Posted on Saturday, 16th May 2015 by

Print This Post Print This Post
Share

I received a call from the wife of a friend who passed away recently. She was concerned about her options after being notified by the TSP that her husband’s account was converted to the G Fund upon his death. She was approached by a financial planner that suggested she transfer her husband’s TSP account to them and they would manage it for her. Her husband was an astute investor and knew the ins and outs of the stock market and personally managed all of their investments.

Before considering moving your TSP to a financial planner read Have You Considered Hiring A Financial Planner that discusses the pros and cons that are involved with such a move. A financial planning firm will often charge 1.65% a year of your total account value or more to actively manage your funds. For example, if you have $300,000 in your TSP account, and transferred it to a financial planning firm, they would charge you $4,950 a year, with a 1.65% annual fee, for their services plus individual fund management fees and in some cases transaction fees. The TSP would have charged you $87 in 2014, .029% for that same amount, and they have no transaction fees! They only charged 29 cents per thousand dollars in your account in 2014. The financial planning firm would have to achieve much higher gains to offset their fees. Typically, higher gains often come from higher risk investments.

Often when a spouse who managed the finances for the family dies the surviving spouse is unsure how to manage the inherited account without risking the principle. This is why a financial plan and estate plan are so important. Not just for annuitants but for all federal employees as well. How would your family cope and survive if something tragic happens to you! I have always been a planner and enjoy the process because it creates order out of potential chaos.

 

Financial Planning

Financial Planning

A survivor is vulnerable at the time of loss and for many months thereafter. My suggestion to a surviving spouse is to not make any major financial decisions for at least 6 months or more to give you time to grieve and to deal with all of the issues that must be taken care of at the time.

The TSP is one of the lowest cost plans available anywhere and it can be easy to manage especially for retirees where they, for the most part, want to conserve and not risk their life savings. The G-Fund has NO MARKET RISK and Uncle Sam guarantees that the G-Fund will never decrease in value unlike all other funds. A recent article that I wrote titled The TSP Advantage (Should I Stay or Go) outlines the advantages of the THRIFT Plan including their extremely low management fees that average 29 cents per thousand dollars invested, by far the lowest fees available anywhere.

The disadvantage of bond funds in general right now is their low rate of return and the fact that once the Federal Reserve starts to increase interest rates bond funds typically decrease in value. That won’t happen with the G-Fund since it is guaranteed not to decrease in value as noted above. When you compare the G-Fund to any Certificate of Deposit (CD) or most other bond funds it’s rate of return is higher than most would expect. In 2014 the G-Fund averaged 2.4%, the same year it was difficult finding a CD that paid anywhere near 1% unless you tied up your money for 3 to 5 years. So far in 2015, January through April, the G-Fund has averaged .64% well on its way to earning 2% again this year. Your account will never decrease in value if you retain 100% of your account in the G-Fund.

The problem with keeping everything in the G-Fund is that, for the most part, it won’t keep up with inflation long term. There is another option for annuitants that many select, the L-Income fund. This fund is designed to achieve a low level of growth with a high emphasis on preservation of assets. Unlike the other four L Funds, the L Income Fund’s asset allocation does not change quarterly. However, like the other funds, it is rebalanced daily to maintain the following target investment mix:

  • 74% G Fund (Government Bonds)
  • 6% F Fund (Fixed Income)
  • 12% C Fund (S&P Index)
  • 3% S Fund (Small Cap)
  • 5% I Fund (International)

The L Income fund averaged 3.77% in 2014 compared to 2.4% for the G Fund and for the past 12 months it has earned 3.98%. There is market risk to 26% of your total investment and the trade off for that risk is a higher yield overall as long as the market doesn’t tank again like it did in 2008 and 2009. The key to determining if you can tolerate the risk is whether or not you need the funds now to live on and when you anticipate taking withdrawals to maintain your lifestyle in retirement.

There are TSP options to consider with your THRIFT plan and the more you know about it the better prepared you will be when the funds are needed. Explore your options carefully and take time to understand exactly what impact your decisions will have on your account balance, the bottom line.

Request a FREE Retirement Benefits Summary & Analysis. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.

Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

 

Be Sociable, Share!

    Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

    Comments (0)| Print This Post Print This Post

    Posted on Wednesday, 29th April 2015 by

    Print This Post Print This Post
    Share

    Up until recently the only way you could obtain a federal retirement ID Card, officially referred to as a “Retirement Services Reference Card,” was to call OPM and request a copy. They would send it in the mail and you would receive it in 5 to 7 business days. Recently OPM Services Online added a Retirement Services Reference Card printout function to their service. My card was damaged and instead of calling OPM I simply signed on to OPM Services Online and printed out a new copy. It only took 5 minutes. Here is a screen shot of my card with my name and ID number removed.

    When I first printed the card it was too small. My print scale was set at 70%. If you reduce the size of your prints be sure to change it back to 100% before printing your card.

     

    Retiree ID Card

    Retiree ID Card

     

    Herb Casey, one of our quest writers, wrote a comprehensive article titled “Connect to OPM Retirement Services Online” that walks you through the site and explains how to get connected. I use this service to printout my 1099-R income tax form at the end of the year. It is sent in the mail but I like to get a jump on my taxes and it is available online and easy to print out. It is often difficult getting through to OPM’s retirement hot line so I use this service whenever I can to change allotments, print out annuity statements and verification of your FEGLI insurance coverage, and other features.

    Hearing is Believing

    In my article titled “Did You Hear That? A fitting End to a Frustrating Problem” I discuss how it is difficult for many, especially retirees – older folks, to hear the TV clearly and the solution I discovered. Basically I purchased wireless capable hearing aids through Costco and a TV streamer that sends the TV sound direct to your hearing aids. The TV streamer works fine however the downside is that it drains the hearing aid batteries to the point that I was changing the batteries every other day! Also the fidelity of the streamer isn’t nearly as good as what a headset provides.

    While researching alternatives online I discovered a sound solution. The web site 4homespeakers.com, a division of JMJ Supply LLC, specializes in the sale and support of wireless speakers, headphones, and hearing impaired devices. They tailor systems to provide a vast array of unique options to suit all of your hearing needs and more. I purchased their RCSA RF Wireless TV Speaker and Headphone Combo about six months ago and my wife and I use it daily. This package offers a wireless 900 MHZ transmitter system that allows you to hear the audio up to 150 feet away from the source. You get a headset with cradle and a small tower speaker for $129.99, now on sale for $79.99. I like the option of having the wireless speaker and headset for my wife and I. If you have dexterity or poor eyesight issues you may want to upgrade to a system with a charging base that you just set the headsets into and they automatically charge. With the system we have, that’s currently on sale, you have to plug in a small charging cable to the headset from the headphone cradle and the connection may be difficult to make if you have sight or dexterity issues.

     

    Headphone & Speaker System

    Headphone & Speaker System

    The system we have, one of many they have available at very reasonable prices, is suited to our needs. My wife uses the headphones and I often use the speaker that is small enough to sit on an end table or on the floor by your chair. You plug the headset cradle into your TV’s audio out RCA jack and it drives both speaker and headset. If you don’t have a RCA audio out jack on your TV they have an analog to digital converter that connects your headset to the Toslink output and another options will connect your audio through a HDMI output. The converters are not included with the package. Check your TV to confirm what connection options you have before ordering. Their tech support can walk you through the setup if you are having problems.

    Our TV has an RCA jack and it works fine as long as you turn up your TV audio so that the audio out of the RCA jack is sufficient to power the remote headset and speaker. When you plug in your headset to the RCA jack your TV speakers are turned off.

    If you need two headsets or prefer separate small speakers at multiple locations they offer that as well. You will also find high fidelity options available that some prefer. I also purchased a RCA audio splitter that allows us to use two headsets if desired. The reason I ordered the headset and speaker combination is that I can turn off my speaker and read in the same room that my wife is watching TV without distractions. Another benefit of having a speaker is that when both of us have headsets on we can’t hear the phone or doorbell ring.

    Check out their site to see what options are best for you. They have numerous videos that demonstrate how each system operates and connects to your TV.

    Request a FREE Retirement Benefits Summary & Analysis. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.

    Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

    Visit our other informative sites

    The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

    Be Sociable, Share!

      Posted in BENEFITS / INSURANCE, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

      Comments (0)| Print This Post Print This Post

      Posted on Monday, 6th April 2015 by

      Print This Post Print This Post
      Share

      In one of my previous articles titled Have You Considered Hiring a Financial Advisor  I discussed professional investment assistance and the advantages and costs associated with hiring a financial advisor.  This article focuses on the Thrift Savings Plan (TSP),  its benefits,  and their very low management fees compared to other funds.  It also introduces you to various options that you have available within your TSP to grow and manage your retirement nest egg.

      Many retirees contemplate moving their TSP to other vendors that promise a more diverse basket of fund options, higher returns, and the ability to purchase individual securities.  Those who take the leap and leave need to be aware of the risks and costs involved beforehand.

      After retirement federal annuitants can transfer all or a part of their TSP account to a professional financial management firm or to a self managed retirement account with companies like Fidelity and Vanguard where many more investment options are available. They can open a retirement account for you and assist with transferring all or a part of your TSP to a brokerage account where you can purchase any mutual fund, stock, ETF, and bond if desired.  If you elect to do this be sure to have your TSP funds transferred direct to the new retirement account otherwise the transfer would be considered taxable by the IRS.

      Federal employees can also make an age-based in-service withdrawal anytime after they reach age 59½ as long as they are an active civilian federal employee or a member of the uniformed services. Some use the age based withdrawal option to transfer a part of their TSP to a private retirement account that they can personally manage or to a financial planner to compare their performance and services.  A word of caution here; a friend of mine used an age-based withdrawal to pay for his daughter’s wedding and was surprised at the amount that was withheld for federal taxes.  If you withdraw the funds for personal use the entire amount will be taxable in the year withdrawn.

      I have my company’s retirement account at Fidelity and the advantage for me is that I can pick and choose from a broad spectrum of investments.  My account is set up like any other brokerage account except it is tax deferred until I start withdrawing at age 70 ½. I actively manage my account and Fidelity only charges $7.95 a trade.

      If you are an experienced investor, understand sound investment principles, and are willing to study and follow the market wherever it takes you, this may be the way to go.  Others, with limited investment experience or lack the time needed to personally manage their account could move funds to a fee based financial advisor that manages their accounts for them.

      I’m not a professional investor however I did write a primer titled Dollars and Sense, Safe Investment Strategies for Small Investors back in the 1980s. The book was based on my personal investment strategies and I’ve always leaned towards a very conservative approach to all things financial.  I have a personal interest in the TSP because I’ve invested in the THRIFT Plan from its inception in the 1980s. Even as a CSRS employee I was able to contribute 5% and over time, without any matching funds, my TSP account grew appreciably.  I retired ten years ago and elected over the years to keep my TSP fund intact for a myriad of reasons.

      TSP Advantages

      To start with the TSP funds have possibly the lowest management fees available. They charged .029% for all fund families, 2.9 basis points according to the Federal Retirement Thrift Investment Board.  Expressed another way, this means that expenses charged to each TSP account in 2014 were approximately 29 cents per $1,000 of investment or only $29 for each $100,000 in your account. Indexed funds typically have the lowest management fees and in the private sector they average .15% or $1.50 per $1,000 invested according to a recent article in Money Magazine;  five times more than what the TSP charges.  It would be difficult, if not impossible, to find lower fees than what the TSP offers. Stock funds average expenses are .90%, considerably higher than indexed funds and if you buy funds with front end loads you could pay as high as 5% or more just for this one time charge.

      Expenses and fees matter and can make a significant dent in your long term savings. For example, the Securities and Exchange Commission in their report titled “How Fees and Expenses Affect Your Investment Portfolio” reports that a 1% annual fee reduces an initial $100,000 portfolio, that earns an average of 4% a year over 20 years, by nearly $30,000! In this example the account would be worth $210,000 with a .25% annual fee to just under $180,000 with a 1% annual fee.

      If you transferred your account to a financial planning firm you would more than likely add another 1% to 1.65% for asset management to fully managed accounts plus transactions fees in certain cases on top of the fund fees that would further reduce your gains.  Managed account fees often start at or above 1.65% of the first $500,000 invested or an additional $1,650 per $100,000 in your account each year plus fund fees.  Financial advisors actively manage your accounts and they strive to beat the market averages which if successful can significantly offset their management fees.  The key is finding a firm with a sound track record that can provide the services you need and the investment results you desire.

      TSP Funds

      TSP participants generally would like to have more fund choices.  I too would like to see a few specialty funds and value funds added.  However, I believe the TSP only requires a little tweaking down the road.  Federal employees and annuitants can research all of the funds in their account online at http://www.tsp.gov including the performance of each fund. There are also no transactions fees when you elect to rebalance your account or simply switch to a different fund allocation.

      The TSP funds are not the typical mutual fund even though the C, F, I, and S index funds are currently managed by Blackrock and similar to their mutual fund offerings.  The G Fund assets are managed internally by the Federal Retirement Thrift Investment Board.  The G Fund is invested in nonmarketable U.S. Treasury securities that are guaranteed by the U.S. Government and the G Fund will not lose money.

      The C Fund is designed to match the performance of the S&P 500 while the F Fund’s investment objective is to match the performance of the Barclays Capital U.S. Aggregate Bond Index, a broad index representing the U.S. bond market.  The I Fund’s investment objective is to match the performance of the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index. The Small Cap S Fund’s objective is to match the performance of the Dow Jones U.S. Completion Total Stock Market Index, a broad market index made up of stocks of U.S. companies not included in the S&P 500 Index. The C, F, I and S funds are trust funds that are regulated by the Comptroller of the Currency, not by the Securities and Exchange Commission, and therefore do not have ticker symbols.

      The F and C Fund assets are held in separate accounts and the S and I Fund assets are invested in Collective Funds. These trust funds are comprised of investments by tax-exempt institutions like the TSP, such as pension plans and endowments. Investing collectively in this way can be advantageous because it reduces trading costs. The securities held in these commingled funds are held in trust and they are not assets of BlackRock, nor can they be used to meet the financial obligations of BlackRock.

      The Life Cycle funds are a combination of the primary funds mentioned above and they are adjusted to a more conservative mix as you approach the life cycle target date. These funds are good for those who are uncomfortable with making investment choices and when they time out you end up in the Income Fund which is about 75% invested in the G Fund. You still maintain a mix of the other funds to hopefully beat inflation and still grow your funds for when they are needed.

      TSP Annuity Conversions

      According to the Thrift Savings Board, “When you are ready to withdraw all of the money from your TSP account, you can do it all at once, over a period of time, or you can purchase an annuity that will make payments to you for life. For maximum flexibility, you can choose any combination of these full withdrawal options.”

      The Life Annuity option can provide an additional monthly payment to you and your spouse for life if desired and there are many variations to consider. Visit the TSP Life Annuity online guide to learn more about all of the options available and to use their income calculator to help you determine if a Life Annuity is right for you. Before converting to a life annuity through the TSP you may wish to compare offers from other providers first and to do that you really have to read the fine print on the offers. There can be substantial differences between providers.

      Before abandoning the TSP ship know why and where you are heading and if the destination you are targeting will be able to perform to your expectations.  Your TSP account can be a significant portion of your total retirement, especially for FERS employees. We all need to be good stewards of our TSP funds to achieve a secure and sound financial retirement.  Personally, I take my time with major financial decisions and try things out on a smaller scale first. For example, if I was considering moving my account to a personally managed retirement account or to a financial planning firm I would only transfer a portion, maybe 25 to 50% tops, and give it a year or more to compare the results.

      Request a FREE Retirement Benefits Summary & Analysis. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.

       

      Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

      Visit our other informative sites

      The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

      Be Sociable, Share!

        Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

        Comments (0)| Print This Post Print This Post

        Posted on Sunday, 29th March 2015 by

        Print This Post Print This Post
        Share

        A step back in time awaits you in this seaside city on the Atlantic coast of Florida. Whenever I visit I always plan lunch or dinner at The Columbia Restaurant. It sits in the center of the old city and is a personal favorite. They offer sangrias made table side, the white is the best I have had anywhere made with a sparkling wine. The menu is specific for lunch or dinner so if you plan to visit check the menu to determine which menu best suits your desire. The old city is full of galleries, eateries and historic sites including museums and provides a view of early life in North America. There is likely to be something to peek your interest during your visit.

        Saint Augustine is the oldest permanent settlement in the United States. Founded in 1565, it continues to provide a view of life in the early settlements created in the New World. The Spanish style fort, Castillo De San Marcos, protected the city and is a National Landmark maintained by the National Park Service. Tours are available daily before dark. Fort Matanzas also guarded the city from those approaching on the river and has tours by boat. St. Augustine’s lighthouse is also open and includes a museum. It is located south of the city on the coast. The old city includes the oldest standing one room school house which is open for tours. Mission of Nombre de Dios is the smallest church in America also located in the old city.

        St. Augustine offers a variety of activities. The waterfront area includes walkways for a nice stroll along the coast past the marina and eateries of this seaside city and the opportunity to sit and enjoy the view on one of the many benches along the way.

        Tour stands are situated throughout the city offering a diverse selection of tours. There are several guided walking tours of specific areas that offer an opportunity to learn about the history of the city. Ghost story tours abound and provide you with enough details that you can visit local establishments following your tour to see for yourself the spirits that visit, if you dare. Ponce De Leon believed he had found the fountain of youth and the nearby park includes a chance to see the fountain and perhaps restore a youthful perspective if nothing else during a visit there. Segway tours are also offered whether you want to soak in some local history or just try it for a fun ride. You can always enjoy spirits while you are looking for Spirits on the Haunted Pub tour. Pirates that preyed on these coastal waters are also featured on tours and at a local museum.

        Special events are planned this year to celebrate the 450th anniversary of this quaint city. The main events to celebrate the 450th anniversary occur Labor Day weekend. Festivities include a Spanish Wine Festival, fireworks on the Matanzas River September 5th and Founders Day from September 4-7th includes several activities in the City. In the early evening you can observe the changing of the guard. Complete in 18th Century Spanish Soldier costume the St Augustine Garrison march from the old city to city hall. Visit the websites listed below for more detailed information.

        Of course there are water activities throughout the year in St. Augustine including dolphin watching trips, Eco tours in kayaks, surf lesson camp, sunset cruises (complete with Christmas lights during the holiday season), sailing trips, speedboat tours, parasailing, ghost boat tour and of course sea fishing.

        St. Augustine is located between Jacksonville and Daytona Beach Florida. It is also an easy day trip from Orlando if you are visiting theme parks. All in all it is a beautiful city full of history and charm. It is among my favorite seaside cities to visit.

        Request a FREE Retirement Benefits Summary Analysis from a local adviser. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. A sample analysis is available for your review. This service is not affiliated with www.federalretirement.net

        Learn more about your benefitsemployment, travel, and financial planning issues on our site and visit our Blog frequently at http://fedretire.net to read all forum articles.

        Visit our other informative sites

        Helpful Retirement Planning Tools
        Distribute these FREE tools to others that are planning their retirement

        The information provided may not cover all aspect of unique or special circumstances. Travel policies and packages are subject to change without notice. To ensure the accuracy of this information, contact travel providers and hotels at the time of your bookings to confirm pricing, itinerary, and all costs. The comments and observations are limited to the author’s personal experience and your results may vary significantly. This article and replies to comments are not intended to substitute for professional travel services. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

        Be Sociable, Share!

          Posted in LIFESTYLE / TRAVEL, Travel

          Comments (0)| Print This Post Print This Post

          Posted on Saturday, 7th March 2015 by

          Print This Post Print This Post
          Share

          The impact that our Cost Of Living Adjustment (COLA) has on our annuity is significant and without it retirees would find themselves doing with less as they age. Even though our COLAs don’t truly keep up with inflation as claimed we at least experience increases most years. If COLAs would have been paid in 2010 and 2011, like most years, our annuities would have been several percentage points higher today.

          Since I retired on December 31, 2004 my annuity has increased over 20% for an average increase of just over 2% a year during this period. Social Security reports that in 2005 the Average Wage was $35,448 and in 2014 wages increased to $44,888 and this mirrors our COLA increases.

          When I was discussing retirement with one of my uncles years ago he warned me about how his corporate annuity hadn’t increased in 20 plus years. My uncle worked in the banking industry and when he retired the annuity he received from his employer he thought generous. Over 20 years later, without any cost of living increases, they were struggling to keep up with the high cost of everything. Fortunately they received Social Security which did increase each year. Without COLAs we too would see our annuity’s buying power shrink dramatically in a few short years.

          My mother was born in 1914 and she told me that during the 1930s they could buy a complete meal at a restaurant including drinks for 35 cents! You can’t buy a cup of coffee for that today. Even at those prices my mother couldn’t afford to eat out. She was forced to quit school after sixth grade, along with her 5 sisters, and shortly thereafter went to work. Her first job paid $2.00 a week working 6 days a week as a maid for a couple in Pittsburgh. She and all of her sisters had to send most of their pay home to their father!

          We visited an antique store back in the 1970s and I picked up a copy of LIFE magazine for my birth month, May 1949. LIFE magazine was one of the premier publications back then and it was huge, 14 by 10 1/2 inches and a half inch thick. The ads are fascinating to read; GE radios starting at $19.95, console black and white TVs from $395 to $985, Lane Cedar Hope Chests for $49.95, razor with 10 blades in a case for 98 cents, watches for $2.50 to $4.95, TUMS 10 cents a pack, cameras $9.98, and they advertised dog food at as low as 8 cents a day.

          Some of the items on this 1949 list seem to contradict the premise that everything goes up over time. Today you can buy a 48 inch flat screen TV at Wal-Mart for $388 and we purchased a 60 inch SONY smart TV recently for under a $1,000. All well within the range of what you could buy black and white consoles for in 1949! TVs were just coming into the market and they were a luxury back then, very few homes, less than 1 %, had them. Here is a list of what things cost in 1949; compare them to today:

          • Average annual salary: $3,600
          • Average cost of a car: $1,650
          • Gas: 26 Cents a gallon
          • Average home: $14,500
          • Bread: 14 cents
          • Postage stamp: 3 cents
          • The DOW reached 200!

          Hopefully our COLAs will continue to provide the cushion everyone on a fixed income needs, more buying power as costs increase. Fortunately we also have the THRIFT plan to help grow our retirement funds. The L Income fund offers some growth while protecting most of your nest egg in the G Fund which is guaranteed never to decrease in value.

          The 2016 COLA may be lower than the 1.7% we received this year if trends continue. The October and November 2014 CPI-W figures were lower than the previous three month period. If the CPI-W continues to decrease our COLA will follow suit. Many factors contribute to the CPI-W. For example, wall street is contemplating that the Federal Reserve will raise interest rates soon due to a heated up economy that can lead to inflation. That would be good news for the 2016 COLA.

          It’s too early to determine the actual impact and the trend could change for any number of reasons as we progress through the year. Because 2016 is a presidential election year my gut feeling is that we will receive a COLA, it just may not be as much as we would like or deserve.

          Update

          We are in the process of totally redesigning and upgrading our Federal Employees Retirement Planning web site. If you visit later this month don’t be surprised when you find a new and updated format. The new site is designed to display perfectly in all media from desk top computer, iPad, and tables to smart phones. Over 50% of all site traffic now comes from mobile devices.

          The new site will be much easier to read and navigate and we are also reviewing and updating content as we go along. Visit www.federalretirement.net later this month to check out the new format and functionality. Let us know what you think and your input is always welcomed. We use visitor submitted comments to keep our site up-to-date and focused on the true needs of our site users.

          We are still looking for a retired federal annuitant with an extensive background in HR and federal benefits to host our Benefits and HR Forum. If you are retired, enjoy writing about things that matter to federal employees and annuitants, would like to stay active and involved after leaving federal service, send an email to ddamp@aol.com and include your phone number. The person selected would also review and provide updates for our website.

          Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

          Visit our other informative sites

          The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

          Be Sociable, Share!

            Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, LIFESTYLE / TRAVEL, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

            Comments (0)| Print This Post Print This Post

            Posted on Friday, 13th February 2015 by

            Print This Post Print This Post
            Share

            Many are uncomfortable with investing and managing money in general. With the Federal Reserve intentionally keeping interests rates artificially near ZERO do we ladder CDs to make less than 1%, buy Treasuries with historically low yields, or invest in the market with its inherent risks? If we do invest in the market what stock and bond mix will not only preserve but grow out nest egg? If we are doing this on our own do we buy individual stocks and bonds or invest in indexed mutual or exchange traded funds that often have very low management fees.

            Up to 5 years ago many retirees were able to ladder CDs making 5% or more with 48 month or longer maturities. Also, for those in the TSP many kept large amounts in the safe G-Fund with good yields. Unfortunately those days are long gone and I’m not sure when, if ever, they will return.

            Often, one or the other spouse takes control of finances and manages investments for the family. If the person in control knows what he/she is doing, and has the time and energy to invest wisely, that often works fine as long as that person doesn’t take undue risks with your family’s life savings. I basically assumed this responsibility with my family and have done this for years. Even though I manage the investments I discuss options and strategies with my spouse to solicit her input and she is knowledgeable about all of our accounts.

            For situations where neither partner is knowledgeable about investments federal employees and annuitants often rely on the TSP Life Cycle Funds to steer them towards retirement. Annuitants often consider investing in the L Income fund, a conservative choice with the majority in the G-Fund yet enough in the other funds to provide some growth even in retirement. Of course, there are other investments that must be managed such as IRAs, private sector 401Ks, brokerage accounts, savings bonds, savings and money market accounts, and so on. Today, the very low rates of return are forcing many to choose higher yielding riskier investments than the typical FDIC covered or Treasury issues.

            The problem with having one person managing investments is that when that person becomes infirm or dies the surviving spouse is generally at a disadvantage. They will have to turn to another family member or financial adviser to help manage and preserve what has taken a life time to accumulate. Hence the need to establish a relationship with a knowledgeable financial adviser while both are alive and healthy.

            Walter Updegree writes for Money Magazine and in an article on this subject he advised, “when you need help with your finances, you want to find a pro who can balance your need for trustworthy advice with his or her need to make a living providing it.” This is so true, I’ve been researching adviser options for several years and if you aren’t careful you can lose a lot through high management fees, front end loads, and transaction fees. You also have to find a pro that takes the time to truly understand your goals and strives to achieve them without churning your account or focusing on certain investments excluding other more advantageous options.

            Many suggest using a registered investment advisor because they assume a fiduciary roll and are legally required to put your interests first in the relationship. Yet, I still am personally concerned because you are trusting a third party to manage your assets or at least a good portion of them. It is much harder to recover from a loss after retirement when most are on fixed incomes. One of the first questions an adviser typically asks is who you are investing for; yourself or your heirs. What this intimates is that more risk can be tolerated if you are investing longer term for heirs. Personally it seems a mute point, I don’t want to lose a significant portion of my investments no matter who I’m investing for even though, long-term, things may and I reemphasize MAY improve. Once you’ve accumulated a life time of savings I personally don’t want it to diminish significantly.

            Unlike many in the private sector federal employees have a substantial annuity to rely on in retirement. Add to that your TSP Savings, Social Security for all FERS employees and for many CSRS employees. When I first approached an adviser I informed him that I didn’t need someone to establish a plan for retirement, I was already there and able to live within our means. What I wanted was to set up an initial relationship with them so that when I’m not able to manage our accounts due to advanced age or death my wife and heirs can rely on them for assistance. I like to take things in baby steps, start small, learn about the new relationship, and then progress from there. If it works out I would transfer more responsibilities to them as I aged.

            The adviser we first met with discussed our situation and goals, and introduced us to an attorney to revise our wills and trusts. The first step. They also collected considerable data from us. Personally I don’t like giving out confidential information. Many federal employees, especially those who know they will be financially secure in retirement due to their annuities and other income sources, may be able to limit the information to account summaries and balances. If you need a plan to achieve financial security then you would have to provide the additional information.

            Most advisers request any and all information about every account, loan, asset, insurance policy, annuities, income from all sources, and much more including copies of income tax returns. In turn they offer to prepare a plan describing how, from their perspective, you can achieve financial independence in retirement. These plans are often free of charge and introduce you to the services they can provide to help you achieve your goals.

            Basically, they will offer several levels of support from traditional brokerage accounts, portfolio reviews with quarterly updates, asset management, advisory and managed accounts. All come with a cost of course. For example, the fees from one of the firms I contacted included trading fees for the traditional brokerage account, .25% of the account balance annually for quarterly portfolio reviews and recommendations, 1% of the account balance annually for up to $500,000 under their asset management program, 1.25% for advisory and 1.65% for managed accounts. The management fees decrease for larger invested amounts, the more they manage the lower percentage you pay them.

            I always consider the bottom line; how much is this going to cost me over my current costs. Remember what Mr. Updegree said earlier about finding a pro who can balance your need for advice with his or her need to make a living providing it. Yes, it is going to cost you more in most cases than what you are paying now to trade and manage your accounts personally. That’s not necessarily a bad thing but it is something you have to contend with. It is always difficult making a decision to pay more. If your results are what your adviser projected and you expect, and you achieve the level of desired services, then the cost will be worth it and your time will be freed up to do other things.

            I discovered that not all brokerage accounts are alike. My brokerage firm charges $14.95 a trade and often the fee is waived due to trading activity. They also offer all trading options such as trailing stop loss orders and options trading. One of the financial planning firm’s brokerage commissions were 1% of the trade value. If you purchased 100 shares of say Apple at $124 a share the commission would be $124 for that trade! That is excessive by any standard considering that Fidelity only charges $7.95 a trade no matter what the dollar value of the transaction is. You may want to keep your trading account with your local brokerage firm if you are an active trader. If you don’t trade much it wouldn’t be a big issue and if you are only transferring stock from one brokerage account to the financial planner’s brokerage house there wouldn’t be any transfer fees in most cases.

            If you are considering hiring an adviser visit the SEC site to check out a brokerage firm, individual broker, investment adviser firm, or individual investment adviser. The SEC and FINRA provide abundant information on advisers and firms that you can use to start your search.

            When I was searching for an adviser I wanted one that could purchase any and all investments for my account not just one family of funds or investment options. Firms that offer limited selections may be more interested in selling you a product rather than providing sound investment advice.

            I also suggest asking the adviser, before sitting down with them, for an updated copy of their Part 2A Form ADV. The Form ADV is the uniform form used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. The second part requires investment advisers to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the adviser’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the adviser. The brochure is the primary disclosure document that investment advisers provide to their clients.

            If you are considering talking to a financial adviser contact several firms to compare options, costs and services before making a decision. The ADV forms will help you readily compare firms and advisers. Once you sign up stay in touch and monitor results to ensure they meet or exceed your expectations. If you start small, as they prove their worth you will feel comfortable expanding their role in managing your finances. It takes considerable due diligence to settle on an adviser. It’s a very personal decision and one that will hopefully make your life easier as they manage your investments in an ever changing world.

            Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

            Visit our other informative sites

            The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

            Be Sociable, Share!

              Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

              Comments (0)| Print This Post Print This Post

              Posted on Tuesday, 27th January 2015 by

              Print This Post Print This Post
              Share

              1099-R Forms

              I like to complete my taxes as early as possible and often end up waiting for key documents such as our 1099-R form and various bank and investment forms. The online availability of most of these documents does save time. I visited OPM’s Services Online on January 22nd and was able to download my 1099-R annual annuity statement. You must call OPM at 1-888-767-6738 to register for access to this site.

              For those of you not yet retired the 1099-R form is equivalent to the W-2 form we received while still employed with a few key additions. It lists your gross annuity payment for the previous year, the taxable amount – not all of your annuity is taxable, federal income tax withheld, any state taxes if applicable plus it lists your insurance premiums that you paid.

              I receive many email messages each year at tax time asking how to get a replacement 1099-R form. It’s quite easy, especially if you have access to OPM’s services online. All you do is sign in and you can print out copies at any time. You can also call OPM to have one sent out. Everyone should be receiving their 1099-R in the mail shortly but if you don’t visit OPM’s web site or call to get a replacement.

              Tax Time – FREE Tax Prep Software

              I use Turbo Tax to complete my taxes for home and business and it makes the process easy and inexpensive. After using this program one time, each year thereafter, you simply import the general information from the previous year’s program and follow the questions they ask for each area of your return. They include a lot of support and you can electronically file your return. The software program is available at all of the office supply stores, online, Costco and Sam’s Clubs. I filed electronically for the first time last year and it is quick and easy and saves time.

              If you decide to try Turbo Tax be sure to get the correct program. The price ranges from FREE for first time filers and students to $79 for their Home and Business product. I always buy the Home and Business version, most would use the Premiere especially if you own a home, and have income from stocks and bonds. Here is a list of the four available versions:

              • Absolutely Zero (Free) – For first-time filers or students that want easy prep, print, and efile.
              • Deluxe – Use this program if you own a home, have charitable donations to deduct, and have high medical expenses
              • Premiere – If you sold stock, ESPP, bonds or mutual funds, want automatic cost basis calculations, and have rental property income and expenses
              • Home and Business – If you have profit or loss from a small or home business, have home office tax deductions and have small business asset depreciation

              Other programs are available from H&R Block and the government offers IRS Free File for those with an adjusted gross income in 2014 of $60,000 or less. Free File offers easy-to-use, brand-name software, tax prep and e-filing. You can even get help locating important tax credits.

              Updates

              We had a site visitor report a small problem with our FREE 2015 Leave & Schedule Excel Chart. One of the cells would not accept data. The cell was located on the schedule and it didn’t impact leave balances. We corrected this several weeks ago and the updated form is online. Please distribute this free excel leave and schedule chart to all in your organization. Keep the excel chart on your desktop and use it to track your schedule and leave throughout the year and to set target retirement dates that will provide maximum benefits when you leave.

              Employment Opportunity

              We are currently looking for a retired federal annuitant with an extensive background in HR and federal benefits to host one of our Benefits and HR Forums. If you are retired, enjoy writing about things that matter to federal employees and annuitants, and would like to stay active and involved after leaving federal service, send an email to ddamp@aol.com and include a short bio with phone number. As a Forum Host you will join our other experts contributing articles, replying to questions from our site visitors, and help to keep our site up-to-date.

              Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

              Visit our other informative sites

              The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

              Be Sociable, Share!

                Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, RETIREMENT CONCERNS

                Comments (0)| Print This Post Print This Post

                Posted on Friday, 23rd January 2015 by

                Print This Post Print This Post
                Share

                Please forward this article to everyone in your organization that is planning on retiring over the next five years and tag it for your Facebook and other social media pages.

                Once you retire you lose access to many online agency and government web sites that hold valuable information that you may need after you leave. Several recent retirees asked if they could still access their eOPF (electronic Official Personnel File) in retirement. Once you leave federal service all of your official documentation is forwarded to the National Records Center (NRC) to be archived with all those who retired before you. You can still access much of his information through written requests but it does take time, often months, for them to find, copy, and send you the information you may need. If you are already retired and need information that was in your personnel file contact the NRC for assistance.

                Access to your eOPF is often needed for those who wish to work for a contractor in retirement. The retiree may need critical information about their official training, duty stations, security clearances, pay, and positions held during their career for the detailed applications and resumes that contractors often require. If you are thinking about employment in retirement review your eOPF and obtain copies of promotions, details, training, and other pertinent information that you may need to provide your new employer, including security clearances that you may have held.

                If you had a job that required a security clearance within the past two years print out your security clearance authorization from your records. Federal employees that retire are often sought after by contractors that require their employees to have security clearances. If you had a security clearance with your agency before retiring visit the Security Clearance Center to explore lucrative and often high paying contractor employment opportunities.

                I also suggest that you keep a copy of your most recent employment application, the old SF-171, OF-612, or whatever application format your agency used that includes this critical information. Many retirees simply shred most of the paperwork they have at the office before walking out the door only to regret it down the road. I kept several of my old SF-171s that basically provided a comprehensive time line of my military and federal service. These documents provide a wealth of information, not only for future employment but to provide a history of our service for genealogy research or simply to provide to your heirs down the road. Sort of your own personal story of where you where when and what you were doing while you were there.

                Others have asked how to access the govtrip.com web site and their LES data, Leave and Earnings Statements, after retiring. You can’t access this information after you retire so take advantage of the access before you leave. You will have to find a suitable replacement for travel and as far as LES information goes use OPM’s Retirement Services Online that provides similar annuity payment statements, copies of your 1099R misc income tax forms, and benefit information for retirees. You will be able to access their online services after your retirement paperwork is processed.

                You will retain full access to your TSP account just as you did while still employed and you can go in and change allocations and check your balances daily if desired.

                When you select your retirement date be sure to review your eOPF and other agency/OPM sites prior to your departure to capture the information you may need after you leave.

                Helpful Retirement Planning Tools Distribute these FREE tools to others that are planning their retirement

                Visit our other informative sites

                The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and financial information are subject to change. To ensure the accuracy of this information, contact relevant parties and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

                Be Sociable, Share!

                  Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, RETIREMENT CONCERNS, SURVIVOR INFORMATION

                  Comments (0)| Print This Post Print This Post

                  google-site-verification: google7da01e5320bde85e.html Terms Of Use