mark heinrich Archives

FERS OPM Disability Retirement: The Mixed Case

March 16, 2023 /by mark heinrich

It is easily argued that every case is “mixed,” which means that the topic must always consider case law and statutory requirements in addition to the facts of the case. This is especially true for Federal Disability Retirement applications, where the medical records must be interpreted.
Given these facts, it is all the more important to understand that in a case involving a Federal Disability Retirement, merely repeating the medical records does not settle any points of contention. In consistently rejecting the federal employee’s claim for Federal Disability Retirement, OPM disregards the applicable statutes or behaves like an authoritarian bureaucracy free from any legislative or judicial obligation of the controlling laws.
In reality, every Federal Disability Retirement case is a mixed case in which precedents from similar cases have led to legal decisions affecting particular issues inherent in every application. The core disputes that arise rarely center on the medical documentation but rather more frequently on the legal interpretation that results from the application of the relevant laws upon the medical documentation.
Because the “medical specialists” at OPM are not lawyers, they are unaware of the significance and implications of the constantly expanding body of laws governing federal disability retirement. This is why the U.S. Office of Personnel Management frequently makes mistakes in its initial determination when denying a Federal Disability Retirement application.
This being the case, it is crucial to always reply with the force of the law when responding to an OPM denial of a Federal Disability Retirement application and to repeatedly remind OPM that their refusal to approve your case is not just a matter of analytical opinion; instead, it is a glaring and blatant violation of the laws that govern the issues about your Federal Disability Retirement application.
This is one area where a disability attorney can help. Disability lawyers know how to present a case in the most favorable light for their clients, from submitting the application to the hearing level and beyond. Your attorney can help you focus on the information that will be most persuasive to Social Security when submitting your initial application.
They can advise you on your “alleged onset date” of disability, make the case that your condition qualifies as one of the impairments listed in the “blue book” of impairments, and more. Your attorney can gather and submit pertinent medical evidence at the reconsideration and hearing levels, get your doctor’s opinion, draft a thorough brief to the Administrative Law Judge, and prepare you for questions at the hearing.
They will also collect helpful testimony from you during the hearing and may even cross-examine the vocational expert or medical expert to prove that you cannot work.
An attorney can also create complex legal arguments to demonstrate that Social Security incorrectly denied your case at the subsequent appeals stages at the Appeals Council and federal court.

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

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/

3 Strategies You Should Know for Early Retirement

February 17, 2023 /by mark heinrich

A multitude of novel approaches have been proposed by advocates of the “financial independence, retire early” (or “FIRE”) movement. The FIRE group has some great ideas, but you need to be on track to retire at age 40 to benefit from them.

If you want to boost your retirement funds, here are three tried-and-true FIRE tactics.

1. Your HSA Has the Potential to Become a Powerful Retirement Account

A health savings account (HSA) is one of the most potent retirement accounts, and you can open one if your health insurance plan supports them.

To help those with high-deductible health plans offset the costs of healthcare expenses, the HSA was established. Your HSA contributions are not taxed, nor are any withdrawals you make to cover qualified medical expenses.

But many who follow the FIRE philosophy instead save and invest for their golden years. Meanwhile, they use other cash to cover necessary medical care and save relevant receipts. To make a withdrawal from their HSA, individuals provide the relevant receipts.

The health savings account also has a favorable tax treatment. You won’t have to pay payroll taxes on any money you contribute straight from your paycheck.

Beginning penalty-free withdrawals at age 65 is possible if you do not have significant medical costs. Suppose the funds are not used for necessary living expenditures. (I’m not sure how this last sentence fits in.)

2. Pay no Taxes on Your Capital Gains

You undoubtedly already know that a lower tax rate applies to long-term capital gains. Generally, investors will be subject to a 15% tax on any profits made on top of their initial investment. The FIRE community, however, takes full advantage of the fact that there is a tax bracket of 0% on capital gains.

Suppose your taxable income is less than $41,675 (single filers) or $83,350 (married filing jointly). In that case, you qualify for the 0% capital gains tax bracket. The federal government does not tax capital gains if your income falls below the specified thresholds.

To take advantage of the 0% capital gains tax band, you can leave your investment alone and reap the benefits afterward. You can realize your capital gains from selling stocks (or another asset) and promptly reinvest in them. A taxable event has occurred, but there will be no tax due. The final effect is a higher cost basis for your investment, guaranteeing that your profits will never be subject to taxation. The process is known as “tax-gain harvesting.”

Tax-gain harvesting is most advantageous in low-income years. Most people do this before they start getting Social Security or have to start withdrawing money from their IRAs.

3. Unlock the Roth IRA Mega-Backdoor

A Roth IRA is an excellent retirement savings option for those with substantial income. But you may want to investigate if you can access the mega-backdoor Roth IRA, which might permit you to contribute tens of thousands more to your account annually.

You can access the mega-backdoor Roth through your employer’s 401(k) account. You can access this tactic if your plan allows for after-tax contributions outside the Roth IRA and withdrawals while you are still actively employed.

How it Works

A 401(k) plan allows for a maximum contribution amount. First, the amount of money you may save by avoiding taxes is limited. That’s $27,000 if you’re age 50 or older in 2022 or $20,500 for 2022.

Secondly, there is a cap on how much money may be put into the plan under your name. That includes your pretax contributions, your employer’s matching contributions, and any additional posttax contributions that aren’t Roth. For 2022, the maximum is $61,000 (or $67,500 if you’re age 50 or older).

Total contributions would be $26,000 if you contributed the maximum allowable amount to tax-deferred accounts and your employer also contributed the maximum allowable amount ($5,500). That allows room for an additional $35,000 in after-tax contributions.

If your plan permits, you may transfer the $35,000 to a Roth IRA or other approved Roth investment vehicle. You can use the mega-backdoor Roth to put more money into tax-deferred accounts.

You can increase your retirement savings and decrease your tax liability by adopting some of the same practices as the FIRE group. You should respect the innovative strategies put out by those who have chosen the FIRE path, even if you aim to work until the traditional retirement age.

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

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/

4 Social Security Benefits for Seniors

February 17, 2023 /by mark heinrich

Millions of retirees have benefited from Social Security retirement benefits, and many workers eagerly await receiving monthly payments from the Social Security Administration.

While the retirement system is widely discussed and expected, there are other ways senior citizens in the United States can support themselves. Here are four different payment options that may come in handy in your golden years.

1. Survivor Benefits

Survivors’ benefits often provide for those left behind when a loved one passes away. These payments can be received earlier in life than retirement payments, which is especially helpful if you’re taking care of a minor child from a previous relationship. Suppose you and your spouse were married for at least ten years before the death of either party. In that case, you might be eligible for survivor benefits. If your spouse is qualified for these benefits, you are too, even if you have never worked a day.

Seniors living on a fixed income may profit greatly from survivor benefits. Benefits like this are crucial if the higher-earning spouse passes away first, as they allow the lower-earning spouse to continue getting the larger of the two Social Security checks received before the death.

2. Retirement Benefits

With Social Security, you get what you pay into the system. Your benefits are determined by your work history, with an average (inflation-adjusted) pay taken from the 35 highest-earning years of your employment.

The age you are when you begin receiving benefits is also a factor in determining your benefit amount. Although you can start them as early as age 62, you will receive the basic benefit once you reach full retirement age (FRA). Depending on your birth year, the official retirement age ranges from 66 years and four months to 67 years and four months. Delaying benefit receipts past your FRA can help you improve your retirement income, thanks to delayed retirement credits.

3. Supplemental Security Income (SSI)

Low-income seniors and those with disabilities can apply for and receive Supplemental Security Income (SSI) benefits. These payments might be made in addition to your Social Security retirement payout. If your income exceeds the relevant threshold, your benefits can be reduced.

4. Spousal Benefits

Seniors might receive retirement benefits based on their spouse’s employment record if they qualify for spousal benefits. You can file for them if you are still married or divorced for at least ten years.

At full retirement age, a spouse can get spousal benefits worth up to half the primary earner’s benefit amount. Your benefit will be reduced if you receive them before you reach full retirement age. You can start receiving them as early as age 62.

Spend some time familiarizing yourself with the various Social Security benefits available. In retirement, you can maximize your income by planning.

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

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/

Officials in Delaware Revert to the Previous Health Care Plan for State Retirees

January 12, 2023 /by mark heinrich

Delaware officials decided to maintain the present healthcare plan for state retirees through 2023, which is a significant reversal. Even when lawmakers requested a halt, the Carney administration insisted for weeks that the Medicare Advantage scheme would proceed and could not be altered.

But that changed last week when the Medicare Advantage plan’s implementation for the upcoming year was temporarily halted after a Superior Court judge supported state retirees in a lawsuit.

According to Judge Calvin Scott’s order, “during the stay, defendants shall take all the necessary and appropriate steps to ensure that the health care plan and benefits offered to state retirees before October 3, 2022, or under which they were enrolled before that date, remain in full force and effect.”

The State Employee Benefits Committee decided to renew the Special Medicfill Supplement Plan for an additional year during its meeting to comply with the decision.

This is another significant victory for the group of state pensioners who have been opposing this reform since the summer. The lawsuit claimed that the state’s implementation of the reform was opaque and did not allow pensioners to provide feedback.

One of the claimants was former state senator Karen Peterson. Judge Calvin Scott’s decision required a trial to be convened to determine the viability of the Medicare Advantage plan.

The Carney administration earlier chose to switch state pensioners to a Medicare Advantage plan to reduce the state’s increasing unfunded obligations, estimated to reach $33 billion by 2050.

The Highmark Blue Cross Blue Shield of Delaware plan was scheduled to start in January. However, this new idea scared pensioners. Many others feared they would be compelled to purchase health insurance that might delay or refuse service. In recent months, Medicare Advantage plans have come in for much criticism, notably from the federal government.

Eventually, a few congressmen spoke against the Medicare Advantage scheme, claiming that the Carney administration had misled them.

The Senate released a joint statement saying they intend to take advantage of the opportunity of the court-ordered pauses to work with State pensioners to make sure any alteration to their healthcare plan lives up to our obligations to them, protects the health and welfare program, keeps it solvent, and is clearly communicated.

A bill to increase oversight of the transition to Medicare Advantage was scheduled for a vote by lawmakers. However, that bill is no longer applicable due to the SEBC vote on Monday. After its meeting on Monday, the General Assembly declared the vote had been canceled.

The rates under this Medicfill plan will be the same for 2023 as they are for this year. The secretary of the Delaware Department of Human Resources, Claire DeMatteis, noted that these “rates also aren’t being cut as they would have been under the Medicare Advantage plan” as the committee voted to approve them.

Additionally, she said that between 2,500 and 3,000 state pensioners would have seen a reduction in their monthly payments and that close to 500 people who couldn’t afford Medicfill enrolled in Medicare Advantage. The Medicare Advantage plan, according to activists with RISEDelaware, the grassroots group opposing it, might result in substantial unforeseen costs for seniors, especially since prior authorization would be a requirement.

Elisa Diller, a co-founder of RISE, said in a statement: “The fact that retirees were not informed of these changes to their benefits or invited to participate in developing this mandate is particularly worrisome when the evidence supports the reality that their Traditional Medicare plans will be secondary to Highmark’s decisions in matters of healthcare plan approvals and treatment options.”

More than 100 retirees virtually attended the gathering. A few minutes later, the committee faced frank and, at times, heated public comments. While appreciative that the current scheme was being continued, they criticized the state officials’ conduct and pleaded with the committee to involve pensioners in its decision-making.

The Medicare Advantage plan and the decision-making process, according to several retirees, were “screwed up,” “absurd,” and “unconscionable.”

According to retiree Lynda Hastings, the past three months have been “terrible” for retirees and the state. “Let’s avoid doing this once more,” she said. “Please include us when making these decisions.”

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

Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Markâ€™s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families. Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation. Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564 Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402 Member FINRA www.finra.org / SIPC www.sipc.org Broker Check http://brokercheck.finra.org/

How Can I Continue to Provide for My Son After I Retire?

January 9, 2023 /by mark heinrich

The responsibility of raising children can last a lifetime. Many parents still feel obligated to their children, including the need to provide for them financially, even as they get older. This still holds true even though those kids have grown up and have their own families, responsibilities, and lives.

The Cost of Care

What happens if your kids or other family members require your financial assistance after you’ve retired? A retired federal employee asked the following question.

Question: I am a widowed CSRS retiree and will turn 65 in late 2023. At that point, I’ll sign up for Medicare. My son, who is 22 years old, is a college student who wants to go on to graduate school and potentially beyond. I’m now enrolled in the Federal Employee Health Benefits program as a self-plus one.

I’m unsure what the best course of action would be to ensure that I have enough medical coverage once I turn 65 and up until my son ages out of FEHB at age 26. Any recommendations?

Reg Jones, a senior executive service founding member, responds to this question.

Reg’s Answer: When they become eligible for Medicare, most retirees continue with the FEHB plan they were enrolled in. That’s because the two together significantly lower their out-of-pocket medical expenses.

Some choose a less expensive FEHB option or plan because they believe it will cover most of their needs. Even fewer people choose to sign up for Medicare Part B because they believe the cost is not justified by the few additional advantages they will receive.

You should think about which FEHB plan or choice will best protect your kid and also protect you financially in the event of an unforeseen medical emergency since you want to ensure that he has adequate health insurance coverage. At the same time, he is still enrolled in your enrollment.

Any Open Season is appropriate for changing your choices or plans. However, you have a once-in-a-lifetime chance to change that under Qualified Life Event 2L, starting on the 30th day before becoming eligible for Medicare.

Further Breakdown of FEHB and Medicare for Kids

FEHB for Kids

Your spouse (including a legal common-law marriage) and children under 26 years old, including legally adopted children, stepchildren, and acknowledged natural (born out of wedlock) children, are family members who are eligible for coverage under a Self and Family enrollment.

They are included if your foster children reside with you as part of a typical parent-child relationship. Another qualified family member is a child aged 26 or older who cannot support themselves due to a mental or physical impairment before that age.

To evaluate whether the child is an eligible family member, the employing office will consider the child’s relationship to you as the enrollee.

Medicare Benefits for Kids

Medicare coverage is available in a few specific situations for children. According to Medicare, a “kid” or “child” is someone under 22 years old and unmarried. As long as they remain single and continue to meet the requirements, a child who has been approved for Medicare may continue to get coverage until they turn 26.

A kid must have a parent or legal guardian who, in either scenario, has either accrued at least 6 Social Security work credits in the previous three years or is currently receiving Social Security retirement benefits.
Children can be eligible for Medicare through birth, adoption, or stepparents. Stepparents must have been the child’s stepparent for at least a year to qualify.
Children can also be eligible if their grandparents or step-grandparents serve as minors’ guardians.
Only children with disabilities are eligible for children’s Medicare coverage. Even then, a child will only be qualified for coverage at certain times.

What Elements of Medicare Cover Children?

Different elements of Medicare can cover kids, depending on how they qualify. Any component of Medicare, except Medigap, is open to enrollment for children who meet the criteria for Medicare and who have a disability.

Only Medicare beneficiaries who are 65 years or older can purchase Medigap policies from most Medigap carriers. Some businesses, though, will market to beneficiaries who are younger. In fact, some states mandate that all Medicare participants, regardless of age, have access to Medigap coverage.

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

Landlords Are Being Compelled to Lower Rent Prices by Inflation and Declining Demand

December 14, 2022 /by mark heinrich

America’s tenants have had it with record-high housing costs and rising expenditures for everything from food to energy. Just a few months ago, rental prices soared to all-time highs, but now the market has finally caught up with inflation, economic uncertainty, and declining demand.

In many areas of the US, rent increases are now beginning to slow down. This will end a years-long boom that has made housing unaffordable from coast to coast. Landlords are being forced to scale back significant increases: because tenant demand has abruptly decreased.

It’s a stark contrast to a few months ago, when people were vying for a few apartments, enrolling on waiting lists, or shelling out multiple application fees to get one house. The applicant pools have now diminished, and listings remain on the market for longer, especially in epidemic boom cities like Las Vegas and Phoenix. US household formation metrics are also now negative.

The most recent Nationwide Rent Report from Apartment List shows that the national median rental price decreased on a month-over-month basis by 0.2% in September. Rents will likely continue to decline in the upcoming months as the slow winter season gets underway, which is consistent with the typical pre-COVID seasonal tendency. In September, rentals increased by 7.6% over the previous year.

The market is still weakening from its scorching pace earlier in the year, although rental prices usually fall during the summer. According to NPR, which used data from Redfin, the median listing rent for an apartment in the US surpassed $2,000 per month for the first time as recently as June.

However, a different survey from Realtor.com published earlier this month revealed that the median rent in September ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“ the amount tenants really paidÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Âwas $1,759 per month. That was the smallest annual increase since June 2021, representing a 7.8% increase over the previous year. Additionally, September was the second of the past eight months when rental prices fell from one month to the next.

“Before we affirm a dramatic shift like the current cooling of the rental market, it’s especially crucial to establish consistency after more than a year of double-digit annual rent rises and nearly as many months of record-high rates.”

But September data shows that national rents have declined from their most recent all-time high recorded just two months ago, according to a statement from Realtor.com Chief Economist Danielle Hale.

She said, “We anticipate that rent growth will continue to decelerate in the coming months, partly due to the impact of inflation on tenants’ budgets.” When the “available rental inventory has started to reflect the recent uptick in multi-family new construction,” she continued, “it will be unlikely that rents will return to a more typical pre-COVID pace of growth before at least another year.”

The slowdown in rent growth is “being mirrored by further softening on the supply side of the market,” according to the Apartment List study. Its vacancy index now stands at 5.2% after nearly a year of modest gains from a low of 4.1% last November.

According to Apartment List, September rents decreased month over month in 69 of the 100 largest cities in the country. Rent growth in eight additional cities was flat month over month. The rent increase was less rapid during the first nine months of 2022 in 93 of the top 100 cities than it had been during the corresponding period in 2021.

According to Bloomberg, one factor restraining demand is that young people who may otherwise be seeking an apartment are choosing to stay with their parents instead. You can blame rents, which have increased so significantly that many individuals are now priced out of the market.

Some are also sharing spaces, as in the case of 18-year-old Coleby Hillenbrand, who shares an apartment with several other people. “I was able to round folks up and make rent inexpensive,” said Hillenbrand, who shares a small two-bedroom home south of Kansas City with his girlfriend and another couple. “People our age don’t make enough to pay their rent alone.”

According to a Zillow estimate, the average American would have needed to work more than 64 hours in September to cover the average monthly rent.

According to Jeff Tucker, a senior economist at Zillow, who spoke to Bloomberg, people in many markets could not afford rent. “The fact that fewer people will sign a lease shouldn’t surprise us.” Add additional inflationary difficulties, and the demand for rentals will decline.

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. MarkÃ¢â‚¬â„¢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.

Should You Delay Your Social Security?

November 14, 2022 /by mark heinrich

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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/

Allowable FEHB Changes You Can Make Outside of Open Season

November 10, 2022 /by mark heinrich

Limited enrollment adjustments are allowed at other times when a person has a qualifying life event. Although the majority of changes to the Federal Employees Health Benefits (FEHB) program’s enrollment occur during the program’s yearly open season. Registration or an enrollment change is possible due to the following important events: The family situation changes, like getting married, having a child or adopting one, taking in a foster child, getting a divorce, or the death of a spouse or dependent.

A change in employment status occurs in the following way:

When an employee returns to work after being absent from their position for more than three days
When an employee resumes their regular pay status after having their coverage canceled while they were on leave without pay status
When an employee was on break without pay status for more than 365 days
When an employee’s pay increases to the point where premiums are withheld
When a worker returns to civilian life after serving in the armed forces
When an employee changes from a temporary appointment to an appointment that entails continuing employment.

Due to the covered enrollment being terminated, canceled, or converted to self-only status under another federally supported health benefits program, you or a family member lose FEHB or other coverage under another FEHB enrollment. It could be Medicaid or a similar state-sponsored program for the poor. Furthermore, it could be because your membership in the employee organization supporting the FEHB plan terminates or you enrolled in a non-federal health plan.

When one of these occurrences occurs, you may be able to enroll and modify your enrollment. Modifications include switching from self-only to self-plus-one to self-and-family, enrolling in another FEHB plan or option, enrolling in self-only, or canceling your registration. On the other hand, a change to self-only may be made only if the occurrence causes the enrollee to be the final eligible family member under the FEHB enrollment. A cancellation may also be granted if the enrollee can demonstrate that they fulfill the requirement. That is, as a result of the qualifying life event, they and all eligible family members now have other health care coverage.

The SF-2809 form, available at www.opm.gov/forms, includes a table of the allowable adjustments for each case.

Enrolment Cancellation Ã¢â‚¬â€ You may cancel your enrollment at any time. However, you and any family members covered by your enrollment cannot switch to a nongroup plan or enroll in temporary continuation of coverage if you do so. In general, voluntary enrollment cancellation prevents re-registration in the FEHB program. Request that OPM terminate your enrollment. OPM will provide a detailed explanation of how the cancellation may affect your rights.

Suspending Enrollment Ã¢â‚¬â€ You may choose to put your enrollment on hold. Registrations are typically halted because the enrollee wishes to join a Medicare-managed care plan or be covered as a family member. The coverage could be under another person and family FEHB program enrollment.

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

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/

In September, the OPM retirement backlog fell by nearly 9%.

November 10, 2022 /by mark heinrich

As highlighted by OPM‘s Director “Kiran Ahuja,” a significant aim of OPM is to modernize the processing of federal employees’ retirement packets. With so many disclaimers and fields covered by federal retirement calculations, it has proven nearly problematic to transition from the present paper-based procedure to a digital one. OPM’s genuine effort to digitize the retirement claim process is paying off. However, there is much to be done.

OPM Retirement Backlog in September

With the above in mind, the OPM retirement backlog fell by over 9% in September 2022. However, the total number remains enormous as the calendar year closes.

Only 8,086 new retirement claims were received by the OPM last month, but they processed 10,681, contributing to a 2,595 reduction in the total backlog. The total is now 26,642, which is still considerable, but it was close to 40,000 in the spring.

While September had one of the most extended average monthly processing times this year, the backlog saw a reduction. OPM processed retirement applications in 92 days, second only to 94 days in January.

Compared to the previous five years, September 2022 was a busier month for the retirement activity. OPM received and processed more retirement claims this September than in any prior year since 2018. However, the backlog in 2021 was more significant than this year.

Despite the decreasing OPM retirement backlog, federal employees who plan to retire soon should expect to wait several months for OPM to process and finalize their retirement paperwork.

The end of a calendar year is typically the busiest time for retiring. Suppose OPM can progress in lowering the backlog during the year’s fourth quarter. In that case, it will offset the regular surge of retirement applications in January and February.

Status of OPM Retirement Backlog Processing – September 2022

After approval, disability determinations are included in the pending number. The average processing time is the number of days from when OPM receives the retirement application until final adjudication.

Cases created in less than 60 days required an average of 38 days to complete, but cases produced in more than 60 days took an average of 125 days to complete.

What to Expect If You Plan to Retire Soon

The Office of Personnel Management (OPM) found three critical reasons for delays, as stated in a report published by the Government Accountability Office in 2019 that looked at claims processing from 2014 to 2017. The report stated that despite efforts, they remained reliant on paper applications and manual processing, which leads to bottlenecks (particularly during peak season) and incomplete applications, as well as a lack of personnel. This category contains up to 40% of all applications.

What can you do based on this information to ensure your retirement transition goes as smoothly as possible?

- Plan for delays to avoid being taken off guard.
- Keep an emergency fund on hand if you must wait for your claim to be processed. You will receive partial retirement payments while you wait, but not your full annuity benefit.
- Use the online application forms provided by OPM to ensure legibility.
- Make sure to thoroughly check your application before sending it to your HR department. You must remember to sign and initial the application for the Federal Employees Retirement System (SF3107, Section D) or the Civil Service Retirement System (SF2801, Section F).
- The personnel office at your agency that completed your SF 2801-1 or SF 3107-1 (Certified Summary of Federal Service) form should provide a copy with their name and contact details. If you notice any discrepancies or problems, correct them before your divorce.
- Keep copies of your completed application and your service history (SF-50 Notification of Personnel Action) forms. The forms show the beginning and ending dates of federal service appointments, changes in your work schedule, changes in your retirement coverage, military records, and records of civilian and military service credit deposits.
- Inquire with your retirement specialist about how long you should expect to wait for your lump sum annual leave payout. Also, inquire how long it will take for your application to be forwarded to OPM.
- Visit the Thrift Savings Plan (TSP) website to learn about the four critical things you must do with your account after leaving federal work.

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

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/

Retirement Eligibility Under FERS

November 10, 2022 /by mark heinrich

When you retire as a regular Federal Employee Retirement System (FERS) employee, your eligibility is determined by your years of service and age. To be eligible for an “immediate” unreduced pension, you must fulfill one of three primary minimum age and service criteria. While there are additional elements to consider when planning for retirement, such as income demands, and health and Social Security benefits, the basic necessities are a great place to start.

Minimum Retirement Age (MRA) with a minimum of 30 years of service

Other than an “Early Out” option, retiring at MRA with a minimum of 30 years of service is the earliest that regular FERS employees may retire without penalty. The FERS employee’s birth year determines the MRA.

Separating at MRA with a minimum of 30 years of service also makes you eligible for the supplement. The OPM supplement is intended to bridge the income gap between retirement and Social Security eligibility at 62. These retirees also maintain their Federal Employee Health Benefits (FEHB) and Federal Employee Group Life Insurance (FEGLI). Remember that regular FERS retirees don’t get cost-of-living adjustments (COLA) until they’re 62.

Age 60, with a minimum of 20 years of service

For employees who may have later started their careers with the government, retiring at age 60 with at least 20 years of service might be a viable “middle ground” choice to still qualify for a penalty-free pension. Like the previous qualification, this retiree is eligible for the supplement and retains their health benefits and life insurance coverage. It also brings them closer to qualifying for a cost-of-living adjustment (COLA). There’s a benefit to working two more years and retiring at 62 with at least 20 years, which we’ll discuss shortly.

Age 62, with at least five years of service

Retiring at 62 with at least five years of service also makes you eligible for an “immediate” unreduced pension. As the Social Security age has been reached in this case, there’s no supplement for retiring at 62 because you can begin receiving Social Security benefits immediately. You would also be allowed to carry over your health coverage and life insurance into retirement. One significant advantage of leaving at 62 is that you don’t have to wait for a COLA.

Pension Calculation

FERS employees who retire in any of the above-discussed scenarios receive 1% annually of service towards their high-3 (the highest average three years of the base plus locality earnings at any point in a FERS employee’s career).

Example: Jen has attained her MRA at 57 with 32 years of service and a high-3 of $65,000. Jen would receive 32% (1% multiplied by years of service) of the $65,000 (her high-3).

$65,000 x 32% = $20,800 annually

$20,800/12= $1,733.33 monthly

Please remember that this example excludes Jen’s income from the supplement.

Age 62, with a minimum of 20 years of service

Employees who reach 62 with at least 20 years of service receive a higher pension calculation. Instead of getting 1% for every year of service, this employee receives a 10% higher calculation of 1.1%.

Example: Peter is 63 years old, has 25 years of service, and has a high-3 of $80,000. Peter would receive 27.5% (years of service multiplied by 1.1%) of the $80,000 (his high-3).

$80,000 X 27.5% = $22,000 annually

$22,000/12= $1,833.33 monthly

Peter doesn’t qualify for a supplement because he retired at 62.

What works for you?

It’sessentialt to be aware of your alternatives and prepare for retirement ahead of time. Just because you achieve your MRA and have those 30 years doesn’t guarantee that the numbers will work out and lead to a good retirement. Working a couple of additional years to earn a COLA right away or a higher pension calculation can make all the difference. It also leads to more time contributing and receiving a match in your Thrift Savings Plan (TSP). All of this will impact your retirement’s success.

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

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/

Retirement: Why You Should Have More Money in Your Reserve

November 1, 2022 /by mark heinrich

Retirement planning appears to have altered little throughout the years. You work, save, and then retire. Even though the way it works is the same, savers today face some problems that savers in the past did not.

First, life expectancy is increasing, so you’ll need your money to survive longer – possibly into your 90s. Bond yields are also significantly lower than before, implying that you can’t buy a few fixed-income products and get a double-digit return. Then there’s the public health problem caused by the coronavirus pandemic.

Companies are increasingly switching from offering defined benefit pensions to defined contribution plans, which are more prone to market fluctuations and guarantee a certain amount of money in retirement.

So, how do you achieve the retirement you’ve always wanted? After all, retirement is a time for enjoying activities that are out of reach while working. Some things retirees hope to do with their free time include going on exotic vacations, running marathons, writing novels, and spending more time with friends and family.

After you retire, the pay will end, and while the annuity will begin, it will be smaller than the pay. You might have to go into your savings to cover your expenses.

One method is to accumulate a cash reserve before retiring. It would be best if you strived to save at least one year’s worth of spending. For example, suppose you estimate you’ll require $60,000 a year from your portfolio. In that case, you should deposit $60,000 into a money market fund or bank account.

You can set up recurring monthly payments to your checking account using a money market fund. In this manner, you will use money from your cash reserve to replace the paychecks you no longer receive.

Then you must figure out how to replenish the funds in your checking account. You could sell stocks or bonds every six months to restore your cash reserve. Withdrawals from your IRA or other retirement savings plans, such as the TSP, must begin after 72, and the funds can be deposited into your cash reserve.

Another method is to start with your taxable accounts. This allows your accounts to continue growing tax-free.

Suppose you retire before 59Â½ and begin drawing on your retirement assets before that age. In that case, you will typically face income tax and a 10% penalty. You’ll be past the 10% penalty after 59Â½. Then there may be instances when it makes sense to withdraw from your IRA, such as if your future tax bracket will be higher due to changing tax rules or mandatory IRA distributions.

If you wish for that comfortable retirement, you need to consider saving more today. No matter your current age, you can begin saving now. Every dollar you save today can make a huge difference tomorrow. It is also essential that you work with a financial planner on this journey.

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

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/

Early Social Security and Federal Retirement

October 14, 2022 /by mark heinrich

The Federal Employee Retirement System (FERS) was established by Congress in 1986 and went into operation on January 1, 1987. This retirement program offers potential advantages from three separate sources. Covered employees’ retirement benefits will come from Social Security, the Thrift Savings Plan (TSP), and the FERS Basic Benefit Plan.

You can get a FERS pension estimate from your federal organization’s human resources department. What happens to your Social Security benefits? The TSP offers several calculators and tools to assist you in forecasting your future income alternatives based on the balance in your TSP account.

Your Social Security and MRA

Your Social Security pension can be predicted on the Social Security website, but it makes a crucial assumption for people retiring at the Minimum Retirement Age (MRA). This article will examine why people retiring at their MRA should be aware of how working or not working after serving in the federal government impacts their Social Security income.

FERS employees are eligible for a full (unreduced) instant annuity at age 62 with at least five years of service. They are also qualified for a full, immediate FERS pension whenever they reach their MRA with a minimum of 30 years of service or when they turn 60 with 20 years of service.

The FERS MRA ranges in age from 55 to 57, depending on the birth year. The range is 55 for those born before 1948 to 57 for those born in 1970 or later, with those born before 1970 having the lowest MRA.

The good news is that you will receive your Retiree Annuity Supplement (RAS) if you leave federal employment with enough time at your minimum retirement age or any age before age 62 to be eligible for retirement. You are entitled to receive the supplement, which is paid by the Office of Personnel Management (OPM) in addition to your FERS annuity, as long as your post-FERS retirement earnings do not exceed $19,560 in 2022. Your supplements will be reduced by $1 for every additional $2 over the cap.

The RAS ends the month you turn 62, whether or not you begin receiving Social Security at 62. These and other details about the RAS are covered in an entire chapter of the OPM’s CSRS and FERS Handbook.

The RAS has no bearing on your ultimate Social Security income. Although you are not paying FICA tax since you are receiving the supplements for not working, your social security account is not receiving any contributions from any wages during this time.

Your wage history is visible in your Social Security online account and is utilized in a formula to determine your projected pension. The forecast, however, considers an annuity based on whether you kept working until age 62, your full retirement age, or age 70. These estimates depend on the supposition that you will continue to earn around the same amount as you did the previous year.

Will you have 35 years of Social Security tax payments at your MRA?

Remember that Social Security builds your retirement benefit using the 35 years of your highest earnings. Delaying retirement typically enables you to replace specific low-income periods with larger years, which increases your benefit because your yearly income tends to increase with time. However, each year it did not work, you received no income credit for calculating your pension if you don’t have up to 35 years of earnings.

Use the Social Security online calculator for just a personalized evaluation as a workaround if you plan to retire at your minimum retirement age and stop working. Be aware that this approach requires time and careful data entry.

It’s advisable to acquire expert assistance rather than take on the calculator problem. If you plan to stop working before age 62, consider calling Social Security for specialized help in obtaining an accurate estimate of your Social Security pension. Verify that all of the data in your Social Security account is accurate. Utilize the free phone number at 1.800.772.1213. It is accessible between 8 a.m. and 7 p.m on workdays.

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

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/

Social Security and Federal Retirement

October 2, 2022 /by mark heinrich

When it comes to the details surrounding your Social Security retirement benefits, it can seem a bit confusing, especially in terms of understanding and receiving the amount you are qualified to receive. By taking the time to understand the average retirement check for the current year, maximum earnings, work record, full retirement age, and more, you will be well-equipped to receive your Social Security benefits to their fullest.

There are many ways in which you can rest assured you are receiving the most out of your Social Security check each month. For example, many individuals are misinformed regarding how crucial it is to receive Social Security payments at the right age, claim proper benefits on a spouse’s work record, and continue working past the earliest retirement age available (depending on your age).

The age at which you choose to retire has a significant influence on your overall benefits, even in terms of spousal eligibility. For example, if the wife chooses to retire early on, it will impact her spousal benefit at whatever point her husband retires in the future. However, suppose she waits until reaching full retirement age. In that case, she will be eligible to receive half of the full Social Security benefit the spouse qualifies to receive or her benefit (depending on which is higher).

In this example, the highest possible amount the wife was eligible to receive at full retirement age is subtracted from half of her husband’s benefit. However, this amount is a bit higher than the benefit she has received, considering she opted for early retirement at age 62. The current amount she receives will increase by the sum calculated from half of her husband’s benefit, providing a new monthly benefit. Had she chosen to retire at her full retirement age, the wife could have received a higher monthly payment, further highlighting the importance of avoiding early retirement when possible.

Although age 62 is the earliest you can begin receiving Social Security benefits, there are many reasons to put it off until reaching full retirement age. Depending on the year you were born, the full retirement age may be somewhere between 65 to 67. Health problems are one of the main concerns for those who choose to retire early, among other conditions. This further enables those with a limited lifespan to enjoy time with their loved ones while they still can. Consequences of early retirement often include penalty taxes and significantly lowered Social Security benefits.

Individuals who were married for more than ten years, who did not remarry, and haven’t received a work-sponsored pension may be eligible to receive Social Security benefits depending on their spouse’s work record. When a former spouse meets specific requirements, they are treated as a current spouse, thereby extending entitlement to their Social Security benefits. However, if the former spouse receives Civil Service Retirement System benefits, they will be affected by the Government Pension Offset. This detail will further reduce spousal benefits by up to 60%. Unfortunately, in many cases, this nearly eliminates the entirety of the retirement benefit.

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

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/

How to Calculate Your Retirement Annuity

September 21, 2022 /by mark heinrich

It can be challenging to make the right decisions regarding federal retirement planning. After all, there are many things to consider, and the options can be confusing. However, making some common mistakes can cost you dearly down the road. It would be best to learn to avoid these mistakes before they cost you thousands of dollars.

With a few exceptions, you may only receive one of the government’s most significant benefits, the Federal Employees Health Benefits (FEHB) program coverage, beyond retirement if you’ve been registered for the previous five years or since your first chance to join. (Note: The one very unusual exception is if your agency allows you to retire early, in which case you must be registered in the FEHB program at the time the offer is made.)

Check, double-check, and triple-check your eligibility to maintain FEHB. After that, give it some time and double-check it. This is not a prank. If you retire without that eligibility, you’ll receive a one-year extension with no government contribution to premiums, and then you’re on your own.

If you lose your health benefits, you may wish to delay your leave until you continue your retirement coverage.

Once you’ve determined that you’ll have the health insurance coverage you’ll need, be sure that your retirement income will provide the financial security you’ll want. Overestimating the number of years of service that will be included in your annuity calculation is one of the most frequent errors encountered, particularly for the following:

Refunded Service

If you ever left the government, received a refund on your retirement payments, and then returned to government employment, that refund might have a significant influence on both your eligibility to retire and the calculation of your annuity. Since the requirements for CSRS and FERS vary in terms of whether you must or may redeposit the money to get credit for that period, you’ll need to consult with one of your agency’s retirement advisers to discover which rules apply. Only then will you be able to choose which alternative is ideal for you.

Military Service

If you are a CSRS worker who served in the armed forces before October 1, 1982, you will not be required to deposit to get credit for your active duty service for it to be utilized in the calculation of your annuity. You will if you served after that date. If you do not make that deposit, are retired, and are eligible for a Social Security benefit at the age of 62, your annuity will be recalculated downward by 2% for each year (5/12th of 1% each month) covered by that term of service. FERS workers are subject to distinct regulations. If you are one among them, you have just one alternative: make a deposit and get credit for that time (or don’t make a deposit and receive no credit for that time). Your retirement income will be less, though you’ll still receive a monthly annuity payment.

Other potential errors can adversely affect your annuity calculation, including errors in the application of special salary rates or leave without pay. If any of these apply to you, be sure to get expert help to make the corrections.

Also, consider if your final annuity plus the nest egg in your Thrift Savings Plan account will be enough to allow you to live the life you wish to live in the future. That TSP account may be a lovely figure, but how and for how long will it convert into income? There are calculator features available at www.tsp.gov to assist with this study; you may be surprised at what you discover.

Make sure you have an accurate picture of your annuity, taking into account any potential cutbacks. Also, keep in mind that if FERS insures you, you will not get a cost-of-living adjustment (COLA) on your annuity until you reach the age of 62, unless you opt for a survivor benefit.

If you are eligible, the value of that annuity, plus Social Security, will be less – often considerably less – than your wage. However, you will still have to meet essential costs such as housing payments or rent, health and life insurance premiums, federal and state taxes, and so on. Experience is a terrific teacher, and it teaches us that living in retirement costs more than we anticipate.

If you don’t perform the essential math, you may have to postpone your retirement until the numbers are equal, but if you don’t, you may have to go back to work to make a decent living. So, take the time to do the math and decide that’s right for you.

It’s essential to get an accurate estimate of your retirement annuity. This number will play a significant role in your post-work life, so it’s crucial to understand all the factors that go into its calculation.

There is no one-size-fits-all answer when it comes to retirement, but by taking these essential factors into account, you’ll be on your way to making a well-informed decision.

Retirement planning can seem daunting, but you can ensure that your golden years are everything you hope for by understanding the basics and taking a few key steps.

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

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/

Meet ‘AVA,’ a TSP change that affects more than just the investment window

August 25, 2022 /by mark heinrich

While participants who satisfy specific criteria can invest a portion of their accounts in outside mutual funds, which has garnered the most attention among the planned reforms, the TSP is also emphasizing other new features, such as an artificial intelligence chat-bot known as “AVA.”

The TSP said in a statement detailing features coming in June that AVA will be available 24/7 through tsp.gov and an app to “provide a secure means to ask inquiries about your account and will even link you to a live Thrift Line agent through chat during work hours, when necessary.”

That will be one of the several ways the TSP will encourage more transactions online and through the upcoming app, including a new feature in “My Account” for messages, documents, and statements about the account, the option to opt-in to receiving text messages for transaction confirmations, and quarterly statements will be posted rather than mailed by default.

Almost all transactions on the website will be available on the app, including transactions, tracking investment performance, altering investment elections, and submitting specific forms and documents, according to the company. The software will allow users to log in using biometric controls such as fingerprints or facial recognition.

In addition to this, account holders will have a new ability to shift money from one or more specific funds to another particular fund or funds without affecting the balance of the account. Now, moving money already invested requires a new percentage allocation for all chosen funds.

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

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/

Bill in Senate to Equalize the COLAs to Both FERS and CSRS Federal Retirees

August 9, 2022 /by mark heinrich

Legislation to standardize the yearly rise in annuity payments that retired federal employees receive across retirement systems was proposed by a group of five Democratic senators in May.

Sen. Alex Padilla, a Democrat from California, introduced the Equal COLA Act (S. 4221), which would guarantee that federal retirees in the Federal Employee Retirement System and the Civil Service Retirement System both receive the same annual percentage cost of living rise each year.

The CSRS now determines the cost-of-living adjustments based on the yearly change in the third quarter worker consumer price index under regulations that date back to 1986. However, FERS COLAs are calculated by extrapolating from that adjustment; therefore, retirees under FERS will get the full COLA if the CSRS sees a rise of less than 2%. FERS participants will only get a 2% raise if the adjustment is between 2% and 3%. Moreover, FERS retirees would get that increase, minus 1%, if the CSRS COLA is 3% or higher.

For example, as inflation increased this year, CSRS retirees earned a 5.9% increase on their defined benefit annuity payments. However, the rise for FERS members was only 4.9%. That was the situation for the January 2022 COLA, which was 5.9% under the CSRS but 4.9% under the FERS, and it probably will be the case once again unless the legislation is altered, for the January 2023 COLA, which is expected to be even greater.

The bills would not, however, address another distinction between the two systems: whereas FERS retirees are not eligible for COLAs until after turning 62 unless they are disabled or have retired in accordance with a mandatory retirement requirement, CSRS retirees receive full COLAs regardless of age.

Although more than 95% of federal employees now employed are covered by the FERS system, most of those currently retired, or roughly 55%, did so through the CSRS system.

Ken Thomas, national president of the National Active and Retired Federal Employees Association, claims that when consumer prices increase by more than 2%, retirees under the Federal Employee Retirement System (FERS) may not always get the full cost-of-living adjustment (COLA). This is a result of a fundamentally unfair policy. That is not the same as how COLAs are determined for both Social Security beneficiaries and Civil Service Retirement System pensioners (CSRS).

By giving full COLAs to FERS retirees and establishing parity between FERS COLAs and CSRS and Social Security COLAs, the Equal COLA Act would enable federal retirees to keep the value of what they have legitimately earned during years in public service.

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

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/

How Does Working Longer Affect Your Social Security Benefits?

August 9, 2022 /by mark heinrich

If you’re like most retirees, you’ll be living off your Social Security payments in your golden years. More than half of older Americans rely on Social Security for at least 50% of their income, and 25% rely on it for 90% of their income, according to the Center on Budget and Policy Priorities (CBPP).

You may also have to work longer hours. Since data collection began in the 1960s, the percentage of American employees between the ages of 62 and 65 has been at its highest. People over 65 now are twice as likely as they were in 1985 to be employed, with roughly 20% continuing to do so (though there was a slight downturn during the pandemic).

As a result of the first set of facts, I believe that maximizing your Social Security payments is critical for your retirement. Many of you may be curious about how working longer affects your benefits and how to make the most of those earning years, given the rising trend of Americans staying in their current jobs for extended durations.

Working Past ‘Retirement’ and Social Security

Delaying Social Security payments for extended periods is common among persons working more hours. Social Security payments might be increased by postponing the date they are paid to you. To put it another way, the larger your benefit, the longer you wait to get your benefits (until age 70, at which point they stop growing).

Increasing your benefits by postponing credits and increasing the earnings figures used in benefit calculations is an additional advantage that may go unnoticed if you work longer. Your monthly Social Security payout is calculated based on your 35 highest-earning years (until age 70). As long as you continue to work and contribute to Social Security, your earnings record will continue to grow. You’ll get more rewards if you earn more money later in life than you did earlier.

Some Pros to Working Longer

You can boost your Social Security payments if you continue working past the more customary retirement age of 65.

There would also be an increase in any future spousal benefits.
You may be able to keep up your sharpness. Several studies have shown that those who continue to work have a greater mental acuity level. This research demonstrates that the social networks and mental demands of employment are most likely to blame for this phenomenon.
If your spouse is covered by your plan and is not eligible for Medicare, you may be able to save money by utilizing your employer’s healthcare instead of Medicare. A Medicare enrollment can be tricky, but Medicare.gov states: “Generally if you have work-based health insurance via the company you are now employed by (or the company your spouse is currently employed by), you do not have to sign up for Medicare while you are still working. There is no need to join up until you quit working (or until you lose your health insurance if that is the case).” You may want to hold out on Part B but join up for Part A because it’s free. Exceptions do exist. A health savings account (HSA) is unavailable if you have any Medicare coverage, including only Part A.

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

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/

Avoid These Mistakes While Planning for Retirement

August 1, 2022 /by mark heinrich

It is terrible that some government employees who have worked for their country for 10 or 20 years will not be able to retire when planned because of unfinished business from their time in the service to the country.

This article focuses on employees’ most common federal retirement planning blunders. It doesn’t matter which retirement system these employees are covered by. They might be covered by CSRS, the FERS, or even a hybrid of the two (known as “TransFERS” employees). As a federal employee, if you plan to retire, you should avoid these mistakes to avoid any trouble.

Not reviewing personnel records.

Form SF 50 (Notice of Personnel Action), which is updated annually, should be reviewed by federal workers regularly to ensure that it is accurate and up to date. Important retirement-related information can be found on Form SF 50, such as: On Form SF 50, the “retirement plan” box 30 shows the retirement plan an employee is covered by, such as the Civil Service Retirement System (CSRS), the CSRS-Offset, or the Federal Employees Retirement System (FERS) (FERS).

It is the responsibility of employees to verify that they are enrolled in the right retirement plan. Federal employees have been mistakenly enrolled in the wrong retirement system when employed, a mistake they didn’t discover until they were about to retire.

Fails to request estimates of unpaid deposits.

By depositing military or non-deduction time, many employees do not realize that this resets their SCD for retirement backward, increasing the amount of their CSRS or FERS gross annuities. They may also find that they may retire earlier than they had anticipated.

It is possible to redeposit withdrawn CSRS or FERS contributions for federal employees who previously worked for the government, left before they were eligible for retirement, and then later returned to work for the government, restoring the years of service that were lost as a result of these withdrawn contributions (usually with interest charges). Some workers are only informed of their deposits or redeposits at the end of their careers, resulting in a higher interest rate and a more significant financial burden.

Not understanding the health benefits.

Federal employees’ health insurance coverage under the Federal Employees Health Benefits (FEHB) program is often misunderstood by those who work for the government. Notably, just 25-28% of total FEHB premiums are paid by workers and annuitants, with the federal government picking up the other 72-75% of the tab.

To depart on a “postponed” retirement under FERS’ Minimum Retirement Age “MRA +10” or “MRA +20” rules, an employee must retire under an immediate retirement (one that commences within 30 days of separation). In addition, the employee must have been enrolled in FEHB for five years immediately before retirement or since the retiring employee’s first chance to enroll in FEHB as a family member (such as a spouse) to be covered by FEHB.

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

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/

Analysis of Medicare Part D Prescription Drug Costs — Astounding and Disappointing

July 12, 2022 /by mark heinrich

How much could strongly promoted medications cost our seniors? Is there anything else Medicare beneficiaries should know?

The Centers for Medicare and Medicaid Services (CMS) mandates that insurers offer Part D medication insurance. Most insurers must cover at least two prescriptions in most categories, including heart meds, arthritis, and depression/anxiety. Three well-known “designer drugs” from each category were chosen at random. They’re all famous brands thanks to advertising.

A generic choice in each group was also given as an alternative when using Medicare’s find plans feature. The analysis involves a dozen medicines. As per Medicare’s tool, the results are for the year 2022.

We have nothing against these medications or their makers. They’re vital for millions of senior Americans’ health. But they come with a “sticker shock” price.

To traverse this “consumer-driven” health landscape, examining your data by the output sections is vital. First, see whether any Part D plans cover your drug.

Like Lipitor versus Atorvastatin, some brand names aren’t covered by Medicare part D â€‹â€‹â€‹â€‹â€‹â€‹â€‹ plans. In the analysis:

â€¢ The plan with the lowest premium plus prescription expenses doesn’t cover four of the nine brand-name drugs.

â€¢ Four of the five tiers covered the rest.

You should also check for restrictions:

â€¢ Does the prescription require pre-authorization?

â€¢ Will there be a quantity limit?

Only two arthritis medications require pre-approval, and three have dosage restrictions. Celebrex’s generic version has a quantity limit, but Celebrex doesn’t. Preauthorization isn’t necessary for any cardiac or depression/anxiety drugs. However, three have quantity restrictions.

Also, consider costs. The costs in the chart are from the most affordable Part D plan. Most promoted medications cost above $1,000 per year, and seven of the nine brands have significant expenses. Prices ranged from roughly $3,000 to over $85,000 per year.

Do retirees see changes in Medicare Part D costs during annual open enrollment?

No. Most Medicare Part D plan holders don’t re-shop. They don’t know their in-network pharmacies are no longer in-network. Less than 30% of Medicare beneficiaries reevaluate their Part D or Medicare Advantage plans with Part D during yearly enrollment. It grows worse with age:

â€¢ 65% of those aged 65-74 didn’t shop for insurance during open enrollment;

Using the plan-finding tool is too hard for many elderly Americans. So how will they inform themselves?

We asked a local pharmacy how one can compare prices for a Part D plan. He said no one at the pharmacy would know about any local pricing possibilities. Even the pharmacist won’t know costs until the insurer bills. And the costs for the same prescription vary between Part D plans. He suggested checking with your carrier or simply Googling it.

How is this acceptable?

More key points

This analysis’s extra notes may help you investigate Part D:

The cost of non-covered specialty medications is unaffordable for most patients. Still, they’re highly advertised, intending patients to ask for them by name. Be careful!

â€¢ It’d be reasonable for all the generics to be found in tier 1 pricing. But in this study, they were ranked differently. (See chart.)

â€¢ Only one generic in this analysis costs $1/month. Their brand version is $3.50 or $9.50 each month. The pricing of generic medications is neither predictable nor consistent.

â€¢ In this analysis, only one pharmacy was preferred, in-network. The preferred pharmacy’s drug pricing should always be lower than non-preferred or OON pharmacies. Not really. Four of the nine brand-name medicines have the highest cost at the preferred in-network pharmacy. Out-of-network pharmacies are offering the lowest prices for the same four medications.

â€¢ Is mail order always the cheapest option? No. Only four of the 12 medications had it. Most times, it was within $10. But Celecoxib’s postal order is $56 more. Xeljanz’s is $110. Rexulti’s is $130 more.

Consider Medicare Part D Options Before 65

This short analysis required hours to understand how Medicare Part D works. It’s complex, to put it mildly. There’s no consistency. You don’t know what you’re missing unless you go deep into the results. You can’t rely on one drug’s findings to be the same in all Part D plans.

But we expect our seniors to do this every year. That’s wrong.

The “consumer-driven” Medicare program begins at age 65. You’re fully responsible for all analysis, appraisal, and interpretation of Medicare’s find plans tools. Every year of retirement.

Waiting until 65 to start your own drug plan is a mistake. Depending on your medication, you may be overpaying by thousands of dollars annually. Also, call for a specialty drug. Call every insurer that covers your medicine. Begin exploring all options well before you need to make a decision.

Call an independent insurance broker to help you work things out. Call a State Health Insurance Assistance Program volunteer. All viable options. But you don’t want to go into these discussions blindly.

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

Wondering About A Divorcee’s Social Security Benefit? Here’s What You Need To Know

July 12, 2022 /by mark heinrich

When going through a divorce, Social Security is the last thing on your mind. But divorce can affect how much Social Security you get when you retire. In some cases, you may get a more considerable benefit than expected, while you may get nothing in others. Here’s how divorce and Social Security work together and how to plan to maximize your benefits.

Qualifying under your work record

The Social Security Administration (SSA) bases retirement benefits on the retiree’s work history. To be eligible for Social Security benefits, you must have worked for at least 40 “quarters of coverage” or ten years. You’ll get your full benefit at 67. However, you’ll reduce it if you claim it at 62 or increase it if you wait until 70. If you qualify for your own Social Security benefits, your divorce may have no impact on them. The SSA will compare your work record benefit to any potential spousal benefit, and you’ll get the higher of the two.

Spousal benefits for shorter marriages

Sadly, many divorced spouses don’t qualify for Social Security benefits, especially if they were homemakers before the divorce. If you were married less than ten years before the divorce, you’re ineligible for spousal benefits. That can be problematic for stay-at-home spouses with no work history. In that case, you’ll have no Social Security benefit and have to fund your retirement with outside savings and investments.

Spousal benefits if married for at least ten years

If you were married for at least ten years before divorcing, you might be eligible for Social Security benefits. Spouses married for ten years or more are entitled to the same spousal benefits. The ex-spouse pays no penalty and keeps their full retirement benefit.

Remember that if you remarried, you wouldn’t be eligible for a spousal benefit unless you were over 60.

The amount of a spousal benefit

The base spousal benefit is 50% of the primary beneficiary’s payment. You lose money if you retire before the Full Retirement Age (FRA)Ã¢â‚¬â€67 for those born after 1960. If you claim at age 62, your benefit may be reduced from 50% to 32.5% of the primary worker’s benefit. Waiting until 70 increases your Social Security benefit, but not spousal benefits, which are capped at 50% of the primary beneficiary. However, even that amount could be generous if you don’t qualify for your own Social Security benefit due to a lack of work history.

For those born before Jan. 2, 1954

You can still file and suspend if you were born before Jan. 2, 1954. That means you can file for spouse benefits at full retirement age and suspend your primary benefits immediately. Then, at 70, you can move from your spouse’s benefit to your own, presumably greater benefit. This procedure is no longer authorized. However, it’s grandfathered for people born before Jan. 2, 1954.

The spousal Social Security benefit

The most straightforward approach for claiming spousal Social Security is online. Other options are going to a Social Security office or calling 800-772-1213. You’ll need to present confirmation of citizenship or legal alien status and your final divorce judgment. The SSA will also ask for your name, gender, Social Security number, birthplace, job, and marriage(s). If you’re eligible, tell the SSA when you want to start receiving benefits, and they’ll take care of the rest.

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

Category: mark heinrich

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Not reviewing personnel records.

Fails to request estimates of unpaid deposits.

Not understanding the health benefits.

Analysis of Medicare Part D Prescription Drug Costs — Astounding and Disappointing

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