What are the Differences Between Postponed and Deferred Annuities?

January 27, 2023 /by jeff boettcher

Meeting age and service requirements are two necessary conditions for annuities, especially in terms of an immediate and unreduced annuity. However, suppose you are looking to leave the employ of the federal government or were let go due to downsizing. In that case, you may be entitled to a postponed or deferred annuity if you don’t currently qualify for voluntary retirement. Although some agencies currently undergoing reorganization and substantial restructuring, among others, utilize voluntary early retirement to increase the number of eligible employees for retirement, it isn’t always the case.

Proposed annuities are available to FERS employees who meet specific criteria, including service requirements (under the MRA+10 provision) and the age requirement. Unfortunately, CSRS employees are not eligible to receive a proposed annuity. For FERS employees, though, individuals may choose to postpone receiving an annuity to another date to eliminate or reduce the age penalty should they fail to meet unreduced annuity requirements.

Annuities are calculated according to the FERS formula, depending on the length of service, unused sick leave, high-3 of your separation, and the remaining age penalty. Although you are ineligible for SRS, you can receive Social Security benefits and a COLA on FERS civil service benefits starting at 62. However, this does eliminate any FEHB and FEGLI coverage on the date of separation. Once your retirement begins, you may reenroll if you had previously been enrolled for five consecutive years prior to separation.

Deferred annuity eligibility is dependent upon a few circumstances for individuals planning to leave the government before reaching immediate annuity eligibility. Qualifications include a minimum of 5 years of civilian service and refraining from requesting a retirement contributions refund. Plus, individuals under FERS and CSRS are eligible based on your high-3 and length of service (at the point of separation). This case is much unlike voluntary retirement, where unused sick leave will not be used to calculate service time. Finally, those covered by CSRS can begin receiving their deferred annuity upon reaching 62, with an amount that will increase with annual COLAs.

However, more deferred annuity options are made available to those covered by FERS. These options include unreduced deferred annuity eligibility at age 62 with a minimum of 5 years of service, age 60 with a minimum of 20 years of service, or minimum retirement age with a minimum of 30 years of service. Upon meeting your MRA, you will become eligible for a reduced FERS annuity at the ten-year service mark. This reduction includes a 5% penalty for each year you were less than 62 years old at the point of separation. It is important to note that deferred retirees are ineligible to receive FERS SRS (special retirement supplement), which typically approximates the SS benefit earned during employment (paid up to 62).

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients â€“ I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.

How to go about ensuring a financially stable retirement

January 11, 2023 /by aaron steele

It’s crucial to have numerous income streams coming into your bank account each month as you prepare for retirement to preserve your peace of mind throughout your golden years. After all, when you should be unwinding after a lifetime of labor, the last thing you want is to worry about your finances! Here are three strategies to ensure you don’t run out of money in retirement.

1. Required Minimum Distributions (RMDs)

You have the choice to take a particular amount of money out of your retirement savings once you reach a certain age. However, you should research because each option has unique benefits and drawbacks.

If you want your investments to grow, you can decide to leave your money in your retirement account before you turn 72. This can be the best option if you don’t need the fund.

When taking money out of several retirement accounts, careful planning is critical. In other words, it’s probably advisable for you to take withdrawals from taxed retirement funds first.

However, you do have many options when it comes to your retirement distributions. For instance, you can opt to remove stocks and bonds rather than actual cash.

This could be a great choice if you already have enough money to maintain yourself because you could invest these financial assets and gradually raise your net worth.

It’s probably a good idea to utilize your right to an RMD reprieve if you are still working at age 72.

The optimal time to retire is by January 1st, so you might want to be strategic about when you make that decision.

RMD withdrawals are understandable if you require income, but it’s probably advisable to leave your money in retirement accounts for as long as possible to benefit from compound interest.

You can contribute to different retirement accounts, which is crucial to keep in mind. There are numerous retirement accounts to pick from, including;

The Solo 401(k) and the Roth IRA,
The Traditional IRA,
The SEP-IRA (for self-employed individuals).

The optimal course of action will once again rely on your goals, financial status, and desired standard of living.

2. Social Security

Most people who have worked for most of their lives will be able to obtain Social Security. However, the amount you will receive will differ depending on several variables.

As you can see, it is preferable to have several sources of income so that you are not entirely dependent on Social Security.

Unless you absolutely need to, it’s generally in your best interest to file for Social Security later rather than immediately.

You could get by on this amount if you want an inexpensive way of life. Still, it could be constraining, especially as you get older and become more accustomed to certain creature comforts, which is understandable.

For this reason, it’s crucial to remember that Social Security is just one source of income.

Your Social Security will be considerably impacted if you have a pension from the public sector. In fact, you might not even be qualified for Social Security.

Unfortunately, not everyone will be eligible for Social Security, making it crucial to avoid being dependent on this specific income source in your later years.

3. Systematic Strategic Withdrawals

Even if you have millions of dollars in your bank account, taking them all out at once and hiding them under your bed is not an intelligent way to maximize or protect your income. Regardless of your nest egg size, the smart move is only to withdraw the money you need and leave the rest to continue working for you.

The core of a systematic withdrawal approach in retirement is calculating your cash-flow requirements and regularly withdrawing only that amount of money. Sure, withdrawing the same amount of money every week or month falls under systematic behavior, but it isn’t strategic if your withdrawals aren’t based on your needs.

Most people use a systematic withdrawal strategy, gradually liquidating their assets in one way or another. Bonds, bank accounts, and other assets should all be considered in addition to equity holdings, which are frequently the highest money sources tapped in this way.

Equity holdings include mutual funds and stock in 401(k) plans. Your revenue stream can last as long as needed if a withdrawal strategy is correctly applied.

In summary, the best retirement plan depends on the demands of the individual, so if you’re unsure of the best path for you, you might want to speak to a financial advisor.

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

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

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

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

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

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

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

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

That’s making a difference.

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

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

Projected 2023 COLA hits 8.7%

December 27, 2022 /by george learned

The Senior Citizens League predicted that the Social Security retirement benefit cost-of-living adjustment (COLA) for 2023 might be 8.7%. The increase would be the biggest in almost 40 years.

The SCL stated in a press release that a COLA of 8.7% is uncommon and would be the biggest payment ever made to the majority of Social Security recipients still living. Since the introduction of automated adjustments, it has been higher only three previous times (1979-1981). You may read about the history of COLAs here.

The estimate is based on updated Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) data through August. The final month of consumer price information has passed. On October 13, following the September CPI-W data publication, the Social Security Administration is anticipated to make the 2023 COLA announcement.

The method for calculating each COLA is laid out in the Social Security Act. The methodology states that rises in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) serve as the foundation for COLAs.

A COLA for December of a given year is equal to the percentage increase in the average CPI-W for the third quarter of that year over the average for the third quarter of the year before, the one in which a COLA went into effect. If there is one, any increase would be rounded to the nearest tenth of 1%. There is no COLA if there is no rise or the rounded increase is zero.

How are the CSRS COLA and FERS COLA differences calculated?

A COLA may impact different federal retirees under the Federal Employee Retirement System (FERS) and the Civil Service Retirement System (CSRS).

The FERS COLA and CSRS COLA are compared in the following table:

Medicare Part B premiums in 2023 may stay around the same.

According to the SCL, Medicare Part B rate increases in 2023 could not be that significant. The Medicare Trustees predicted in their annual report for 2022 that the regular Part B premium would continue at $170.10 per month in 2023. Mid-November is typically when the Medicare Part B premium and other charges are revealed.

When will the Social Security COLA for 2023 be revealed?

There is just one more month’s worth of consumer pricing information before the Social Security Administration releases the COLA for 2023. The Senior Citizens League anticipates the SSA to announce the publication of the September consumer price index statistics on October 13.

Mary Johnson, the league’s Social Security and Medicare policy analyst, says, “A COLA of 8.7% is exceedingly uncommon and would be the largest benefit that most Social Security recipients alive today have ever received.” Only three other instances (1979-1981) were higher since the automatic adjustments began.

“COLAs are designed to support keeping Social Security benefits’ purchasing power when prices rise. The total Social Security income that retirees will receive throughout their retirement will steadily increase due to these permanent increases. According to Johnson, without a COLA that sufficiently keeps pace with inflation, Social Security benefits will gradually buy less over time, which might be difficult for older Americans retiring later in life.

“The COLA for August 2023 has, on average, fallen 48% short of inflation through August. A $1,656 benefit is short by a total of $417.60 year to date, or around $43.80 per month on average.”

The tax implications of the COLA increase

Although Social Security COLAs are intended to provide financial relief, they may increase your tax burden. According to preliminary findings from The Senior Citizens League’s 2022 Retirement Survey, almost 59% of respondents feel they may have to pay more in taxes in 2022 because of the 5.9% COLA they received this year.

Furthermore, according to 21% of respondents, their household income was below the income levels that might subject up to 85% of Social Security benefits to federal income taxes until 2022. This group is concerned that they may have to pay tax on a portion of their Social Security income for the first time during the upcoming tax season.

For the next year, a COLA of 8.7% would result in comparable recurring increases in tax obligations.

Premiums for Medicare

The government typically announces the Medicare Part B premium and other expenditures in the middle of November. In 2023, Johnson predicts that the cost of Medicare Part B won’t likely increase significantly.

In their 2022 annual report, the Medicare Trustees predicted that the regular Part B premium would remain at $170.10 in 2023. The extra Part B premium charges from this year, as decided following a reassessment, will be used by the Centers for Medicare and Medicaid Services to lower the Part B premium in 2023, according to the agency.

Contact Information:
Email: [email protected]
Phone: 3037587400

Life Planning Resources About You That Your Loved Ones Will Need

November 24, 2022 /by bill hoff

Your spouse, partner, or children will appreciate this article if you become incapacitated due to cognitive deterioration or pass away. First and foremost, the information comes from you. Second, the informational sources are all government entities they must become acquainted with to comprehend their position as your advocate, care provider, or beneficiary. Third, these digital resources are updated regularly, ensuring that the material is up to date when needed.

This article is designed to be used as an attachment to be shared with others through email. The idea is that by giving this information, you’re presenting them with several reliable digital resources that can be shared with them now, electronically archived by them, and made available to them when required in the future.

Remind your close ones about the article when you give them specifics about your estate planning instructions, such as your will, advance directives, powers of attorney, etc.

Important Federal Agency Resources

Office of Personnel Management (OPM)

During their retirement, all federal annuitants, regardless of the federal agency they worked for, are subject to the oversight of the Office of Personnel Management (OPM).

Here’s an example of how to collect information using the OPM search box. For example, entering “death” into the OPM’s search box yields 49 results. Each outcome provides a two or three-sentence summary of the associated material, for instance, FAQs on the death of a government employee or annuitant. All the links provide paperwork, extensive descriptions of a procedure, or other relevant information.

Thrift Savings Plan (TSP)

Almost everything a spouse, partner, and children need to know about the Thrift Savings Plan (TSP) may be found in a special section for beneficiaries on their website. The site includes a PDF document entitled “Your TSP Account: A Guide for Beneficiary Participants,” which may be accessed via the website.

Social Security Administration (SSA)

Social Security offers various resources that others close to you may find valuable. The first is about people helping others and how Social Security can help you when a family member dies.

Medicare

Medicare provides information on important Medicare-related matters such as where to sign up for Medicare, how to change plans, the advantages of Medicare drug coverage, and where to get Medicare paperwork for claims and appeals. It offers a searchable database of Medicare-accepting medical providers.

Centers for Disease Control and Prevention (CDC)

The CDC provides an overview of Alzheimer’s disease and offers a wide range of information on the subject and the option to get email updates.

National Library Service for the Blind and Print Disabled (NLS)

The NLS provides a plethora of resources for senior citizens and their families. At least once a year, various organizations, online tools, and publications from government, academic, and nonprofit sources are updated. Connections for caregivers, legal, eyesight, physical health, and psychological health services are a few of the topics covered.

Conclusion

These tools aren’t meant to be a replacement for thorough estate planning. Conversations with the receivers of this article may be just what you need to get started on a personal estate plan.

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

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

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

Can You Finance Your Retirement With Social Security?

November 23, 2022 /by jeff boettcher

Most Americans lack confidence in the future of the Social Security program. According to a recent survey, 23% of Americans think the program won’t exist by the time they retire, and 46% think it will offer far fewer benefits than now.

Despite this, most Americans say they will rely on Social Security to pay for at least some portion of their retirement. While 26% said they would use Social Security to cover less than half of their retirement expenses, 51% said it would cover more than half (31%) or all (20%) of their expenses.

However, is this a sure bet? The survey team consulted experts to learn what you should know about relying on Social Security to pay for your retirement. Here is what they said.

Can Americans rely on Social Security to fund their retirement in its current form?

One-fifth of Americans intend to finance their whole retirement with Social Security benefits. Still, even if the program is kept in place, most retirees will probably find it challenging to do so.

Frank Murillo, a partner and managing director at the Snowden Lane Partners, says, “Unless you can actually stick to a budget, which in my experience most people don’t, Social Security is not enough for most retirement needs.”

There are differences in what people expect to spend in retirement and what they do. “Recreating the Dollar is an exercise I undertake with the clients I deal with where we put together sources of income to look like what they had throughout their working years. The findings of how much they can genuinely spend after stretching it over a respectable amount of time are eye-opening.”

According to Wade Pfau, the Retirement Income Center co-director at the American College of Financial Services, Social Security was never intended to be a retiree’s sole source of retirement income.

He said the benefit “is intended to replace around 40% of the typical indexed lifetime income of someone who has worked and earned an average pay over their career.” Many retirees will aim to replace a greater proportion than this.

Most financial gurus advise saving at least 70% of your pre-retirement income for retirement.

Katherine Tierney is a CFA senior retirement strategist at Edward Jones. She said, “Since Social Security is probably only going to make up a percentage of your retirement income, it’s crucial to have a well-rounded approach to satisfy your income demands in retirement.” We advise you to take action right now to learn what you must do to realize your dream retirement. A financial advisor can help outline your objectives, create a plan to achieve them, and track your progress if you are unclear on where to begin.

What to Do If Social Security Is the Only Retirement Income Source You Have.

Although financial experts do not advise relying only on Social Security for retirement income, this is the case for many Americans. According to another poll, 36% of Americans have less than $10,000 saved, and 25% have not yet begun saving for retirement.

Colleen Carcone, head of wealth planning solutions at TIAA, said, “Each scenario is unique. Some people can live wholely on Social Security exclusively.” Continuing to work while delaying your Social Security benefits might help you narrow the gap between the amount you need to retire successfully and the amount you have saved. A delayed start will result in a larger check when you start receiving benefits.

The Future of Social Security: What Will It Look Like?

According to the survey, most Americans think Social Security benefits will be cut or eliminated in the coming years. Are these worries justified since the Social Security trust fund is projected to exhaust in 2035?

Most analysts anticipate that Social Security will endure, but doing so will probably necessitate significant modifications to the current scheme.

A few straightforward fixes will probably be implemented, according to Jeremy Finger, CFP, founder of Riverbend Wealth Management. “First, we can remove the Social Security tax earnings cap, making any income over $147,000 subject to tax. The Social Security trust fund might be extended as a result. The second option is to raise the full retirement age, which would be similar to a salary reduction. For instance, persons born after 1970 could not be eligible for full benefits until they were 68 or 69 years old. Third, they might raise the Social Security payroll tax.”

According to Finger, the Social Security trust fund should be in balance using one or a combination of these remedies. However, Finger does not advise relying on Social Security to finance your retirement because there are enough unknowns.

I wouldn’t suggest that clients base their Social Security decisions, he said, “on what the government might do.”

There is a high possibility that payments will be cut in the upcoming years, regardless of how the Social Security trust is ultimately funded (and most experts think this will happen before it gets emptied).

Carcone says, “Social Security may be cut to match incoming cash from people and their companies.”

When preparing for retirement, Social Security’s uncertain future should be considered.

You will be less dependent on Social Security benefits the more you save over time through pension schemes and portfolio building.

Conclusion

Social Security isn’t going anywhere for the time being, and there are hopes that the government acts to replenish the reserves or pass relevant laws like those advised above.

But before then, you must have other retirement savings since Social Security covers less than 40% of an individual’s retirement income.

Contact Information:
Email: [email protected]
Phone: 8007794183

Which day of the month can you expect your Social Security check?

November 17, 2022 /by mickey elfenbein

Each month, beneficiaries receive Social Security retirement payouts. Benefits are paid the month after the month in which they’re due. For example, a recipient would get June’s benefit in July, but which day of the month does the check arrive?

When a person receives their payment is determined by various factors. These include their birth date and the record on which the benefits are being claimed:

If you have benefits on your record, the exact day you get them is determined by your date of birth.

If you’re getting benefits on someone else’s record, such as for a deceased spouse, the payment date will be determined by their date of birth.

Those getting spousal benefits under their live spouse will also receive benefits based on the date of birth of their spouse.

Schedule of Social Security payments

The following is the payment schedule:

Those who began receiving Social Security payments before May 1997 get them on the third of each month. If the third of the month comes on a Sunday, the payments are made on the preceding Friday. Suppose you receive both Social Security and Supplemental Security Income (SSI). In that case, you receive Social Security payments on the third of each month and your SSI benefits on the first.

Supplemental Security Income (SSI) is a government program that provides supplemental income to handicapped, blind, and elderly individuals and families with limited income. SSI benefits are paid by the Social Security Administration (SSA). However, the program is supported by general tax revenues rather than Social Security taxes.

How will you get your Social Security check?

If you haven’t already, setting up direct deposit is one of the best methods to ensure that you receive your Social Security payment on time. That’s possible when first applying for Social Security benefits. If you haven’t signed up for direct deposit at the time, you can do so now using your mySocialSecurity account.

With a mySocialSecurity account, you may have access to a site where you can manage many of your Social Security needs. You may use mySocialSecurity to seek a new Social Security card and estimate your future benefits, among other things. You may also set up your benefits to be paid by direct deposit using this platform. To create an account, you don’t need to be a retiree or receive Social Security benefits.

Another option for opening an account is to call the Social Security Administration (SSA) toll-free at 1-800-772-1213.

Those who don’t have a bank account can use the Direct Express card program to receive payments. With this program, deposits from federal payments, such as Social Security benefits, can be sent straight to the recipient’s card. To enroll in the program, contact 1-800-333-1795 or visit www.godirect.org.

Can I get my money by check?

When registering for Social Security or SSI benefits, you must choose whether to receive your benefit payments online (through direct deposit or Direct Express). According to the SSA, if you now get your benefit payment by check, you must switch to one of the electronic payment methods.

There are some exceptions, but benefit payments must generally be sent through one of the two electronic modes: direct deposit or Direct Express.

Is Social Security income taxed?

According to the Social Security Administration, approximately 40% of all people receiving Social Security benefits will be required to pay taxes on those payments.

You should expect to pay taxes on your benefit if your income exceeds $25,000 and you submit an individual federal tax return.

You must pay taxes if you submit a joint return and your combined income exceeds $32,000. According to the SSA, if you’re married but filing separately, you’ll likely have to pay taxes on your benefits.

Contact Information:
Email: [email protected]
Phone: 6122163911

Bio:
Mickey Elfenbein specializes in working with Federal Employees relative to their retirement benefit plans, FEGLI, TSP, Social Security and Medicare, issues and solutions. Mr. Elfenbein’s mission is to help federal employees to understand their benefits, and to maximize their financial retirements while minimizing risk. Many of the federal benefit programs in place are complicated to understand and go through numerous revisions. It is Mr. Elfenbein’s job to be an expert on the various programs and to stay on top of changes.

Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.

He has over 30 years of senior level experience in a variety of public and private enterprises, understands the needs of federal employees, and has expertise built on many years of high-level experience.

10 Strategies for Federal Employees Planning to Retire Before 2030

November 17, 2022 /by jeff boettcher

Thousands of federal personnel have retired since the COVID-19 pandemic began in March 2020. Many more eligible employees plan to retire during the following eight years.

Employees who are eligible to retire must be financially prepared to do so. With enough planning, an employee may do more than fantasize about a pleasant and financially secure retirement.

No one can know what the national economy and investment landscape will be like in 10, 20, 30, or more years. Hence, all employees who plan to retire in the next eight years should know what to expect financially after they retire and what should be done to complete the necessary tasks to prepare better for their retirement years.

Here are three recommendations to help employees who plan to retire within the next eight years:

1. Recognize and comprehend the link between investment risk and investment return and how it applies to TSP investing.

Unfortunately, risk connotes something negative for some TSP members. However, because the TSP is a long-term tax-advantaged savings plan, the “risk/return” ratio cannot be overstated. There is no doubt that investing in the stock market is risky. Investing in the TSP’s three stock funds (the C, S, and I funds) carries a certain amount of investment risk.

However, by taking the risk of investing at least half of a TSP portfolio in the C, S, and I funds, a TSP participant will be rewarded with a better investment return over the long run. Participants in the TSP should also be mindful that inflation may be disastrous to a long-term portfolio like the TSP. Stock investments have proved over the years that they can outperform inflation in the long run.

TSP participants are consequently advised to avoid attempting to dodge the current-year stock decline by investing in the so-called safe US Government Securities G fund. While invested in AAA-rated short-term US Treasury securities, the G fund doesn’t outperform inflation in the long run.

2. Decisions on Social Security.

The majority of government employees are entitled to monthly Social Security retirement benefits. The three most frequently asked questions about Social Security retirement benefits among employees and retirees are:

(1) At what age can I apply for my monthly retirement benefit, and are there any benefits to deferring the commencement of my payments?

(2) Do I qualify for any of my spouse’s, former spouse’s, or deceased spouse’s Social Security payments, and if so, under what conditions?

(3) Will my Social Security monthly income be reduced if I stop working in my late 50s or early 60s and wait until my late 60s to begin receiving Social Security benefits?

Individuals fully insured for Social Security can apply for retirement payments as early as age 62. However, if they choose to begin receiving benefits at age 62, their monthly amount would be permanently reduced. Delaying the start of their monthly Social Security retirement benefit increases the individual’s monthly payment by 7 to 8% each year they postpone their benefits beginning at 62 and continuing until 70.

Employees who will retire within the next eight years and are near their 62nd birthday are advised to delay obtaining Social Security benefits as long as possible (preferably until age 70). A guaranteed 7 to 8% rise in monthly benefits should keep up with the current cost-of-living increases. Married couples where both spouses are eligible for Social Security payments should seek counsel on coordinating their benefits. That covers which spouse should apply for benefits first and the choices available to the surviving spouse if the first spouse dies.

3. Even with the right to maintain FEHB health insurance, out-of-pocket health care costs will continue to rise.

After retirement, federal employees are entitled to maintain their FEHB health insurance coverage, with the federal government continuing to pay, on average, 72 – 75% of the FEHB program health insurance premiums. However, this doesn’t imply that a federal retiree can expect to pay the minimum out-of-pocket for health care during their retirement.

For instance, FEHB health plan rates, like other health insurance premiums, will continue to rise. Retirees are urged to enroll in Medicare Part A (Hospital Insurance) at no cost and Medicare Part B (Medical Insurance) with a monthly payment paid by the retiree (depending on the retiree’s income). If married, a federal retiree and spouse can reduce out-of-pocket health care costs by enrolling in an FEHB health plan and Medicare Parts A and B.

Contact Information:
Email: [email protected]
Phone: 8007794183

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

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/

Astonishing Data on the Current State of Retirement in the United States

October 24, 2022 /by bill hoff

You may always start saving for retirement. People in the US work hard throughout their careers to retire. Planning requires cognitive abilities and a focus on saving money.

According to a Gallup study, the average retirement age in the US has risen from 60 to 66. With a 78.7-year life expectancy, Americans will have at least 12 years to enjoy retirement.

The average annual income and net worth of the 47.8 million Americans aged 65 and older are $38,515 and $170,516, respectively. That’s a lot of money to save for retirement. Here are some more startling facts concerning the situation of retirement in the United States.

Young people believe they can retire early, which does not happen.

Most respondents aged 18 to 29 who took part in a Gallup poll believed that they would be able to retire early, around the age of 60. However, their optimism may fade as they approach 30 because of the difficulties of making a living and earning income.

Retiring may take longer than anticipated.

The average lifespan in the US is 78.7 years, but many people survive into their 80s or 90s, making it challenging to predict retirement worth. According to the Social Security Administration, a healthy 65-year-old has a good probability of living to 86 or 84. Over 65s should save for a 20-year retirement.

More and more people in the United States are preparing for a longer retirement.

Americans take extended life expectancy seriously. 81% of Americans are moving their assets in anticipation of living longer than their predecessors by minimizing spending, acquiring safe life insurance, and boosting pension payments.

Many Americans are taking money out of their retirement accounts early.

In contrast to those who are saving for longer life, many Americans are taking early withdrawals from their retirement accounts. 44% of Americans between the ages of 40 and 79 have pulled money from their retirement plan. While 46% of those aged 40 to 49 and 53% aged 70 to 79 have done so as well. Financial experts warn against early withdrawals from a retirement account, as doing so might result in hefty fines.

Americans Aren’t All Set for Retirement.

77% of American employees are considering retirement via company plans and other alternatives. People begin saving for retirement on average when they turn 27 years old. Only 33% of Americans have anything set aside for their retirement days.

Americans are falling short of their financial goals.

As many as 77% of Americans are planning for their retirement, but most don’t have quite enough personal savings to maintain their standard of living in retirement. As per a 2017 GAO analysis, the typical retirement funds for Americans aged 55 to 64 were a little over $107,000. Although it may sound like a lot of money, the GAO points out that if it were placed in inflation-protected annuities, it would only provide $310 minimum repayments.

Social Security isn’t a sure thing.

Social Security is only guaranteed to be financed until 2035, when it may be three-quarters financed, citing Business Insider. Those already receiving benefits may see a drop, while freshly retired folks may not receive any. This is partly linked to aging. The number of Americans 65 and older will climb from 56 million to 78 million by 2035. More people will withdraw money from the pool, while fewer will contribute.

Your Retirement Could Be Squeezed Out of You Before You Know It.

It’s helpful to have a retirement plan in place. But occasionally, life has several other intentions. According to a TD Ameritrade survey, health issues and career changes are the two most popular causes for retiring. 50% of persons retired early due to unemployment, parenting duties, a sudden change in their economic standing, and health concerns.

A Larger Amount of Money Is Necessary to Retire comfortably.

Experts recommend that you save between $500,000 and $1 million to maintain your current standard of living in retirement – a considerable sum of money, the accumulation of which may take many years.

Residential Care for the Elderly Is Expensive.

Long-term care is mainly needed by individuals who reach the age of 65. Medicare doesn’t pay assisted living fees. A care facility costs $4,051 per month, whereas a nursing home costs significantly more. Other medical expenses aren’t included. In their 60s, more people buy long-term insurance.

The Time Is Now.

More and more consultants are labeling themselves “complete,” and this trend is expected to continue. The issue is that many individuals we talk to do not incorporate conversations about risk assessment into their line of work. Even if they are joking, it doesn’t change that they aren’t seriously trying to come up with recommendations or answers.

According to our assessment, these professionals are missing out on a fantastic opportunity. The environment of investment planning has changed, and customers now want a more exceptional customer experience, which is why so many advisors are now similarly advertising themselves.

Currently, experts that offer a comprehensive service have most of the financial advantage. Learning about and putting into practice different risk management measures, such as annuities, could be a straightforward first step.

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

6 basics of social security information you should know

October 18, 2022 /by mickey elfenbein

Social Security payments are one of the three parts of the Federal Employees Retirement System (FERS), together with the Thrift Savings Plan (TSP) and the FERS pension. Social Security monthly benefits are essential to a federal employee’s retirement.

Here are six things to think about when it comes to your retirement income.

1. What Determines Your Monthly Benefit Amount?

That depends on various variables, the most important of which is your lifetime income from jobs for which you have paid Social Security taxes. Your “basic” benefit is calculated by Social Security using the average of your 35 highest earning years adjusted for inflation. This average is then entered into an advanced calculation. The age you are when you apply for benefits will also impact the amount. Even though you won’t know for sure until you apply, you can estimate using the AARP Social Security Calculator.

As of June 2022, the typical Social Security benefit (except survivor and disability benefits) was $1,592 gross per month. Remember that a portion of your Social Security may be subject to taxation if your annual income exceeds a specific threshold ($32,000 for a married couple and $25,000 for an individual).

The following factors determine your Social Security amount:

Working experience
Age
Start of benefits
Marital situation

Although it is not factored into the calculation, it is sometimes thought that the IRS life expectancy factor affects one’s Social Security payment.

2. What is Full Retirement Age?

It’s crucial to think carefully before withdrawing your benefits. You become eligible for benefits for the first time at age 62 and a half. Still, if you continue to work, your benefits will be subject to the dreaded earnings test, which results in cutbacks if your earned income exceeds a specific threshold – $19, 560 in 2022. Knowing your full retirement age (FRA), at which point you can still receive your entire pension while working, is a good idea. Depending on when you were born, your FRA will be between the ages of 65 and 67. For instance, your FRA is 67 if you were born in 1960 or after.

3. Medicare and Living Wage Adjustments (COLAs)

Direct Medicare B premium deductions are made from your Social Security check. When hearing about impending COLAs, which are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and come once a year, it is crucial to keep this in mind. Your monthly benefit remains the same if neither inflation nor deflation occurs. If so, your Social Security pension will rise by the same amount as the CPI-W. The COLA for 2022, for instance, was 5.9%. According to estimates, the COLA for the following year will be the highest in about 40 years.

Nevertheless, even though COLAs raise Social Security income, healthcare costs – and hence Medicare premiums – often increase along with inflation, generally offsetting any COLA increase. However, a decrease of 8.6% beats a reduction of nearly 14%. The 2022 Medicare B premium rise was 14.5%, eliminating the 5.9% adjustment.

4. Survivor Benefits

Any surviving children or spouse can be qualified for Social Security survivor payments in the event of your passing. Many government employees may be unaware of this. Even if they are, they may not be aware that the survivor benefits are not the entire amount the original beneficiary would have received.

5. Benefits for ex-spouse

If all five of the following facts about an ex-spouse or ex-husband are accurate, they may be eligible to receive a share of your Social Security benefits:

1. They are 62 years old or older.

2. Neither of them has remarried.

3. At least ten years were spent in the marriage.

4. The benefit they are entitled to is lower than the benefit awarded to them if you were their ex-partner.

5. You must also qualify for Social Security through retirement or disability benefits.

6. What are the maximum benefits one can get per month?

The highest monthly benefit is $3,345 for a worker filing for Social Security at full retirement age in 2022. That’s roughly double the average retirement pension ($1,666 in April 2022). Your earnings must have surpassed Social Security’s maximum taxable income, or the annual adjusted cap on the percentage of your income subject to Social Security taxes, for at least 35 years of your working life to be eligible for the top benefit.

Contact Information:
Email: [email protected]
Phone: 6122163911

Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.

Understanding The CSRS Hybrid Offset

October 15, 2022 /by rick viader

If you were employed under the CSRS and served the government for at least five years before leaving, returning after a hiatus of more than a year, and doing so after December 31, 1983, you were given an option. The CSRS and Social Security, or the FERS, could provide coverage for you. If you selected option two, you were protected by a brand-new job classification known as CSRS Offset.

Those employed between 1984 and 1986 who had at least five years of service at the time of the official start of FERS on January 1, 1987, are also eligible for the CSRS Offset (the others were put under FERS).

As a CSRS Offset employee, you are qualified for benefits under the CSRS and Social Security programs since both cover you. You will become eligible for the same amount of retirement benefits upon retirement as you would if CSRS solely covered you. However, the funds will come from two distinct sources: the Social Security Administration and the Office of Personnel Management.

Your retirement annuity as a CSRS Offset employee will be determined in the same manner as it is for all CSRS employees:

The sum of .015% x your “high-3” average wage x 5 years of service plus. 0175% x your “high-3” average salary x 5 years of service, and .025% x your “high-3” x all additional years and months of service.

Your predicted retirement annuity will be the total of those three calculations. That estimate will be more precise as you draw closer to retirement.

You will receive a pure CSRS annuity if you retire before age 62. Your annuity will be deducted depending on the same amount of Social Security benefits you received while working as a CSRS Offset employee when you reach the age of 62 and become eligible for them. The offset will still happen automatically whether you apply for a Social Security benefit.

When you are around 62 years old, OPM will request an entitlement decision from the SSA. Two benefit computations – one including all Social Security-covered earnings and the other, excluding earnings related to CSRS Offset service – will be sent by the SSA to OPM. (The offset calculation will be performed if you retire at or after age 62.)

Your gross CSRS annuity will need to be reduced, and OPM will figure this out. According to the law, the lesser of the following two options applies:

1. The difference between your Social Security monthly benefit amount with and without CSRS-Offset service; or

2. The product of your monthly Social Security benefit amount and federal earnings is your total CSRS Offset service, rounded to the closest whole number of years, divided by a fraction, with 40 as the denominator.

The latter computation above appears as a formula as follows:

Social Security Benefit x Offset Service Years in Total / 40

Ensure you file for Social Security benefits a few months before turning 62 if you intend to retire before that age. This will give SSA enough time to handle your case and prevent delays in the full benefits package you are entitled to. If you don’t do that right away, your CSRS annuity will still be reduced; however, you will eventually receive a retroactive payment for the full Social Security benefits you are eligible for.

CSRS Offset and Social security

Employees who have CSRS Offset are eligible for retirement payments under both the CSRS and Social Security programs. These advantages are combined to give employees the same compensation for their government services as CSRS might have provided exclusively. The primary distinction is that funding will come from the Social Security Administration and OPM, two distinct organizations.

The employee’s annuity will be determined during retirement in a manner identical to that of ordinary CSRS employees. People who retire before turning 62 receive a pure CSRS annuity. Suppose they reach the age of 62 and become eligible for Social Security benefits. In that case, OPM will reduce or offset their CSRS benefit by the same amount as the Social Security they would have earned as a CSRS Offset employee. The changes will be made when you retire at or after age 62 and become eligible for Social Security benefits.

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

Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.

In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.

His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.

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/

Retirement’s top 5 monetary threats

October 14, 2022 /by aaron steele

Many individuals excitedly await retirement, yet it also causes worry. After retirement, you may travel more, spend more time with family, and try new things. However, retirees face severe risks.

Older Americans may be more aware of the dangers. Compared to Generation Z, just 14% of the following generation is secure about their financial future in 2022, according to a Bankrate study in December 2021. Several factors contribute to the financial insecurity of retirement, including rising healthcare expenses, price fluctuations, and hyperinflation. As individuals encounter retirement, they must be aware of these and other dangers.

Top Threats

The rising expense of health care

If you don’t prepare, you might find yourself in a financial bind as you age. According to Fidelity’s projections for 2022, the average 65-year-old couple will require $315,000 to cover their healthcare costs alone. In each scenario, the cost will be different, but this indicates what it will cost in retirement.

Because Medicare might not even pay all your medical bills, retirees’ healthcare is more expensive. For example, long-term healthcare, dentistry, and assistive devices are not included. Medicare Part A premiums could rise to over $500 per month by 2022.

Volatility in the financial markets

In the near term, the stock market may be highly volatile, making it challenging to develop long-term wealth. Research from financial management firm First Trust shows that the typical bear market in the United States lasts 1.4 years, with a loss of 41% on average. These bearish circumstances might seriously threaten your financial stability if they occur during your retirement years.

Therefore, having a well-diversified portfolio is a good idea as you approach retirement. At the conclusion of your employment, increasing the proportion of bonds in your investment might reduce your exposure to market turmoil. Bonds are less risky than stocks, but no investment is risk-free.

Inflation

If you’re retiring in 2022 and no longer accepting wage increases from a job, inflation is a concern for you. Luckily, Social Security adjusts benefits for inflation each year. Conversely, inflation might risk devastating your lifestyle even if you have plenty of available cash and aren’t dependent on work.

Investing in equities after retirement is a common way for retirees to combat inflation. Maintaining a small stock investment can help stave off the consequences of inflation, despite the fact that retirees typically have a lower stock allocation than those in their 20s. Some other investments, such as TIPS or Series I savings bonds, adjust for inflation regularly. This might be helpful.

Having no money left to spend

As a result, many retirees are concerned about running out of money. In addition to the fact that individuals are living longer than in previous decades, many retirees may not have the resources to cover their last expenses.

When it comes to saving for retirement, you can do a few things if you’re behind and worry about running out of money someday. Your retirement funds could be boosted by optimizing payments to an IRA and boosting your payments to a 401(k) or another plan.

Postponing Social Security benefits and purchasing insurance are two more options. If you postpone taking Social Security, you will receive more money each month. On the other hand, annuities allow you to purchase insurance that will pay you a fixed sum for the rest of your life.

The loss of a loved one

Your spouse also poses retirement risks. Pension benefits may be cut after a spouse’s death. Sharing expenditures with your spouse may make it harder to make monthly payments. Also, remember that funerals are costly.

Several insurances may help lessen the financial effect of your spouse’s death. Survivor payments and life insurance can reimburse you.

Conclusion

Retiring isn’t easy. Leaving a job requires several life and financial adjustments. After retirement, you may encounter medical expenses, macroeconomic variables, and inflation. Because there are so many factors, a financial counselor may be helpful. An advisor can help you assess how much money you’ll need and how to plan your draw-down.

If you’re worried about consultation costs, a fee-only fiduciary financial adviser can assist. This service may cost you upfront, but it will likely save you money over time.

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

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

That’s making a difference.

Working Longer Not the Only Way to Boost Retirement Funds

October 8, 2022 /by todd carmack

Several strategies increase the amount of money available to pay for your retirement. In this post, we’ll examine two additional strategies: 1) continuing to work part-time after retirement; and 2) downsizing or relocating to a region with a cheaper cost of living.

You can work part-time after retirement if continuing in your government position is not an option because: 1) you detest it, or 2) you must resign by law. You can postpone applying for Social Security by working part-time, allowing it to increase to a higher sum. It will also keep you busy since not everyone adjusts well to having an extra 45 to 50 hours per week to fill.

If you choose to, nothing will prevent you from continuing to work full-time after retirement. Consider working at a job you enjoy, or that makes use of your existing skills.

Consider downsizing, moving to a region with a cheaper cost of living, or doing both if working after retirement is the last thing you want to do. This is ideal for people who have lived in high-cost areas for a long time and have built up home equity in the high six figures.

Additionally, you might not require as much space as you did when raising your children (in fact, reducing the number of bedrooms in your house is an excellent way of keeping your children from moving back in). Downsizing will result in savings even if you stay in the exact location. You will discover that expenses (such as taxes, utilities, and so forth) will be lower for your new, smaller home, in addition to the difference between what you paid for your previous home and what you received when you sold it.

You can increase your retirement income by moving to a region with a lower cost of living because you will spend less for a similar home and even less if you downsize.

According to statistics, most individuals do not relocate after retirement. Thus not everyone may benefit from the relocation strategy. A survey from Boston College’s Center for Retirement Research found that 17% of seniors move at the time of retirement, and a further 16% move later in retirement, usually when health issues dictate it.

Do you have to pay taxes on the capital gain you made when you sold your primary residence?

Due to the sale, you will likely owe little or no tax. You can shield $250,000 in capital gains from taxation if the house you sell has been your primary residence for two of the previous five years or $500,000 if you file jointly.

There are many ways to improve your finances in retirement, but if you’re still young and the methods we’ve covered here don’t particularly appeal to you, there is something you can start doing right away. That is, make as many TSP contributions as possible to ensure that there won’t be any income gaps when you retire.

Contact Information:
Email: [email protected]
Phone: 6232511574

Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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

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/

You May Be Making These 4 Retirement Errors Without Even Realizing It

September 24, 2022 /by bill hoff

Retirement planning should be rewarding. It’s bittersweet to leave your career and start a new chapter. There are things you can do to improve your retirement savings and investments, and other factors that might damage you. Here are four retirement mistakes you may not have noticed.

1. Inability to take advantage of the Roth IRA tax benefits while they are still available

Roth IRAs are a great method to save for retirement. Allowing your money to grow tax-free and withdrawing tax-free from retirement funds can help you retire wealthy. Six-figure Roth IRA withdrawals escape capital gains taxes, saving thousands over time.

Roth IRA contributions are not open to everyone because of the income threshold. If you’re single and make less than $129,000 a year, you can make contributions to the $6,000 maximum, with a cut–off range up to $144,000. Contributions for couples’ joint income are limited to $204,000, with a cut–off range of up to $214,000.

Don’t miss out on the significant tax advantages of a Roth IRA.

2. Reaching the maximum limit for 401(k) without contributions to IRA

A 401(k)-contribution limit of $20,500 (or $27,000 if you’re over the age of 50) will be in place for the tax year 2022. Many folks are unable to contribute the full value. Nevertheless, even if you have the resources to donate the full amount, you may discover it to be overvalued.

You must not contribute any less to your 401(k) than your company’s contribution. To maximize your IRA contributions after you have adjusted your payments to your company match, the next stage is to increase your payments.

There are a few reasons why this is a good idea. To begin with, you may not be capable of contributing to a Roth IRA if your income exceeds a certain threshold (conventional IRAs do not have this restriction but do limit the amount you may deduct from your income). IRAs, like brokerage accounts, allow you to invest in any stock or mutual fund you want. When you can invest in various options, rather than only those supplied by your employer, you have greater control over your money or where it flows.

Increasing your 401(k) contributions after maxing out your IRA contributions may be an option.

3. Employing targeted date funds in the 401(k) account

In your 401(k) plan, you’ll see funds named after the year in which they were created, such as ABC Fund 2060. Because they’re called “target-date” investments, the year listed here is the year you’re close to retiring.

To become more cautious as you approach retirement, target-date funds redistribute your assets. On the other hand, target-date funds are more expensive since they are actively managed rather than passively.

Target-date fund expenses can be avoided by investing in the funds that are commonly held in the fund. Suppose you’re in your 30s and have a 401(k) breakdown like this, 60% is invested in the large-cap index fund, a 20% stake in a global index fund, 10% invested in an Index fund for mid-cap companies, and a 10% stake in a small-cap index fund. Please remember that small-cap and mid-cap vehicles are riskier, so you’ll want to avoid them as you get closer to retirement.

4. Miscalculating your Social Security benefits

You can expect to get a monthly Social Security income based on the day you retire. Social Security now considers the age of 67 to be the FRA for anyone born after the year 1960. However, you have the option to begin receiving benefits at the age of 62 or to wait until you are 70 before doing so.

For each monthly claim earlier than your FRA, your benefits are cut by five-ninths of 1%, up to a maximum of 36 months. Taking benefits longer than 36 months prior to your FRA will result in a reduction of your monthly benefit by a fraction of a five-twelfth.

At the age of retirement, the maximum benefit can include $2,364 at age 62, $3,345 at 67 years old or full age of retirement, and $4,194 at age 70.

However, you may need to lower your hopes if you want to get the most out of the program. Monthly Social Security payments average $1,666. Even if you do get more than that, the odds are not in your favor of getting the greatest amount of money possible.

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

OPM’s FERS Retirement Timeline: What to Expect

September 8, 2022 /by todd carmack

Are you considering retiring from your federal job? Congratulations! You’ve dedicated yourself to public service for a long time, and now it’s time to reap the advantages of that fantastic benefits package you’ve heard so much about throughout your career.

Unfortunately, to complete the retirement process and earn your pension, you must jump through some hoops. It’s a time-consuming and costly process (if you’re not careful). Since the epidemic, the average processing time for retirees has been around 60-90 days.

Timeline for Retirement Paperwork

The application for FERS retirement is merely the first step. First, your department’s personnel office will ask you to sign a few documents and begin the process of certifying your service, which can take a long time if any paperwork is missing. Your life insurance (FEGLI) and health insurance (FEHB) enrollments are also transferred to the OPM.

Then it’s off to the payroll office. They authorize your final paycheck and the payout of unused yearly leave once they receive your papers from personnel. They also send your salary, retirement contributions, and service history to the Office of Personnel Management (OPM).

When OPM receives all of your papers from these other offices, they provide you with a civil service claim number that you may use to keep track of everything. Then you wait for them to assess your eligibility, compute your annuity, and Ã¢â‚¬â€ at long last! Ã¢â‚¬â€ sending you your check.

So, how long will this all take? Here’s where we are now in terms of the board timeline:

â€¢ Day 1: The date of your retirement. Congratulations! Get rid of your alarm clock and start doing those things you’ve always wanted.

â€¢ TSP monies are available for withdrawal on day 30. The payroll office will notify TSP of your automatic retirement, and you should be able to withdraw your funds without penalty within 30 days of retirement.

â€¢ Day 30-45: A lump amount payment for annual leave is sent. This payout takes at least two full pay periods to complete following your retirement date, and it can take up to six weeks to receive. The payroll department is responsible for this process.

â€¢ Day 45-70: The Office of Personnel Management (OPM) sends out the first retirement letters. OPM will send you the Civilian Service Annuity Number (CSA#) six to ten weeks after your retirement date, which you will need any time you contact them. Later, they’ll send you a letter with an online password to set up future communication.

â€¢ Day 45-70: The Office of Personnel Management (OPM) provides an interim retirement check. You’ll get your first annuity check when you get your first letters, but it’ll only be for 60-80% of your estimated annuity. This is only to keep you afloat while they process your paperwork, which should arrive between six to ten weeks after your retirement date.

â€¢ Day 90-120: The Office of Personnel Management (OPM) delivers your complete retirement check. When OPM has finished processing your papers, they will issue you a check for the entire amount of your annuity. This pays you the balance due from the interim check, minus insurance and taxes. This entire check may take three to six months to appear.

Contact Information:
Email: [email protected]
Phone: 6232511574

Medicare in 2022 – What We Should Expect

September 3, 2022 /by bill hoff

Medicare is a health insurance program of the United States government that subsidizes healthcare services. The plan provides coverage for individuals 65 or older, those younger than 65 who meet certain eligibility criteria, and those with certain diseases.

Medicare comprises several plans, each providing coverage for a particular aspect of medical care; however, some require the insured to pay a premium. Medicare gives consumers more options in terms of costs and coverage, but it also makes it harder for people to sign up for the program.

Medicare Changes in 2022

According to a report by the Kaiser Family Foundation, the typical Medicare beneficiary will have access to 39 different Medicare Advantage plan options in 2022, more than in recent years. The expected changes would consist of the following:

Improved Alzheimer’s Drug Coverage

According to the Alzheimer’s Association in the U.S., the disease affects approximately 6 million Americans. It has grown to be a serious issue for the medical industry because it is among the most widespread illnesses that affect people of all ages.

An effort was made to control and help those afflicted by it by the government. For instance, CMS announced that they plan to submit a proposal for a monoclonal antibody drug that could help fight Alzheimer’s disease.

The government is still testing the drug and needs more real-world data before it can be sold to the public. The Food and Drug Administration Authority has approved the use of AduhelmTM as the only treatment for Alzheimer’s disease.

Improved TeleHealth Services

Medicare has over 44 million beneficiaries, making it one of the largest health-related programs in the U.S. The program is designed to cover a large population. It offers some of the most comprehensive treatment plans currently available to patients. As a result, many Medicare beneficiaries have limited mobility or are in poor health, making it difficult for them to access hospital facilities in their area. Sometimes the journey is so strenuous and exhausting that some people prefer to stay home and postpone their doctor’s appointments. It was a significant issue for people during the recent covid outbreak.

Fortunately, Medicare has addressed this issue by providing more telehealth care services to its patients. Telehealth services enable medical professionals to treat COVID-19-related or other medical conditions from the comfort of their own homes, offices, or other locations.

Reduction of Insulin Cost

The price of insulin has historically been a significant burden on the finances of older adults. Many older Americans rely on insulin, which puts their lives at risk if they don’t have it. According to statistics, one in every five Medicare beneficiaries has diabetes. Unfortunately, many people continue to lack adequate access to insulin.

The Part D Senior Savings Model was introduced by the Centers for Medicare and Medicaid Services in 2021, marking the beginning of the process by which the Medicare program would begin to address this concern for senior citizens. This model limits insulin costs to $35 per month.

Since its expansion in 2022, the Medicare Part D Senior Savings Model now assists more people enrolled in the Medicare program. The program has expanded to include all 50 states, the District of Columbia, and Puerto Rico so that everyone can get the same insulin doses at the same price.

Medicare Advantage Changes

Another popular option for Medicare beneficiaries in the U.S. is the Medicare Advantage plan (Part C). People must be aware that there may be numerous changes soon regarding this plan.

The Medicare Advantage Plan (Part C) price has dropped from $21.22 to $19, making it a viable option in 2022. Coupled with the monthly premium for Part B, beneficiaries are responsible for paying an additional premium because of the benefits it provides to users and because the program benefits patients in various ways. The following are some of the most popular advantages of signing up for the Medicare Advantage Plan:

· Amplification devices for the deaf

· Availability of gyms and exercise facilities

· Assistance during an emergency

These plans are easily accessible to people who have a plan subscription. In 2022, experts estimate that the number of people enrolled in Medicare Advantage plans will rise to 29.5 million. People with chronic conditions may also qualify for a 19% to 25% reduction in the monthly premium for their Medicare Advantage plans.

How Do I Sign Up for Medicare?

Once you are eligible for Social Security benefits at age 65, you will be automatically enrolled in Medicare Part A, which covers hospital costs, and Medicare Part B, which covers doctor visits. You are automatically enrolled in these programs without taking any additional steps. On the other hand, you will be required to sign up for additional Medicare-related services. You must enroll in Medicare Part D to receive coverage for prescription drugs. You can apply for this through the Social Security Administration’s website, even if you do not currently receive benefits from Social Security. This should be done within seven months, around your 65th birthday. This window includes the three months preceding your 65th birthday, your birthday month, and the three months following your birthday month.

To qualify for Medicare Supplement Insurance, also known as Medigap, you must enroll in Medicare yourself. This enrollment period begins the month after you reach the age of 65 and are enrolled in Medicare Part B. If you sign up during that period, the private insurers offering Medigap plans are required to accept you.

It’s possible to switch Medicare plans at any time during the year if you miss the initial open enrollment period or decide to enroll later.

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

Getting Started with Medicare

August 27, 2022 /by marvin dutton

Medicare is a health insurance program for those over the age of 65 and those under age 65 who have specific disabilities. You can sign up for Medicare at least three months before your 65th birthday. If you’re new to Medicare, you might be unsure where to begin. What you need to know is summarized below.

Medicare is Divided into Four Sections

These four components operate together to offer comprehensive coverage, although each part is responsible for different services.

Medicare Part A: covers inpatient hospitalization, hospice care, skilled nursing facility care, and home health care. For the most part, this Medicare category is free.
Part B Medicare: covers outpatient services like doctor visits, X-rays, and lab tests. Part B coverage is paid for monthly.
Medicare Part C (Medicare Advantage): this allows you to combine your Medicare coverage into a single plan. Hospital and doctor care and prescription drug coverage may be included in these plans. You normally pay a monthly premium for Part C coverage, plus a deductible or copayment if applicable.
Part D: Prescription drug coverage is provided under Part D of Medicare. This coverage is available as a stand-alone plan or as part of a Part C plan that includes prescription coverage. For Part D coverage, you must pay a monthly premium and a deductible or copayment.

Parts A and B Are Available Without Charge

For the most part, Part A is free. Unless you or your spouse have never worked and paid Medicare taxes, you usually don’t have to pay a monthly payment for Part B. If you’re unsure if you’re eligible for premium-free Part A, contact your Human Resources department if you’re still employed or the Social Security Administration if you’re retired.

If you’re still working at age 65, Medicare is secondary to employment coverage. (If you get health insurance via your employer, you won’t have to do anything until you retire or your job-based coverage stops.) Parts A and B should be signed up for three months before your 65th birthday or eight weeks after you retire (whichever comes first).

Medicare Supplement Insurance Provides Additional Protection

You can get supplemental insurance, generally known as Medigap, in addition to the four categories of Medicare. Some costs not covered by Medicare, like deductibles and copayments, are covered by Medigap plans.

Medicare Advantage Plans Can Also Provide Coverage

You can acquire coverage through a Medicare Advantage plan if you don’t want to buy a Medigap policy. These plans are offered by private insurance companies that have a Medicare contract. All Original Medicare services must be covered by Medicare Advantage plans (Part A and Part B). They can, however, provide additional benefits such as prescription medication coverage, dental coverage, and vision coverage.

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

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementiong a sound plan for your retirement. We are commited to helping you achieve your goals. Visit us at M. Dutton and Assoiciates.COM. Tel. 212-951-7376: email: [email protected].

A 6% COLA Increase is Now Possible

August 25, 2022 /by mickey elfenbein

Following a 0.5 percentage point increase in the inflation index used to compute the COLA in April, the COLA count stands at 6% through seven months of the counting period for the January 2023 federal retirement cost of living adjustment.

Unless inflation changes direction throughout the rest of the measuring period, the count is on track to surpass the 5.9% rise received in January for those retiring under CSRS and 4.9% for those retired under FERS who are eligible for COLAs (generally not until reaching age 62).

That was the most significant increase since the 8.7% paid in 1982 when the FERS system existed.

COLAs go into effect on December 1 of each year and are applied to annuity payments the following month. COLAs for persons who have been retired for less than a year are prorated according to their retirement date. If you retire in January, your first adjustment will be for 11/12ths of the COLA amount in January of the following year. It will be 10/12ths if you retire in February, and so on. COLAs in the future will be for the whole amount.

COLA According to the Consumer Price Index

The COLA is calculated using the average change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI/W) average from one year to the next. Benefits are frozen but not lowered if the inflation rate is negative. Also, the beginning point for the following COLA count remains the same in that circumstance.

Note: COLAs for Social Security follow the same methodology, except a full Social Security COLA. Even if you’ve been receiving benefits for less than a year, you’ll get a COLA.

Contact Information:
Email: [email protected]
Phone: 6122163911

Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.

Tag: social security benefits

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