Kevin Wirth Archives

More Assistance Is Coming for Feds Having TSP Transition Issues and Flood Victims

April 5, 2024 /by kevin wirth

Participants in the federal government’s 401(k)-style retirement savings program have had a difficult month. In addition to suffering losses in the financial markets, they also experienced issues with the June 1 switch to a new recordkeeper.

According to Kim Weaver, Director of External Affairs for the Federal Retirement Thrift Investment Board, a high frequency of calls to the Thrift Savings Plan‘s Thrift Line has continued for more than a month following the switch. The workforce at the hotline will have nearly quadrupled by Friday, going from 485 on June 1 to a projected 955, which is fantastic news for participants attempting to get through to a representative who can answer their inquiries (there were already 805 contact center representatives as of June 21).

Weaver forewarned that the recently hired agents would need some time to get trained before taking their first call. Although the new recordkeeper offers several advantages, like a safer login process and access to 5,000 mutual funds, many participants first encountered difficulties with the fundamental actions required to utilize these features, such as setting up their accounts.

Weaver noted that the TSP executive director has promised to provide weekly updates on the recordkeeper transition to Del. Eleanor Holmes Norton, D-D.C., and will provide ad hoc updates to any concerned lawmakers.

Norton stated that she was “pleased Director [Ravindra] Deo accepted my request to be issued weekly updates.” She went on to say, “The new system continues to cause my constituents, federal employees, and retirees around the nation significant problems, including taxes being wrongfully deducted from accounts, inaccurate beneficiary information, and inability to access their retirement assets.”

Weaver reported that 1.2 million different TSP participants had used the new system since it launched on June 1. In a typical year, almost 3.3 million participants – or half of all participants – log onto My Account.

An Expansion of the COVID Response’s Special Hiring Regulations

On June 27, the Office of Personnel Management expanded the use of special hiring privileges to aid in recruiting personnel for the federal response to the COVID-19 epidemic. According to the email sent to agency heads by OPM Director Kiran Ahuja, hiring officials may still use the Schedule A recruiting power for excepted services to fill temporary positions directly relevant to the pandemic up to March 1, 2023.

Schedule A enables agencies to forego traditional competitive hiring processes to discover candidates more quickly and effectively. For instance, organizations are not required to make the position public on USAJobs.gov (though they can still do so if they would like).

To fulfill their missions and/or to fill open positions, agencies currently “continue to need more tools to perform strategic, targeted hiring for specific, short-term tasks,” Ahuja stated. According to OPM, “Agencies have ongoing obligations directly tied to the COVID-19 epidemic. Hence the continuous exercise of this extraordinary power is justified.”

Specific hiring regulations apply for temporary appointments lasting up to a year in positions directly related to the COVID-19 response. Hires made before the deadline may be kept on for an additional year.

Assistance for Flood Victims

To assist federal workers and their families impacted by the catastrophic storms and flooding in Montana, OPM has created a leave donation program. In June, major floods brought on by heavy rain and melting snow affected Yellowstone National Park and the surrounding areas, necessitating rescue efforts, evacuations, and closures.

Through the emergency leave transfer program, flood victims in Montana’s Carbon, Park, and Stillwater counties can take extended time off to recover from floods that occurred on June 10 or later without using up any of their own paid leave. If an agency had staff members impacted by the storms and flooding, OPM left it up to the individual agencies to determine their needs and set up contribution programs.

The July 1 memo from Ahuja to agency heads stated, “Agencies with employees affected by the disaster are in the best position to determine whether and how much donated their employees need annual leave, and which of their employees have been adversely affected by the specific emergency within the meaning of OPM regulations.” Additionally, they are best positioned to promptly arrange the transfer of donated annual leave inside their agencies.

If officials don’t have enough donated leave on hand to meet their needs, they can potentially ask other federal agencies for assistance.

If an employee wants to contribute time off, they should speak with their agency rather than OPM, and if they need assistance, they should write to their agencies.

Contact Information:
Email: [email protected]
Phone: 9143022300

Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial planning.

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Why Retirees are Returning to Work in Droves

March 26, 2024 /by kevin wirth

Currently, the American workforce has experienced a rate of resignation like never before. As companies brace against the Great Resignation, others embrace the Great Unretirement as retirees turn toward employment. More than 1.5 million American retirees who exited the workforce just one year prior have begun seeking employment once again. This number represents just 3% or more of our nation’s total number of retirees, and trends prove little evidence of a decline. But what was it exactly that caused senior citizens within retirement to decide to begin working again?

According to the AARP, the sheer increase in overall healthcare costs, among other necessities, has risen beyond 3.5% from years past. This burdensome requirement continues to come at a higher cost than ever before. On the other hand, qualified retirees who haven’t had the opportunity to retire have been opting to remain in the workforce simply for healthcare coverage alone.

Issues within the stock market directly impact retirement income, especially in terms of passive income and other investments. With the Dow falling nearly 10% and the S&P 500 slipping further behind, most retirees are witnessing the decline of their 401(k) balances. Prices have continued to skyrocket, leaving retirees with few options aside from continuing to work or remaining on the payroll.

An ever-increasing rate of inflation has affected every single US citizen, with retirees being no exception. Once you begin living on a limited income, especially in a time of inflation, it becomes increasingly difficult to even pay for simple necessities such as groceries, utilities, and more. Back in April, the rate of inflation hit 8.3% in the United States. The recent Social Security Cost-of-Living Adjustment, or COLA, was only 5.9%. Ultimately, this leaves retirees to manage less income than ever before.

While there are other reasons to justify coming out of retirement, including loneliness or an inability to manage not working, financial reasons remain the top concern. When retirement savings aren’t up to par, paired with individuals who hope to avoid delaying the receipt of Social Security, the need for health insurance and loss of value in investments may continue pushing retirees toward the workforce once again.

While for many retirees, working again after experiencing retirement has provided a sense of camaraderie, purpose, and accomplishment they had been missing, especially after COVID lockdowns. However, many are admittedly seeking employment for a better sense of financial stability. By planning early, and taking steps to avoid financial mistakes, saving for retirement through a number of avenues will pay off well into the future. However, if you are uncertain about the financial stability of your golden years, it is important to speak with a financial advisor before facing the consequences of an unstable income.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Top Tips for Mid-Career Federal Employees Planning for Retirement

March 5, 2024 /by kevin wirth

Ensuring you have done everything to get the most out of your retirement benefits should be on your mind before retiring. Of course, there are quite a few tasks to complete throughout your federal employee career, even in the early stages and beyond. However, for individuals in the mid-career years of said tenure, there are particular tips for improving the outcome of retirement benefits.

Federal employees with 5 to 15 years of active service would be considered mid-career. Mid-career federal employees are eligible to receive a pension once they reach 60 to 62, should they decide to leave government employment. However, this only applies if retirement contributions are left within the retirement system, even with only five years of service. You must adhere to specific rules if you are considering leaving government service mid-career and well before retirement.

Maintaining eligibility is not automatic, especially when filing for a future pension. Once you have met the 5-year service mark, additional specific actions can enhance your benefits upon retirement. For example, making deposits eligible is crucial as “buying back” the appropriate time served in the military. As a mid-career employee, there’s never been a better time to start researching this before retiring. The longer you wait to calculate the possible interest owed, the more it will accrue. Unfortunately, most federal employees owe thousands in interest unnecessarily due to a deposit that wasn’t made early on.

Working until your MRA, or Minimum Retirement Age, is an often overlooked way of maximizing your federal retirement benefits. It is best to determine your MRA based on your birth year and your youngest possible retirement age. With at least ten years of service, upon reaching your MRA, you may be eligible to retire from your position within the government onto an immediate annuity. Deferred and postponed are two other types of annuities available upon retirement from government service. By learning the difference between each annuity, you are poised to take advantage of all the benefits available.

FEGLI insurance continues to rise, and while you are in your mid-career years, it may be easy to overlook these small increases. However, there has never been a better time to be proactive about life insurance and estate planning. A thorough life insurance review could save thousands of dollars or more. This practice includes a look into your applicable Health Savings Account (or HSA) to ensure you receive the tax-saving benefits before retiring.

Contributions made into a Thrift Savings Plan (or TSP) should increase every year. As a federal employee, you should strive to improve your TSP through good investment strategies to further increase your retirement’s value. As a result, you are more likely to thrive in retirement than those throwing caution to the wind and hoping for the best.

Regardless of whether you want to remain under federal employ, undoubtedly, you have already invested in your future with a mere 5 or 10 years of service. Should you choose to leave well before retirement, there are many trade-offs regarding future benefits whether or not you remain in the federal career path. You will be well-equipped to enjoy your golden years by maximizing the available benefits.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

WPS Health Insurance Intends to Expand Its Medicare Supplement Insurance In 45 States

February 25, 2024 /by kevin wirth

One of Wisconsin state’s most popular Medicare supplement insurance options will soon be available in even more states. Over the next 36 months, WPS Health Insurance and its wholly owned subsidiary, The EPIC Life Insurance Company®, seek to expand Medicare supplement insurance, which is presently available in 16 states, to 29 more states.

Medicare supplement insurance assists consumers in covering costs that remain after Medicare has paid its part for eligible medical services. WPS Health Insurance and The EPIC Life Insurance Company insurance plans provide consumers with worry-free, no-hassle service supported by pleasant, concierge-level customer assistance.

WPS Health Insurance has sold Medicare supplement insurance in Wisconsin from the beginning of the Medicare program. They’ve already expanded into a few states throughout the country. Now, they’re introducing their Medicare supplement insurance to more customers in more states.

Once launched, the plans will be offered in the new states through chosen insurance agents and retiree exchanges. Medicare supplement insurance plans provide several coverage alternatives for Medicare beneficiaries, as well as special programs and services at no extra cost. Every plan includes value-added benefits, including fitness, wellness, vision, and hearing programs and the opportunity to add dental coverage. All clients have access to identity theft and fraud review services.

When the Medicare program started in 1966, WPS started providing Medicare supplement insurance. Since then, tens of thousands of consumers have benefited from the company’s dedicated service. WPS and The EPIC Life Insurance Company already have over 60,000 Medicare supplement insurance customers. WPS will commemorate 75 years of servicing customers and beneficiaries in 2021. With a long history of caring and innovation, WPS is dedicated to making health care more accessible to the people it serves.

WPS Health Insurance

Wisconsin Physicians Service Insurance Corporation (WPS Health Insurance) is one of the state’s largest health benefits providers, offering a wide range of services and coverage through Preferred Provider Organization health plans for individuals and groups, third-party administrator services, and Medicare supplement plans. WPS Health Insurance is firmly devoted to Wisconsin and its citizens, with headquarters in Madison and employees around the state. For additional information, go to wpshealth.com.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

If you Want to Retire Stress-Free, you Need to Diversify Your Investments

February 5, 2024 /by kevin wirth

Twenty years ago, a dollar that you saved lost roughly half its value. Both seniors nearing retirement and those already retired are at risk from this kind of inflation. Since 2000, the buying power of the US dollar has dropped by an astonishing 44.2%. According to data from the government’s own Bureau of Labor Statistics (BLS), inflation seems to be worse than previously thought. While interest rates are at historic lows, the inflation-inducing practices of the Federal Reserve may work against them.

Retirees and pre-retirees, how does this affect you?

Your advisor or team has certainly brought up the concept of “diversification” at some point. Although it was formerly considered a “good notion,” diversity has become an urgent need since 2020. Diversification seems the only way to thrive in an increasingly turbulent investment market. A retiree’s worst nightmare is to outlive their funds. Thus, diversification or so-called “hybrid” retirement plans are vital.

Financial planning includes measures to reduce risk and increase return on investment (ROI), such as diversification. However, despite the advice of some financial gurus, there is no shortcut or “one size fits all” template that may decrease the time it takes to get started. Generalizing the best way to allocate a portfolio is impossible since every investor is different. In the opinion of some financial experts, diversification can only be achieved by investing in every asset class.

Possibilities and Hazards

What is the best way to diversify one’s portfolio?

Keeping track of and managing different assets is a hassle for many individuals. Therefore, they don’t want to distribute their money around. Retirees and those who are approaching retirement should consider several sources of income. Each of these assets has its own set of advantages and disadvantages, as well as development potential.

It is called the Social Security system!

Social Security is a reliable source of income for retirees, but they should not rely on it as their only source of retirement funds. Utilizing fixed-interest debt instruments, such as bonds, is a systematic way to establish a wide range of retirement plans. Interest in these types of investments is typically paid twice a year. Upon maturity, the investor receives a return on the initial investment. There is excellent potential for expansion, but recent volatility has shown that more significant dangers typically accompany this growth.

This alternative must be carefully weighed against the potential risks and the time it will take for any financial losses to be recovered. Considering the recent COVID-19 epidemic, Wall Street’s results have become increasingly shakier, which means that seniors who invest too much in the market may not recover for years. When stock prices fall, retirees may be forced to take more significant sums of their investments, contributing to quicker depletion of retirement resources.

Consider consulting a professional financial advisor to see whether you have enough money invested in equities. These are investment vehicles that are considered “safe money.” Permanent life insurance and annuities are the building blocks of a secure retirement. Making a portfolio centered on these tried-and-true items makes more sense than throwing them in as a last-minute addition. There are several benefits to investing in less risky and tax-friendly goods, many of which give guaranteed income streams.

Your ability to plan will improve since you know you have a reliable source of money. As a result of this, unlike stocks and other investments, your money is safe. Using these goods may also leave a lasting impression on the people you care about. In addition to the tax benefits that annuities and life insurance providers offer, these safe-money products are also an excellent way to save for the future.

Other options for diversifying your retirement portfolio exist, and they are based on your hunger for growth and your level of risk tolerance. Due investigation and study should be done before making any of these more “exotic” investments. To get straight answers concerning money, consult a reputable financial counselor who will not attempt to upsell you anything.

Financial blunders might hurt your happiness when you no longer have a job. Fortunately, feasible alternatives to conventional planning and a “hybrid” portfolio may help you avoid making these blunders.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Navigating through social security

January 5, 2024 /by kevin wirth

Tina Ambrozy, senior vice president at Strategic Customer Solutions at Nationwide, believes that people at all career phases can benefit from learning more about the Social Security system and retirement planning. She says problems in social security are due to “a lack of communication.”

That was also what was discovered in a study conducted by the Harris Group on behalf of Nationwide. The insurer and pollster found a shocking lack of understanding about Social Security among Americans who stand to profit from it. But according to the survey, the taxpayers, not the agency, are at fault.

Harris polled nearly 2,000 respondents to assess Americans’ understanding of Social Security benefits. Sixty-eight percent of Americans, for instance, are unaware that Social Security is inflation-protected. Since the administration informs beneficiaries each year that their benefits have increased owing to inflation, you should be aware of this if you are receiving benefits.

It recommended that the administration reorganize its communications division in light of the general lack of understanding of the very foundations of the system, given that, at least theoretically, Social Security benefits would eventually reach all of the people surveyed.

Here’s what they found out:

• Nearly half (49%) of adults don’t know or are unsure what percentage of their income will be replaced by Social Security in retirement.

• According to the pollsters, less than 10% of respondents could name “all the stated elements that influence the maximum social security benefit someone can receive.”

• 44% of those who are not already receiving Social Security are unsure of the amount of their monthly Social Security benefits.

• Just 13% of adults who guessed their full retirement age based on their birth year were correct.

• 49% wrongly think their benefits will increase automatically if they apply for benefits before reaching full retirement age.

What’s alarming about this is that everyone entitled to Social Security benefits might learn the answers to these and other questions by simply entering into their own Social Security account. Nearly every city, regardless of size, has a local office you may phone or visit. Helplines are widely advertised.

But despite knowing little about them, people make judgments based on what they think, not facts.

Other results of the poll include:

• 26% of boomers not currently receiving Social Security payments want to file for benefits early while continuing to work.

• Of the baby boomers not already receiving Social Security, 39% intend to start receiving payments before reaching full retirement age.

As long as you know the consequences, there is nothing wrong with doing either. Again, you might get the knowledge you need to make a wiser choice by speaking with a financial expert or contacting SS.

The survey also discovered a lot of doubt regarding the Social Security system’s viability. “Across all generations, most consumers (70%) are concerned that Social Security will run out of money during their lifetime. The researchers found that 33% of adults think they won’t receive any of their earnings when they retire.

In the survey, people were also asked about the current status of the economy, which is more erratic than it has been in more than ten years.

The survey also found that “Americans across generations are changing their daily routines and canceling or postponing life events due to inflation in the past 12 months.” People go out to eat less, drive less, delay trips, and delay vehicle purchases.

Two-thirds of Americans (66%) worry more now than they did before about their retirement income due to the pandemic’s ongoing financial effects, increased market volatility, and high inflation.

Tina Ambrozy, however, suggests that customers could alleviate some of their worries by learning more about Social Security.

Given the current economic climate, she thinks it is logical that individuals are concerned about retirement. People at all phases of their employment can profit from becoming knowledgeable about the Social Security system and retirement planning, and a reputable financial expert can assist with that education. Alternatively, speak with the Social Security Administration in your locality.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

The Implications of Federal Reemployment on Annuities

December 27, 2023 /by kevin wirth

Those who retire from the government and then return to work may enjoy a significant increase in their annuity.

Unless you’re one of the few who will be allowed to maintain both the annuity and the entire income of your new job, what happens will depend on whether your retirement was voluntary or involuntary and the retirement system you were in. Generally, a retiree’s annuity terminates if he was involuntarily removed from his employment and the new post is permanent in nature, such as a career, career-conditional, or excepted service appointment. However, if the involuntary separation was mandated by law due to age and length of service (or for cause), the annuity continues, and the retiree is treated as if the retirement had been voluntary.

If the separation was involuntary and your annuity was terminated, when you return to work, you’ll have the same status as every other federal employee in an equivalent job and with a similar service history. To put it another way, you’ll take up where you left off. If you leave the government again, your annuity will get reinstated unless you’re entitled to an immediate or deferred annuity based on the new separation.

If, on the other hand, you retired voluntarily, you’ll continue to get your annuity; unless you’re one of the few authorized to draw both entirely, the amount of your annuity will be deducted from your income for the new employment. The decrease will be proportional if you work part-time.

If you received a $26,000 annuity and your new position pays $75,000, your take-home income for the year would be $49,000 ($76,000 – $26,000).

You’ll be eligible for a supplementary annuity if you’re reemployed full-time for at least one year. However, if you work for at least five years, you’ll be entitled to choose a redetermined annuity. That means that you can have your annuity recalculated based on your total number of years of service and your greatest pay base, regardless of when it was earned.

Retirement contributions are needed to get such benefits. They’re mandatory for FERS employees and optional for CSRS employees (CSRS reemployed annuitants have the option of paying the deposit after separation if they want so.) The amount to be paid is the standard portion of your basic wage before the annuity is deducted.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

How to choose a Medicare broker

November 26, 2023 /by kevin wirth

Brokers for Medicare act as agents for insurance providers but are independent of any one group. Instead, it is their responsibility to assist you in understanding your alternatives and choosing the best coverage option and insurance products based on your senior’s particular needs and requirements. They are typically considered neutral, independent agents within the insurance market, despite having incentives to enroll you in some type of coverage. This is because they won’t recommend one insurance company over another unless it is indeed the best choice for you.

Why would you require a Medicare broker?

The need for a Medicare broker may be something you and your senior loved one are debating. After all, why not simply browse Medicare.gov’s insurance alternatives and choose the best one? Here are some possible justifications for thinking about a Medicare broker:

• You lack time to investigate your insurance choices.

• You’re unaware of how Medicare operates.

• You have inquiries about specific policies.

• You’re having trouble finding the appropriate plan options for the particular healthcare requirements of your senior.

• You struggle to understand the complex language used in policy descriptions since your senior is on a tight budget and needs to get the most “bang for their buck.”

• Your senior has no insurance at all.

For instance, you might not be clear on the variations among Medicare plans. Adults over 65 must have Part A (hospital insurance), which is required, and Part B (medical insurance), which is optional. Government agencies are in charge of both Parts A and B. In addition to this, there is Medicare supplement insurance offered by private companies. For instance, Part D assists with the cost of prescription medication.

Self-examination questions to consider when looking at Medicare brokers

If you’re still unsure about whether hiring a Medicare broker is the best option for you, consider the following:

• Do I have enough time to spend hours comparing various insurance policies?

• Do I possess the knowledge required to select the optimal strategy for my senior?

Is saving money on health insurance a top concern for my family?

Despite the advantages of Medicare, just 18.4% of Americans are currently covered by it. Due to the lack of protection, many elders and family carers are left open to expensive medical bills.

What services are offered by Medicare brokers?

Medicare brokers can deliver fast outcomes.

Time is of the essence when taking care of an older person who needs health insurance due to a medical problem. Working with a Medicare insurance broker has several advantages. One is that they can speed up the enrollment and selection processes, enabling your seniors to receive the medical treatment they require as soon as possible.

Family caregivers working alone may spend hours sorting through several plan options while attempting to understand intricate coverage specifics. You may rely on their knowledge and quickly choose the best health plans when you work with a Medicare and health insurance broker.

How can I tell whether my Medicare broker is reliable?

Medicare brokers are agents with full licenses and a variety of credentials. You must have the certifications, education, and on-the-job training necessary to practice in your state as a Medicare insurance broker. There are slight variations between states’ criteria. Every year, specialized training must be completed by anybody intending to offer Medicare Advantage plans or Part D prescription medication insurance.

Most states recognize the AHIP certification training. When it comes to Medicare Advantage accreditation, AHIP is regarded as the “gold standard,” and candidates must pass with a score of 90% or better. The sale of any Medicare plans during that calendar year is illegal if they fail the test or choose not to take it.

What’s the frequency of your senior’s doctor visits?

• How frequently does your senior see doctors?

• Does your elderly relative take prescription medication?

• How much do you have set aside for medical care?

These are the most fundamental inquiries your broker needs to make of you, but depending on the exceptional circumstances surrounding your senior, they might ask many more.

What do Medicare brokers charge?

Medicare brokers should be free of charge. Any attempt by Medicare brokers to bill you for their services raises a red flag. Seniors and other family members are simply persuaded to use this helpful resource because these services are free.

Contact Information:
Email: [email protected]
Phone: 9143022300

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

A Breakdown Of The Basics Of Life Insurance

May 19, 2023 /by kevin wirth

The industry education organization Life Happens declared September as “Life Insurance Awareness Month” in 2004. The “Life Insurance Awareness” month aims to inform the public about the importance of life insurance and how it may serve as a solid financial foundation for a family.

Reasons People Buy Life Insurance

Life insurance should have a goal or justification, just like purchasing any other financial item. Among the explanations people have for getting life insurance are:

â€¢ To ensure the named beneficiaries’ financial security.

â€¢ To make provisions for estate liquidity, the heirs’ equitable distribution of inherited assets, and wealth transfer.

â€¢ Providing money to pay off a specific debt, like a mortgage.

â€¢ Comply with the demands of the divorcing spouse, and

â€¢ To invest, such as a life insurance policy with a single premium.

Individual Life Insurance Policy Types

There are two prominent types of life insurance policies: (1) individual or group-sponsored; and (2) term or permanent (cash value). Both are discussed here.

Individual vs. Group-Sponsored Life Insurance Policies

Individual life insurance policy

A person can apply for an individual life insurance policy that provides such policies. The person must most likely qualify for insurance since, among other things, the insurance company will scrutinize the person’s medical records, and the person almost certainly needs to undergo a medical exam.

Group-sponsored life insurance policy

Permanent employees of an employer are entitled to join a life insurance plan at the time of hire, and the employer sponsors the plan. The Federal Employees Group Life Insurance (FEGLI) program of the federal government is an example of a group-sponsored life insurance plan.

A group-sponsored life insurance plan has the benefit of being a “guaranteed issue,” which means that anyone applying for coverage is not required to provide proof of insurability.

All potential employees, regardless of age, gender, or smoking status, are welcome to apply. There are no medical exams or records of specific patients checked.

Comparison between Term Life Insurance and Permanent Life Insurance with Cash Value

Term life insurance

Term life insurance provides complete defense (in the form of a death benefit) against monetary loss brought on by a decedent’s passing during a predetermined period. When a person needs life insurance for a relatively short time – less than 30 years – term life insurance is typically the most suitable option and the best investment. In summary, term life insurance provides the highest level of protection at the lowest cost (premiums). It is not intended to cover a long-term requirement for life insurance.

Permanent life insurance with a cash value

The term “permanent” (also known as “cash value”) refers to life insurance that does not expire as long as the payments are paid, and the policy owner does not switch from one cash value life insurance policy to another. Whole life, variable life, and universal life are the three main categories of permanent life insurance plans and are discussed below.

1. Whole life insurance: A whole life insurance policy offers death benefit protection for a fixed premium for only the duration of the insured’s life. Another name for the whole life insurance policy is a “straight line” policy. A portion of the premium is invested at a fixed rate of return, which allows the policy to save money.

2. Universal life insurance: A cash value fund that grows tax-free as long as the insurance is in force is combined with term life insurance to provide death benefit protection with universal life insurance.

In the case of a universal life insurance policy, the insurance provider subtracts certain costs and the first month’s premium payment from the death benefit.

The remainder of the premium is invested in a cash value fund, which is often a high-yielding government securities fund and receives interest at the market rate. The cost of an additional month’s death benefit plus expenditures is taken from the cash value fund each subsequent month.

3. Variable life insurance: Variable life insurance combines the benefits of tax-free deferred savings with the growing potential of stocks (stocks). Like standard life insurance, variable life insurance products provide fixed premiums and a guaranteed death payout.

Contrary to other life insurance policies with cash value, like whole life, the cash value of an insurance policy is not guaranteed and will fluctuate according to the performance of the investment portfolio that the policyholder has chosen.

Contact Information:
Email: [email protected]
Phone: 9143022300

Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300

Early Retirement In More American’s Plans

April 29, 2023 /by kevin wirth

We all know that most of us will leave our jobs and retire at some time in our lives. According to some findings, many Americans want to retire a few years before the age 65.

Hearts & Wallets, a consumer research firm, released a report in March 2021 that over 17% of Americans believe waiting until age 65 is too late to retire. Insufficient savings, high housing prices, and debt burdens prevent many from reaching full retirement at 55.

According to Hearts & Wallets, the percentage of people planning to retire at 59 has risen from 11% in 2018. 17.3% of participants wanted to retire before 55, while 39% planned to retire before 65.

According to the survey, 11.5 million of the approximately 70 million American families with major breadwinners under 55 aim to retire by then. Almost half are under 35. Increasingly, individuals work beyond retirement age. That’s up from 23% in 2015.

Laura Varas, CEO of Hearts & Wallets, said more and more individuals are stating, ‘I will work as long as I can.’ “Despite appearances, these two occurrences are not mutually exclusive. For example, Varas cites the Covid-19 era’s realization that health issues or job losses might impair retirement plans. As a result, she says, individuals are thinking about ways to reduce their reliance on work. The firm found that those who wanted to retire by 55 had less total debt and saved money. Varas estimates that just one in five families save at least 15% of their income.

Housing and utilities account for 43% of consumer expenditures, making them the biggest category. Varas says most individuals can save money on housing by downsizing or moving to a cheaper region. It’s difficult for advisors and guidance programs to balance real estate and investible assets. “That’s the largest trade-off in this equation.”

A quarter of families also have student loan debt, either for themselves or their children or grandkids. Hearts & Wallets reports that although that proportion is steady, the average amount owed is smaller.

Nonetheless, three-quarters of those anticipating early retirements lack a full year’s worth of savings. Varas advise against quitting employment without at least a five-to-one asset-to-income ratio.

Two Retirements

Randy Bruns, the founder of Model Wealth, says that retiring before 65 takes special planning.
“We’ve had many clients ask for this. We assumed early on that a 4% rule would need to be reduced to 2 or 3% to accommodate for a longer retirement,” Bruns noted in an email. ‘Normal’ retirement (age 65+) was subsequently cheaper if the early retirement years (55-65) were isolated.

For example, consumers must seek private health insurance before being eligible for Medicare.

Setting Financial Concerns Aside

According to Michael Simmons, director of financial planning at Transitions Wealth Management, the pandemic has made some customers more focused on the charitable possibilities when they retire. It has made others want to retire sooner. He added that clients should evaluate the emotional and social aspects of quitting their job.

“Retirees encounter extra obstacles they haven’t addressed or prepared for,” Simmons stated in an email. “What will they do? How will they respond to losing touch with coworkers they have known for years? How will they now define success?

Patricia Hausknost, 66, was one of the early retirees who worked hard to save and pay off debt. The couple currently teaches at UCLA and are open to other options in the future. “Most individuals who can afford to retire don’t know what to do with themselves,” wrote Hausknost. Liz Windisch of Aspen Wealth Management says she sees more millennials pursuing financial independence before age 50.

Windisch remarked in an email that people should retire from corporate America around 50 and then work for themselves or a charity. “They can accomplish it if they start early.”

An Excellent Way to Discover New Things

According to Juan HernandezAriano, director of WealthCreate Financial, persons contemplating early retirement are frequently engineers or physicians who own their clinics and have significant interests in other activities.

Studies show that hobbies lead to early retirement. “I’ve seen engineers who are more financially prepared yet more cautious. But physicians-entrepreneurs are less prepared but more determined to retire early.”

Contact Information:
Email: [email protected]
Phone: 9143022300

How to Get the Most From Your FEHB

April 26, 2023 /by kevin wirth

The Federal Employees Health Benefits (FEHB) program remains one of the most significant government benefits. Solicit the opinion of a non-insured private sector employee or a retired private sector employee who had insurance but lost it when they left their job.

With no limitations or waiting periods to join, and the same government contribution to premiums for retirees and active workers, FEHB has long been held up as a model program for employer-sponsored insurance. Most federal workers like their program.

A 2019 survey rated the FEHB as the second most valuable federal employee benefit behind retirement. Many said it was essential to them & three-quarters thought it was a good to exceptional value.

70% of individuals said having health insurance affected their choice to work for the government, and after being in the FEHB, they liked it more. 80% indicated it influenced their choice to stay. Almost all eligible individuals who are not registered revealed they have health insurance from another source, such as a spouse’s job or the military Tricare program.

That doesn’t mean it’s flawless. However, some private sector companies pay more than 70% of the entire premium cost, at least for some enrollees. Also, FEHB has coverage gaps in certain places, and rates rise each year. To get the most out of the FEHB, you must educate yourself and make wise decisions. The steps explained below help you achieve that.

The Step-by-Step Procedure

The first step is to learn FEHB. While it may seem redundant, especially if you’ve been in the software for a long time, there may be essential aspects you’ve overlooked. Many FEHB members have been with the same plan for years, if not decades, and pay little attention to open season except to compare new premium costs and coverage modifications. Even though all are entitled to change during yearly open seasons, just 5% do so.

Due to new legislation and OPM rulings, it’s also critical to understand how FEHB develops over time. Don’t make the mistake of assuming your coverage will be the same next year. Don’t assume your current plan will be available next year; some do, as did some HMO plans for 2021. Enrollees must re-choose a plan or risk losing coverage if they do not. Meanwhile, new plans join or current plans increase their offers, providing new options for the 2021 plan year.

The average FEHB enrollee premium increased 4.9% in 2021 over 2020, somewhat equal to prior increases (except for a modest 1.5% rise in 2019), compared to the experience of big private-sector employers in their programs. Benefits for retirees qualified for Medicare to join the program, even if it requires paying a separate fee, and benefits for insured individuals to engage in wellness programs and improve their healthcare quality.

Inflationary pressures such as rising usage rates, providers adopting newer and more costly equipment, and other factors such as medical inflation continue to drive prices up. Aside from premium and coverage terms, consider your enrollment type. A family member must be qualified for coverage under the program to be eligible for self only coverage. Although self plus one is less costly than family coverage inside a plan, there are still thousands of family coverage enrollments covering just two individuals years after self plus one was introduced. Then it would help if you had to know what options you can make and when. Outside of open seasons, adjustments are permitted for life events like marriage or childbirth, when you may want to review your health coverage.

Keeping what you have is also a choice, and it may be the best. Whatever you decide, be sure you make an informed choice based on all the facts.

Understanding FEHB Options

The flexibility of FEHB allows eligible individuals to make informed judgments about how to utilize the program in their circumstances effectively. Only ten carriers provide nationwide plans for 2021 (or 18 if you add certain of their high-deductible and consumer-driven choices, explained below), and even those have restrictions on who may enroll. Most of the remainder are LHMO plans, with one in every state.

In practice, enrollees have about 15 options depending on where they reside, with more options in cities and fewer in rural regions. Some plans provide two tiers of coverage, a large deductible or a consumer-driven design.

FEHB insures 8.2 million individuals. Almost all federal workers and retirees are eligible, as long as FEHB covers them for five years before retiring on an immediate annuity (there are limited exceptions to that requirement). Retirees pay the same premiums as current workers, but monthly rather than biweekly, and the employer contribution remains the same.

Postal retirees and non-postal federal workers pay around 70% of the premium; the employer contribution is somewhat greater for current postal employees but not for retirees. Activists may pay premiums using pre-tax paychecks. Retirees cannot use this “premium conversion” option, making their insurance costlier even if their premiums are the same as current workers.

Contact Information:
Email: [email protected]
Phone: 9143022300

Pay Agent Repeats Criticisms of Federal Pay-Setting Process

January 29, 2023 /by kevin wirth

Senior Present administration officials, acting as the President’s Pay Agent, have repeatedly criticized the government’s process for setting federal employee raises based on comparisons with private sector jobs.

The Pay AgentÃ¢â‚¬â€the heads of Labor, OMB, and OPMÃ¢â‚¬â€said in its latest report that there is a need to consider major legislative reforms of the white-collar federal pay system since the enactment of a 1992 law.

That law created a formula of across-the-board raises plus locality pay designed to bring federal salaries within 5 percent of the private sector average by geographic area. But it said that the procedure must be amended since January 1994 because of budgetary and methodological concerns.

The Budget Issue

Closing the indicated pay gaps according to that formula would cost an additional $19.2 billion in the first year. However, it is also important to emphasize that the underlying methodology for locality pay of relying on one singular locality rate covering a locality pay area has lacked credibility since the beginning of locality pay in 1994 to such a degree that the statutory formula for closing pay gaps has been overridden either by Congress or by successive Presidents every year since that first year.

Ignoring that non-federal pay in a local labor market may differ between different occupational groups. As currently applied, locality payments in a local labor market may leave some mission-critical occupations significantly underpaid while overpaying others.

New Administration

In its first two years in office, the Biden White House has not recommended what would be a fundamental change to consider occupational and geographic differences in the raise-setting process.

Instead, it has followed the practice of its predecessors by urging agencies to use various pay-setting flexibilities and incentive payments for occupationsÃ¢â‚¬â€such as IT and health careÃ¢â‚¬â€where the government has the most trouble recruiting and retaining employees.

The next significant opportunity for the White House to recommend a major overhaul would be in the fiscal 2024 budget proposal to be sent to Congress in a few months.

Contact Information:
Email: [email protected]
Phone: 9143022300

The Retirement Process: Some Changes at the Last-Minute

January 19, 2023 /by kevin wirth

In these last three weeks, it was observed that you and your agency OPM had to do something to make you a retiree from being an employee. But a question arose. What if you have doubts?

There can be several reasons for this. One, there are better times to retire than now which can ultimately affect your decisions. Second, you are worried about the allowance that would not be enough for you to carry on normally and maintain your regular lifestyle. Or you heard that your company is taking over, and you do not plan to miss it. Do you want to know something better? The best thing about it is that you can change your decision anytime. You can retract your retirement application before OPM passes a judgment and finalizes an answer. But if you have gotten an interim stipend, you might have to return it.

You may have lost your job and cannot return to it. Why did that happen? There might be reasons for that too. Either the job position has been filled by someone else or has been abolished. Both of them will influence your mind. Even if no one fills the position, and you would like to return to the place, your agency can deny your request. And they would even explain in writing if they did deny your request. If you do not want to change your mind, you can still alter the amount you chose for the annual stipend for your spouse. Since the law allows it, you will still have to provide a survivor allowance for your spouse. You can only reduce the amount if your spouse allows it in writing.

There is a very small chance that permits you to do so. You only have 30 days from the first monthly payment to less than 18 months when your annuity begins. Moreover, if your spouse agrees to have a lesser monthly stipend or no allowance at all but you want to increase it, there is another thing that can be done. You will have to make a payment to OPM, which is one time and equals the amount difference between the old and new payment. There is a certain percentage, of 24.5% if you upgrade from no survivor benefit to a full one. And 12.25% if you are making them a partial one.

You will have to write a letter to OPM and request a change in your original survivor benefit. The address is OPM, Retirement Operations Center, P.O Box 45, Boyers, PA 16017. You must write the details of the claim number and the amount of your new survivor election, including the name of your spouse. Also, add your DOB and a copy of your marriage certificate.

This gives you a more exact idea of whether you can retire.

Contact Information:
Email: [email protected]
Phone: 9143022300

Your Life or Your TSP? Your choice

December 29, 2022 /by kevin wirth

What Is the Value of Your Life? Imagine someone pulling a gun on you as you are crossing the street.

If you don’t give them your wallet, they’ll shoot. Most of us would unquestioningly hand over our wallets. But what if they compelled you to turn over your house or TSP?

Selling Your Life to Get Rich

Even this choice is simple when facing death. You’ll want to live even at the expense of your finances. But what if it’s the other way around? Instead of the man requesting payment in return for your life. What if he demanded payment in exchange for a portion of your life?

Would you accept that exchange?

It seems that you already are. You guarantee a portion of your life as a federal employee in exchange for a salary today and a pension tomorrow. Now, this is not advocating against ever exchanging your time for cash. Everyone needs money.

However, it is critical to understand precisely what you are losing in exchange for your cash.

How much are you paid in reality?

Most people can name their annual income off the top of their heads, but do you know their hourly rate?

Not your hourly rate as it appears on your pay stub, though. Your hourly wage is in actual dollars. If you work eight hours a day, for instance, you might actually spend ten hours a day on job-related activities like getting ready, traveling, etc.

What about the additional costs that result from your job? Consider your gas money, work clothes, etc.

So even if a person is paid $50 per hour on paper, after deducting all the additional time and money needed to do their work, their actual hourly wage may only be $35.

Then if you account for additional costs like Social Security tax, Medicare tax, income tax, etc., your actual hourly rate will decrease even further. But there’s no need to go there to keep this post straightforward. You could be shocked if you do the math for yourself.

How much does this boat actually cost?

By this point in the essay, you should know that you are exchanging your time or your life for money, and you ought to be able to estimate your hourly rate more accurately.

Now that you know that, you’re ready to move things along.

The fact that your money is much more than just money may now be dawning on you. It stands for the time and effort you put in to earn it. If you decide to spend money on something, you are trading a portion of your life for that object.

For instance, if you exchange 2,857 (100,000/35) hours of your life for the $100,000 wakeboarding boat, your actual hourly rate is $35/hour.

So consider the gunman once more. However, he is exchanging 2,857 hours of your life for a boat this time. Do you want to do it?

This doesn’t mean the transaction is a bad one. It may be a fantastic trade for someone who is passionate about boats. However, when you invest your hard-earned money, it is crucial that you fully understand what you are buying and selling.

You only have one life, and once it’s over, it’s over.

The hope is that when you look back on your lives, you can all say that the money and time you invested were worthwhile.

Contact Information:
Email: [email protected]
Phone: 9143022300

part 2

November 29, 2022 /by kevin wirth

SECURE Act 2.0 raises the RMD age, encouraging tax sheltering.

The SECURE Act 2.0’s costliest provision delays the age when retirees must accept minimum IRA and 401(k) distributions. The SECURE Act 2.0 would raise the age from 72 to 75 during the following decade. Minimum distribution requirements guarantee that savings incentives encourage people to save for retirement and tax savings that went untaxed earlier. Raising the age for required distributions doesn’t do anything for lower-income retirees who need their savings to make ends meet. Instead, it benefits the wealthy by allowing them to conceal more income for longer, avoid paying taxes while alive, and pass on more untaxed assets to their descendants. Using retirement accounts as a tax shelter is apparent since 99.6% of 65- to 70-year-old owners of both traditional and Roth IRAs withdrew from their traditional account in 2016, but just 17% withdrew from a Roth.

SECURE Act 2.0’s greater catch-up limitations favor high-income savers

Another pricey element of SECURE Act 2.0 would allow near-retirees to make catch-up contributions to retirement funds. Under existing legislation, those aged 50 and older can contribute an extra $6,500 per year ($3,000 to SIMPLE IRAs). The SECURE Act 2.0 would allow 62- to 64-year-olds to contribute an additional $10,000 ($5,000 for SIMPLE IRAs) and index those amounts for inflation. A Vanguard Investors poll indicated that in 2020, just 15% of account holders made a catch-up contribution of any amount, consistent over time. 6 out of 10 account holders with incomes of $150,000 or more made catch-up contributions, compared to 1 in 10 with incomes under $100,000. 58% of individuals affected by the existing contribution limit have incomes of $150,000 or more, and the majority already had bigger account balances.

The SECURE Act 2.0 reduces the expense of increasing retirement tax advantages by encouraging saving to use Roth IRAs.

Savers pay taxes on the amounts they contribute to a Roth account, forgoing the automatic deduction for traditional IRAs or 401(k)s. Roth account withdrawals aren’t taxed, thus increasing the long-term budget costs. Wealthy account owners can use Roth accounts to pass untaxed savings to their descendants, as there’re no minimum distribution restrictions.

Privileging Roth IRAs over traditional accounts worsens existing inequities because these accounts benefit those likely to stay in the same tax bracket in retirementÃ¢â‚¬â€higher-income households with more assets. This contrasts those who expect a lower post-retirement tax bracketÃ¢â‚¬â€lower-income households with fewer assets. According to TPC researchers:

A Roth [IRA] shields 50% more income from tax than a traditional retirement account for the same dollar deposit. Assuming the same contribution and withdrawal behavior, the Roth IRA contribution costs 50% more (in present value) than the traditional contribution.

Other policies would benefit those more who are most vulnerable to retirement instability.

CAP study recommends reforms for the retirement savings system, including a universal Thrift Savings Plan (TSP) and revising tax-based incentives.

Other modest initiatives might better help individuals who don’t benefit from current savings incentives.

Refundable saver’s credit

Restructuring the saver’s credit, the only retirement savings incentive for low-income households, would be more egalitarian. The existing saver’s credit gives married filers with earnings up to $66,000 a small credit for contributing to a retirement plan. Due to the credit’s design, few qualified taxpayers claim it, and few receive the entire amount. Only 3.25 – 5.33% of eligible filers claimed $156 to $174.34 in credits from 2006 to 2014.

Because the credit is non-refundable, few households claim it. Non-refundability restricts households whose potential credit is more than their federal income tax obligation from getting the credit’s benefit. The House-passed SECURE Act 2.0 would enhance the credit for many middle-income families starting in 2027, but it wouldn’t make it refundable, thus, still excluding low-income savers.

Making the saver’s credit refundable and structured as a match for amounts contributed to an account will allow more of its intended audience to build substantial retirement savings. This strategy, contained in legislation by Sen. Ron Wyden (D-OR)35 and Rep. Judy Chu (D-CA), would aid households most at risk of inadequate retirement savings and decrease racial and other disparities in the existing tax system. Allowing households to utilize the “short form” (1040EZ) to claim the saver’s credit would further improve its effect, comparable to the EITC.

Increase asset limitations in anti-poverty programs like SSI

Asset restrictions in safety net programs prevent many low-income people from saving. The Supplemental Security Income (SSI) program severely limits permissible savings, providing a very low-income floor for the poorest elderly and disabled persons. People are ineligible for SSI if their assets exceed $2,000, excluding a home, one car, and household items. That restriction, which hasn’t been raised in over 30 years, inhibits people from saving even modest sums for unanticipated needs, let alone the large amounts needed for retirement security. Sens. Sherrod Brown (D-OH) and Rob Portman (R-OH) presented bipartisan legislation to index the SSI asset limit to inflation on May 3, 2022. That proposal should be incorporated into all saving-related legislation.

Stop mega IRAs

Some high-wealth households have used loopholes in the existing system to establish enormous tax-favored retirement savings accounts, compared to the modest retirement savings of most Americans. In 2019, less than 500 taxpayers had $25 million-plus accounts, averaging $154 million. Mega IRAs have exploded in the past decade. Between 2011 and 2019, the number of $5 million-plus accounts almost tripled, from 9,05741 to 28,615. Wealthy investors can use these funds to avoid capital gains taxes on the appreciated asset and estate taxes that would otherwise be due on inherited accounts.

Policymakers might minimize high-balance IRA misuse with reasonable measures, including those in drafts of the FY 2022 budget reconciliation plan.

â€¢ Limit investments to publicly listed securities, preventing well-connected individuals from sheltering gains on pre-IPO shares.

â€¢ Ban backdoor mega IRAs created by transferring employer-sponsored accounts supported by after-tax contributions to Roth IRAs, which have no MDRs.

These measures would limit high-income households’ ability to exploit retirement provisions to generate untaxed wealth.

Contact Information:
Email: [email protected]
Phone: 9143022300

Federal Employee Retirement Eligibility by Kevin Wirth

August 5, 2016 /by Kevin Wirth

Kevin Wirth explains retirement eligibility for Federal Employees

Kevin D. Wirth – Retirement Expert

For many people, “saving for the future” means just exactly that – setting money aside for “some day.” But as the years clip by, it becomes more important to have an actual plan for retirement, and a big part of that plan includes knowing the time when you can actually separate from employment service.

If you are a federal employee, the good news is that your retirement program makes it somewhat easier to track when you can retire. For example, retirement eligibility is determined by your age, as well as the years of service that you have put in.

In many instances, employees can retire and receive an immediate retirement benefit. This refers to a benefit that begins within 30 days from the date that he or she stops working. Provided that the employee meets one of the following criteria, they would be entitled to an immediate retirement benefit:

Age 62 with 5 years of service
Age 60 with 20 years of service

In some cases, you may also be required to have reached the MRA, or Minimum Retirement Age, in order to receive an immediate retirement benefit. Upon meeting the MRA, you may be required to either have 10 or 30 years of service, depending on your circumstances.

The following chart outlines what your MRA would be, based upon your year of birth:

If you were born:	Your MRA is:
Before 1948	55
In 1948	55 and 2 months
In 1949	55 and 4 months
In 1950	55 and 6 months
In 1951	55 and 8 months
In 1952	55 and 10 months
In 1953 – 1964	56
In 1965	56 and 2 months
In 1966	56 and 4 months
In 1967	56 and 6 months
In 1968	56 and 8 months
In 1969	56 and 10 months
In 1970 and after	57

Source: OPM.gov

A federal employee may also be eligible for early retirement. This could be the case in the situation of an involuntary separation from service, as well as in the case of a voluntary separation such as for a reduction in the workforce or during a major reorganization.

In order to be eligible for retirement in these types of situations, an employee must either be age 50 and have put in at least 20 years of service, or be any age and have put in a minimum of 25 years of service.

When Will Your Benefits Begin?

Are far as benefits beginning, it is important to be mindful of the actual date that you retire, as well as the date that you legally attain a certain age. For example, a person actually legally becomes a given age on the day prior to his or her date of birth.¹ This can be significant when choosing the date of retirement, as it could make the difference between your annuity benefits beginning the month of separation from service, or the month following.

Higher FEGLI Rates in 2016 by Kevin Wirth

June 16, 2016 /by Kevin Wirth

Kevin Wirth discusses the Higher FEGLI rates in 2016

If you’re enrolled in the FEGLI (Federal Employees’ Group Life Insurance) program, either as an employee or a retiree, you may have recently noticed that your premiums have increased. This is because the FEGLI plan has changed its premiums for those who are currently enrolled, effective as of the first pay period of 2016.

Although the rise in cost is considered to be “slight” for older enrollees (and in fact the cost for those who are in the younger age brackets has actually gone down), the increase in premium can nevertheless be difficult for some who have not had a pay raise lately, or who are living on a fixed income.

Yet, if you’re planning to cancel your FEGLI coverage due to the higher premium, you may want to consider all of your alternatives prior to moving forward, as well as the financial consequences of going without this important financial protection.

For example, most people carry life insurance so as to ensure that their loved ones will not have to endure some type of financial hardship upon their passing. With that in mind, ask yourself what type of debt you may be leaving behind, such as:

Unpaid mortgage balance
Personal loans
Auto loan(s)
Credit card debt
Any business loans or debt

You may also have additional financial needs to cover, such as a surviving spouse and / or dependent’s ongoing income – especially if retirement income sources will be reduced or eliminated upon your passing.

In addition, today, even the cost of basic final expenses can exceed $9,000 in many areas of the country now. This is especially the case when factoring in elements such as a burial plot, head stone, transportation, and obituary notices.

So, while the cost of your FEGLI premium may be rising, the cost of going without life insurance protection could be a great deal more. If this particular coverage is too cost prohibitive, though, there may be other options available in terms of an individual life insurance policy or a final expense life insurance plan.

More From Kevin Wirth:

Getting Started Early for a Successful Retirement by Kevin Wirth

Kevin-Wirth.com

Kevin Wirth Author Page

Federal Employees Eligible Retirement by Kevin Wirth

Getting Started Early for a Successful Retirement by Kevin Wirth

May 26, 2016 /by Kevin Wirth

Kevin Wirth Explains How to Get Started Early for a Successful Retirement

Kevin D. Wirth – Retirement Expert

Nearly everyone dreams about the day they can retire. Regardless of whether you plan to hike in the mountains, relax on the beach, or volunteer in a faraway place, one thing is for certain, and that is in order to have a successful retirement, a good plan should ideally be in place.

Unfortunately, though, not everyone has the opportunity to do an ample amount of long-term planning. That may be due to an unexpected health situation, an offer of early retirement, or some other event that has moved up the clock on your leaving the world of employment.

In any case, the good news is that you still have some options on your side for making the most of your finances, as well as your insurance benefits, for your retirement years. The best way that you can ensure success beforehand, then, is to start by taking a good inventory of what you’ve got.

Getting All of Your Retirement Ducks in a Row

As you plan for this next phase of your life, the most important aspects from a planning standpoint will include the following:

Insurance – Because health care can be a retiree’s biggest expense, you will want to make sure that you have good coverage here. If you won’t be eligible for Medicare yet, and if being added to a spouse or partner’s employer-sponsored health plan also isn’t an option, then there are ways that you can take your FEHB (Federal Employees’ Health Benefits) with you – provided that you meet certain criteria. You will also want to ensure that you don’t leave your loved ones vulnerable to financial hardship when it comes to life insurance. So, be sure that you check into either an individual plan of coverage, or consider taking your FEGLI (Federal Employees’ Group Life Insurance) coverage with you in retirement.

Financial – A good, solid financial plan is also an essential aspect of a successful retirement. This is because in order to live the lifestyle that you desire, you will need a way to replace your current income. Therefore, you should start by obtaining an approximation of how much you will be receiving from your retirement annuity when that time comes. If you’re covered by FERS, inquire as to how much income you’ll get from Social Security benefits, too. Because this income won’t likely be enough to completely replace your employer’s salary, you will also want to give yourself a boost by maxing your contributions while you still can to the TSP (Thrift Savings Plan). This will help you to obtain a larger amount of payout when the time comes to convert your savings into income down the road.

Once you have actually decided when the big day will be, you will want to get your retirement paperwork filled out in plenty of time. Typically, you should do so approximately two months prior to your actual date of retiring. This will help to ensure that all goes well – and just in case there are any glitches, you will have some time to get things straightened out and back on track.