thrift savings plan

The Thrift Savings Plan is one of the most important parts of a Federal Employee’s retirement plan. The Thrift Savings Plan is similar to a 401(k) plan offered to Private Market employees and has very similar rules and regulations. An Advantage of the Thrift Savings Plan is the automatic contributions that FERS eligible employees receive along with the relatively inexpensive average internal expense ratio that is charged to Federal Employees on TSP Fund investments.

How you can increase your 401(k) savings

December 8, 2022 /by jeff boettcher

It’s been a challenging few months for anyone contributing to a 401(k). Your account balance has probably decreased as the value of both stocks and bonds has decreased. Younger investors should not overreact. Even if you haven’t seen one before, extended down markets are unavoidable. The good news is that they allow you to purchase more shares at a discount.

But regardless of your age, now is an excellent moment to reassess your 401(k) strategy if you’re experiencing anxiety. This is crucial if your contribution amount has not changed since you enrolled in the plan or were enrolled automatically.

This article outlines the steps you can take to increase your 401(k) savings.

How Much Can You Contribute to 401(k) in the Coming Year?

The Treasury Department is required by law to raise 401(k) contribution caps as the cost of living rises. This is consistent with the IRS‘ most current inflation-adjusted tax rule.

The current 401(k) contribution limit is $20,500 (an increase of $1,000 from 2021). You will be permitted to make a $22,500 contribution to the 401(k) plan starting in 2023. You can also make an additional $7,500 contribution if you are over age 50, for a total donation of up to $30,000.

What Happens if I Have a Different Kind of Retirement Plan?

Other retirement plan types, such as 403(b)s, the majority of 457 plans, and federal Thrift Savings Plans, are subject to the new $22,500 contribution cap.

Also increasing is the IRA. In 2023, the IRS will increase the annual contribution ceiling for traditional and Roth IRAs to $6,500. That is an increase of $500 from this year.

Since pensions are getting harder to get, most people must rely on retirement savings (as well as Social Security). Therefore, these inflation adjustments are essential, regardless of your retirement goals.

Steps to Increase Your 401(k) Plan

1. Refuse to accept the standard savings rate

It’s becoming more common for new hires to automatically open a retirement account at work, most frequently by having 3% of their pay put into their employer’s 401(k) plan. But while saving 3% of your income is better than nothing, it might not be enough to support your present standard of living in retirement.

When you earn a raise, save 1% extra each year until you’ve hopefully saved up to 20% of your pay.

2. Get a 401(k) match

The typical 401(k) match is about 50 cents for every dollar saved, up to 6% of gross income. Make sure you save enough money to leverage your employer’s 401(k) match, if available.

3. Continue until you have vested

You won’t be able to keep your employer’s 401(k) match until you have fully vested in the 401(k), which may take up to five or six years of employment with the company.

Depending on their years of service, some employers permit workers who leave before they are fully vested to keep a portion of the match, while others demand that they forfeit the entire match. Working for a company until you reach your full 401(k) vesting benefit might occasionally be worth thousands of dollars.

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.

10 Simple Ways to Derail a Federal Retirement

December 8, 2022 /by jeff boettcher

Are you planning for retirement? Here are 10 common ways you can derail your federal retirement plan.

1. Simply show up

The days of “putting in my time” and retiring with a prosperous financial life are long gone. This is especially true thanks to the dubious idea of the Minimum Retirement Age (MRA). To maximize your benefits, you’ll need a solid plan.

2. Pay your bills in full before starting any savings

No! Change that. Your income and way of life need to be separated by a wedge. The best people were those who built and sustained that wedge. They never overspent their resources and never even came close to doing so. They advanced in this fashion thanks to raises and bonuses.

3. Take out a loan for tomorrow

The use of TSP loans must be a last, absolutely last resort. Better yet, refrain from doing it. However, this practice results from a poor cash flow plan. Now hear this: debt is not a friend. Although it might be a tool, it is not a fix. One of the pillars of financially successful people is effectively managing and ultimately getting rid of installment debt.

4. Silo Save

Silo Save TSP (Thrift Savings Plan) is great, but it’s not a strategy. The retirees who are the most successful have assets in standard plans like TSP and non-retirement assets. Once your TSP has been maximized, start slipping some cash into a conventional investment account. You can do it alone or with a consultant. Just go ahead and do it.

5. Poor TSP funding

The majority of people don’t optimize their contributions. A sizable TSP balance is required if you plan to retire before age 65. Period.

6. Losing your balance

This means the allocation in your TSP, not market fluctuations. You can’t just have it fixed and forget it, even if you have configured a sensible asset mix among the five main funds in your TSP. Now, you don’t have to try to steer too hard. Remember to take another look at it a year from now if you determine that 40% of your investments should be in C funds based on your age and risk tolerance. You must do more than smile if it is now 48%. It’s time to transfer the surplus to the other funds (the ones that didn’t perform as well). This may seem illogical, but it’s the best decision you can make.

7. Poor TSP technique

Investing 20% in each core fund or a small amount in all funds (including all lifecycle funds) isn’t a recipe for success. Both aren’t entirely in C (since it’s been doing fantastically!). Your asset portfolio should fairly represent your capacity to bear risk in both good and poor times. Trying to time the market or changing your investment strategy depending on “what’s occurring” is a road to tears. Keep in mind that you will require a large balance.

8. Forgetting to bring your umbrella

This doesn’t imply that you should walk with an umbrella to avoid getting wet. It’s about not having enough liability insurance. Nothing can wreck your retirement dreams more quickly than an incident followed by a negative ruling. Get a price on an excess liability umbrella immediately and check your auto and home limitations.

9. Ignoring the risk of long-term care

Insurance rates keep rising (even for Fed plans), but the problem persists. You need to clearly understand your commitments and resources, as well as have a working plan in place. Will you look for care at home? You might require a facility. Right now, ask those challenging questions!

10. Mishandling FEGLI

The Federal Employee Group Life Insurance Plan is your best workplace plan. This does not imply perfection, though. For instance, by law, an employer plan must charge all employees similar premiums for optional coverage depending on age (the unsubsidized part). Therefore, everyone pays the same amount, whether they smoke or not, and as long as they are in good health. As a result, as we become older, these plans get significantly more expensive. This is the truth. Throughout your career, trying to shop around and examine options from the private sector might save you tens of thousands of dollars. Every cent you save can support your retirement.

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

part 2

November 29, 2022 /by kevin wirth

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

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

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

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

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

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

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

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

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

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

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

Refundable saver’s credit

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

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

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

Increase asset limitations in anti-poverty programs like SSI

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

Stop mega IRAs

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

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

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

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

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

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

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

Part 1

November 27, 2022 /by mickey elfenbein

This article explores a retirement option for FERS employees known as deferred retirement. We’ll talk about the requirements for a FERS employee to choose deferred retirement and the benefits and drawbacks of it.

Some of the Reasons a FERS Employee Might Choose Deferred Retirement

To help understand how a deferred retirement might be the only option for a FERS-covered employee, we’ll look at two scenarios:

Scenario 1: A FERS-covered employee is ineligible to retire and wishes to leave federal employment rather than work the extra years required to qualify for immediate and unreduced FERS annuity retirement. Table 1 shows the three minimum age and years of service combinations that enable a FERS-covered employee to retire under an immediate and unreduced FERS annuity retirement.

Scenario 2: A FERS-covered employee is younger than their MRA, and their agency is undergoing a reduction in force (RIF), a substantial reorganization, or function transfers. The employee is ineligible for retirement and must quit government employment.

A FERS-covered employee is qualified for deferred retirement, and will receive a FERS annuity for the remainder of their life if they meet the following requirements:

â€¢ Satisfies the minimal criteria for civilian service.

â€¢ The employee doesn’t request a refund of their FERS Retirement and Disability Fund contributions while leaving federal service (made through payroll deduction while working under FERS).

â€¢ When the employee reaches the requisite age to begin collecting their FERS deferred annuity, they formally inform OPM‘s Retirement Office of their eligibility for the deferred annuity.

These requirements are explored and clarified more below.

Minimum Civilian Service

A FERS employee must have at least five years of creditable civilian service to be eligible for deferred retirement. Examples of creditable civilian service for this purpose include:

â€¢ Full-time or part-time permanent service in which full FERS payments were made to the FERS Retirement and Disability Fund through payroll deduction.

â€¢ “Nondeduction” (intermittent or temporary) service for which a total FERS deposit (including interest charges) was made before retirement from federal employment.

â€¢ Service for which full Social Security (FICA) payroll taxes and full or reduced CSRS deductions were deducted and not reimbursed.

â€¢ For employees eligible for a CSRS annuity component for their retirement (referred to as “Trans” FERS personnel) for deferred retirement:

(1) “Non-deduction” (temporary or intermittent) service subject to CSRS retirement regulations regardless of whether a deposit is made or is considered under the alternative annuity provisions.

(2) Service for which full CSRS retirement payments, typically 7% of salary, were deducted, even though CSRS contributions were returned and not re-deposited.

Non-creditable Civilian Service

The following forms of FERS service cannot be used to meet the five-year minimum civilian service requirement:

â€¢ FERS service for which a FERS-covered employee claimed a refund of FERS contributions paid through payroll deduction while the employee:

(1) Previously worked for the federal government.

(2) Resigned from the federal government and claimed a refund of FERS contributions (paid through payroll deduction).

(3) Returned to federal employment but didn’t re-deposit those contributions.

â€¢ Any non-deduction (temporary or intermittent) service undertaken before 1989 in which the entire FERS deposit required for FERS retirement eligibility requirements wasn’t completed before departure from service.

â€¢ “Non-deduction” (temporary or intermittent employment) conducted after December 31, 1988, unless included in a CSRS annuity component (applicable to a “Trans” FERS employee).

Please note that any unused sick leave time at the time of departure from federal employment would be permanently lost and hence not creditable for FERS retirement eligibility or the computation of the FERS pension, as will be detailed.

When Does a Deferred Annuity Start?

A FERS employee who retires through the deferred retirement option can earn their deferred FERS pension later. The commencement date of the departed employee’s deferred FERS retirement and first FERS annuity check will be determined by the number of years of creditable service the employee had at the time of their formal departure from federal employment.

Table 3 indicates the departing employee’s combination of years of creditable FERS service and the earliest age at which they’re entitled to receive their first deferred FERS annuity payment.

The following are some examples:

(1) As of May 2022, Bill has 32 years of FERS creditable service. Bill is 51 and has an MRA of 57, which he will reach in July 2028. If Bill retires under a deferred retirement plan, his deferred retirement will become effective in July 2028, and he will be eligible for his first FERS annuity check in August 2028.

(2) As of May 2022, Sandra has 23 years of FERS creditable service. Sandra is 48 and will be 60 in June 2034. If Sandra retires under a deferred retirement plan, her deferred retirement will become effective in June 2034, and she will be entitled to receive her first FERS annuity check in July 2034.

(3) Taylor, 38, departed the federal government in May 2017 after six years of FERS creditable service. Taylor will be 62 in August of 2046. Taylor’s deferred retirement will take effect in August 2046, and he will be entitled to his first FERS annuity payment in September 2046.

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.

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.

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

Most Common TSP Mistakes During Bear Markets

November 15, 2022 /by jeff boettcher

Even the most diligent investors have difficulties in bear markets. No two bear markets are identical, and the factors that affect them are often challenging to put together in real time. As a result, many investors struggle with portfolio decisions.

This article will go through the most common mistakes federal employees make when dealing with their TSP this year.

Neglecting Rebalancing

Whether due to forgetfulness or being paralyzed by indecision, not rebalancing quickly and appropriately during bear markets can cause issues.

If you’re approaching retirement, your portfolio should have enough liquidity to provide you with the necessary income for the foreseeable future. That’s less important if you’re still generating income. However, if you’re already retired and drawing on your portfolio, the need for low-volatility assets and cash increases. During bear markets, it increases even more.

When markets are turbulent, your capacity to generate cash in a sustainable mannerÃ¢â‚¬â€keyword: sustainableÃ¢â‚¬â€is hampered. That’s because volatility enhances the market’s short-term unpredictability.

What are the chances that if you need cash in 12 months or less during a bear market, the markets will have dropped even more by the time you’re ready to earn that cash? It’s higher, so you must plan for these cash needs ahead of time.

There’s one exception: if you have a taxable account (individual, joint, or trust), strategic rebalancing can result in considerable tax savings over time. As a result, the timing of your portfolio rebalances is critical. So, you may want to postpone earning income to align more closely with the added goal of achieving tax savings.

Being Too Cautious

This point has major cognitive dissonance. True, you want to protect your wealth during bear markets, but how long do bear markets last? Will you spend all of your money throughout this period?

We began prepping our clients for a bear market in January this year. Historically, bear markets run around ten months on average. Some are shorter, some longer, but they all have one thing in commonÃ¢â‚¬â€they all come to an end.

Due to this, portions of your portfolio must be invested for the years following the bear market. In 10 years, you’ll most likely need your portfolio. Volatility between now and then is far less critical than volatility on the money you need between now and the end of this year.

We know it’s not easy, but try to divide your money into distinct piles with different jobsÃ¢â‚¬â€some for satisfying your immediate needs, some for the long term.

Having a well-planned investment strategy ahead of time is quite beneficial in this situation. It frees you of the weight of decision-making when the gut takes over your brain. Investors attempting to forecast declines have wasted much more money than has been lost in the corrections themselves.

Transferring to the G Fund in Panic

Unsurprisingly, G Fund transfers are at an all-time high. Employees in the federal government are struggling as their portfolio values plummet. Transferring money from riskier assets to safer ones, such as the G Fund, helps to safeguard the principal against future decreases.

However, this type of transfer is a double-edged sword. It also prevents you from participating in the regrowth when it returns. Furthermore, if these transfers are made after experiencing losses, an investor may effectively make those losses permanent. We want to warn investors to avoid the “G Fund Trap.”

Not Planning Distributions in Advance

This mistake is closely related to the first. It’s vital to make a strategy for your expected cash needs, so you know how much cash you’ll need on hand. Meanwhile, you must also consider how you’ll obtain this money.

If you request a TSP withdrawal, your account will draw proportionally from any money contained inside. We just discussed how you want to make cash ahead of time so you don’t have to sell stocks after they’ve fallen even further.

Please reconsider if you intend to use the G Fund to meet your cash needs. The distribution request may trigger sales of other more aggressive funds in your TSP, potentially realizing investments when they have declined, thus, making those losses permanent.

The risk of sequence-of-returns occurs when the market declines when you need to withdraw funds. This risk is mitigated by not having to touch the falling investments. This feature of withdrawing distributions from all TSP funds presents a difficulty for federal employees who use their retirement portfolio to supplement their needs.

If possible, try meeting your cash needs using sources that don’t have this restriction. However, be cautious since having too much cash in your portfolio might put your money at risk of not growing quickly enough to maintain your lifestyle for the rest of your life.

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

Government Employee Retirement Strategies

November 10, 2022 /by jeff boettcher

As a government employee, there are several ways to manage retirement for stable financial security well into your golden years. Aside from Social Security benefits and 401(k) plans, it’s essential to understand the federal retirement benefits made available to you, specifically as an employee of the federal government. Depending on your hiring date, you may receive coverage through a different retirement system than your peers. So let’s delve deeper to see what applies to you and how it will benefit your retirement.

Hired in 1984 and Beyond

Civilian service employees hired in 1984 or later receive coverage from the Federal Employees Retirement System (FERS). This program provides government employees with Social Security benefits, a Thrift Savings Plan (TSP), and a basic pension plan. The TSP comprises government contributions, matching, and voluntary employee contributions. These retirement benefits are structured as an annuity, depending on years of service, plan contributions, and the participant’s age.

Hiring Date Prior to 01/01/1984

Those who began working before January 1st, 1984, might have access to the Civil Service Retirement System (CSRS). This distinction provides older civilian service employees with disability, survivor benefits, and retirement. Unfortunately, you will be ineligible to receive Social Security benefits because your employer did not deduct Social Security taxes from your paycheck. However, you may qualify for some Social Security benefits if another employer employed you to earn them or qualified through a current or former spouse.

Contributing to a Thrift Savings Plan (TSP)

The TSP is a defined contribution plan that allows federal employees to determine the amount of money and the method they’d like to invest. Ultimately, the amount available upon retirement is up to you, utterly dependent on your financial determinations according to your plan. Additionally, a TSP is not available to FERS employees alone. A CSRS employee may also make contributions to a TSP. The most significant difference here is employer contribution eligibility, with FERS receiving another 1% of their salary toward contributions made by their employer.

Furthermore, those covered by FERS can also receive matching employer contributions by increasing employee contributions accordingly. Calculating your maximum contribution amount according to the available employer match will reap big rewards. This strategy will enable you to accrue the necessary years of service to receive the automatic 1% match. If you had a retirement account through a previous employer, you could also roll these funds into your TSP.

Investment Options

Depending on your risk appetite, TSPs provide several investment choices, including low-risk funds (U.S. Treasury investments), higher-risk funds (international stock investments), and beyond. A life-cycle fund is another investment composition that changes as you age. In doing so, this design meets retirement goals with minimal effort overall. Low expense ratios are just one of the many reasons to utilize a TSP. In 2021, for example, TSP participants paid around $0.42 per $1,000 in net administrative expenses depending on the fund.

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

Disclosure:
Not affiliated with the U.S. Federal Government or any government Agency. 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.

Allowable FEHB Changes You Can Make Outside of Open Season

November 10, 2022 /by mark heinrich

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

A change in employment status occurs in the following way:

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

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

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

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

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

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

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

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/

Retirement Eligibility Under FERS

November 10, 2022 /by mark heinrich

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

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

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

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

Age 60, with a minimum of 20 years of service

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

Age 62, with at least five years of service

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

Pension Calculation

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

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

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

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

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

Age 62, with a minimum of 20 years of service

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

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

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

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

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

What works for you?

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

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

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564

Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402

Member FINRA www.finra.org / SIPC www.sipc.org

Broker Check http://brokercheck.finra.org/

Retirement Options with the TSP

November 8, 2022 /by rick viader

How do I use my TSP once I retire? Yes, this is the most frequently asked question by people getting close to retirement, and for a good reason. Nobody is surprised to hear another “it depends” as the response. However, to simplify it, it’s best to divide the options into three categories to weigh their advantages and disadvantages.

The first thing to keep in mind is that until you have been retired for at least 30 days, you are not required to do anything with your Thrift Savings Plan and are not even permitted to do so. You have choices when the 30-day period is over.

Option1: The TSP Annuity

The TSP annuity and the FERS annuity are very different from one another, if not entirely different. With a TSP annuity, you give your TSP funds to MetLife, an insurance provider, in exchange for a lifetime payment guarantee.

An immediate annuity can be purchased in a variety of ways, including:

Life only

Life with period certain

Joint life

Life with remainder

You’ll receive the largest monthly payout from a life-only instant annuity. The monthly annuity payment gets smaller as you add more options. In contrast to a joint life annuity, which would pay out about $2,700 per month, a life-only annuity might pay out $3,000 per month.

A person forfeits access to their TSP balance while choosing one of the aforementioned instant annuity choices. A life with remainder annuity would give the insured income during their lifetime and then pay the beneficiary the leftover balance (the initial purchase amount less the sum of all monthly payments) following the insured’s passing.

Your lifetime income stream is assured with an instant annuity, which is its fundamental advantage. You will already have two guaranteed income sources as a FERS retiree, in the form of your FERS annuity and Social Security. Therefore, giving up access to your investments might not be required to secure the rest of your income.

Pros:

Lifetime income assurance

Cons:

Loss of control over the principle

Subject to interest rates

Inflation might make things more expensive

Option 2: Keep the Money in the TSP

In retirement, you have the option to continue participating in the TSP, which is essentially the same as when you are employed. The two biggest distinctions are that you can no longer contribute and you are not permitted to borrow against your account. In all other respects, your investment options are the same, and you can still modify your account balance in the same way you could while employed.

Access to your assets before age 59 1/2 is one of the main advantages of leaving money in your TSP during retirement. If you retire in the year you turn 55 or later, you can immediately withdraw funds from your TSP without incurring any fees. Employees in the special category (SCE) who retire in the year they turn 50 or later have immediate access to their TSP.

Pros:

Continue to use your TSP as usual

Utilization of your G fund

A quicker and penalty-free way to access your money than an IRA

Cons:

Having only five available investment possibilities

Minimum required distributions from a Roth TSP

Inability to select the funds from which to withdraw money

Potential problems with beneficiaries

3. Transfer to an IRA

The third choice is to move money from your TSP to an IRA. It is possible to transfer funds entirely or in part to an IRA without incurring penalties. To make full and partial withdrawals, use the forms TSP 70 and TSP 77. Your TSP account has each of these forms.

But given how inexpensive the TSP is, why would you want to transfer elsewhere? The TSP is now more expensive than other significant custodians. Ten years ago, the TSP was seen as inexpensive compared to other custodians, but this is no longer the case. In an IRA, purchasing funds or indexes comparable to those in your TSP is now possible. Only your G fund is a particular investment in your TSP.

Moving funds to an IRA has a few advantages. The first is that there are countless ways to invest in an IRA.

Increasing your withdrawal options is another advantage of switching to an IRA. An IRA offers greater withdrawal flexibility, regardless of your withdrawal plan.

Furthermore, transferring funds from a Roth TSP to a Roth IRA can eliminate Required Minimum Distributions (RMDs). Unlike a Roth IRA, a Roth TSP has RMD requirements, while a Roth IRA does not. This gives you more flexibility with withdrawals and lets your money grow and compound income tax-free for a longer period.

Pros:

Additional investment options

Latitude for withdrawals from investments

Roth IRAs don’t require RMDs

Greater adaptability for account inheritors

Cons:

Restricted access until age 59 1/2

No use of the G Fund

Once you withdraw all of your funds from the TSP, you cannot put them back in

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.

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.

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/

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.

The Winning Streak of Index Funds Faces Risks in Retirement

September 7, 2022 /by aaron steele

Investors are used to pouring money into index funds and seeing gains. But are those the best retirement bets?

Rising rates, inflation, and geopolitical upheaval have challenged index funds. Investors wonder if index funds will still be the best ETFs and mutual funds and how active strategies will fit into their retirement portfolios.

Retirement Index Funds Are Hard To Beat

Fund managers struggle to beat market indices over time, as is well-known. Last year was the third-worst for active managers, according to S&P Dow Jones Indices’ biannual SPIVA (S&P Indices vs. Active) US Scorecard for 2021.

Despite good absolute returns, 80% of domestic equity funds and 85% of active large-cap funds lagged the S&P 500. Even worse were mid- and small-cap funds. In the meantime, passive funds saw net inflows while active funds saw outflows.

That said, some market areas usually lean toward active management. According to Morningstar Direct, alternative and unconventional equity active funds saw net inflows at the end of March, and so did bank loans and intermediate core bonds.

Active vs. Index Retirement Funds

How should retirees or those planning for retirement compare active and passive index funds?

Active investing gets a poor rap because passive investment supporters don’t consider the reality of the investor situation. And retirement is one where active investing is important.

Simply put, we all are active investors because everyone buys and sells. Rarely does someone buy something, put it in a safe-deposit box, and never change it. So we all become active investors sooner or later. The question is, how active are we and whether it’s a quantitative, disciplined process?

Including Active Investing in Retirement

Active investment should always be part of a portfolio because it’s hard to foresee when to switch. Risk management and reducing losses are crucial for retirees.

If you take a hit early in retirement, you have less money to live on. If you restrict portfolio losses through risk management, you can be reactive to the market and lower overall losses.

For Significant Downturns, Look Beyond Index Funds

Diversification isn’t enough. It helps in short, shallow market downturns known as “baby bears” – corrections of 0-20%. Most retirees’ diversified portfolios can handle it. The concern is the “grizzly bear” – a 30-70% downturn.

All asset classes are connected during these prolonged downturns. Diversification isn’t a grizzly bear market protection. Risk management and active management are designed for grizzlies.

If the grizzly bear hits early in retirement, it punishes you. So, it’s crucial to protect retirement capital.

Combining Active and Index Funds?

Now it’s a perfect moment to explore active versus passive strategies.

Active and passive aren’t mutually exclusive; both are used in client portfolios. Passive investment has cost and market exposure advantages. While active investment can provide a complement or increased market exposure in some sectors you want to be exposed to.

Active can deliver a higher risk-adjusted return in uncertain markets where we are now. Our message isn’t only about returns. Our overall message includes risk, where active gets incorporated. We’re looking for the highest risk-adjusted return.

New Investors Favor Index Funds For New Money

Some of the greatest mutual funds and ETFs are on thin ice, with the S&P 500 down over 10% and the Nasdaq down 18%. Index funds gained $15.3 billion in the first quarter amid overall sluggish flows, while active funds lost $6 billion.

Market weakness likely prompted investors to buy index funds. Areas like alternative investments helped diversify portfolios as markets dropped. Alternative fund assets climbed 9.3% in the third quarter. That’s the third-highest growth rate of any category group since 2011.

Index Fund Active Investing

Investors can employ indexed strategies tactically or actively. Passive doesn’t mean inactive.

Investors can retain a core indexed strategy but pick between a market-cap-weighted or fundamental indexing strategy. Investors can then supplement their portfolios with market-weighted or active funds. Active funds typically handle less liquid areas like fixed income or emerging markets.

Be Aware of Fees

Long-term investing must be disciplined. And that means taking into consideration taxes and fees. People have been calling for active vs. passive investing for a long time, but it hasn’t worked out.

Some things have changed in the past year that haven’t changed in decades. Increasing interest rates to fight inflation is one of those changes. The decades-long easy monetary policy is ending.

The result will finally reward companies for excellent fundamentals, not just momentum. Being active and finding firms with a solid foundation is crucial.

Active investing should now encompass active product-level selection, like active mutual funds or ETFs.

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.

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

August 25, 2022 /by mark heinrich

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

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

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

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

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

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

Disclosure:
Securities offered through GRF Capital Investors, Inc., 6506 South Lewis Avenue, Suite 160 Tulsa, OK 74136 Phone: 918-744-1333 Fax: 918-744-1564

Securities cleared through RBC Capital Markets, LLC. 60 South 6th St., Minneapolis, MN 55402

Member FINRA www.finra.org / SIPC www.sipc.org

Broker Check http://brokercheck.finra.org/

An Overview of TSP’s Early Withdrawal Penalty

August 24, 2022 /by bill hoff

If you’re a federal employee leaving the government, you may have heard that early withdrawals from accounts like the Thrift Savings Plan (TSP) might result in penalties.

Penalties, especially levied by the IRS, should be avoided when possible. Let’s go through an overview of the early withdrawal penalty.

Background

So, let’s start. You’ve worked hard to save money in a tax-deferred account like a Thrift Savings Plan (TSP) all your career. You plan to use that money in retirement, but the IRS has set rules for when you can withdraw it. Remember, the IRS granted you a tax break when you earned that money. You know you’ll have to pay them eventually, right? When you earned money, they handed you the pass, but there were some strings attached as you can only access it at 59.5 years or later.

There are certain exceptions, and we’ll discuss them for the TSP. But first, let’s explain the IRS rule. A person who withdraws money from a tax-deferred account before age 59.5 will be charged a 10% IRS early withdrawal penalty. This penalty is in addition to any standard tax you owe.

TSP’s Special Rule

There are some special rules for the TSP. Federal employees who retire or leave federal service in the calendar year they turn 55 can take TSP funds without penalty.

First, note that the TSP doesn’t differentiate between retiring and separating. Either you work, or you don’t. Some things are allowed if you’re employed, and others if you’re separated or retired (of all the actions that TSP can do for you).

Next, let’s discuss if you retire “in the calendar year you reach 55.” If you turn 54 in October and want to retire at the end of the year, that won’t be the calendar year you turn 55. That year, you turned 54. To avoid a penalty, you must wait until the following year.

This exception, the TSP’s special rule, only applies to funds straight from the TSP. You can’t move money from the TSP to a private IRA and then obtain a dividend from it. You’ll be penalized if you do so. Special provisions employees, like police enforcement officers, firefighters, and air traffic controllers, have a special age of 50, not 55. You can retire considerably earlier than the usual government employee. Therefore they’ve made an exception for you if you fit into one of those categories. Everything else is the same.

Who’s Affected

Employees with regular retirements are exempt from any penalty. Regular retirement is when employees have reached their minimum retirement age (MRA) and have the required years to go. They include those who aren’t special provisions employees, law enforcement officers, firefighters, or air traffic controllers.

A penalty may be imposed on an employee who retires early. That’s where a job vanishesâ€”someone retiring under deferred retirement regulations, unable to collect their pension immediately. Then there’s the special provision workforce. So even though they have special rules, they may still be penalized. We’ll explain how later.

Triggering the Penalty

There’ll be different rules if you do or don’t fulfill these special rules, and you trigger the penalty. So, let’s look at a few scenarios.

If you’re under the age of 59.5 and don’t meet the special rules, you’ll be penalized regardless of whether you take your money immediately from the TSP or roll it to an IRA and subsequently take it. You can roll the entire account into a private-sector IRA or keep it all in TSP. Any money taken before age 59.5 will be subject to a penalty.

If you’re under 59.5 and meet the special rules, you’ll enjoy penalty-free access to your TSP money until you turn 59.5. Don’t forget that when the funds touch an IRA, they lose the special rule allowed by the IRS.

Moving TSP Money to an IRA

Don’t worry. There’s a way to move some money to an IRA without penalty. Assuming you have money in the TSP, you know that moving the entire account to an IRA will result in a penalty on any withdrawals made before 59.5 years of age. The key is leaving enough money behind to cover the time between separation and 59.5. You can put the rest in an IRA and let it grow and do its thing. Just don’t touch it till you reach 59.5.

You can get the best of both worlds if you do as mentioned above. You can avoid paying the penalty on the money you take from the TSP. And with the private IRAs, you get all the flexibility and control. The trick is to wait until you’re 59.5 or older to get the money.

Other Options For Avoiding The Penalty

There are alternative ways to avoid the penalty inside the TSP. For example, if you’re a disability retiree, it has to be a total and permanent handicap; you won’t also be penalized if you withdraw your TSP in particular ways, like taking a TSP annuity which is not recommended for many reasons.

Another alternative is if your deductible medical expenses surpass 10% of your adjusted gross income or if you prefer to have your money paid in substantially equal installments. It can be straight from the TSP or from an IRA. Getting those payments out, not in a monthly form that you choose, but allowing the entire account to be calculated as if it was paying you out throughout your lifetime, would be enough to avoid the penalty. The downside is that you could face a total penalty if you change your mind.

Assume you depart the federal service at 55 as a regular employee. In this case, if you decide to make these substantially equal payments and have the TSP calculate your monthly payments but not annuitize them, and then at age 58, you decide to change your mind because you’re not getting enough income from your TSP, they will assess the penalty as if you hadn’t done anything properly from age 55 to 58.

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

3 Strategies to Lower Taxes and Maximize Your Income In Retirement

July 26, 2022 /by aaron steele

When people begin to plan for retirement, they frequently concentrate on one primary goal: saving enough money to retire comfortably when the time comes.

Unfortunately, that’s often where the planning ends, which means some crucial details may be overlooked, such as:

• Determining how to turn those accumulated assets into a steady income stream to support the desired lifestyle.

• Investigating tax techniques you can adopt to keep and pass on retirement savings to your heirs.

Creating a strategy that distributes your assets in the most tax-efficient manner possible can assist you in achieving your retirement and long-term objectives, but it’s not an easy undertaking. And if you wait too long, you may miss out on some of the Tax Cuts and Jobs Act of 2017’s significant tax savings, as many of its provisions are set to expire at the end of 2025.

Here are three tax strategies to improve your retirement strategy in the future:

Convert Traditional IRA to Roth IRA

Are you worried about future tax rates, particularly when RMDs kick in at age 72 (75 soon)? Converting a traditional IRA to a Roth IRA could help you and your heirs save money on taxes in the future. Consider the following scenario:

Our office currently assists a client who wishes to withdraw approximately $60,000 per year from an IRA when she turns 72. That, along with her other sources of income, is all she expects to require. However, based on what she currently has in her account and a projected 6% growth rate, the amount the government requires her to withdraw could be closer to $90,000â€”or even more.

Fortunately, according to the Tax Cuts and Jobs Act, she can convert her traditional IRA to a Roth convert at a 3% lower tax rate until the end of 2025. She’ll have to pay taxes on the money as she moves it, but her savings can grow tax-free after being safely deposited in that Roth account.

Giving to Charity to Reduce Taxable Income

A CRUT is an estate-planning mechanism that pays a named beneficiary income. After the beneficiary passes away, the trust’s remaining assets are distributed to a charitable organization of their choosing.

Using NUA Distribution to Make the Most of Company Stock

If you’re concerned about the tax burden you’ll face in retirement, you might consider putting up a net unrealized appreciation (NUA) payout.

Employees with corporate stock in a 401(k) can roll those shares over to a brokerage account and pay tax only on the stock’s cost basis at the time of distribution under the NUA rules. The account holder will pay taxes at more favorable long-term capital gains rates than ordinary income tax rates when those shares are sold.

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.

How Are Investment Options Going To Expand In Federal Retirement Savings Program?

July 24, 2022 /by bill hoff

Federal and military employees will soon be able to choose from a wide selection of new investment alternatives for their retirement savings plans.

The Thrift Savings Plan (TSP) administration said it would open a long-planned mutual fund “window,” enabling participants to access some 5,000 products provided by approximately 300 mutual fund companies and the index-based funds that TSP itself provides.

Some financial consultants who have coached government employees regarding their TSP funds have emphasized that the opportunity should be taken with prudence.

Underwork from Years

The TSP had more than 6.5 million account holders and $740 billion in investments, thanks to a law implemented in 2009 that authorized more expansive options for TSP. In addition to additional web services and security precautions, the TSP’s operational platform is being upgraded to include a mobile app.

To participate in the mutual fund window, investors must have at least $40,000 in assets, and no additional investments can exceed a quarter of an account’s total value, which is why only those with at least $40,000 in investments will be eligible.

Current and Former Federal Workers

Only roughly 350,000 of the almost 2.5 million current and former military people with accounts in the TSP have balances over that level.

There are also yearly fees of $150 and $28.75 per trade for mutual fund users due to a 2009 law that mandated that they pay for the fund window’s operations.

Funds Tracking Stock and Bond Indexes

This is the TSP’s standard lineup of 5 funds that track broad stock and bond market indexes and funds that can be diversified by the predicted withdrawal date. There was a significant increase of choices before the approaching transition, including expanding the number of target-date funds from 5 to 10.

Over the years, several pieces of legislation have been filed in Congress to expand the TSP’s investment options or eliminate specific enterprises from its portfolio. As a result of political resistance, the program withdrew its original 2020 proposal to expand its fund monitoring overseas equities to cover markets in around 24 different nations.

How to Access It?

It will be available to investors who fulfill eligibility requirements and will contain a screening tool that allows users to choose mutual funds fitting their criteria, including what the funds invest in and how much they charge for their services.

So, it was all about the investment options that will expand in the federal retirement savings program. Ensure you have read this post completely so you don’t miss anything.

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

More Information About New TSP Features

July 20, 2022 /by todd carmack

Over the next year, federal employees and retirees should watch the Thrift Savings Plan.

The agency in charge of the plan is in the early phases of a significant modernization operation that will replace the back-end systems that operate and protect the TSP.

However, the effort will also include new features and benefits for TSP participants. The project is known as “Converge” among the personnel and contractors involved in its technical components.

However, participants will identify it as the initiative that will ultimately deliver them a new TSP mobile app, a mutual fund window, improved security functions, and a few other elements that most consumers would recognize from online banking.

Many of these modifications have been in the works for years, particularly the technological things on the back end. However, the Federal Retirement Thrift Investment Board has said that participant feedback influences the development of some new features.

According to a recent poll of its participants, 57 percent of those under 40 want a mobile app to access the TSP. Approximately 24% of individuals over the age of 40 agreed.

Participants will continue to have access to their accounts and can contact the TSP via their online accounts, email, and the customer support phone line. They will also get access to a new TSP mobile app, a chat option, and an artificial intelligence-powered virtual assistant beginning next summer.

That will be available to the participants 24 hours a day, seven days a week, so whenever they go into the website, they’ll have access to the virtual assistant, said Tanner Nohe, the TSP’s project program manager, at the monthly meeting of the board last week. It was essentially a tutorial of queries that participants may have.

The chat option will be administered by live TSP customer care representatives, who will be able to transfer participants to other personnel who can help with more specific queries or issues over the phone.

The TSP will also introduce new features to help participants manage their money and connect with the plan. These include additional online forms and electronic signatures.

Participants will also be able to digitally scan checks into the TSP, which is a function that most banks provide.

Nohe also stated that the TSP would provide a “concierge” service to help members roll the money into the plan. This prevalent issue frequently raises concerns from government employees and retirees.

According to the TSP, there will also be an impending mutual fund window, which will open sometime next summer. Through the plan’s core five, participants will have thousands of dollars they wouldn’t usually have access to.

The plan is still creating the mutual fund window. However, according to Nohe, it will provide a search engine so members can sift through the funds and look at their options based on essential characteristics. Additionally, the plan will establish a specialized contact center for participants with queries regarding the mutual fund window.

There’ll be no trade limits after participants join the window, but certain funds may have their own, according to Nohe.

Both participants and members of Congress are interested in the mutual fund window. More information from the TSP is expected in the coming months.

Participants will witness additional security precautions in addition to the mobile app and the mutual fund window next year.

Participants might have more prompts for a one-time password, for instance, while conducting higher-risk online transactions. The objective is to enhance the online experience with more fraud detection and prevention tools. Participants will also be able to access their TSP accounts using biometric data, such as facial recognition or fingerprints.

According to the FRTIB, participants will begin to see these changes as early as next summer. Meanwhile, the TSP will start engaging with its participants next year to prepare them for the modifications.

And indeed, participants will be required to prepare actively.

Most significantly, participants must create new log-in credentials to access their online accounts. They must create a new username, password, and multi-factor authentication.

Those with several TSP accounts, for example, a military and a civilian retirement account, will need to create a single new credential to have access to everything, according to Nohe.

Before the launch, there will be a temporary blackout period during which participants might be unable to access their accounts or perform certain transactions for a limited time.

The TSP is currently ironing out the details. In the meantime, keep an eye out for further information from the plan beginning in January or February next year.

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

Tag: thrift savings plan

thrift savings plan

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What Happens if I Have a Different Kind of Retirement Plan?

1. Refuse to accept the standard savings rate

2. Get a 401(k) match

3. Continue until you have vested

10 Simple Ways to Derail a Federal Retirement

part 2

Part 1

Most Common TSP Mistakes During Bear Markets

Government Employee Retirement Strategies

Allowable FEHB Changes You Can Make Outside of Open Season

Retirement Eligibility Under FERS

Retirement Options with the TSP

The Winning Streak of Index Funds Faces Risks in Retirement

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

An Overview of TSP’s Early Withdrawal Penalty

3 Strategies to Lower Taxes and Maximize Your Income In Retirement

How Are Investment Options Going To Expand In Federal Retirement Savings Program?

Underwork from Years

Current and Former Federal Workers

Funds Tracking Stock and Bond Indexes

How to Access It?

More Information About New TSP Features

TSP & Retirement

Insurance