Tag: Postal retirement

Federal and Postal Employees – Choosing a Financial Professional

Will Spending Be The Same In Retirement?

Federal Retirement Spending Habits

For Federal Employees, spending will change in retirement. Some federal retirees will spend more and some will spend less based on their individual financial situation. It is useful to note that expenses today may not be expenses tomorrow. Therefore, some projections and forecasting is needed when looking at spending in retirement.

Expenses like transportation and food costs may go down. If you don’t choose to work or even if you work part-time, you will probably not spend as much money in transportation as you did before. Your budget for clothing may also decrease. Entertainment and social activities may go up or down. Because you are retired, your social calendar may not be as busy. But, on the other hand, because you are retired, your social calendar might be completely filled because you do have more free time.

Medical Expenses and Life Insurance in Retirement

Let’s take a look at medical expenses in retirement. Those expenses will probably go up because it seems to follow that as we get older, we require more medical attention. Conversely, taxes will probably go down because you will no longer have payroll taxes for Social Security and Medicare if you don’t have earned income after retirement. For instance, someone earning $60,000 in 2009 might have paid $4,590 for Social Security and Medicare Taxes, but will pay zero dollars in retirement if there is no earned income. The tax savings could also help to replace some of the salary we will need to cover in retirement. Savings should be aggressive prior to retirement. Your cost for life insurance, FEGLI or private compay life insurance, may also decrease – you should compare your FEGLI coverage and costs again private life insurance to make sure you are getting the best deal.

There are many ways in which our expenses and income may fluctuate in our retirement years. But knowing what we know, it is prudent to aggressively save prior to retirement and even more prudent to aggressively pay down debt prior to retirement. Carrying heavy debt into retirement is a disaster waiting to happen. Reducing your debt lowers interest and increases your net worth. If you have a very high debt: income ratio you will have to spend a lot of money just paying interest.

I know you are still thinking about your vision for retirement. What about insinuating “some magic dust” into your vision —- living debt free before you reach retirement? Imagine how much bigger and fantastic your vision could be if you had no heavy debt to carry around with you. A rule of thumb is to lay out your entire debt ranking the order in which they should be paid. You pay off debt with the highest interest first and then you put off the debt with the lowest interest last until you have paid everything off.

You don’t want to pay off your mortgage unless you have a lot of disposal income because you may need the tax advantages from the mortgage payment. If I had enough money to pay off my mortgage, I would do a very careful analysis of the pros and cons before taking the next step of paying off the mortgage. Paying off a mortgage might be the right thing to do for some and not for others. Each person’s financial circumstances is uniquely different. Try living by this “mantra” – What I cannot pay for in cash, I cannot afford, mortgages aside. You will be amazed how living by this mantra will curtail spending. Decision-making strategies must always be utilized when spending your money. Sometimes credit gives us too much flight to fantasy. We all need credit, but how we handle it will be key to our retirement success.

Remember when it was assumed when one retired the mortgage would also be retired. That is not always the case now-a-day. Having to make large debt payments out of a limited retirement income can easily sour one’s financial picture in retirement. Every effort must be made to leave debt behind as you move into retirement. Having a vision and dreams for retirement has associated costs. If you pay down your debt then you will have money that is not obligated for expenses to spend the way you want. It is called your vision and dream cache. The more savvy you are at managing your finances, the better that cache will look and feel. Most retirees talk about being able to travel. That is an expense that is outside of the normal day-to-day expenses especially if the travel is extensive. So we have to be very careful in planning our trip and making sure we are comparison shopping.

P. S. Always Remember to Share What You Know.

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Federal and Postal Employees – Choosing a Financial Professional

Retiring In Less Than One Year

Consider the following if your retirement plans are less than one year away.

Is there any way that I could be indebted to my employer?

If you have outstanding travel advances.
Overpayment of salary that has not been resolved.
Indebtedness for failure to return government property or for damage to government property.
Advanced leave.

**When and how do I waive my military retired pay?**

If you would like to waive your military retired pay to receive credit for military service in the computation of your benefit, you can write to the Retired Pay Operations Center at least 60 days before your planned retirement. Send your waiver to:

Defense Finance and Accounting Service

U.S. Military Retirement Pay

P.O. Box 7130

London, KY 40742-7130 or you can “fax” your request to (888) 469-6559

**What Is The Maximum Federal Retirement Benefit I Can Receive?**

The basic civil service retirement annuity cannot exceed 80% of your high-3 average salary, excluding your unused sick leave. The 80% limitation is typically reached when you have 41 years and 11 months of service, not including accumulated sick leave.

Law Enforcement Officer (LEOs) Retirement Annuities

Law Enforcement Officers (LEOs) may under special computation provisions receive the 80% limit with fewer years of service.

Service beyond the years which provides the maximum benefit will not be used to compute your Law Enforment Officer annuity. The retirement contributions you made during those years will be automatically refunded to you with interest at the rate of three percent per year, compounded annually. You have the option of using the refund to purchase additional annuities as if the contributions and interest are voluntary contributions.

However, if you have federal civilian employment periods when you did not contribute to either or FERS, excess contributions are automatically applied toward any deposit due for those employment periods.

How do I find out if I am eligible for Medicare coverage?

It is recommended that you contact the Social Security Administration at least three months before you reach your 65^th birthday to apply for Medicare Benefits. The Social Security Administration will have the records pertaining to your eligibility for Medicare coverage. If there is a problem locating your records either you or your employer can obtain a statement of your earnings by writing to:

General Services Administration

National Personnel Records Center

Civilian Personnel Records

111 Winnebago Street

St. Louis, Missouri 63118

Your request should include:

Your name as shown on your payroll records;
Your date of birth;
Your Social Security Number;
Your complete mailing address;
The years for which earnings are needed;
The name and location of employer for each year;
State clearly the reason for the request;
Affix your written signature; and,
Write a statement declaring that all other sources of information have been exhausted.

When should I choose my exact retirement date?

If you have not already done so, start thinking about choosing your exact retirement date. Your benefit can be estimated based on the exact date you choose. Remember OPM cannot give you the best estimate until you have actually applied for retirement.

When should I complete my application?

You should carefully read all of the information in the application package and submit the forms. You do not need to submit a resignation letter. Your completed and signed application is equivalent to a resignation. However, if you are eligible for benefits, you should not resign with the intent of retiring at some later date. If you were to expire after separation but before filing your retirement application no life insurance, no survivor benefit and no survivor health insurance coverage would be available to your survivors. All other exit procedures required by the agency should be followed and completed.

Should I check on my military service deposit?

Your human capital office will verify with your payroll office that the deposit to give you credit in your annuity for military service you performed after 1956 has been paid, or that arrangements have been made for complete payment before you leave the agency’s rolls.

Should I sign up now to receive my retirement payments by direct deposit?

If your retirement records are electronically transmitted by your employer via the Data Exchange Gateway (DEG), the account information for direct deposit will be sent automatically. If this is not the case, then you must submit with your retirement package, a request to receive payments by direct deposit. A letter can be submitted or SF 1199A with the application. SF 1199A can be obtained from your financial institution.

Direct deposit is generally not available to persons with a permanent address outside of the United States, except for Canada. Persons with permanent addresses outside the United States may request direct deposit to a financial institution in the United States.

P. S. Always Remember to Share What You Know.

TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Records To Check Before Retirement

For Postal Employees – LiteBlue and the TSP

Image Credits

It is best to make certain all of your records are in place when anticipating retirement. Tips to get in shape for retirement.

-Review your designation of beneficiary for the lump sum payment of retirement contributions when no one is eligible for monthly payments.

– If a copy is not in your folder, file a new designation. The designation is made on

Standard Form 2808 for CSRS and Standard Form 3102 for FERS. Make sure

the form shows very clearly the person(s) you want designated.

– FERS transfers and any prior designation made for CSRS is cancelled. You may want

to file a FERS designation. Automatic transfers to FERS from CSRS,- the designation

will remain in force.

If there is no designation of beneficiary, benefits will be paid as follows:

Your widow or widower.
Your children in equal shares.
Your parents in equal shares.
Your appointed executor or administrator of your estate.
Your next of kin under the laws of the state you reside in when you die.

What records are needed for my health benefits?

Inside of your OPF should be a record of all of your health benefit registration forms (Standard Form 2809) and where appropriate Standard Form 2810, Notice of Change in Health Benefits. When you retire be absolutely certain that your official records show a complete history of your health insurance enrollment for the last five years. Your records should include your current Federal life insurance coverage on a Standard Form 2817, “Life Insurance election”, and where appropriate, a current life insurance designation of beneficiary (Standard Form 2823).

P. S. Always Remember to Share What You Know.

TSP ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Is Your Thrift Savings Plan (TSP) Working For You?

For Federal Employees – Tips To Creating A Retirement Budget

Federal Employees and Retirement Budgets

You don’t have to follow any particular format for creating a budget except to measure income against expenses. The tips below might help you get started.

Determine a time horizon for tracking your income and expenses.
Outline all of your sources of income and then total the sources.
Outline all of your expenses, everything you spend money on. Break down your expenses into variable and fixed income so that you can really see where there is room to make adjustments if needed. Total all of your expenses. Remember “savings” are a fixed expense; therefore you must pay yourself first (PYF).
Subtract your expenses from your income. If expenses outweigh income, you have some work to do in the ‘adjustments’ arena. If income outweighs expenses, then you should consider paying yourself a little more so that your financial goals might be achieved earlier than planned. Plans are made to be flexible and this is good flexibility.
Now that you have the tools necessary to develop both a financial plan and a budget, take sometime to compare one to the other and see how they mesh and if any refurbishing needs to be done. Your spending plan should be in harmony with your financial goals. Do this often throughout your life.

P. S. Always Remember to Share What You Know.

LiteBlue and TSP RELATED ARTICLES

Federal and Postal Employees – Choosing a Financial Professional

Budgeting And Federal Employee Financial Plans

LiteBlue; Online Access to More Than Just Your USPS Earnings Statement

For Federal and Postal Employees, building a budget carries equal weight to building a financial plan.

Envision constructing a house – The financial plan is the front door to your dwelling and the budget is the back door, both are necessary if you expect to be safe and secure.

Having a sound financial plan and a budget are paramount to a successful retirement future. Having a budget allows us to direct money towards goals we establish in our financial plan. The budget acts like a navigation system, it directs our course, but only if we stick to it. Sounds familiar, a financial plan only works if you follow it and a budget is only a good navigator if you heed the directions given. A budget, like a financial plan is not etched in stone, but is meant to be flexible and SMART.

**Primary Elements of a Federal Employee Retirement Budget**

There are two primary elements to a Federal Employee retirement budget – income and expenses. Income may be derived from various sources: employment, interests from savings and investments. Expenses are summed up in our wants and needs. There must always be a very careful balancing act between income and expenses. When expenses become more than income, we run the risk of running out of money and that is exactly what we don’t want to do in retirement or at any other time for that matter. The budget helps us to rein in spending and make wise choices that will keep our income and expenses in harmony.

As we approach retirement it will become even more critical that we recognize what our spending habits are and employ definite strategies to ensure they fit into our financial plan and are guided by a sound budget.

When we spend money it is generally for expenses that are either fixed, variable or occasional. Most of us spend money and then think about saving what ever is left over. When we mentioned earlier the concept of PYF or pay yourself first, it is meant to do exactly that. Pay yourself first in the form of savings right off the top of your income. It need not be a particularly large amount, but it must be defined and consistent. Savings must be entered in the budget as a part of “fixed” expenses. If we treat “savings” as a variable or occasional expense, it is very clear that we will be met with significant challenges in meeting our financial goals in the future.

Federal Employee Retirement Budget

Creating a budget is easy enough. We need only list all income against all expenses to see where we stand. If expenses outweigh income, then we need to make some immediate adjustments. Most of us simply run out of money or find that we don’t have enough, without outlining everything in a budget so that we can actually see how we are spending our money. SMART budgets must be updated regulary throughout our lives. Remember as events change in our lives, we will very necessarily have to adjust our budget, our financial goals and the way we spend money.

There are many software programs that will allow you to monitor your budget and to stay on track by keeping your expenses and income in a spreadsheet. A budget is your spending plan about what you can do with your money. Warren Buffet knows exactly how much money is coming in, how much will be spent on bills and day-to-day expenses and how much to set aside for meeting large financial goals. People who are SMART with their money, no matter how much or how little, know where their money goes because they have a plan.

Once you build a budget you will know that you have mastered the objective of creating a budget when your budget is balanced to show that total income equals total expenses and that your budget supports each of your financial goals. It’s your money. You have worked hard for it and now you must make it work SMART for you!

P. S. Always Remember to Share What You Know,

LiteBlue Related Pages

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PostalEase / LiteBlue

What Postal Employees Should Do On LiteBlue Before Retirement

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Statements to Answer and Get You Thinking

Sometime we need a little nudge, some motivation to get our engines pointed towards painting a picture of our retirement future. The following statements can assist in setting the parameters for both our plan and individual action plan.

I have a definite strategy to SAVE. ___
I have clearly written down all of my financial goals for retirement. ___
I have a spending plan for all sources of income. ___
I have a plan for reaching my goals for retirement. ___
I always review my goals before spending. ___
I have clear plans as to how I will spend any unobligated funds before I spend impulsively. ___
I have a budget that I monitor now and will continue monitoring my budget in the future. ____
I know exactly how much money I can spend on clothing monthly and yearly. ____
I know how much money I can spend for eating out and entertainment. ____
I plan ahead for times of big expenses, i.e., replacing the furnace or AC unit, purchasing a new car, major car repairs, home repairs, etc. ____
I have a plan in place for unexpected expenses. ____
When I must make a major purchase, I do comparison shopping. I test the market. ____
All of my purchases are part of my plan for reaching my retirement goals. _____
I set aside some money to spend as I please, only after paying myself first (PYF). ____
I have emergency funds set aside equal to at least six months of living expenses. ____
I have begun a sensible debt reduction plan. ____
I pay off the entire monthly balance due on my credit cards to avoid paying interest charges. ____
I know the difference wants and needs and I prioritize needs over wants. ____
I know the rate of interest I am receiving on all savings accounts. ____
I follow and monitor the rate of return on my investments. ____
I understand what my investments mean and the risk associated with them. ___
I belong to a credit union to reduce transaction costs in conducting my financial affairs. ____
I determine the amount of money I can spend on a car and secure financial for that amount before selecting a car. ____

Give yourself one point for each item you have already taken action on. Add up your score and see how far you need to go to put your plan of action in motion.

P. S. Always Remember to Share What You Know.

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Federal Employees – Building Your Financial Plan

TSP (Thrift Savings Plan)

As a Federal Employee you may seek the advice of a Financial Planner, you need to do some homework towards building your financial plan. The Financial Plan is a key component of your overall Retirement Planning strategy, so you can retire well and live in comfort and security.

Some key items of what your Financial Plan should consist of:

– One SMART Short Term Goal (0 – 3 months)
– One SMART Intermediate Term Goal (3 months – 1 year)
– One SMART Long Term Goal (1 year plus)
– A quarterly record of how you get and use your money (you may choose to use a weekly or monthly record)
– A process of allocating your money by using the decision-making process
– Identification of at least 3 factors that might potentially impact your financial plan (factors may change from time to time)
– At least four strategies that will keep you firmly on your plan
– Process by which you can easily and clearly articulate how you will monitor and modify your plan.

Building your retirement plan in your mind is the first step to getting started, commiting it to paper (electronic or otherwise) is the first step to implementation. Your plan does not need to be anything technical, but a plan that you can work with; a plan that is not tossed outside but becomes the roadmap to securing your financial future in retirement.

Federal Employee Retirement

FEGLI (Federal Employees Life Insurance)

FEHB

‘High-3’ Income

Retirement Annuity Calculations

P. S. Always Remember to Share What You Know.

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Buy-Outs Are On The Rise

Phased Retirement’s Debut

Mandatory Reduction of Workforce

There has been a lot of conversation around the Federal and Private sectors about strategies to reduce payroll by cutting down the number of employees on the rolls. The Federal sector has a mandate to reduce the rolls by 20% and a number of incentives have been put on the table to accomplish that goal. The Department of Defense has taken the lead in responding to the President’s mandate. The number of employees expected to sign on for retirement did not happen because too many Federal employees are ill-prepared to retire.

Federal Employee Buy-Outs and Incentives

The Post Office started out by asking individuals eligible to retire to do so. That didn’t get much leverage therefore a monetary incentive of $25,000 was offered to sweeten the pie. It got a little mileage but not enough to make the kind of dent the Federal Government is so desperately seeking. There is a new bird afloat that other organizations might be interested in if they can afford it. A few years back Continental and United Airlines merged. There were so many differences between the airlines that it has been difficult to impossible to come up with a contract to the mutual benefit of both sides. Continental had a pension plan, United did not – representing the biggest nut to crack.

If the airlines are going to merge into one entity then they must have the appearance of parity and equity. That is easier said than done. The airline could have a conversation with the Feds. Afterall, thus the birth of the Federal Employees Retirement System out of the old Civil Service Retirement System. Bring in the new and work towards phasing out the old. It is not easy, but the Office of Personnel Management (OPM) proved that it can be done.

Continental and United have set an agenda to shave 1,000 workers from both airlines. The initial push to ask eligible retirees to exercise that right without an incentive fell on deaf ears, the same response from Federal workers. The management at Continental and United have pulled out the big guns. The Airline is offering $100,000 for retirement eligible individuals to leave the rolls. As of this writing, there is a whole lot of conversation, but not enough takers.

A recent conversation with an employee of Continental said he was simply not ready to retire and that he was not interested in the $100,000 although it sounds good and is the biggest incentive the Airline has offered, he is declining for more time in the sky.

Individuals who have put in years of service are often conflicted in two ways about retirement. First, many are not financially able to retire and second, work has become the largest part of their lives. Cutting the umbilical cord from work to retirement is a process where early planning is the key remedy.

P. S. Always Remember to Share What You Know.

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Determining If A Trust Is Right For You

July 29, 2014 /by Dianna Tafazoli

It seems to be the general concensus that a Last Will and Testament is an essential part of a good estate plan but Living Trusts are not as widely used nor understood. Although many may think that probate is a negative of the Last Will and Testament, a great many individuals remain comfortable with it. There are a number of ways to pass your wealth onto family members. But whatever method or tool you choose, taking action is pivotal. Don’t spend so much time thinking about what to do that you simply do nothing.

Planning a strategy to pass on your wealth to family members, charities or friends must be a highly personal and individual decision. It is good to consult with individuals skilled in a number of arenas concerning making plans to secure the integrity of your estate. In the final analysis, you must make the decision as to how your assets will be handled. This requires researching and educating yourself so that you can participate intelligently in the conversation and oftentimes requires working with a knowledgeable financial professional.

It is never a good idea to be in a position to listen and listen without the benefit of having some knowledge under your belt. You don’t have to be an expert, but you surely need to have enough information so you can determine which direction you want to take. Summarily, you don’t want anyone making critically important decisions for you. You want to make those decisions yourself.

More and more individuals are turning to Trusts in managing the transfer of their wealth to their loved-ones. As the grantor or the trustor of the trust, you may make changes, additions or transfer assets. You may even terminate the trust altogether. A trust can be changed and so can a will. Both instruments require being informed. By comparing Wills and Trusts side-by-side and of course having a decision with someone you trust will help you decide if a Trust is right for you.

P. S. Always Remember to Share What You Know.

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Can You Participate In The TSP After Retirement?

July 19, 2014 /by Dianna Tafazoli

Your Thrift Savings Plan (TSP) is funded via payroll deductions. Therefore, once you are no longer an employee your participation in the TSP stops as far as being able to make contributions. However, you don’t have to take your money out of the TSP, you just cannot put money into it.

TSP After Leaving Federal Employment – TSP Withdrawals

If you leave service and decide to make a TSP withdrawal, you may do so in two ways. You may make a partial TSP withdrawal or a full-withdrawal. You can make a partial withdrawal of $1,000 or more. You can make a request for a partial withdrawal online or use Form TSP-77. If you make a full withdrawal you can request a single payment withdrawal of your entire TSP balance. You may also request a series of monthly payments. In this way you can choose a specific dollar amount to receive each month or you can receive a monthly amount based on your age and your account balance. If you are requesting a specific dollar amounts, the monthly payment must be a minimum of $25.00.

TSP-77 Form

TSP Annuity

You may also elect a TSP life annuity. The TSP life annuity pays you a monthly benefit for life. The TSP will purchase an annuity for you from their provider (Currently Metropolitan Life Insurance Company – MetLife). Make sure that you read up on the pros and cons of purchasing a TSP annuity directly through the TSP (We at PSRetirement.com suggest to strongly consider NOT taking this option). You may also mix up your withdrawals. You may use the methods outlined in the TSP Full Withdrawal option in a number of combinations – single payment, TSP monthly payments or the life annuity. You can combine two options or all three, which ever fits into the plans you have made for you and your family and always make sure to speak with a trust Financial Professional before making any decisions.

Read over your TSP account(s) and make sure you understand how your TSP works in retirement and how to maximize your federal retirement benefits. If you have put a retirement action plan in place, then you want to gain as much information as possible to help you live in retirement on your own terms. FERS employees have to be especially cautious, yet assertive, by fully funding their TSP whenever possible because the TSP is the larget monetary component of the FERS retirement system.

How you manage your financial affairs is an individual matter. However, just like any good work, it takes time to examine and analyze to choose the best options that fit your situation. No two situations are alike, so don’t take a position because it sounds good. Use your planning tools and take a position because it works for you.

P. S. Always Remember to Share What You Know.

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The Military Wants to Buy You Out

July 19, 2014 /by Dianna Tafazoli

The Military Wants to Buy You Out

The Department of Defense (DOD) has issued a mandate ordering each branch of the military to reduce costs and staffing levels across the board by twenty percent by 2019. The Air Force is taking the lead in meeting that requirement by moving forward to put an even greater requirement on itself. The Air Force has set a goal to reduce its workforce by the same percentage within the first year. The Air Force intends to achieve this goal by offering early retirement and buyouts to civilian personnel.

The Air Force estimates that it will realize savings of over $1 billion over the next five years. It is suggested that management both domestically and abroad will be targeted to reach the numbers. The Air Force believes that reducing civilian personnel will give them much needed resources to prepare and train military personnel and prepare those personnel for war missions if the need arises.

Some qualified service personnel have been offered voluntary retirement incentive programs. The Department of Defense, like other agencies offering VERA and VSIP, will consider a reduction-in-force if VERA and VSIP do not reach the intended targets. The Air Force is also exploring ways of streamlining resources.

It appears that part of America’s workforce is looking at ways to help stabilize the budget. Collaboration just might bring America’s budget in balance.

P. S. Always Remember to Share What You Know.

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Impacts of Voluntary Early Retirement (VERA)

July 18, 2014 /by Dianna Tafazoli

Impacts of Voluntary Early Retirement (VERA)

Retirement isn’t always voluntary. Microsoft announced recently that it was laying off 18,000 workers. When the Information Technology Industry (IT) begins to lay-off workers, then the country has to get pretty scared. IT is the industry to be in. We know that Silicon Valley at one time was almost overkill, but colleges and universities are still getting an extraordinarily large amount of students majoring in Computer and Information Technology. There seems to be a lot of early-outs and lay-offs recently. That might suggest the country is in great need of creating jobs. If we are laying off people, I gather all of those people are not retirement age, then where will they go for work? We know that layoffs mean increasing the unemployment rolls in many instances. There is not in reality a job waiting for every person who has been laid off.

Does Industry follow Government or does Government follow Industry? It matters not, but more that the layoffs are layoffs and the economy continues to hurt. When the economy hurts, families hurt There are a number of agencies offering voluntary early retirement (VERA). The Transportation Security Administration (TSA), the Environmental Protection Agency (EPA), and the Social Security Administration SSA) to name a few.

The Federal Government is working fervently to cut the size of government in order to minimize cost and streamline the budget. TSA employees qualify for VERA if they have completed at least 25 years of service at any age and 20 years of service at age 50. Employees meeting these qualifications are under a special category of retirement. The TSA employees are classified as Law Enforcement Officers (LEOs). However, air marshals and specialists working in intelligence do not qualify for VERA at TSA.

Employees at the National Geological Survey are also being offered voluntary early retirement. There are many other federal agencies that are either planning or have already begun sending out VERA notices. The Federal Government needs agencies to think seriously about trimming staff, hopefully avoiding a reduction-in-force (RIF) that is always a morale killer in any agency.

The Office of Personnel Management (OPM) is quickly approving agencies’ requests to offer VERA in order to help them create efficiency in their organizations. Employees participating in VERA must be very careful to analyze their retirement action plans. They must evaluate the impact VERA might have on their plans to live well in retirement. VERA offerings might help agencies create efficiency and balance the budget, but those same results might not be achieved for the federal retiree.

P. S. Always Remember to Share What You Know.

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Federal Retirees Are Leaving the U.S. for Central America

July 13, 2014 /by Dianna Tafazoli

The American economy is not improving for many citizens, including federal retirees. Because affordability is a key phenomenon for many retirees, they choose different paths to living out their retirement years. Many retirees are looking towards Central America for homes and lifestyles they can afford. They are finding living expenses are just too high to maintain the kind of lifestyle they desire to live in their retirement years.

Central American countries, like Ecuador still place them within reach of their families back in America within a day’s flight. Retirees who have moved to Ecuador report paying on average $400 for a 3 bedroom apartment that might cost them $900 or more per month in some parts of the United States. They also report spending much less for health care expenses and can spend the equivalent of $2.00 per person on a high-end lunch. These attractive economic features have many retirees looking to other shores to enjoy their fixed-income status in retirement.

Retirees report missing their friends and families when living abroad, but are comforted knowing an airplane reservation will help them make that connection relatively easy. With retirees leaving the United States, will that be yet another drain on the American economy? Dollars that could be spent in the USA are being spent other places not benefiting the U.S. economy at all. It is time that the USA started looking into ways to not only retain workers in the workforce but retain its citizens in the country after retirement.

The statement alone that retirees are leaving the U.S. for other shores that offer a more affordable lifestyle on a fixed income is more than food for thought. The US should be strategizing and finding solution-driven ways to create more home affordability for American citizens. Why should an American citizen have to leave the country of his/her birth to find affordability? If leaving the country is simply a matter of choice, then that it one thing. However, to leave because you cannot afford to live in your own country is an eye-opener and a call to action that something needs to be done without delay.

After spending 30 to 40 years on a job, the expectation should be that one can choose to live out the last years in comfort and relative security. It is terribly disturbing that a move is made because of the inability to afford the basic needs of life – a place to live, food to eat, transportation, medical care and a little something left over to do whatever you will. If that cannot be accomplished, then why spend the majority of your life working only to find out that after retirement you must hitch up your wagon and stake out a new place because your retirement money can’t pay for you stay within U.S.. borders.

We’ve got a lot of work to do to make America work for its people. As you age and have paid your dues by working long and hard, you should not have to bare the burden of looking for a place you can afford to live in. Places in the States designed for senior living are basically for high-income individuals. Let’s not forget about low-medium-high. There are people, retirees in every category. Let’s work towards accommodating them.

P. S. Always Remember to Share What You Know.

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Federal Retirement: Have The Talk

June 20, 2014 /by Dianna Tafazoli

Federal Retirement: Have the Talk

Federal Retirement: We have discussed at great lengths the reality of death and what must happen in order to execute the final business of our lives. I shared these ideas and stories to remind us and to give us the impetus to have the talk. It is a difficult and painful talk to have, but it must happen in order to handle the business of death. We mentioned in the newsletter that death is not surprised whenever it prevails upon us. For us to be surprised is human, to be unprepared is also human. But to be unprepared carries an emotional as well as a financial cost.

You say how does one really get prepared for death. You don’t, because it is something none of us want. It means an end and human beings prefer beginnings as opposed to endings. We can prepare for the business end of death and that starts with having the talk, a talk that should take a high priority in every household. If you cannot initiate the talk, get someone else to help you and your family get started. It doesn’t have to be a professional, maybe a good friend, a member of your church or a support group.

That’s an idea. I don’t think I have ever heard of a pre-death support group, but it is certainly something that is needed. What is the talk? The talk involves one basic question and it can be addressed in a myriad of ways. For example, a conversation would go something like this:

Honey, have you thought about what will happen when we pass away? We need to make sure that we know what we have and where our important papers are. What good would a safe deposit box be if nobody knew we had it or where the key was or what bank housed it for that matter?

Now as the conversation progresses it is only natural that you begin thinking about how safe is it to divulge all of this information. The talk must happen with people you know and trust and it is not a wise idea to only tell one person.

A trusted attorney with a good record might be a safe alternative. Although you might seek the services of an attorney you must still due your due diligence. Bernie Madoff had a good quality about him, I bet you didn’t know that. He taught us to be more involved in our own business and not leave it entirely to someone else. I have never known anything bad where something good didn’t come out of it. You just have to look for it.

Whatever your choice is and the format you choose to inform your family members is yours and yours alone; but you absolutely need to have the talk. It is too hard and unnecessarily so when the hurt of your passing is escalated because your family members do not know what you have, where it is and who it is left to. Have the talk so that your life can be celebrated in a way you and your family deserve.

P. S. Always Remember to Share What You Know.

Federal Retirement: Things Happen

June 12, 2014 /by Dianna Tafazoli

No matter how well we plan for our future and federal retirement, things happen because we do not live in a perfect world. As we age, we will invariably encounter more and more health problems. We need to prepare ourselves for those things we have not necessarily planned for. We don’t plan for a death, a serious illness, or countless other calamities, but when they happen we must have a back-up plan.

Serious illnesses and sudden death can often derail a family’s financial stability. Families that are accustomed to a two-household income may need to start planning early for the – what if – one income is gone. We need to think about whether we have enough coverage to take care of a disaster in our home or in our lives. We need to save not for a rainy day but for a tsunami.

I would like to share a personal story. I have lived in my home for nine years and never had a need to file a claim with my insurance company. A guy was mowing my lawn once and a rock hit the patio door and it crumbled like a beautiful pattern inside of the plastic casing. The guy was my brother-in-law, so I absorbed the replacement cost and moved on. No need to contact the insurance company.

But things happen. Doing a load of laundry and suddenly there is a tsunami making its way from the upstairs laundry room into the dining room via the chandelier. I rush, grab buckets, toss blankets and towels all over the floor to abate the water damage. Remember I have never filed a claim, so I don’t know how the entire process works.

I call the insurance company and tell my story and then I start looking for a company to dry up the water. I am completely out of my element. I don’t know what to do. Finally, I get a very compassionate insurance representative on the phone and she guides me through the process. She said, “We should have sent someone out to dry up the water immediately. ServPro will contact you shortly or you may use another company. No, I said, “ServPro is fine. I want to get back to my life.”

Ceiling and walls were damaged, subfloor and tile severely damaged in laundry room, carpet damaged, electric outlets no longer functioning, gas fireplaces won’t come on and the microwave is completely silent. Plugs are not responding to electrical signal. I am now frightened the house is going to catch on fire, mold is going to take over the house and THINGS HAPPEN.

Finally, I get a contractor I think I can work with whose estimate is significantly different from the Insurance Adjuster. Hold it, the story has not ended. The house is still in disarray, oriental rugs have been sent out for cleaning. I am becoming very familiar with the local laundry mat, and the house’s pleasant smell is gone and so am I.

I am not living in my house right now and the insurance company is not happy about paying the claim based on my contractor’s estimate. Now tell me why did I not file a claim in nine years and decided to take care of small things myself? I have more than enough coverage; yet, the insurance company is in no hurry to settle the claim and let me get back to living my life.

Things happen no matter how well we plan so the best course is to be prepared, stay calm and know that all storms, not matter how bad, pass over. A lesson to me that I would also like to share. Even if you never file an insurance claim, at least know before hand how the process works. It makes things much easier.

P. S. Always Remember to Share What You Know.

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