TSP Archives

TSP stands for “Thrift Savings Plan” is an essential component of federal employee retirement savings efforts for federal employees. The Thrift Savings Plan is similar to a 401(k) plan, allowing participants to make contributions on a pre-tax basis. The TSP also has several competitive advantages, such as automatic contributions for certain federal employees, lower costs (compared to most private-market investments) and employer matching contributions.

Protecting Social Security

September 15, 2023 /by michael crowe

H.L. Mencken famously noted that the objective of politics is to keep the people alarmed (and hence clamorous to be brought to safety) by threatening them with an infinite series of fictitious hobgoblins.

He was correct, and few things in politics reflect his insight more than Social Security. Currently, the debate around Social Security is dominated by exaggerated scaremongering. Either the Republicans will gut the program, or the Democrats will kill it.

It’s politics as usual, which is unfortunate since politicians from both parties are more than willing to watch the program fail in the future if they can get a few more votes now. The program on which the rest of us rely is essentially a method of shifting voters on the margins from one party to the other on election day.

Most people are troubled by this debate framework since the passage of time is Social Security’s Achilles Heel. Last year, the program created $700 billion in promises that no one expects it to meet since Congress didn’t do anything to change the program’s financial trajectory. In 2022, the cost of doing nothing will be greater-and considerably more the following year. Congressional inactivity is responsible for almost two-thirds of the current crisis.

Politicians are incentivized to keep the status quo as long as people blame the opposition.

The latest round of drama began a few weeks ago when Senator Ron Johnson (R-WI) allegedly stated that Social Security should be evaluated as a discretionary expenditure every year so that Congress may solve faults with the program. According to the Senator, the move would bring accountability to the equation. He explicitly attributes the program’s poor prospects to a lack of oversight and negligence.

It’s uncertain how this modification can help the program recover from a $20 trillion shortfall. Congress now has oversight but chooses not to use it. Year after year, decade after decade, Congress has allowed the program to meander on a well-documented path to disaster.

He wants Congress to continue doing its job. It’s a job in Congress that no one wants. The Senator’s idea sounds a bit like a parent saying that if I make my kids wear coats and ties to dinner, they will stop throwing food at each other.

Pensions may be pretty long-lasting. Our country has recently finished paying off the last of the Civil War pensions. In Social Security’s case, the average beneficiary retires after 20 years. As a result, the goal of Social Security reform should be to create a system that can function for lengthy periods without Congressional action.

Senator Johnson would take reform in the other direction. If he had his way, the program would only be in effect for a year. If you’re 45, the last thing you want to see is Congress slapping legislative duct tape and baling wire around the program every year.

Voters should stop worrying about what the GOP would do to Social Security and instead focus on the fact that they have done nothing by far. During Trump’s presidency, the program amassed around $7 trillion in unfunded obligations. The extent of the deficit has virtually doubled.

The GOP hasn’t come up with a single Social Security proposal in almost a decade. The last major proposal was in 2016, only weeks before the final recess of the 114th Congress, when a retiring Congressman presented the “Saving Boomers’ Social Security at the Expense of Everyone Else” Act.

The name is a joke, but it’s hard not to notice that the idea would have retained benefits for people born in 1960 or earlier while decreasing benefits for the rest by more than 25% on average.

While the Republican Study Committee has included this plan in its yearly budget, no one knows if it would make the program sustainable or how much benefits would be decreased since no one has checked with the Social Security Administration to see if it’s effective.

The GOP’s strategy for Social Security is simple: assure voters that the party would safeguard benefits and hope that no one questions how they intend to uphold that promise. So far, that method has proven incredibly effective because no one will ask a disrespectful question.

The Democrats’ plan for Social Security is to pretend that the GOP is a hobgoblin and to take up righteous anger with everyone who doubts the folly of the proposition.

Contact Information:
Email: [email protected]
Phone: 6023128944

Bio:
Mike was born in Chicago, Illinois on August 13, 1946. He was brought up in the
suburb of Skokie on Chicago’s northwest side and graduated from Niles Township (
East ) high school In 1964. Two years later he joined the US Air Force in November of
1966. After 2 years of Intense training he volunteered for Viet Nam and was sent to
Bien Hoa Airbase, which was 25 miles from Saigon, the nation’s capital. He
volunteered for a number of especially dangerous missions on his days off, such as
flying as a door gunner on a US Army helicopter and as a technical assistant on a
psychological operation on an Air Force O-1E observation aircraft. Capping off his
impressive accomplishments was winning the coveted Base Airman of the Month for
March 1969, a feat which was featured in the Pacific Stars And Stripes newspaper
read by every service man stationed in the Pacific theater of operations. After his
Viet Nam tour of duty he was stationed at Luke Air Force Base in Glendale, Arizona
where he met and married his wife, Lequita.
He graduated from Arizona State University in May, 1973, and after a 30-plus year
career as a financial advisor he joined a number of service organizations including
Easter Seals and Valley Forward, sponsor of EarthFest. He was also involved with the
National Federation of Independent Business and became the longest-serving
chairman of the Leadership Committee ever. He spoke before the ( AZ ) House Ways
and Means & Senate Finance committees. He then joined Disabled American
Veterans ( DAV ) in September of 2015. He rose quickly through the ranks and
became Chapter 8 Commander in May of 2019 where he served with Distinction for 3
years before being “ termed out”. The next year, as Vice Commander, he won the
title of National Champion Recruiter!

Why you can’t rely solely on dividends to fund your retirement

September 9, 2023 /by michael crowe

It’s common knowledge that it is crucial to hold various retirement investments that enable income generation. After all, Social Security may be forced to make benefit adjustments in the future, which could mean a lower monthly payout for you.

Even if Social Security benefits aren’t reduced, those benefits will only replace roughly 40% of your pre-retirement income if you make an average salary. You will receive a lower replacement income if you earn more than average. Furthermore, while retirees can frequently get by with less than 100% of their prior income, they typically require more than 40% to live comfortably.

Because of this, you might be tempted to invest money in dividend stocks before retiring and hold them throughout your senior years. This way, you can then utilize those continuous contributions to pay for your retirement expenses.

Holding dividend-paying equities is indeed a fantastic method to increase your Social Security income. But you should venture outside of that.

Limit your reliance on dividend stocks

Keeping dividend stocks in your portfolio throughout retirement is unquestionably a good strategy. However, they should be one of several items you invest in at that time.

One factor is the general volatility of stocks. Additionally, as a senior, it’s wise to preserve some of your money in securities whose value is less likely to fluctuate dramatically, like bonds. That is but one argument against investing excessively in dividend stocks.

Another factor is that dividend payments are not assured to be made to you. When you invest in bonds, the organizations that issue your bonds are legally required to pay you interest at predetermined periods. This does not imply that individuals entitled to the interest payments can or will default on them. But when you make that investment, they are at least mentioned in terms of your bonds.

On the other hand, businesses that distribute dividends to stockholders are not compelled to do so. Furthermore, they are in no way required to maintain a specific dividend. As a result, you can fill your portfolio with dividend-producing stocks only to discover that, over time, some or all of those companies reduce or stop paying dividends altogether.

As such, dividend stocks ought to be one of the numerous income sources you set up for yourself during retirement. Your goal should be to diversify your holdings so you can earn income from various investments, including bonds, index funds, and possibly real estate, if you have the appetite for it.

Diversification is always a good idea.

When you’re younger, it’s crucial to keep a broad financial portfolio; as you age, it’s essential to continue. This entails not becoming unduly dependent on dividend stocks but instead using them as one of several resources to augment your Social Security payments and guarantee you have enough money for a pleasant retirement.

You probably need a million-dollar portfolio to live off your dividends right now, but that number will only increase.

If you’re currently saving for retirement, remember that a current retiree would need about $1 million to live off the dividends. You most likely will need 22% more if you are ten years away from retirement, and 49% more if you will retire 20 years from now. And most likely twice as much if you’re 35 years away.

These increases are to cover inflation. Of course, this quick calculation ignores factors like a downsized home, an inheritance, a decline in expenditures in your later years, etc. It also ignores the possibility that your dividends won’t keep up with inflation.

Stocks usually gain value in addition to the dividends they pay over time. You should consider increasing your capital during retirement if you intend to only rely on your dividend income.

Conclusion

Living off dividends may be possible depending on your expenses, required amount of income, and assets. It’s crucial to avoid letting dividends determine your entire asset allocation plan. This can put your income stream in danger and potentially your entire portfolio. (Re)think about the significance of living off dividends in your financial strategy as you contemplate how to retire comfortably or gain financial flexibility. It might not be as crucial as you believe.

Contact Information:
Email: [email protected]
Phone: 6023128944

An Open Season Checklist for Federal Employees

September 8, 2023 /by todd carmack

Federal employees can review and make changes to their health insurance plans annually during the Open Season. It can be daunting, with many plans and premium increases to consider. This year’s Open Season will take place from Friday, November 14 to December 12, 2022. The changes will take effect on January 1, 2023. And it’s the best time for federal employees to switch health plans and alter their existing plans. So, ensure your health plan is the most excellent fit for your family’s needs. Let’s look at the open Season checklist to guide you through the process.

High Premium Increases

Employee premium share will rise by 8.7% next year. It’s the highest increase in a decade, making this year preferable for many employees to contemplate switching FEHB plans. Premiums will go down in 56 programs, remain the same in nine goals, rise below the usual in 119 plans, and rise slightly above the standard in 78 projects throughout the upcoming year.

For instance, Self-only registrants will have to pay an additional $6,510 due to a decrease in premiums of 36.5% in Nevada, a rise in premiums of 49.5% in New Mexico, and a 34.2% rise in Illinois plans. It’s crucial to check how the premium for your FEHB plan has changed. So, here is how you can select the best health plan for 2023.

Selecting New Health Plans

Shopping for a new health plan can be daunting, but selecting the option that offers the best value is worth the effort. Total cost should be the primary factor in your selection process. It includes your premiums and the likely out-of-pocket expenses based on your family’s age, size, and expected healthcare usage.

For federal employees, Checkbook’s Guide to Health Plans ranks plan options based on total cost estimates. The differences in 2023 can be striking. For instance, a family of four living in Washington, D.C., could save more than $4,000 in estimated costs by switching from BCBS Standard to Kaiser Standard. Alternatively, this same family could keep their PPO coverage and save $3,500 by switching from BCBS Standard to GEHA Elevate.

Hence, the goal is to ensure that you select the plan that offers the best value for you and your family. Let’s see how you can do it effectively because savings can be huge.

Flexible Spending Accounts

Flexible Spending Accounts (FSAs) are a great way to save money on out-of-pocket healthcare expenses. With FSAs, you can set aside pre-tax dollars to cover eligible healthcare costs. Unfortunately, only 20% of federal employees are taking advantage of this program.

Considering setting up an FSA, it’s essential to know critical details. You can contribute anywhere from $100 to $3,050 in 2023. This money is taken out of your paycheck in equal installments, avoiding payroll taxes, which means you get an adequate 30% savings on qualified healthcare expenses!

Plan Benefit Changes

As health insurance plans prepare for significant changes across the board in 2023, it’s essential to be aware of the changes to your current FEHB plan and any plan you may be considering. These changes can significantly affect the benefits you’re entitled to and how much you’ll pay for them. It’s crucial to look at the official FEHB plan brochure and closely at Section II â€“ How Your Plan Will Change in 2023.

You’ll find detailed information on any additions or changes in your plan benefits and an overview of the cost increases you could be facing in the year ahead. Please ensure you’re prepared for a very different FEHB experience in 2023 before it’s too late.

The same goes for your provider directory, formulary updates, and dental benefits for 2023. Make sure you check your doctor’s coverage and dental needs to ensure that you are making the best decisions for yourself and your family. Updating these lists and aligning them with your needs and goals is essential in managing your health insurance.

Final words

Less than 2.5% of federal employees switched health insurance during Open Season, despite the highest premium rise in the past decade. However, professionals should check to see if their current FEHB plan is still the best option. They should look for changes in 2023 to the significant benefits, provider networks, and prescription drug coverage.

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

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and 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, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his 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 has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

Why Aren’t Annuities Popular Among Retirees?

September 8, 2023 /by joe carreno

Could a defined-contribution retirement savings plan introduced in 1918 provide answers to one of the most perplexing 401(k) questions?

Yes, is the quick answer. Teachers Insurance and Annuity Association (TIAA) is a retirement savings plan that attracts members from colleges, universities, and other non-profit organizations.

The complex personal finance subject concerns how employees with 401(k) plans can convert their accumulated savings into a retirement income.

The fundamental problem is that if retirees spend too much quickly, they may have to reduce their living standards later in life substantially. Moreover, retirees who are overly cautious with their money risk regret missed opportunities and die rich. The uncertainty about life expectancy adds to the difficulty.

Investing in an annuity contract is a great way to ensure consistent income in retirement. But most retirees don’t seem interested in annuities.

Why Annuities Are not popular

Annuities aren’t particularly popular among retirees for several reasons.

Firstly, annuities are complicated contracts. When household circumstances change, annuities are rigid.

Second, many participants are deferring withdrawals from their TIAA retirement accounts until their Required Minimum Distribution (RMD) date. The RMD is the percentage of assets that individuals must withdraw beginning at a certain age. The percentage of TIAA participants who waited until their RMD climbed from 10% in 2000 to 52% in 2018. During the study period, the RMD was 70 years old. However, in late 2019, the secure act upped it to 72 years, and if the Secure Act 2.0 passes, the RMD age will eventually grow to 75 years.

Research shows that the IRS‘s RMD table is a more effective technique than other well-known guidelines, such as the 4% rule of thumb. RMD is a great way to figure out how much you can spend.”

Thirdly, retirees value their freedom. Yes, annuities protect against the risk of living longer than planned, but retirees still face additional risks, such as health concerns and unforeseen bills.

Retirees may need their money if a spouse unexpectedly needs medical assistance or an adult child returns home with grandkids after divorce. For individuals with adequate funds to wait, the RMD option is a viable option.

Aside from purchasing a private annuity, other options for reducing longevity risk are other options. For one reason, inflation-adjusted spending falls throughout retirement (with a healthcare-driven increase later in life).

It’s possible that the rise in the average retirement age among TIAA participants coincided with the rise in popularity of the RMD option. The average retirement age increased by 1.3 years for women and 2 years for men among participants.

From a public policy standpoint, politicians are correct in encouraging corporations to sell annuities to their future retirees. Unless the product is significantly enhanced, few retirees will take advantage of the offer. According to the TIAA study, retirees would like to preserve control of their savings just in case.

Contact Information:
Email: [email protected]
Phone: 8139269909

We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.

Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. 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. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. 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.

Fed retirees are doing better because of the FERS Annuity’s indexing for inflation

September 3, 2023 /by michael crowe

It shouldn’t be a surprise that employees nearing retirement are more scared of inflation, per a recent survey by Schwab Workplace Financial Services®. Monthly costs (mentioned by 35% of participants) and stock market volatility (cited by 33% of participants) came in second and third, respectively, behind inflation, which was noted by 45% of survey respondents.

Should government workers be as concerned about inflation as poll participants are? The answer is “No.”

It’s not that inflation is unimportant; it’s just that federal pensioners experience it to a lesser extent than the typical retiree in the private sector.

Why? Because both the FERS annuity and the Social Security payout you will receive are indexed to inflation. The majority of workers in the private sector don’t get annuities like FERS, and for those who do, the payouts are usually not inflation-indexed.

The FERS cost-of-living adjustment (COLA) is based on changes in the Consumer Price Index (CPI) between the third quarter of one year and the next. The CPI may increase by 9% by the end of September 2021, when Social Security announces the COLA amount in the middle of October.

Since the FERS COLA trails the CPI by 1% in years with inflation of 3% or more, FERS retirees are likely to get a COLA of 8% or more. The full Social Security COLA is per the CPI.

FERS retirees will have access to social security, the FERS pension, and the Thrift Savings Plan as their three primary income sources. These three sources have been adjusted for inflation in two of them.

Nearly half of all retirees in the private sector will participate in a defined contribution plan like the TSP and receive Social Security benefits. Thus, inflation will have a negative effect on a more significant portion of their retirement income.

In the Schwab poll, one-third of participants were unsure of the lifespan of their funds. In a previous American Advisors Group® poll, 29% of respondents predicted that their financial situation would likely worsen before time ran out (although they would still have Social Security).

You won’t run out of funds from your FERS pension, Social Security, or any of those sources, leaving your TSP.

What steps could you take to ensure that your TSP balance won’t be depleted and that your withdrawals will be able to cover inflation? Here are a few ideas.

• Increase your TSP contributions while you’re still working to have more money when you retire. Remember that the amount you can contribute increases by the year you reach 50.

• Start with a specific proportion of your account each year (many financial advisors advise starting at 4%), then raise it each year by the rate of inflation to ensure that your withdrawals stay up with inflation. According to studies, using this method, sometimes known as the “4% rule,” increases your chances of not running out of money during retirement.

• You might want to think about choosing installment payments calculated using the IRS life expectancy chart if you plan to utilize your TSP as a source of ongoing income. Your payment will be revised by the TSP each year. The amount you withdraw would be adjusted upward in a “good” year and downward in a “poor” year since this re-calculation is based on your year-end balance (for example, the 12/31/2021 balance was used to compute the 2022 installment payments, etc.).

Keep in mind that this, too, shall pass. Yes, inflation has been high, but monetary policy has finally controlled it. Note that inflation has averaged 3% a year over the past century. High inflation may be there for a while, but it won’t last forever. Not to worry.

Contact Information:
Email: [email protected]
Phone: 6023128944

TSP Strategies- Are You in Control of the Market or are You Being Played?

August 15, 2023 /by jason anderson

What do a Las Vegas gambling trip and stock (or bond) market timing have in common? Frequently, the same thing. Most people at a casino or home watching Wall Street let their emotions rule. People that are nervous zig when they should zag. They were lost before they even got out of the starting gate.

So, how should you handle what matters most in these exciting timesâ€”your retirement nest egg, the TSP? It’s an uncertain time with issues ranging from the Ukraine war to record inflation and soaring gas costs, which are expected to deteriorate even further. Perhaps even worse! In difficult times, most federal TSP accounts are vulnerable. Remember that it might provide anything from one-third to one-half of your retirement funds. And the greater the sum and the later you begin spending it, the better.

The 100,000-plus TSP millionaires (as of December 20, 2021) shared a few characteristics.

Except for a few politicians, political appointees, and federal judges, the vast majority were not already millionaires.

Most invested in the TSP stock funds regularly for an average of under 30 years, particularly during difficult times (2008-2009) when the markets were down. As it turned out, market timers sold low, while steady-as-she-goes investors acquired equities at low prices.

When things are going well, many investors know what to do. The fight-or-flight response occurs when things go wrong, which they frequently do in times like these. So we’ve asked a few financial planners what they’re advising their active and retired clients these days.

Here’s what they said.

The TSP has a double-down dose.

Except for G, the value of all TSP funds fluctuates. That includes both down and up. And, except for G, the stock and bond funds both fell in the last quarter.

How bad did it get? The first-quarter returns for the five traditional funds are explained here.

First of all, all L Funds, including L Income, fell in the first quarter.

According to the Wall Street Journal, on April 1, 2022, bond markets fell at a rate not witnessed in over 40 years, while equities had their worst quarter in two years. Among the reasons are:

The Federal Reserve raising interest rates,
inflation skyrocketing to its highest level in forty years,
Russia’s invasion of Ukraine, and
a downturn in the Chinese economy.

During the first week of April, both the bond and stock markets continued to fall.

So, that’s unsettling. However, what does it mean for TSP participants?

It indicates that participants must focus on longer-term returns for funds needed in five years or later. However, past performance is no guarantee of future results, long-term returns for US stock funds strongly outpaced bonds and overseas equities.

Employees not nearing retirement should be aware of two investment risks: volatility and market drops. However, the drops provide an opportunity to “buy low” with bi-weekly contributions.

Retirees supplementing their Annuity and Social Security benefits with TSP withdrawals should aim to withdraw from their G Fund holdings until the other funds recover. Unfortunately, participants in the TSP cannot withdraw from only one of the funds they’re currently invested in. Withdrawals are made from each of the funds in proportion to the participant’s current allocation. If you have 50% in G and 50% in C, half of your withdrawal will come from G and half from C.

Contact Information:
Email: [email protected]
Phone: 3234811328

Bio:
For over 13 years, Jason Anderson has served as a Personal Financial Advisor, Estate and Retirement Planner, helping to educate individuals from all walks of life and income levels on wise money investment and planning for a comfortable lifestyle and retirement.

Over time, Jason Anderson has become the ‘Go-To’ leading authority on personal financial advising, financial planning, and analysis, as well as retirement planning and financial planning for SMALL BUSINESS OWNERS. He also provides HIGHLY Popular financial education seminars for groups. These financial seminars empower people to more effectively budget, plan, manage their money, and achieve their personal financial goals. As a result of the excellent results, praise, and feedback that their financial seminars have received, the City of Los Angeles, The AFL-CIO union groups, as well as several other organizations, have decided to partner with Jason to more effectively accomplish their mission. He was also honored to be showcased in the November 2014 issue of Forbes Magazine “Americas Financial Leaders” and has been dubbed by the media as ‘The Financial Educator.’

Jason is passionate about the work he does because it brings him joy to help his financial planning and advising clients reach their financial goals. He finds excitement in assisting families in saving and paying for their children’s college education without stress, thanks to the financial plans he designs for them. He also takes pride in witnessing clients reach retirement and enjoy it precisely the way they desire.

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

TSP With a Pay-To-Play Arrangement

July 28, 2023 /by michael crowe

A magazine reporter once questioned a PGA Tour golfer about their starting salary. Their response was that, for their first year, they actually lost money. Today’s economy makes establishing a career in this profession more expensive than a generation ago. Accommodation, food, and transit costs rapidly increase while traveling for weeks. Then there are the tournament fees, a fixed salary for the caddy (who also gets a percentage of winnings on a scale with more for top finishes and wins), coaches, trainers, dietitians, etc.

To succeed, you must break even. When the TSP investing window opens in June, it’s crucial to provide participants (within constraints) access to outside mutual funds. Investors have long grumbled about the TSP’s limited choices of broad, index-based products. Success costs them.

It will take some time before the TSP becomes a full-fledged pay-to-play organization. In response to a minority of investors treating their TSP funds more like passbook banking accounts than long-term retirement savings, the program decided to start charging $50 for customers who took out a loan. Loans were taken out for various reasons, such as paying a semester’s worth of college tuition and then repaying over some time via paycheck withholding. The TSP’s overhead increased due to each of those transactions, and the program determined that individuals who caused the expenditures should bear the burden.

So, it shouldn’t be surprising that the TSP has adopted the same investing strategy. The $28.75 trade fee is an additional charge. As a result, if a person decides to invest $10,000 outside of a mutual fund, they will be approximately 2% behind at the start of their new investment.

Are mutual funds focusing on specific market sectors, or even wide ones, capable of beating the TSP stock index fund in terms of performance? Sure. At the very least, it will have to perform at least as well to avoid a financial loss. And the losses will be more significant if it becomes worse. The TSP aims to “redetermine” such costs every three years, implying they will go up or down depending on market conditions. There will also be an additional $600 cost for processing alimony and child support orders as part of the more extensive set of changes to the TSP tied to the new record-keeping system.

To make the TSP more affordable for investors, the program’s general expenditures are divided out among all participants reasonably. On the other hand, certain services come at an additional cost, and individuals using them are expected to foot the bill. Even if individuals who must pay the fees feel slightly irritated, that’s how the TSP is going.

Contact Information:
Email: [email protected]
Phone: 6023128944

The Installments vs. Annuity Dilemma When Using TSP for Regular Income

July 21, 2023 /by marvin dutton

The primary reason we contribute to our Thrift Savings Plan account is so that we can begin withdrawing from it at some point in the future. In addition, most of us view our TSP balance as a source of monthly income to augment our government annuity and Social Security (both of which are also paid monthly).

If we want to replace 80% of our pre-retirement income (as many financial advisers recommend), the great majority of us will fall short of that objective if we rely only on an annuity and Social Security. As a result, many retirees choose to receive TSP payments regularly.

In fact, over half of the separated employees choose a TSP withdrawal option that offers recurring income. Two income-generating withdrawal options are available: installment payments and a TSP life annuity. Installment payments can be made monthly (most common), quarterly, or annually. With installment payments, your money will stay in the TSP, where it’ll (hopefully) grow. A TSP life annuity involves withdrawing money from your TSP account and using it to buy a single premium immediate annuity (paid monthly) from MetLife; you can use all or part of your TSP balance to buy the annuity.

So, what’s the distinction between installment payments and a life annuity? Though both options allow us to collect recurring payments, the rules are significantly different. The most significant distinction is that a TSP Life Annuity is an irrevocable option, whereas installment payments can be altered frequently. Individuals who use installment payments can start and stop payments at any time and adjust the amount of the installments many times per year.

The TSP life annuity ensures that you won’t run out of money over your lifetime; you won’t have to look after your investments. But unfortunately, there’s no guarantee with installment payments, and you must watch after your withdrawals to verify that you continue receiving payments.

Both installment payments and life annuities allow you to receive payments based on a certain amount of money (level payments) or your life expectancy (increasing payments).

The Thrift Savings Plan has various calculators, including the TSP Payment and Annuity Calculator, with which we came up with the following examples. Due to the ongoing repercussions of the Thrift Plan’s new system, this calculator is no longer available on TSP’s website (as of July 2022). In our calculations (completed in April, before the new system’s implementation), we estimated that a 57-year-old retiree had $350,000 in their TSP when they started withdrawals upon retirement. We also assumed they would live to be 90 years old and that any money remaining in their TSP account would grow at a rate of 5% per year. The annuity interest rate index was 2.075% – the rate for TSP annuities in February 2022.

Level monthly payments of $1,750 would remain until death at 90, leaving a $4,244 balance in the TSP account.

Monthly benefits would begin at $1,045 and would have reached $2,247 at 90, according to the IRS life expectancy chart. As a result, $295,069 would stay in the TSP account.

A monthly annuity with a basic level payment would earn $1,394 and keep paying that amount throughout the individual’s life. At death, there would be no funds left.

A basic increasing payment annuity would have started at $998 and grown to $1,887 at 90. At death, there would be no money.

Which option is most popular among separated federal employees? Monthly payouts are significantly more common than life annuities. Separated employees appear to prefer the opportunities for continuous development and the freedom to adjust their payouts that monthly payments provide over the certainty of the Life Annuity.

According to recent research, there are 1.2 million fewer workers than before the pandemic. However, it also said that if the pre-pandemic worker growth rate had remained, there would be 3.5 million more employees in the workforce today.

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

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

TSP Compiles a List of June’s New Features

July 15, 2023 /by marvin dutton

All TSP participants will need to create a new login for the new My Account after the transition in June. This one-time setup process will guide you through the steps of verifying your identification, creating a username and password, updating your contact information, and securing your account. You’ll notice a new design, additional tools, and expanded functionality to help you manage your account once you log in to My Account:

â€“ The configurable, user-friendly homepage will provide rapid access to the information you want to see first.

â€“ You’ll be able to see all the information for both accounts in one spot if you have both a civilian and a uniformed services account. This includes your overall total amount.

â€“ You’ll have the option to use your device’s identification software, such as fingerprint access and facial recognition, to add an extra layer of security when you access My Account from your mobile device.

â€“ If you need tailored assistance, you can utilize our virtual assistant, AVA, to ask account-specific inquiries and connect directly to a Thrift Line Representative for a live chat session during business hours.

The window for mutual funds

TSP participants who want more investment freedom may look into the mutual fund window. You can choose from a pool of over 5,000 mutual funds if your account fulfills specific qualifying conditions. This flexibility comes at a cost, as it does with most mutual funds:

TSP participants who do not utilize the mutual fund window pay a $55 yearly fee to ensure that using the mutual fund window does not increase TSP administration expenses.

The annual maintenance charge is $95

Distributions and withdrawals

The process for requesting a withdrawal or distribution will be more efficient and time-saving with the improvements coming in June:

â€“ We’re providing the opportunity to use electronic signatures and submit many requests online, just like we do with other transactions.

Support choices have been expanded.

With our increased support options, you’ll have more opportunities to have your issues answered starting in June:

â€“ On our website and in the TSP Mobile App, you’ll have 24/7 access to help through AVA, a virtual assistant (coming in June). AVA will provide a secure place for you to ask questions regarding your account and, if necessary, will link you to a live ThriftLine agent through chat during office hours.

Online transactions that are quick and easy

We’re providing new ways to perform most transactions and requests online to save you time and reduce paperwork:

â€“ You’ll be able to request transactions, upload forms and documents, and electronically sign your name in the new My Account.

Other useful information

You’ll be able to submit beneficiary information online through a new tool in My Account or by calling the ThriftLine. There will be some modifications to the way beneficiaries are designated:

â€“ You’ll be asked to confirm beneficiary information once a year to ensure it’s accurate.

â€“ You can easily designate equal distribution to beneficiaries using the online option for providing beneficiary information through My Account, without having to list precise percentages unless you choose to.

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

Federal Employee Health Benefits (FEHB) Fast Facts

July 14, 2023 /by joe carreno

OPM’s lowest-cost countrywide plan choice will be automatically selected for you if you don’t switch plans.
The number of providers and their makeup under the Federal Employees Health Benefits program is changing more this year than in prior years.

In light of this, OPM recently released a Federal Benefits Fast Facts bulletin that started by listing the four factors that might impact your current FEHB plan enrolment:
1. Terminating the program completely
2. Narrowing the scope of its services and removing its enrolment code
3. Narrowing the service area while maintaining the enrolment code
4. Removing an alternative (such as Standard or High)
Then it offered some questions for you to think about, which are included below.

How will I know whether this will influence my enrolment?

You will get a letter from your insurance provider informing you that it is either ceasing to offer coverage in your region, ceasing to participate in the FEHB program, or removing an option.

What should I do if something affects my enrolment?

You can switch your enrolment to a different plan during Open Season or a time frame that OPM specifies.

I plan to leave the FEHB program. What occurs if I don’t switch to a different plan?
If you don’t switch plans, OPM’s lowest-cost countrywide plan choice will be automatically selected for you.

My enrolment code is no longer valid, and my plan is expanding its coverage region. What occurs if I don’t switch to a different plan?
If you don’t switch plans, OPM will automatically enroll you in the most affordable countrywide program.

My plan’s coverage region is shrinking where I live or work, but my enrolment code is staying the same. So what occurs if I don’t switch to a different plan?
You’ll only have access to emergency care services in the new plan year; to get complete coverage, you’ll need to travel to the plan’s remaining service region.

My strategy obviates my choice. What will happen if I don’t choose another plan or one of the other options?
You’ll be enrolled automatically in one of the remaining alternatives in the plan. For example, if a High Deductible Health Plan is the only choice left, OPM will automatically enroll you in the option with the lowest-priced countrywide program.

What happens to my Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) if my High Deductible Health Plan (HDHP) discontinues coverage in my service region or withdraws from the FEHB program?
You must sign up for another HDHP if you want to keep making contributions to your HSA. If you don’t do that, you won’t be able to contribute to your HSA, but you will still be able to withdraw money for allowed medical costs. If you don’t utilize your HRA credits before the plan you choose takes effect, you’ll lose them.

How can I switch my enrolment to a different plan?

If you work for an agency and are a FERS employee, you can use online self-service tools like Employee Express, MyPay, Employee Personal Pages, EBIS, etc. Call your HR department if you need further assistance. Also, call Open Season Express at 1-800-332-9798 if you are a CSRS or FERS retiree.

When does my old plan or option stop offering coverage and my new one start?

Your current plan will continue to provide benefits. There won’t be any voids in protection. Until the start date of the new plan you choose during Open Season or for another period specified by OPM. The first day of your first full pay period in January 2023 will mark the start of the Open Season enrolment adjustments.

What are my rights if I’m expecting or suffering from a chronic or incapacitating condition?

Enrolees who are receiving treatment from a specialist for a chronic or disabling condition or who are pregnant in the second or third trimester have the right to carry on with their care for up to 90 days or until the end of post-partum care after receiving notice that a plan is leaving the FEHB program.

How can I compare the many health plans I have access to?

There are numerous tools at your disposal to compare plans: you can use the Plan Comparison Tool or the Consult Consumer’s Checkbook to review and compare the various available programs.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. 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. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsÃ¢â‚¬paying ability of the issuing company. 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.

Investing In An Annuity With TSP

July 10, 2023 /by michael crowe

An annuity is one of several withdrawal arrangements available in the Thrift Savings Plan (TSP).

While only a tiny percentage of TSP withdrawals allow annuity purchases, ensure that you understand the benefits of investing in annuities before discarding them as a possibility.

For one point, the TSP’s annuity payout offers more flexibility compared to the standard FERS or CSRS retirement benefits.

The TSP offers three basic annuity options:

• Single life annuity – a one-time payment made only to you during your lifetime.

• Joint life with spouse annuity – a payment made to you and your spouse while both of you are alive. When either one of you dies, the surviving partner will get an annuity for the rest of their life.

• An annuity granted to you while you and another person (not your spouse) are still living while you and someone else (not your spouse) are still alive. This person must have a strong desire to help you. The survivor will receive an annuity for the remainder of their life if one of them dies. In countries that recognize common-law marriages, a former spouse, blood relatives, adopted relatives who are closer, or a person you are living with or in a relationship that could constitute a common-law marriage are judged to have an insurable interest in you.

Joint Life Annuities can provide a survivor benefit of either 100% or 50%. When either of you dies, your monthly payments will continue in the same amount (100%) or be reduced by half (50%) to you or your joint annuitant.

The basic annuity types can be paired with a variety of annuity characteristics. Increasing payouts, cash refunds, and a 10-year guaranteed payout are among them.

With the fundamental annuity kinds, a variety of features can be combined. Increasing payments, cash refunds, and a 10-year guaranteed payout are some options.

Suppose you (and your partner annuitant) die before taking money equal to the balance used to acquire the annuity. In that case, a designated beneficiary will receive a cash refund of the difference between the payments amount and the funds used to purchase the annuity. If you die within ten years after the start of the annuity, the beneficiary will receive the remaining payments.

Not all features are compatible with all types of basic annuities. Also, once an annuity is purchased, the funds are transferred to a private corporation, and that company, rather than the TSP, provides the benefit.

You can visit www.tsp.gov to use the calculator functions to see how a certain sum might translate into income under various scenarios.

Contact Information:
Email: [email protected]
Phone: 6023128944

The TSP’s Strategic Plan

July 9, 2023 /by marvin dutton

Despite the necessity of focusing on day-to-day operational concerns, many firms need help to build a practical and realistic Technology Strategy. The inability to examine essential components of an IT strategy can have disastrous effects on a company’s ability to compete in the marketplace and effectively address infrastructure and data security concerns.

Technology Leaders are well-versed in industry best practices, and their wide variety of experiences servicing customers of all sizes offers us the benefit of providing you with an informed and impartial perspective to help you find opportunities and avert catastrophes.

We are professionals in assisting loan clients in comprehending the significance of the right software, a solid and secure infrastructure, and a competent support team in achieving overall objectives. So whether you define success in terms of sales, cost savings, risk mitigation, or better company efficiency, we will happily provide a business case for each of our recommendations.

The Thrift Board has determined its objectives by considering the following five visions:

• Our procedures are executed without a hitch;

• We assist participants in making informed decisions;

• We are careful with the money contributed by participants;

• We make the FRTIB a wonderful place to work and an environment in which outstanding work may be accomplished and

• We cultivate fruitful partnerships with those with a stake in the TSP.

The Thrift Board has decided to focus on the following three goals in terms of the consequences that plan participants would experience:

• Make it easier for participants to make decisions by giving information specific to their needs;

• Investigate and put into practice any improvements in plan design and benefits policy; and

• The percentage of participants that carry out a predetermined goal due to FRTIB outreach is increased.

Concerning the achievement of another aim, the provision of services, more time is spent on the participants. The following are the four goals that fall under the participant services goal:

• Raise knowledge about how the services supplied by the TSP compare to those provided by other defined contribution plans, providers, and financial institutions;

• Work in collaboration with employment agencies and payroll offices to provide participants with more seamless service;

• Understand the requirements and expectations of participants and respond to them;

• Open up the opportunity for mutual funds. This task was finished a couple of months ago.

They also wanted the TSP to move toward a managed services strategy, another of their objectives. This shift occurred in May and June, and it needed to measure up to preserve program performance while also maintaining the participant satisfaction that the Thrift Board had set for itself.

The TSP, as of late, has been more user-friendly and proactive than it was in its earlier days. This contrasts with how it was in its earlier days. Their strategic plan will make it possible for them to enhance the services they provide for the benefit of participants who are both employed and retired.

The Target Date Fund (TSP) employs the IRS Single Life Table to calculate life expectancy-based distributions for participants who have yet to reach the age at which they are obliged to begin receiving RMD payments when those payments commence.

These participants are eligible to transition to the Uniform Lifetime Table once they reach the age for RMDs, which is presently 72 years old.

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

The Six Best Ways For Women to Stretch Their Retirement Dollars

June 6, 2023 /by Mitul Patel

When it comes to retirement, women face unique challenges. Women have a five-year advantage over males in terms of expected lifespan, yet they only earn 84 cents for every dollar their male coworkers bring in. Because of this, it’s not surprising that 60% of women in the most recent Merrill Lynch survey on women and money (Women & Financial Wellness) worry about having enough money to last until they die.

Women may expect to make about $1.1 million less than men over their working lives. Just let that number settle in for a second. Women are expected to multitask and complete more tasks in less time, whether they like it or not. To that end, this article outlines six strategies they can implement to make the most of their retirement funds.

Negotiate the Best Salary Offer You Can

The initial payment is an essential factor. The impact of compound interest can be significant over time. Women must pay close attention to their earnings from the beginning of their professions.

If the initial offer needs to be higher, keep looking. Make the most of your bargaining ability by learning the market averages for your position before entering any talks.

Take On Even More Risk

Women are typically more risk-averse investors, but this isn’t sustainable when your income is lower, and your life expectancy is higher. Investors in “target date” funds, prevalent in employer-sponsored 401(k) plans, incur additional risk at the outset of their investment careers since the funds are tailored toward a specified retirement date.

Develop Your Financial Self-Assurance

When making financial plans, there is no such thing as a foolish question. Choose a financial adviser who makes you feel confident about your financial future. Even if you believe you have a good handle on personal finance, there is always more to learn and more confidence to develop.

Put Aside as Much Money as Possible

With the gender pay disparity and increased life expectancy, women must save at least 1.5 times as much as men to meet their financial goals. You can maximize the potential of compound interest if you begin saving early in your career.

Limit Your Time Away from Work

Although it is not always feasible, continuing to work after retirement might significantly impact your final retirement account balance. Women are disproportionately expected to take on the caretaker role, but this can have a devastating impact on their ability to save money. There is the loss of wages and the forfeiture of the employer’s 401(k) match.

Have The Guts to Ask for Help

Use every resource, including the internet, people you know, accountants, and books. You can’t just take a stab in the dark and hope everything works out for your finances.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Consider Investing Your COLA Increase in These Exciting Stocks for Social Security

June 6, 2023 /by Mitul Patel

The 8.7% cost-of-living adjustment (COLA) published earlier this month will result in a welcome increase in Social Security claimants’ monthly payments in 2023. According to the Social Security Administration, payouts will rise by an average of more than $140 per month in 2023.

While many seniors need the funds to deal with the rising cost of living, others may have the resources to invest in some or all of them. That can be a little nerve-wracking in the present bear market, especially if you’re living on a fixed income. However, some potential equities have lower risk levels than others.

If you’re thinking of investing your COLA raise in the stock market, search for well-established, reliable businesses that distribute dividends regularly. Dividends are particularly significant since they ensure a return of some kind, even during bear markets for stocks.

These five stocks are worth checking out.

Walgreens Boots Alliance (WBA)

According to The Motley Fool, the pharmacy industry has grown its yearly base payout for the previous 47 years and continuously paid a dividend for nearly nine decades.

We will always need prescription pharmaceuticals, healthcare services, and medical equipment. Hence, Walgreens is less vulnerable to market and economic fluctuations because it primarily operates as a healthcare business rather than a retail stock. The corporation has also made significant investments in its direct-to-consumer and online businesses.

Icahn Enterprises (IEP)

Icahn Enterprises is a holding company run by renowned investor Carl Icahn and his son Brett, which focuses on investing in steady performers rather than high flyers.

Pep Boys, a chain of automotive service centers with a long history, is an example of one of its investments. Icahn Enterprises has a “sky high” dividend yield of 14.86% as of October 23, according to Investor Place, and its stock price has managed to post a slight increase in 2022 despite the bear market.

JPMorgan Chase (JPM)

According to The Motley Fool, JPMorgan Chase has been the largest and most dependable performer among major U.S. banks in recent years. Unlike many of its competitors, JPMorgan did not require a bailout during the financial crisis, and it has generally stayed clear of the problems that have dogged Wells Fargo and Citibank.

Even better, JPMorgan has been paying a dividend yearly for the last 50 consecutive years. As of October 23, it offers a dividend yield of 3.5%, but this figure should rise over time.

Central Securities (CET)

Although this closed-end investment company has existed since 1929, it may not be as widely known as the others on this list. According to Investor Place, Central Securities “basically functions as a holding company.” Insurer Plymouth Rock, oil and gas company Hess, and credit card juggernaut American Express are among its interests.

Some of Central Securities’ current investments have been held by the company for 40 years. On October 23, Central Securities announced a dividend yield of 10.6%, which is paid every six months. The payoff at the end of the year is usually the largest.

Target (TGT)

Like many businesses, Target is susceptible to economic fluctuations. This year, as consumer spending has slowed due to consumers’ weariness with inflation, its earnings and stock price have suffered. With a share price that has increased by roughly 170% over the previous five years, Target continues to be a top performer in the long run.

According to The Motley Fool, it also has considerably higher operating margins than competitors like Amazon, Walmart, and Costco. As of October 24, Target had a dividend yield of 2.7% and had increased its payout for 50 consecutive years.

Conclusion

Due to their income distributions, dividend stocks appeal to investors, particularly seniors. However, before purchasing a stock, investors should do their homework to ensure that the dividend payout is sustainable. This is especially true in an unstable financial environment.

All five stocks discussed in this article hold industry leadership positions and have substantial competitive advantages. Additionally, they have solid profitability that can sustain their high dividends, ensuring dividend security even during a recession. These are the best stocks to purchase with your COLA increase.

Contact Information:
Email: [email protected]
Phone: 8139269909

A Breakdown Of The Basics Of Life Insurance

May 19, 2023 /by kevin wirth

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

Reasons People Buy Life Insurance

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

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

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

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

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

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

Individual Life Insurance Policy Types

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

Individual vs. Group-Sponsored Life Insurance Policies

Individual life insurance policy

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

Group-sponsored life insurance policy

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

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

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

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

Term life insurance

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

Permanent life insurance with a cash value

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

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

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

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

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

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

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

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

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

The TRICARE Fact Sheet Can Help You Choose the Best Dental Plan

May 18, 2023 /by mickey elfenbein

Do you want to make the most of your TRICARE dental coverage? Remember that dental coverage differs from TRICARE’S medical care, so it’s essential to understand the difference between plans. To learn more about each dental plan and if you qualify, check out the TRICARE Dental Options Fact Sheet.

This fact sheet is a tool that will help you see which dental coverage plans are available. So, use it to make the best choice for your dental health.

Here’s a breakdown of what the fact sheet highlights.

1. Active Duty Dental Program (ADDP)

ADDP offers civilian dental treatment to active duty service members. United Concordia Companies, Inc. (United Concordia) manages the program both within the continental U.S. (CONUS) and outside (OCONUS). If you’re outside the U.S., you must be remotely situated and registered in TRICARE Prime Remote Overseas. ADSMs in the CONUS are eligible for care under the ADDP if they are either referred by a military dental facility or remotely located. That means you live and work at least 50 miles away from a military dental clinic.

Check out the ADDP part of the fact sheet for more information on eligibility, obtaining care, and other topics.

2. TRICARE Dental Insurance Program

United Concordia administers the TRICARE Dental Program (TDP), a voluntary premium-based coverage. TDP is available both domestically and internationally. TDP is not available to ADSMs. Who qualifies? You can join TDP if you are a family member of:

i. an active-duty military member

ii. a National Guard, or

iii. a Reserve member.

TDP, as described in the TRICARE Dental Options Fact Sheet, provides complete coverage for most dental services. However, to obtain coverage, you must enroll in TDP. Check out the fact sheet for additional information on enrollment choices and prices.

3. Federal Employees Dental and Vision Insurance Program (FEDVIP)

FEDVIP is another optional program. The U.S. Office of Personnel Management (OPM) is in charge of it. FEDVIP is available for the following:

i. Retirees and their eligible dependents
ii. Retirees from the National Guard and Reserve
iii. Certain surviving spouses
iv. Medal of Honor recipients and their qualifying family members

FEDVIP offers a wide range of plan alternatives from various dental carriers.

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.

Outside-the-Box Ways to Fund Retirement

May 14, 2023 /by rick viader

Here are some unconventional ways to make money in your senior years.

Dividends

You might have invested for years without worrying about cash flow. Regular income paid expenses and created retirement savings.

As a principal source of income, relying on growing stock price rises is a lousy strategy. You may need to sell shares before a slump when it would most damage your investment. Many growth portfolios have plummeted 20% in recent months. The dilemma may be easily resolved by reducing growth and increasing payouts. A solid dividend stock’s payout is dependable even if its price is completely flipped.

As a point of reference, the dividend yield of the typical stock in the S&P 500 that is included in the index is around 2%.

Back to Work

This isn’t what most retirees wanted. Many of us will continue our occupations in our twilight years if we haven’t already. According to the Rand Corporation, 40% of American employees 65 and older have retired and returned to work. That’s around 10 million individuals, or a fifth of the population.

If you’re receiving Social Security and working, know this: Social Security will reduce your monthly income if you work and earn enough. If your monthly income exceeds $19,560 in 2022, your Social Security benefit will be decreased by $1. Working can offset the loss of Social Security income, making retirement more financially manageable.

Reasonable: Real Estate as an Investment

Being a landlord requires owning property the landlord doesn’t need. If you don’t have a second house to rent, skip this money-making retirement technique.

Now is a good moment to buy a second home or half of a duplex. Due to a lack of rental homes, rents have soared. RSM says the U.S. needs 3.5 million extra dwellings to maintain market stability. By 2030, the country will need to build 1.7 million new dwellings yearly. Anyone with rental housing will benefit till the request is fulfilled.

Flipping Sounds Crazy, but it Works

â€œFlippingâ€ means acquiring an item with the intent of selling it immediately for a profit by charging more than the original purchase price. You can flip virtually any object.

Although it may seem absurd at first, many individuals are generating money by flipping and having a great time doing it. Monthly earnings can be anywhere from a few hundred to several thousand dollars.

The practice depends on the fact that, for many people, convenience is more important than searching around for the lowest price. This is true in many industries, including furniture, toys, consumer electronics, and antiques.

Flipping requires several elements. First, understand the item, and its value. If you don’t know much about power drills, stick to something you know.

Second, the items must be acquired and sold. Yard sales and thrift shops are fantastic places to find inventory, but online marketplaces often fetch the most money. In addition, a seller’s readiness to sell and ship can make or break a deal.

Therefore, it is advisable to begin this hustle on a modest scale to become familiar with its intricacies before expanding into larger endeavors.

Putting your Automobile Up for Rent? It’s a Thing.

Finally, some people would hire your automobile rather than use a traditional car rental service, if you are prepared to allow someone else to drive it. If you join up with one of the many apps that link would-be drivers with vehicle owners who don’t constantly require access to their cars, you may make as much as $9,000 per year, according to HyreCar.

The notion carries with it some obvious dangers and concerns. To begin, even though drivers are required by law to have insurance, your insurance carrier may not be thrilled with the prospect of paying claims for a vehicle that is often used by a wide range of persons for business purposes. Consult an insurance professional before proceeding. Furthermore, it reduces the resale value of your car by causing wear and tear that would not occur under normal circumstances. You should give this some serious thought before you jump in.

However, if you’re willing to accept the terms provided by a trustworthy peer-to-peer automobile rental network, you may make money using this unconventional method of doing business.

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.

An Annuity from TSP Money

May 8, 2023 /by joe carreno

One of the several Thrift Savings Plan (TSP) withdrawal options is an annuity, and it is the least used. Payments may be paid in lump sums, monthly installments, or a combination. Only a tiny fraction of TSP withdrawals are made in the form of annuities. However, before you rule it out, you should familiarize yourself with its advantages and disadvantages. The TSP’s annuity benefit is more customizable than the standard FERS or CSRS benefits.

Three annuity options are available via the TSP:

– An annuity paid to you for the rest of your life is known as a â€œsingle-lifeâ€ annuity.

– â€œJoint lifeâ€ refers to an annuity you and your spouse get while you are still alive. An annuity will be provided to the survivor for the rest of their life if either of you dies.

– Joint life (other than your spouse): An annuity given to you if two of you (but not your spouse) are still alive. It’s essential that this individual profoundly cares about you. An annuity will be provided to the surviving spouse for the rest of their life if either of you dies. You have an insurable interest in a former spouse, blood, or adoptive relatives closer than first cousins, and a common-law spouse in countries that allow them.

There are two options for joint life annuities: a 100% or 50% survivor payout. This implies that if you or your joint annuitant dies, you or your joint annuitant will get the same (100 percent) or half (50 percent) monthly payments.

The basic annuity kinds may be paired with a variety of additional features. Payments are rising, and a 10-year guaranteed payout is included. The monthly payment amount increases by 2% each year because of growing costs. You (and your joint annuitant) may die before receiving annuity payments totaling as much as the account balance used to buy the annuity. Your chosen beneficiary will get a cash return. An annuity with a 10-year payout means that your beneficiary receives the remaining payments if you die within ten years of the annuity’s commencement date.

Every primary annuity type isn’t compatible with every feature. That money is then given over to a private corporation rather than being used by the TSP to deliver benefits after an annuity has been bought.

The www.tsp.gov calculator tools enable you to calculate how much a certain sum would convert into revenue under different scenarios, as shown in the following table.

Spouses’ rights will apply if your account balance exceeds $3,500. Your spouse can forego their entitlement to a joint and survivor annuity, which provides 50% of your spouse’s survivor benefit with level payments, and no cash return option if you are a married FERS member. CSRS spouses must be informed of their spouse’s withdrawal decision by the TSP.

Contact Information:
Email: [email protected]
Phone: 8139269909

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. 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. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. 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.

Are 5000 new TSP Options Too Many?

April 27, 2023 /by marvin dutton

What if your favorite eating establishment’s menu grew from 15 to over 5,000 new options? Could you deal with it? Do you think it’s a good idea, or do you think it’s a bad idea? Maybe you’ll choke on your options.

Prepare to be surprised.

Starting later in the year, the federal Thrift Savings Plan (TSP) will dramatically boost the number of investment options available to active and retired government and military personnel. TSP participants might have up to 5,000 new investment alternatives by the end of the year.

So, what comes next?

The TSP is the governmentâ€™s version of a 401(k) plan. It is currently valued at $770 billion. It is one of the world’s largest investment vehicles that private companies and organizations have sought a piece of since Congress established it.

The TSP is the crown jewel of investment alternatives, with a 5% match for most investors and strict control. Members of Congress, ambassadors, and the Supreme Court are all covered by the TSP, encompassing everyone from SEC lawyers to park rangers and even astronauts.

TSP has only five funds at the moment. They include three stock index funds, a bond and treasury securities fund, and ten Life Cycle funds that automatically adjust to your needs.

Environmental, social, and governance (ESG) funds will be included in the new investment possibilities. This will gratify investors who have been clamoring for greater ESG for decades. Investors will transfer up to 25% of their TSP balance to one (or more) of the newly approved funds. They’ll also have to pay more administrative costs than those who adhere to the five essential funds.

At the end of the day, the main question is whether you should invest some (or all) of your retirement savings in new options with higher growth potential.

Alternatively, you may get into the tank! According to some estimates, the TSP will provide a third to half of the income that more federal or military investors will get in retirement, assuming they invest wisely and effectively.

The new alternatives will be a boon to federal employees. They have been trying to time the market by forecasting high and low moments and then investing accordingly, especially if they know to buy low and sell at a higher price, which is more difficult in practice than it appears in principle.

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

Seven Aspects In Which Your Financial Literacy Changes Once You Retire

April 26, 2023 /by todd carmack

Financial literacy covers a broad range of topics, including budgeting, saving, investing, and retirement planning. However, your financial literacy broadens to cover circumstances that weren’t as important during your working life once you retire. For example, income declines typically in retirement, while costs may remain constant or even grow, depending on your lifestyle and overall health.

Here are seven crucial subjects to learn if you wish to avoid financial pitfalls in retirement.

Social Security

You’ve been paying into Social Security since your first payday. Still, as you near retirement, you should plan your Social Security withdrawal strategy. Your Social Security benefits partly depend on how much you earned throughout your working lifetime. You should also consult a tax or financial professional to determine if you should start benefits early, at full retirement age (FRA), or even later.

Medicare

Medicare is a complicated system of health insurance for seniors. To use it efficiently, you must understand how it works. Medicare has two fundamental portions, A and B, covering hospital and medical costs. Part B has a monthly premium. If you need prescription medication coverage, you can add Part D. Medicare Advantage (Medicare Part C) is a private company’s version of Original Medicare. You’ll probably need to consult an expert to understand Medicare’s financial implications with so many options. Notably, neither Original Medicare nor Medicare Advantage is likely to cover care outside the US.

Required Minimum Distributions (RMDs)

As you’ve paid Social Security taxes during your working life, you’ve also contributed to your retirement accounts. But you can’t keep your money in them forever. Traditional IRAs and 401(k) plans demand annual distributions beyond a specific age to avoid a 50% penalty tax. Congress has extended the deadline for taking RMDs to April 1 of the year after your 72nd birthday. Since Roth IRAs are funded after-tax, they don’t require you to take minimum distributions.

Taxes

Taxes are easy if you have a paid job. Generally, your company will deduct taxes from your paycheck, while all you need to do is supply your W-2 information when filing your taxes. During retirement, you may get many forms like 1099-Rs and K-1s. Some of these may have different tax implications, so you should familiarize yourself with them before retiring.

Expenses

Even if you’re used to budgeting, your retirement budget is likely to vary dramatically. For instance, many retired people have already paid off their mortgages. However, some expenses, like medical bills, are likely to climb, even with good insurance. Other costs will vary based on your lifestyle. Some retirees increase their travel and dining expenses, while others reduce them instead. Budgets differ significantly from one person to another, but they often shift after retirement. Be prepared and aware that your retirement costs might increase or decrease drastically.

End-of-Life Planning

Nobody wants to talk about the end of their lives, yet it’s a necessary step in financial preparation. First, you should create a will and/or trust to identify who will inherit your assets after you die. You may also consider consulting an estate attorney about optimizing the value of your asset transfers to heirs. Nonfinancial considerations include preparing instructions for end-of-life planning in advance if you become disabled. For example, you might want to sign an advance directive, such as a durable power of attorney for healthcare, which authorizes someone else to make medical choices on your behalf.

Asset Allocation

You’ve probably heard of asset allocation in your pre-retirement years, whether in a 401(k) plan or your personal investing account. However, as you approach retirement, you will almost certainly need to revise your asset allocation, which should have served you well during your working years. You will have fewer years to recover from a slump in your assets in retirement and less money to contribute to your account while markets are down.

As a result, many financial consultants may advise you to adjust your portfolio toward more conservative assets as you become older. As each person’s financial position is unique, you should assess your income, spending, and financial requirements, maybe with the help of a financial counselor, before making any significant changes to your portfolio.

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.

Tag: TSP

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