigan
  20. Mississippi
  21. Nevada
  22. New Hampshire
  23. New Jersey
  24. New York
  25. North Carolina
  26. Ohio
  27. Oklahoma
  28. Oregon
  29. Pennsylvania
  30. South Carolina
  31. South Dakota
  32. Tennessee
  33. Texas
  34. Virginia
  35. Washington

 You can earn as much money as you want in these places without worrying about state taxes on Social Security benefits. However, federal taxes may still be an issue.

Once your provisional income surpasses $25,000 for single tax filers or $32,000 for married joint filers, the IRS may reduce the amount of benefits you receive by taxing you on up to 50% of the benefits at the federal level.

As many as 85% of benefits could be taxed for people who make up to $34,000 for single taxpayers or $44,000 for married joint filers. This provisional income is made up of half of Social Security payments, all taxable income, and some nontaxable income.

 What If You’re A Resident Of One Of The Other 13 States?

If you are a retiree living in one of the other 13 states, you may be disappointed to learn that your choice of residence may result in you receiving less Social Security income than seniors who live across the state line in another location.

The good news is that not everyone who lives in one of these 13 locations will face a large tax payment. The nature of the rules will determine the amount you owe and whether you’ll be taxed at all in your area, as well as the amount of income you earn.

Many lower-income Americans are exempt from state benefit taxes, even though higher-income individuals are subject to them.

The Department of Revenue in your state can help you figure out if your Social Security benefits will be taxed. If you are among those who may have to pay a state tax bill, you should factor this into your retirement planning. Because your benefits will be stretched thinner, it’s a good idea to set a bigger savings target to help you get by.

You might also explore moving to one of the majority of places where your benefits are yours to keep without your state taking a share. Still, you should weigh many aspects, including the cost of living and how other retirement income is taxed, before deciding if this is the best choice for you.​​​​​​​

Contact Information:
Email: [email protected]
Phone: 5167611515

Everything you need to know about the latest TSP Service Provider Update by, Aaron Steele

Over the next few months, there will be several changes to the Thrift Savings Plan (TSP). The first change will occur in May 2022 and involve transitioning the thrift savings plan to a new provider. The update to the TSP service provider was known earlier due to the announcement made on January 26, 2022. 

You must keep in mind that there may be a short-term delay in accessing the TSP website and performing certain transaction types during this transition period. However, this transition will start in May and should be completed in June. Therefore, the delay in website accessibility will not last long.

Like other 401(k) retirement plans, the Thrift Savings Plan is available to most federal workers and military members.

Apart from the transition update coming up in May, there are other crucial updates to the Thrift Savings Plan you need to know before the TSP service provider update. 

Before the transition, some significant transactions will be stopped, and below are the cutoff dates for those transactions:

• The last day to make a paper loan document request through the telephone is April 8, 2022.

• The last day to make a paper loan document submission is April 21, 2022.

• The last day to make other paper forms request is April 29, 2022.

• The last day to access or submit a hard copy or online form is May 16, 2022. This date is also the last day you can use email to contact the TSP provider.

• The last day you can change your contributions or transfer between various investments is May 26, 2022, which is also the last day you can contact the TSP provider via telephone.

From May 26, 2022, till early June, you won’t be able to access your account. However, all your invested funds will show appropriate market changes during this transition period.

After the update, you will be able to access your account, and you will have various options to access and manage your Thrift Savings Plan account. This new upgrade provides a virtual chat, which answers all common questions without the physical presence of TSP providers. It also allows you to complete several transactions online. 

When the upgrade is completed, you must update your login information to access the online account. But, this requirement is for first-time users only.

After the account login information update, you will need to do identity verification, contact information update, and account security set up by following the step-by-step guides.

Later in 2022, TSP may add an upgrade that allows TSP participants to buy certain mutual funds from the Thrift Savings Plan website.

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

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

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

How To Change Your FEHB Enrollment After Retirement – Rick Viader

How Do You Change FEHB Enrollment During Retirement?

This article examines Federal Employees Health Benefits (FEHB) coverage and how retirees can change the policy due to specific life-changing events. Although many federal employees are conversant with how and when they may do an overall change in the Federal Employees Health Benefits coverage, other options are applied and evaluated for retirees.

Just like active employees, retirees may also rewrite their enrollment during the annual open season, which runs from mid-November to mid-December. Other openings, however, exist for changing coverage because of changes in circumstances and life events. The options for changing FEHB coverage mainly include:

• Reducing from family or self plus one to self only due to a reduction in family size. This reduction could result from losing a spouse. Retirees and active employees could also downgrade from family to self plus one for the same reason. The reduction could also be owing to the last child outgrowing the policy age, which is 26. As people grow and family members, especially the children, become more independent, a policy change is expected to go in tune with new family size and previously unforeseen life circumstances. 

• Active employees and retirees who relocate may need to consider changes in FEHB policy. Moving away from the service area of your health maintenance organization registered under the policy, for instance, can demand a change of plan. The policy change, for this reason, of course, is reasonable due to a need to initiate a new health maintenance organization close to your new location. 

• Changing to family coverage or a self plus one coverage due to change in marital status, childbearing, or the case of adoption. Federal employees and retirees who get married, give birth, or adopt a child will consider adjusting their policy to cover their new family member; wife or husband, child, or both, as the case may be. 

• For retirees, there is an option of changing to a lower cost option because of Medicare which they become qualified for at 65. Those fraction of federal employees who never stop working at that age remains under FEHB with the choice to change their health insurance policy upon retirement. This situation does not involve active employees. Switching to a lower-cost Health Benefits coverage is open to retirees when they attain 65. The option becomes available for active employees who are 65 when they retire, not before.

It is also good to note that as a retiree, you are not allowed to enroll anew for FEHB except you return to federal employment. Every new federal employee gets to enroll in the scheme automatically. Being rehired as an annuitant will make retirees eligible for the program as active employees.

Another significant difference is the point of contact for active-duty employees and retirees. Active employees transact with their agency’s personnel offices or a programmed machine operated by the office to make enrollment changes. At the same time, retirees have to go through the Office of Personnel Management (OPM).

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

Four Ways to Fill the Hole in Your Retirement Plan

You have been working, saving, and investing for retirement with zeal. You worked 40 or even 60 hours a week for over 50 years. Finally, you may relax and enjoy activities like bridge, golf, fishing. You no longer have to drudge to work or answer to your boss.

Then the pandemic strikes: the economy begins to deteriorate, the stock market plummets, wiping off up to a third of the value of your stock holdings, and bond yields vanish. So, what now?

The good news is that you have options. Begin with these five things, and your chances of a secure retirement will improve.

1. Develop situational awareness

This term originated from the early days of military aviation and is described as “the perception of environmental components and occurrences concerning time and space, the comprehension of their significance, and projection of their future state.” It was thought to be critical for pilots if they were to survive encounters with opposing aircraft.
For investors, this entails objectively analyzing the risks that surround them. Recognize the spectrum of possible outcomes for your investments. Find out what has happened in the past. Make a list of the most critical inputs. Remove the rubbish from your information diet and concentrate on useful, insightful, and accurate sources. Stay away from recession panic. Perhaps most importantly, realize what you can and cannot control.

2. Implement a “decumulation” strategy

How much of your assets will you withdraw every year? That is a tricky question that depends on several unknowns, such as inflation, interest rates, bond yields, financial situation, and even lifespan. William Sharpe, who won the 1990 Nobel Prize in Economics for his work on a model that’s essential in investment decision-making, termed the use of retirement savings “the nastiest, toughest problem in finance.”

The key to successfully handling this is to create a financial plan that accounts for the unknowns and then focus on your goals.

Every plan should assist you in determining how much you can spend comfortably every year. Without such a strategy, you risk either not spending what you want and can afford, or worse, outliving your funds. Working from a position of precise information rather than guessing is the most stress-free approach to retirement.

3. Understand the risks associated with fixed income

Some investors appear to be enticed by the disparity between the best and lowest grade bonds. Remember the 2008-09 financial crisis lesson: Chasing yield is a costly and foolish endeavor. And just because the Fed is suddenly buying low-quality bonds doesn’t mean you should too. Here’s how to approach debt. Bonds act as a counterweight to your stocks. They also generate income. Most significantly, they guarantee a return of (and not on) capital.

Since fixed-income securities should be included in any diversified portfolio, it’s preferable to stay with investment-grade bonds. You cannot go wrong with high-quality corporate debt. Treasury Inflation-Protected Securities (TIPS) are another option for a moderate inflation hedge. Search for opportunities in the municipal bond market, particularly in general obligation bonds, but only from entities that are not too indebted. We won’t see many state defaults, but areas like New Jersey and Illinois can have some scary moments. Those are best avoided if you’re nearing retirement.

High-yielding (or junk) debt might be tempting. But be cautious. Consider what happened to the most significant high-yield exchange-traded funds in recent weeks: Last month, the iShares iBoxx High Yield Corporate Bond ETF and the SPDR Bloomberg Barclays High Yield Bond ETF dropped 22% and 23%, respectively; both are currently down more than 10%. Anyone looking to cash out or readjust their assets was let down. Is the slight increase in return worth the extra risk?

4. Reduce risk, expense, and equities concentration

As equities are riskier than bonds, they have higher expected returns. That means not just the possibility of not achieving the desired returns but also stomach-churning volatility along the road. However, given the general rise in lifespan, you cannot afford to be without them.

The solution is simple: swap out all of your individual stock holdings, pricey actively managed funds, and alternative assets for widely diversified, low-cost index funds.

The danger of owning a single stock is simply too great for those in or nearing retirement. As fantastic as Apple, Google, and Amazon have been, they have seen drops of up to 80% at various periods. You don’t want to have to dip into these when they have declined that much like you don’t want to tap into junk bonds.

5. Make the switch from saving to spending

This is more difficult than it appears, especially during times of market turbulence. The key to this is to manage your money as well as your mindset.

Recent retirees have been stuck when it comes to spending their savings. Surprisingly, for many retirees, underspending might be a bigger problem than outliving their means.

Software applications can be helpful. Every financial adviser uses these to evaluate how much money may be spent comfortably every year. Retirement calculators that do something similar can also be found online. Make use of them.

You gave up decades of your life on the work in exchange for the opportunity to enjoy your retirement. If you do it well, the tradeoff will be well worth it.

You could have sold during the crisis, but (a) you would have taken a significant price hit, and (b) there would have been a significant reduction to the net asset value. These would have been poor-selling opportunities. Investment-grade bonds are rarely this bad; they’re called junk bonds for a reason.

 

Ten Tips That Will Help You Make Great Investment Decisions, by Rick Viader

The Office of Investor Education and Advocacy, a subdivision of the U.S. Securities and Exchange Commission (SEC), provides tools and services that can help solve investment problems. As part of its duties, the agency recently issued an Investor Alert to provide investors with investment tips to help them navigate the current economic situation. For all investors who wish to add to or remove from their existing investment portfolio or those new to the investment world, these tips can help investors make better decisions. 

The agency also hopes that these tips will stop many investors from making rash investment decisions that only benefit them in the short term. It stated that this had been the trend with many investors who are panic buying or selling because of the current economic situation. Here are some tips to help make an informed decision.

Have a Plan 

Every big decision requires a solid, fool-proof plan. Investing is no different. The first tip in the Investor Alert underscores the importance of drawing up a financial plan before making any drastic decisions. Investors need to carefully consider every part of their financial situation, including their goals and risk tolerance level. You can consult a seasoned financial advisor if you do not know how to go about this. The Office of Investor Education and Advocacy also states that an intelligent financial plan, which involves adequate knowledge of savings and investments, can lead to financial independence and security in the long term. 

Know Your Risk Tolerance Level 

One common thing with all forms of investments is the risk of losing money. This factor is one that some investors tend to forget. When such investors make losses, they immediately become disheartened and either pull out their money from other investments or give up on investments entirely. To avoid falling into this category and missing out on all the great benefits of investing, you must carefully analyze your risk tolerance level and make investments in line with it. 

Investors that wish to invest in debt securities, such as bonds, equities and mutual funds, should know that something and everything can go wrong. Debt securities are uninsured investments, unlike savings accounts that have the guarantee of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA). Even if you purchase your investments through reputable financial institutions, you could still lose all or a part of the invested money. 

You can avoid this unpleasant situation when you make investments in line with your risk tolerance level. All investors should also note that with bigger risks come higher returns. Investors who wish to invest in the long term need to make larger investments involving more risk. These investments, such as stocks and bonds, generally have higher returns. If your financial goals are short-term, you may want to invest more in cash equivalents. Such investments have lower returns and risks. However, as long as you do not keep them too long, you should achieve your short-term financial goals. If you hold cash equivalents for too long, inflation could drastically reduce the value of your investments. 

Mix it Up 

Your investment portfolio should contain a mix of asset categories with returns that fluctuate with market conditions. Doing this can protect your investments from significant losses during economic downturns. For example, the three major asset categories, i.e., bonds, cash, and stocks, have always recorded varying interest rate fluctuations. When one gets high returns, another gets medium or low returns. Investors who have all three in their portfolios are more likely to have some form of mitigation against losses. For instance, if market conditions are unfavorable for bonds, investors will be able to balance out the effects using the gains from cash or stocks. 

The Investor Alert also points out the importance of asset allocation, a process whereby investors divide their investment portfolio among different asset categories. A good allocation of assets is usually the first step towards achieving your financial goals. To achieve this, investors must take on risky investments that have higher returns. This step is especially important for investors saving long term for a financial obligation, such as retirement. If you are in this category, experts advise having stocks or stock mutual funds in your portfolio as well. 

If mixing it up would be too difficult for you, or you would rather just put your money in one form of investment, you should consider investing in lifecycle funds. Lifecycle funds help investors prepare for a long-term financial obligation by moving towards less risky asset categories as the obligation draws closer. If you wish to invest in lifecycle funds for a goal or need, you can pick a fund with a similar target date as your financial goal or obligation. Lifecycle funds have managers who oversee the funds’ diversification, asset allocation, and investment methods so that investors can be at rest. 

Go Easy on Employer Stocks and Individual Stocks 

There is no room for sentiments or emotions when it comes to investments. If you are putting your money in your employer’s stocks, ensure that you have your facts right and you are not putting all you have in that one basket. If things do not go as planned, not only will you lose your investments, you might also lose your job. Likewise, you should also be wary of putting all your money in the stocks of an individual company. If anything happens to the company, you will lose all of your money. 

On the other hand, if your investment portfolio is diversified, you will have something to fall back on if anything goes wrong with one or two of your investments. A diversified investment portfolio contains a little bit of everything instead of focusing on one thing.  

Save for Emergencies 

Emergencies will happen. Your car will suddenly need fixing, your roof might start leaking, or something could go wrong at work. If you have a savings account for emergencies, you will be able to take care of these problems without worries. The Investor Alert suggests that investors should save six times their monthly income for emergencies. 

Ensure You Take Care of Your High-Interest Credit Card Debts 

Whether the market is good or not, it is always good to be free of high-interest debts. The longer you hold off paying off these debts, the more money you have to pay. Even if the market is so bad that you are not making gains, you shouldn’t be making heavy losses. Avoid this by paying off your high-interest debts as soon as possible. 

Use “Dollar-Cost Averaging†to Get the Best in all Market Situations 

Dollar-cost averaging is an investment strategy where investors periodically invest in a target asset using a fixed amount. If the price is low, they buy more of the asset and buy less if the price is high. This way, they do not invest too heavily when prices are up or the market is down. The Investor Alert especially calls on investors who invest lump sums at the end of the calendar or fiscal year to use the dollar-cost averaging strategy, especially during economic downturns. 

Use All the Free Money You Can Get From Employers 

Many people pass up the opportunity of the free money they could get in retirement plans that employers sponsor. In many of these plans, employers match a percentage or all of what the employee contributes. If your employer offers such plans, you should save as much as possible to get their maximum match. 

While on the subject of employer-sponsored retirement plans, it is essential to address some mistakes people make about 401(k) accounts. The plan is a retirement plan, and naturally, it frowns on borrowing. Except when it is absolutely necessary, avoid borrowing from your 401(k) savings. If you have trouble doing this, you might want to discard your 401(k) debit card. The more you borrow from the account, the harder it gets to build your savings for retirement. You might even have to pay penalties if you cannot repay the loan.

Regularly Rebalance Your Portfolio 

Over time, it is easy to stray from your original asset allocation mix. As you shuffle things around, you may be putting too much in one asset category and too little in others. The way out of the problem is periodic rebalancing. Rebalancing will help you regularly diversify so your money is not too concentrated on one asset category. It will also help reduce the risk level of your portfolio. 

Another trick is to always buy low and sell high. The point at which an asset is doing poorly is the time to buy more, hoping that the prices will rise and you will make your money in multiple folds. Though it might be challenging to sell asset categories that are performing excellent than to buy those that are not, it could benefit your portfolio if correctly done. Rebalancing can, however, help achieve this.

There are two tricks to rebalancing. You can make it periodic based on the calendar or rebalance it when your investments exceed or fall below a previously designated limit. The Investor Alert states that financial experts advise investors to rebalance once or twice every year for the first method. If you choose to do this, a simple calendar reminder will let you know it is time to rebalance your portfolio. Investors who choose to use their investments simply need a price increase or drop, as the case may be, to start the process. Lastly, the Investor Alert states that rebalancing is best down on a comparably irregular basis. 

Watch Out for Fraudsters

The Investor Alert also warns investors to look out for scam artists who use highly publicized news items to steal from innocent people. They present “legitimate†schemes using these news items, and investors who put in their money because “they heard it from the news†will be defrauded. To know if a scheme is legitimate, the SEC recommends getting satisfactory answers to these questions. The agency also advises investors to seek professional counsel and talk to friends and family members to avoid falling for the wrong scheme. 

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

Planning for Federal Retirement: Death Benefits

In this article, we’ll deal with an essential yet unsettling question: What benefits would be payable, and to whom, when you pass away after retirement? It all depends on the situation.

If you have chosen a beneficiary or beneficiaries, they will receive the benefits they are legally entitled to. In case you have a surviving spouse for whom you have opted a survivor benefit, they will start receiving that benefit. If you registered in the Federal Employees Health Benefits (FEHB) program and chose the self and family or self plus one option, whoever was insured will continue to be eligible for that benefit as long as one of them receives a survivors annuity.

If you have Federal Employees’ Group Life Insurance (FEGLI), the profits will be distributed to those you choose. The same may be said for your Thrift Savings Plan (TSP) account. Survivor payments, as well as a one-time death benefit of $255, may be payable depending on your Social Security coverage.

If you haven’t specified any beneficiaries, any benefits that can be passed on will be allocated in the following order:

  • to your widower or widow; or, if none
  • to your child or children, with the part of any late child distributed among descendants of that child; or, if none, 
  • to your parents in equal parts or the entire sum to the surviving parent; or, if none, 
  • to the administrator or executor of your assets; or, if none, 
  • to your other next of kin as determined by the state laws of where you resided.

You are not required to make a beneficiary designate if you are comfortable that your death benefits will be paid in the order specified above.

If you have filed any designations, you should check to see if you still feel the way you did when you filled out the paperwork. There have been far too many instances where freshly employed, single employees chose their parents to get their life insurance and then failed to modify it when they married, had children, or divorced.

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

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

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

Should You Choose a 10% Pension Bonus or a FERS Supplement?

FERS Supplement at 60 or 10% Bonus at 62

Many FERS employees ask which is more profitable, FERS supplement or the 10% pension bonus. The truth is, the difference between the two choices is way more significant than most people think. This article examines both options to make a choice easier for all FERS employees.

Before we examine the differences between the two, it is essential to investigate their eligibility factors.

Who is Eligible for FERS Supplement?

During the first part of retirement, some federal workers get the FERS supplement every month. But not just anyone gets the supplemental pay. To qualify, FERS employees have to meet one of the following criteria:

• They should have been in federal employment for a minimum of thirty years and be at their minimum retirement age or higher.

• They should have been in federal employment for a minimum of twenty years and be at least 60.

Those who meet these criteria will receive the supplement from the point of retirement until they are 62 years. However, the rules are slightly different for firefighters, air traffic controllers, and law enforcement officers.

Who is Eligible for the 10% Pension Bonus? 

The 10% pension bonus is available for all traditional FERS workers who have spent a minimum of 20 years in federal employment and retire after 62 years. FERS employees that retire before they are 62 or have less than 20 years of service will not be eligible for the bonus.

Unlike the FERS supplement, the 10% bonus lasts for as long as annuity payments.

Which is Better? 

Now that we know the basics, it is time to examine the better option between the 10% bonus and the FERS supplement.

The FERS Supplement Option

To know if this is the better option, let’s examine the example of Ben, a 60-year-old federal employee with 20 years of service. Ben earns 100,000 dollars annually and needs to decide if he should take the FERS supplement at 60 or wait till 62 to get the 10% pension bonus.

If Ben retires now at 60, his pension calculation will look like this:

20 years    X    100,000    x     1% Multiplier      =     20,000 dollars per year or 1,666 dollars per month.

Since Ben is retiring at 60 with a minimum of 20 years in federal employment, he is also eligible for the FERS supplement. To calculate the supplement, we have to know what he will receive from Social Security at 62. If he receives 2,000 dollars per month from Social Security, the calculation of his gross FERS supplement will look like this:

20 years of service    /   40     X     $2,000     =     1,000 dollars monthly.

Since Ben’s FERS supplement will stop at 62, he will only receive the payment for two years. This means Ben’s total FERS supplement will be 24,000 dollars.

The 10% Pension Bonus Option:

If Ben decides to forgo the first option and retire at 62 to be eligible for the 10% pension bonus, the calculation for his gross pension will look like this:

22 years    X    100,000   x     1.1% Multiplier      =     24,200 dollars per year or 2,016 dollars per month.

For working for two more years, Ben will get a 4,200 dollar increase in his yearly pension. However, Ben must consider how long it would take for the increased pension to make up for the FERS supplement he did not receive.

To get this, we divide the FERS supplement by the increase in Ben’s pension.

$24,000/$4,200 = 5.7 years.

In less than six years, Ben will receive what he would have received as his FERS supplement and would receive the increased pension for the rest of his life.

From the calculations above, it is clear that taking the 10% pension increase easily trumps taking the FERS supplement. Working longer has even more advantages because you have extra time to save more money in your TSP account. There is also the issue of cost-of-living adjustments (COLAs), which are derived from your pension amounts.

However, you also have to consider how comfortable it will be to work for two more years.  Some federal employees cannot just bear the thought of having to work for two more years working for two more years. Before you make your decision, ensure you carefully consider your situation and the numbers.

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