Category: Jennifer Vernon

Are You Contributing to Your TSP Correctly? by Jennifer Vernon

Are you in danger of over-investing too quickly?

As per Jennifer Vernon, Every year, there is an annual limit as to how much you can contribute to your Thrift Savings Plan, which is called the elective deferral limit. For this year, the limit is $19,500.

Jennifer Vernon said Federal workers under FERS should be considerate of the limit while they are electing the contribution amount for each pay period. It is possible to lose a government matching if you reach the yearly limit too fast before the year’s end. That is because the matching contributions are for the first 5 percent of your basic salary that you contribute for every paycheck.

If you contribute the limit way ahead of the last pay period, you will miss out on the matching contributions from the agency. That’s why it is very important to ensure that you spread out your contributions correctly throughout the year. At the minimum, make sure to invest the 5 percent of your base pay for each pay period so that you can receive the contribution match. Those that wish to reach the max limit need to calculate how much you will need to contribute each pay period until the last one of the year.

Jennifer Vernon Ask payroll in your agency about how many pay periods there are as they can be anywhere from 25 to 27, and many dates and policies may also differ from agency to agency. So be sure to get as much information as possible.

A Few Ways to Apply Your Military Service to One or More Pension Plans by Jennifer Vernon

As per Jennifer Vernon, A majority of working Americans do not know what a pension truly is worth, nor do many realize the ability to work for such a retirement income that provides a steady monthly stream of money until death. Though a pension may or may not be enough to live on, it would still be helpful to have some income coming in to help with your living expenses while in retirement.

Jennifer Vernon by as stated before, not many have access to such great benefit, as less than 5 percent of employers in the public sector provide pensions. A majority of the pensions provided in the United States are offered to government workers.

However, those that have active-duty military service under their belts have the upper hand among us in possibly receiving a pension. That also includes those that did not stay long enough in active duty to receive a military pension.

Those that did serve enough time in active duty service to receive a military retirement pension may have the ability to put some of their military service toward another pension.

Jennifer Vernon said We will go over a few methods on how to credit your military service for a pension.

If you have continued your service into the Reserves or the Guards, your active duty service will be carried toward retirement from the Reserve or Guards.

Those that retire from the Reserve Component will not be able to claim their retirement pay for military service until they are age 60. However, their retirement benefits and pensions will be available to support them in the meantime.

Another thing you can do is to work for an agency that is federal or of the government while in the Guards or Reserves.

  If you want to take this to the next level, then consider coupling your service in the Reserve Component with joining a federal agency or another governmental agency.

Only Guards or Reservists are allowed to apply their active duty service to a Reserve retirement along with civil service retirements.

Individuals that have active duty service worked can also “buy back” their military service when they start employment as a federal civil service worker.

Under FERS, for every active duty year you buyback, it will count for one year of civil service.

Buying back your military service will be 3 percent of your active duty base salary when you were a service member. However, military service from ’99 to ’00 will be more costly.

For many, this method is quite favorable as they will be purchasing military service credits when their income was low, which allows them to get retirement benefits that are calculated on their three highest-earning years under FERS.

Another benefit of putting your military service time toward your civil service position is that the time will be considered in your “service computation date for leave.” This means that you will earn vacation time faster than those that have zero military service.

Military service credits can be available in many local and state government positions, such as first responders, college professions and teaching organizations, some city, county, and state jobs as well.

Of course, this can be different depending on where you are, so make sure to ask about being able to apply your service time toward a new government position.

In some organizations or agencies, you may have to buy these military service credits, whereas in others, you will not have to. There may be some limitations on how many years you are able to buy as well.

Now, is it possible to receive more than a single pension with your military service time?

More often than not, it is possible, but it depends on the organization.

Former active duty service members are able to purchase back their served time under FERS as well as accumulate more credits toward a FERS annuity. However, they cannot use their service time for both their military retirement and FERS retirement.

Those that continue their service in the Reserves or the Guard will be able to use their service for both FERS and military retirement.

There are other agencies that are non-federal that will allow all types of former military members to use their served time toward their new retirement plan. However, the number of years you can receive or buyback may be limited.

If you are a former or current active duty service member, you will be able to decide how you wish to work toward a pension or even two.

A Good Way to Avoid Damage for Your Retirement Portfolio through COVID

As per Jennifer Vernon the volatility has increased in the stock market due to the outbreak of COVID 19. Now, these concerns are not only confined to health; but the economic crisis will be more severe than the health issues, as one-third of the world is facing lockdown. The supply chain issues might cause a big problem for the tech-related industries. So, several businesses like travel agencies, restaurants, cinemas, and many others in the row will be adversely affected due to this epidemic.  

If you have your retirement after two or three years, you need not worry about this, as the markets will recover their original value by then, and hence your 401(k) or IRA will benefit you in the way you are expecting. But, if you have your retirement sooner, this could damage your economic interest up to a huge extent. So, Jennifer Vernon said if you start withdrawing your money earlier, you lose the chance to utilize that money effectively. So, it will be a better idea for you to postpone your retirement plan until the recession is over and markets are back on their track. 

It Pays to Put in a Little More Time in the Workforce

If you have felt that your portfolio is going down as compared to the past few weeks, you must understand that this is not the right time to get yourself indulged in the matters of retirement. as per Jennifer Vernon if you have not conveyed the message of retirement to your employer, you must let things go on in the same way.

Extending the time of service can help you to a huge extent, as your portfolio will be healed, and you will be liable to have more opportunities under the platform 401(k) or IRA. The third benefit is that working for a longer age might bring you to the stage where you could enjoy higher social security benefits. So, it will be quite a good idea to stick to your job for having better results out of your retirement plans. 

Have the Right Investment Mix

The one benefit is that the portfolios of most of the retirees are invested into the bonds, and bonds are the least vulnerable against the economic swings, so it is a good gesture for such an employee whose portfolio is invested in bonds. In case you intend to resign not long from now, let this ongoing episode of market instability fill in as a reminder to survey your advantages and ensure they are adequately designated.  

Sometimes, your investment plans might come across hard times, and these hard times can truly waste the hard work that you did in maintaining good investment. So, would you allow a downturn of the market to ruin all your retirement plans? Of course, you will not do this. The best solution to this problem is to wait for the right time. It might take a bit longer for markets to recover, but this recovery of the market will surely enable you to make your retirement plans come true. If you are planning retirement, you should shun this idea and keep on working on the position where you are. 

The $16,728 Social Security Bonus Most Retirees Completely Overlook

Jennifer Vernon said in case you are like most Americans, you are a couple of years behind on your retirement savings. For instance: one simple stunt could pay you as much as $16,728 more every year. When you figure out how to augment your Social Security benefits, you could resign unhesitatingly with the genuine feelings of serenity we are all after.

As per Jennifer Vernon for most retirees, the biggest worry comes in the form of threat of finance that they have to face after their retirement. People appear to be perplexed about the fact of how they would be able to pay their bills. Moreover, these retirees are not sure about the social security benefits that they get after their retirement. They don’t know how much they would get out of their retirement, so it remains a problem for them.  

Here appears the sole support from the retirement budget by Jennifer Vernon. This budget presents you with a clear idea of how much money you will get from your retirement, and how you can spend this money to pay your bills and other expenses. Moreover, it also provides you with the opportunity to get yourself in a position where you could pay for unexpected occasions or accidents or medical bills. 

Here is a complete plan of how to create a retirement budget:

1. Financial records are gathered.

2. A list for a monthly fixed expense is made.

3. Some money is saved to cover variable or unexpected events.

4. Non-recurring expenses are also included.

5. Get an estimate of what you will get from retirement.

6. Draw a comparison between total income and expenses.

7. Keep on checking your budget with time to maintain balance.

As per Jennifer Vernon the time that you spend in drafting this process would take a lot of your stress away, as you will gradually know that you have money for tough times. 

1. Gather Your Financial Records

As per Jennifer Vernon to prepare a plan, you need to know your current situation. You may have your checkbooks and bank statements to get an idea about the expenses of the past few years. Many credit card companies help you in estimating your expenditures through credit card statements. Therefore, tax season would be the best time to do this, as you can have a clear idea about the money you have in your hand after paying taxes.  

2. Prepare a List of Your Monthly Fixed-Expenses

There are some expenses that you come across monthly. These expenses include the school fees of your children, utility bills, mortgages, the premium for car insurance, and medical bills. Sum up these expenses, and you will have a number that confirms your spending. 

3. List Your Regular Monthly Variable Payments

This can be a difficult task as your expenses keep on varying every month. These variable expenses might include the expense that you spend for any haphazard circumstances, entertainment purposes, or any medical emergency. Sum up all of these expenses for each category and divide that number by 12 to reach the monthly expenses. There are ways in which you can convert your variable bills into fixed bills, but still, there is a gap available of varying the costs.

4. Factor in Non-Recurring Expenses

If you are planning to go on vacation, or you are going to buy a new car, this is a non-recurring expense, and you have to do advance planning for this. On the other hand, there are other expenses that you pay once or twice a year. These expenses may include repairing costs, Christmas gifts, or birthday gifts. So once you have calculated all these non-recurring expenses, divided them by 12, and you will have a rough idea of your non-recurring expenses.

5. Estimate Your Retirement Income

In this part, you have to add all the income from different resources that you are going to have after your retirement. For most retirees, there is only one option of social security benefit. Add this income with the money that you expect to receive from all other sources like interest or dividends. You might have the revenue from the jobs that you do in your spare time, or from selling your services online on social platforms. However, you do not have to count what you are going to have from winning the lottery or inheritance. This way, you can have a clear estimation of your retirement money.

6. Compare Your Total Expenses to Your Income

Now, you have to add all the expenses mentioned above to calculate the budget of one month. The figure that you have at the end of your calculation will be the total expense of your month. It might include little flexibility. This way, you can calculate your monthly budgets. However, you have to keep on checking the balance between your spending and the money you have. In the end, you must have some extra money. 

Moreover, it will be better for you to cut your expenses where you can so that you will have money you can utilize, or to adjust the budget for next month.  

7. Keep on Checking Your Budget Periodically to Make Sure You’re on the right track

It is useless to make all the calculations mentioned previously unless you are not sincere to abide by the results you receive from this calculation. You should check your calculated budget every month, and then start spending carefully on the things. Once you are successful in maintaining the balance between your calculated budgets and spending on a monthly basis, you are on the right track, and this maintenance will assure you that your plan will work for the whole year.