Posted on Saturday, 13th January 2018 by

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We published the new 2018 Excel Leave Chart back in late October. Since then a number of our site visitors were only able to open the Excel chart in protected mode and couldn’t enter data. If your spreadsheet opens in protected view click the “enable editing” button in the yellow bar at the top of the form. However, if you don’t see the enable editing button you may have an older version of Excel. To remedy this we published two versions of the spreadsheet, one with an xls and the newer xlsx extensions.  Visit our Leave Chart Page for more information and for the links to both versions of the form.

Please share the downloaded 2018 leave chart with everyone in your organization. The chart tracks all leave balances and you are able to annotate your work schedule on the chart as well.

A Microsoft Office consulting firm advised us that If both versions open in protected view the protected view status is a result of security settings on your agency’s LAN and network. Some agencies increase their security settings to lock out certain documents based on the parameters the IT specialist selects. We do include several hyperlinks in our forms to link users to additional supporting information such as our sick leave conversion chart and that may be the cause. If you have this problem when opening the form I suggest talking with your IT people to have them allow the form to pass without restrictions.

DNA Testing Results

I wrote last year about my purchase of two Ancestry DNA kits for my wife and I. We’ve been curious for years about our heritage and I mentioned in the article that I would discuss the results in an upcoming article.

They posted our results online in just under three weeks including an extensive list of cousins from around the world. My results aligned with what I knew about my parents roots. My father’s parents were both born in England and my mother’s parents migrated from Vienna in the early 1900s.

The Ancestry DNA reports indicated that about half of my DNA originated from my father’s side and half from my mothers, no surprise there. However, they broke it down to actual ethnicity estimates for major regional areas. For example, my great grandparents on my father’s side immigrated to American in the very early 1900s with 11 of their 23 children! My great grandfather came to America after Queen Victoria died 1n 1901. He was the coach driver for the queen’s ladies in waiting.  The report showed that 24% of my DNA originated in Great Britain and 10% Ireland, Scotland and Wales with 35% eastern European, 7% west European, and 15% Scandinavian. Looks like I  have some Viking blood in my veins.  It also shows migration paths for years starting back to 1800 with a laundry list of 4th cousins with many pictures.

My grandparents on my mother’s side both came from Vienna in the early 1900s through Ellis Island. That’s where the east and west European percentages came from.

My wife’s story  is similar and she didn’t appear to have any Cherokee blood as her mother had related to her. With that said, my wife’s profile shows that those who migrated to American in the early 1700s and 1800s arrived in what was Indian territory at the time and maybe one of her ancestors married a native American.  My wife has blue eyes and red hair confirming much of what the report provided. Her family migrated much earlier to America, around 1700 and 46% of her DNA originates in Ireland, Scotland and Wales with a concentration around Ulster Ireland, 23% in Great Britain, 9% Scandinavian and 14% western Europe. Again, Viking blood so we are a good match as 48 years of marriage has proven. Now I know why I always wanted to sail the seven seas.

Each report shows migration paths and the years of migration which is also interesting, most of Mary’s family settled in Pennsylvania, Ohio, and Indiana.  Mine settled in Pennsylvania, Canada, and many in Australia.  The DNA reports can be confirmed in part from life in general. My wife’s family had relatives in Indiana, one of the major migration paths shown on her report. Many of my relatives worked in the Pittsburgh area and several were highly skilled woodworkers that built the Cathedral of Learning in Oakland. Whenever I visit I envision my ancestors working on the intricate woodwork that is prevalent though out the site.

Ancestry DNA provides access to family trees, and considerable genealogical research. You can search their census and voter lists, birth, marriage and death notices, immigration records and travel, military records, and their card catalog. I’ve not tried these yet, still too busy with work to make the time I would like to spend on the effort.

From my perspective the cost of the Ancestry DNA kits are reasonable and currently on sale. The online access makes research and review easy and you can also print out your reports for safekeeping and share the results, if desired, on line with family and friends.

Several readers mentioned after my first article on this subject about their concern for privacy. You can limit the release of your data when you sign up. I limited our data so that much of the information isn’t shared however I may change that because by sharing the results anonymously you get a larger pool of results I believe.

Helpful Retirement Planning Tools / Resources

Request a  Federal Retirement Report™  today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.

Distribute these FREE tools to others that are planning their retirement

Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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    Posted on Monday, 8th January 2018 by

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    In January of 2017 the full retirement age (FRA) started increasing to age 67 in two-month increments over the next six years. When I refer to 66 as full retirement age in this article be aware that your FRA will be up to a year later depending on when you turn 62.

    OK…, you are either fast approaching 62 or already there and contemplating the best strategy to take to maximize your benefits. Should I take my benefit early at age 62, full retirement age of 66, wait to age 70, or somewhere in between? It’s a big decision for many who are on the fence and not knowing which way to go. Did you know that you don’t have to be retired to collect Social Security? Federal employees can collect Social Security at age 66, their full retirement age, without any reduction in benefits? You can work and collect it as early as age 62, however you will have to pay back a portion of your benefit until you reach full retirement age.

    Approximately 45% of all Social Security recipients claim their benefit at age 62, 30% at age 66, and only 3 to 4% wait until age 70 or later.  Others file for benefits at ages between these dates.

    Most married couples coordinate their Social Security Benefits to increase their total retirement income, that’s what my wife and I did.  It’s common practice for the lower wage earner to take their benefit early, as early as age 62, while the higher earning spouse doesn’t file for Social Security until age 70.  There are many factors to consider and it takes time to research all of your options and what is best for you and yours.

    According to a January 2018 article in Kiplinger’s Retirement Report, “Benefits at age 70 are 76% higher than at age 62.” Those who delay collecting until age 70 reap the much higher benefit and from the full retirement age of 66 until age 70 benefits increase on average 8% a year! Not bad.

    Many act on necessity. If you need the money to make ends meet apply as soon as possible. In my case my wife applied at age 62 and I won’t collect my benefit for another year and a half when I reach 70. I did file and suspend my benefit when I turned 66 so that my wife could collect a higher spousal benefit. This option is no longer available. If I should die first Mary would apply for my death benefit. The Kiplinger article states, “For married couples, at least consider having the higher earner delay as long as possible. That higher earner’s benefit will be the one that lasts the lifetime of the second spouse to die.”  The death benefit is the entire amount received by the deceased spouse.

    When to apply often depends on the ages of the couple, are you the same age or is one spouse much younger than the other.  Other circumstances come into play when making this decision. The rules are a little different depending on your retirement system.

    The rules are fairly straight forward for FERS annuitants. Employees pay into the system their entire federal and private sector careers unlike CSRS employees that don’t pay into the Social Security system. You may be  eligible for a Social Security Supplement if you retire before age 62 and your benefit is not impacted by the WEP penalty that CSRS annuitants are subject to.

    It is beneficial for FERS workers to buy back their post 1957 military service time. FERS retirees with Post 1/1/57 military service will not get credit or annuity computation for their military service without making a deposit using SF Form 3108. If a deposit is made, the employee will receive credit towards his/her annuity computation.

    CSRS annuitants are eligible for Social Security only if they worked a minimum of 40 quarters, 10 years of employment, where they paid into the Social Security system. Plus CSRS employees are subject to the Windfall Elimination Provision (WEP) that reduces any benefit you earn depending on the number of years you paid into the system. The WEP reduction stops if you have 30 years of substantial earnings.

    CSRS retirees that are eligible to collect Social Security at age 62 and have active military time will see their CSRS annuity decrease unless they buy back their military time. If you served 4 years military service and didn’t buy back your military time, your federal CSRS annuity will decrease by approximately 8%, 2% for each year of military service. If you buy your military time back your annuity will not decrease and you will also collect a Social Security check.

    I wrote an article titled Social Security – When Should I Apply and Replacing a Lost Card in 2012 when I turned 62 that you may find helpful. Be aware that the income limits in the 2012 article are now higher than they are today and some of the information is dated.

    There are many resources available to help you decide on the best path for you. Take your time to determine what is best for you and if you have specific questions call your local Social Security office at 1-800-772-1213, they can help.

    Additional Resources

    Helpful Retirement Planning Tools / Resources

    Distribute these FREE tools to others that are planning their retirement

    Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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      Posted on Friday, 29th December 2017 by

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      Lots of good news for federal employees and annuitants alike this year. First off, there were no major changes to our benefits even though many services wrote volumes about proposals that never materialized. I seldom cover these proposals because the majority of members in both parties currently don’t support them. That being said entitlements and interest on the national debt account for over 73 percent of the national budget according to the Center on Budget and Policy Priorities. This includes Social Security, Medicare, Medicaid, CHIPS, health care subsidies, and safety net programs. I believe we can all anticipate some changes down the road.  Eight percent of the national budget funds benefits for federal retirees and veterans.

      The new 2018 salary charts were released by OPM the last week in December including the new special compensation and SES pay tables. Another major change coming to your TSP is the additional withdrawal options authorized by a law signed by the President in September. The additional options will be available after the Thrift Saving Board completes their review and issues the updated guidance later this year.

      With the passing of the tax reform bill the vast majority of employees will see a significant increase in take home pay this April due to lower federal income tax withholdings. If you are an active TSP participant, and not contributing the maximum to your plan, this would be a great time to increase your contributions.

      Many large private companies such as PNC, Boeing, Comcast, and many others are offering employees thousands of dollars in bonuses due to their reduced corporate taxes plus they are investing billions in new projects. Fifth Third Bancorp is paying more than 13,500 employees a bonus plus they are raising their minimum wage to $15 an hour as a result of the new tax bill. In addition to cash bonuses some companies are also adding one time additional payments to their employee’s defined contribution pension plans!

      Many companies are hiring thousands of new employees for planned expansion such as AT&T that recently announced that it will invest $1 billion in their U.S. networks and offered its employees a one-time bonus. Small companies that file a Schedule C tax return will also benefit and they may be able to hire more workers as a result of projected savings and a significant reduction in their alternative minimum tax (AMT) liability.

      We published a new 2018 Federal Employee’s Leave Chart for employees to track all leave and annotate their work schedule on an Xcel spread sheet.  You will find this helpful for targeting the best date to retire for maximum annual leave buyback and sick leave credit. Many use this chart and keep it on their desk top for easy access. Read the introduction before downloading the spreadsheet. Your IT department may have to unlock it due to their internal server settings.

      The 2018 COLA is 2% for Social Security, CSRS and FERS retirees. This was considerably higher than the .3% awarded in 2017. A complete list of COLAs going back to 1999 and how they are calculated is available for your review.

      The new year looks promising from many perspectives, the unemployment rate of 4% is lower than is has been in many years, companies are hiring, wages are rising and the stock market gained 26% in 2017. This Christmas season saw record retail sales across the board and consumer confidence is higher than it has been for many years. Hopefully, this will continue however things don’t always go up, there are market corrections and sector rotations on the horizon.

      Hopefully, 2018 will prove to be as promising as 2017 was, only time will tell and I’m cautiously optimistic.

      Request a  Federal Retirement Report™  today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.

      References

      Helpful Retirement Planning Tools / Resources

      Distribute these FREE tools to others that are planning their retirement

      Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

       

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        Posted on Monday, 18th December 2017 by

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        No matter where you are at in your life; just starting out, mid career or retired, knowing where you stand financially helps you weather the storms that may be ahead. Do you have the resources to not only make ends meet today but to have the freedom in retirement to expand your horizons and do the things you’ve dreamed about all of these years?

        So few evaluate their finances until their checks start to bounce or they are so much in debt that they can’t dig themselves out. Many simply give up and keep spending beyond their means and live pay check to pay check. The younger generations rely so heavily on their credit and debit cards that they never know how much is really in their account until their cards are rejected for insufficient funds. Most don’t even know how to balance a checkbook because they don’t keep one! I talked with one federal employee recently that earns a good living and yet they can’t seem to get ahead. Each year their raise comes and goes and each year they still end up with huge overdraft fees that they simply accept as part of their world! It’s crazy considering that a few minor adjustments in their life along with some basic budgeting could convert their dilemma into an opportunity.

        This appears to be pandemic today. Being financially responsible is a necessary part of all of our lives and to go through life without knowing where you stand leads to disaster for many. When you have a good job and income many take it for granted that their good fortune will always be there for them to fall back on. That isn’t the case for life in general as many of us know from firsthand experience. You never know what may be around the corner and when times are good those are the times to sock money away for a rainy day not the time to squander what you have on transitory discretions.

        Sure, have fun but in moderation. It’s OK to go on a vacation and to enjoy life, however many simply don’t know when to stop having fun and get serious about their family life and financial security.  Many today schedule multiple trips each and every year, between vacations they take frequent short trips, attend concerts, and are always on the go; it’s never enough. Do you know anyone like that? They don’t know how to simply “smell the roses”…, just sitting back and enjoying each other’s company, their home and family. Moderation is the key, you can’t do everything and remain sane or financially secure.

        Financial problems are one of the main causes for divorce today and general discontent for families overall. If individuals and couples would take a few simple steps they could determine where they stand financially and establish a realistic plan to secure their present and future life.

        There are easy to use online financial planning tools available along with our Retirement Cost Analysis section on our website. One of the easiest and useful online tools to use from my perspective is Kiplinger’s Household Budget Worksheet. I recommend the Kiplinger’s worksheet to anyone I talk to about financial planning and link to it from our website.

        According to Kiplinger, “A good budget helps you reach your spending and savings goals. Work out a proposed household budget by inputting your sources of income and projected expenses into Kiplinger’s exclusive worksheet. You can add and delete rows as necessary to reflect your personal finances. Return and repeat as you track your actual spending.”

        This worksheet is free and can easily be completed online. The categories include:
        • Income
        • Loans/Debts
        • Utilities
        • Insurance Premiums
        • Savings & Investments
        • Miscellaneous (Includes groceries, childcare, vacations, entertainment, clothing, gas and others)

        Under insurance you can add your FEHB coverage and under investments add a line for your TSP account. If you are retired include your federal annuity and Social Security payments in the income section. After completing your entries you are able to download the results.

        This is an easy and painless process that you can typically complete in an afternoon. The first step is to  locate your pay stubs, annuity and Social Security payment information if applicable along with copies of your various bills and bank and financial statements. The worksheet will show your total monthly or annual income in relation to what you are paying for each category. You have the ability to budget for the year, month or pay period.

        This is a good exercise for literally everyone and many will be surprised at just how much they are overspending is certain areas.  This process allows individuals and couples to make informed decisions to cut their spending, save more, and it will reduce your stress. Also visit our Financial Planning pages for additional helpful information.

        I seldom use a debit card. I withdraw a certain amount each month from the bank and use that money for small purchases, restaurants, and general items. You have a better handle on what you are spending with cash. I reserve my credit card for filling up the cars and other purchases and pay the card balance off monthly to avoid interest payments. Using a debit card for all of your day to day purchases can and often leads to overspending. It’s just a  card and most keep pulling it until they receive a notice of insufficient funds from a vendor.

        I reviewed a checking account statement awhile back from someone who needed help with a spending problem. In one month’s time that person had used their debit card over 150 times and each time an entry is posted to their account. Many of the purchases were for less than $5.00 and included debit card payments for a single pack of gum!  They had no idea where there money was going and how much they were spending until it ran out. This individual had overdraft fees of $75 or more each and every month!

        The Bank of America hosts a Savings and Budgeting section on their website that offers sage advice and provides guidance to those establishing a budget and building their savings. Dave Ramsey is a financial guru who has helped many get their finances in order. His books make great gifts for anyone that needs guidance in this area. Visit his website at http://www.daveramsey.com to review his books and to locate a station near you that airs his weekly Dave Ramsey Show. Other resources are available from your broker or local bank. The individual I mentioned above visited her local bank to learn how to balance her checkbook.

        It’s both comforting and a relief when you have a grip on your finances and know the direction you are travelling. Many reading this column already understand these principles. If you know someone who needs help in this ares steer them to these resources, they can make a significant improvement in their lives.

        Request a  Federal Retirement Report™  today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.

        Helpful Retirement Planning Tools / Resources

        Distribute these FREE tools to others that are planning their retirement

        Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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          Posted on Saturday, 18th November 2017 by

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          The TSP Modernization Act (H.R. 3031) was signed by the President November 17, 2017.  This update, one of the first since the TSP was established, provides users with additional options to manage their invested funds, including the ability to make multiple post-separation partial withdrawals and to make multiple in-service age-based withdrawals once the participant has reached the age of 59 ½.

          Under this bill many additional options will be available making it more attractive for TSP participants to keep their funds in the TSP after retiring. Dr. Donna Day, a new contributor to our retirement planning site, summarized the changes in an article she wrote on November 8, 2017 titled Proposed Additional Withdrawal Options for TSP Participants.”

          Currently, upon separation from Federal services, if an account is vested and has more than $200, the entire account can remain in the TSP until the year following the year the participant turns 70 ½. A participant has two options for withdrawing, either partial or full withdrawals. A partial withdrawal allows participants to make a one-time-only withdrawal and leave the remaining balance until a later date. A full withdrawal can occur by taking the funds all at once, over a period of time, or through a purchased annuity that will pay the participant over the remainder of their life. Once a separated participant makes an election, the election cannot be changed. Age-based in-service withdrawals occur once the participant has reached age 59 ½ and is an active Federal employee. Currently, a participant may only take one age-based in-service withdrawal during the time they are actively employed. Taking an in-service withdrawal prohibits the participant from taking a post-separation partial withdrawal.

          These changes won’t go into effect immediately. The Executive Director of the Federal Retirement Thrift Investment Board has up to two years to establish the necessary regulations to carry out the amendments prescribed in HR 3031. We will add the new options to our TSP pages coincident with the release of the new regulations by the executive director.

          Request a  Federal Retirement Report™  today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.

          Helpful Retirement Planning Tools / Resources

          Distribute these FREE tools to others that are planning their retirement

          Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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            Posted on Wednesday, 8th November 2017 by

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            Thrift Savings Plan contributors may see more flexibility when it comes to making withdrawals from their TSP as part of their retirement plan. The TSP Modernization Act will allow multiple-age based and post-separation withdrawals from their TSP accounts; the bill has gone to the Senate for a vote. The TSP Modernization Act of 2017 (H.R. 3031) was passed by the House of Representatives providing long overdue flexibility surrounding Thrift Savings Plan participants. This bill offers greater control for retirement planning. Introduced by Representatives Elijah E. Cummings (D-MD), and Mark Meadows (R-NC), the Act provides additional withdrawals and offers quarterly or annual payments throughout the year.

            Specifically, if the current version of the bill is passed, participants can:

            – Make multiple age-based and post-separation withdrawals

            – Revise timing and amounts of periodic payments

            – Choose to combine partial withdrawals or annuity with periodic payments (Smith, 2017)

            Currently TSP participants are limited to only one withdrawal from their TSP account while in federal service upon reaching the age of 59 1/2 and those leaving federal service could only make one withdrawal as a portion of their  balance in their TSP account. Also, the current system has many restrictions which forced participants to transfer monies from their TSP. However, if the new bill is passed participants will enjoy additional opportunities and financial independence before and during their retirements, which will also encourage them to keep their money invested in their TSP account (Klement, 2017).

            Overall, the bill provides greater flexibility to federal employees by giving TSP recipients additional access to their funds for a longer period. This will enable many participants to reap the benefits similar to those throughout private industry after federal service.  Many federal employees and annuitants were frustrated with the system and withdrew their funds from the TSP, rolling them into more expensive private sector plans. Now, however, the proposed increased flexibility and additional opportunities put TSP participants back in the driver’s seat to better manage their long-term financial future.

            The Act was also supported by the Federal Retirement Thrift Investment Board and a myriad of government employee organizations like the National Treasury Employees Union (NTEU). All feel that the TSP’s current regulation were not effectively meeting the needs of a current, yet changing workforce. The changes, however, are much needed improvements as well as providing an incentive for participants to keep money in the TSP in the first place (Bradford, 2017).“I’m proud to be a cosponsor of this legislation, which will help modernize the federal government’s thrift savings plan by aligning it with current practices for private-sector 401(k)’s,” said Rep. Eleanor Holmes Norton, D-D.C. “I thank ranking member Cummings and Chairman meadows for the important work that will give TSP participants more flexibility in making withdrawals from their accounts” (Burr, 2017).

            Update (11-8-2017)

            The Senate unanimously passed the bill and forwarded it to the the President for signature on November 8, 2017.  TSP participants won’t see plan changes until the Federal Retirement Thrift Investment Board finishes writing the new withdrawal guidelines. This should be completed by early February of 2018.

            References:

            Bradford, K. (2017). TSP modernization bill introduced in house. Retrieved from:http://www.pionline.com/article/20170623/ONLINE/170629897/tsp-modernization-bill-introduced-in-house

            Burr, J. (2017).  House passes TSP modernization act. Retrieved from:

            https://www.federaltimes.com/management/2017/10/12/house-passes-tsp-modernization-act/

            Klement, J. (2017). NARFE applauds house passage of TSP modernization act. Retrieved from:

            http://www.narfe.org/home/articles.cfm?ID=4280

            Smith, I. (2017). House passes TSP Modernization Act. Retrieved from: https://www.fedsmith.com/2017/10/11/house-passes-tsp-modernization-act/

            White, E. (2017). House passes bill to give TSP participants more withdrawal options. Retrieved from: https://federalnewsradio.com/federal-newscast/2017/10/house-passes-bill-to-give-tsp-participants-more-withdrawal-options/

            Request a  Federal Retirement Report™  today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.

            Helpful Retirement Planning Tools / Resources

            Distribute these FREE tools to others that are planning their retirement

            Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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

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              Posted on Wednesday, 1st November 2017 by

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              In the past, retirement was perceived as an end of an era… sitting in your rocking chair watching life pass you by. Not as a launching pad to new and exciting vistas. Many that retired in the mid to late 1900s were simply worn out from working too hard and making too little. They suffered through the great depression and when they retired most didn’t have the energy or health to move on, they settled for whatever came their way and faded into the sunset. There were many exceptions to this and you can find examples of those who used retirement to launch new and exciting careers during the worst of times.

              Fortunately, today things are different. We have support systems such as Social Security and Medicare for all those who need it, our advanced health care system has extended our lives and made it feasible for us to continue on as we age gracefully. Generally our generation is healthier, more secure, and able to stay active far longer than at any other time in history and with continued improvements in health care who knows how long lives will be extended. Plus, federal employees have the additional benefit of receiving a fixed annuity and are able to retire at age 55 and earlier under certain circumstances.

              Life After Retirement will feature annuitants that have developed successful businesses in retirement. There are many who have the talent, interest, and motivation to do the same but just don’t know how to get started or simply fear the unknown. The people we feature have made the transition and may be able to pave the way for others to achieve their dreams.

              We encourage federal retirees that have embarked on new careers to contact us. Your journey may help others realize they too can develop successful businesses based on their hobbies and interests. This first installment of this series will begin with my friend Randy Baldwin, a retired FAA employee who owns and operates Just Write Laser Engraving and its associated web site, www.justwritelaser.com. His company offers laser engraving, etching, marking, and personalization of a vast variety of unique and special products. He is very insightful about not only his business but the business of being retired.

               

              Randy Baldwin

              Randy had an extensive government career before becoming an entrepreneur. He first served on active duty with the U.S. Air Force in the 1960s and after discharge landed a civil service wage grade position with the U.S Navy. He accepted a GS-9 electronics technician position with the FAA in 1971 remaining with that agency until he retired on December 31, 2004 at the GS-14 pay grade. We featured Randy in an article titled Electronics Technician Positions in Federal Government for our federal career exploration blog.

              He began his entrepreneurial journey 18 months before retiring when he was working in downtown Washington D.C. Randy’s hobby was wood working and while still employed with the FAA he attended a demonstration of a laser machine that did inlay work. Randy states, “I had no prior experience in this area but there was an inkling of an idea for a laser engraving business.”

              Randy states, “I started my business from scratch, in my garage and on a shoestring budget. The first six years I was able to move into a show room in downtown Farmville, NC. Today, I have three full time employees that work for me, and this company has nothing to do with what I did in the FAA”.  He states, ” there is insecurity in not knowing where the next job will come from, it was safer working for the government.” Randy has so much work and repeat customers today however it took him years to build the company to a point where he has continuous business.

               

              Just Write Laser Engraving Store Front

              His company  laser engraves ornate plaques, awards, mugs, wall tributes, and Christmas ornaments. They have the capability to provide each branch of the federal government and military service commemorative gifts and also hosts a National Active and Retired Federal Employees Association (NARFE) general store. The store sells hats, shirts, name badges, coffee mugs and other items. NARFE members have to sign in on the NARFE web site at http://www.narfe.org to purchase items. To log in enter your last name and NARFE membership number (located on the address label of your monthly NARFE magazine), then select the general store tab to view their catalog. The general store is located under the RESOURCE LIBRARY on their home page.

              His business is an official vendor for the Navy Exchange System. They are linked to the Navy Exchange website and you can order from anywhere in the world. Randy states that, The Navy Exchange is a retail store chain owned and operated by the United States Navy under the Navy Exchange Service Command. The Navy Exchange offers goods and services to active military, retirees, and certain civilians on Navy installations in the United States, overseas Navy bases, and aboard Navy ships. The Navy Exchange is a type of base exchange, but is separate from the others.” All honorably discharged veterans are now able to purchase from all of the military exchanges online and tax free effective this month.

              Randy explains, “There is a big advantage to being able to retire comfortably, and that enables you to start a business. Over 90% of new businesses fail in the first three years, because they did not have enough capital for expenses or salary”.

              Mr. Baldwin is always doing research and problem solving and is never bored. He is focused on his business, feels relaxed, and finds it very enjoyable.

              He is also able to include the family in certain business activities. Every other year NARFE has a convention and the last one was in Reno, NV. He packed up his truck, took his wife, and they were able to combine working the convention, along with a wonderful three-week vacation.

              Randy suggests, “retire so that you can do everything you want to do and enjoy doing it. Whatever you decide to do, be the best that you can possibly be. Learn all you can about it. Get firsthand knowledge from others about doing the same thing. I did that by driving 200 miles from my home and talking to a local engraver.”

              Randy further states, “don’t let fear stop you, for it is really easy to be scared. I didn’t know anything about laser engraving when I first started. Talk to people about what it is you want to do to get a better understanding about what you are doing and modify it to what you need”. His most important advice is “never stop learning.”

              Visit their web site listed below to view and order products. Randy and his staff make unique commemorative gifts for all occasions and will work with you to design the gift you desire. He made a very special gift for me many years ago when he first started one of his businesses that I cherish to this day. My father passed away when I was one and a half years old and the only thing I had of his was a set of tools. The hammer head broke away from the handle and I didn’t want to throw it away. Randy made me 3 wood pen and pencil sets from my dads hammer handle!  I gave a set to my brother and mine is displayed in my study and I use it for special occasions.

              Here is their contact information:

              Phone: 252-353-4005
              Facebook Page: https://www.facebook.com/Just.Write.Laser
              Web Site: http:/www.justwritelaser.com

              You can see many of their products on their Facebook pages and read testimonials from satisfied customers.

              Resources you can use to start your small business:

              Credits

              Coauthored by Dennis Damp and Betty Boyd, Ms Boyd also conducted the interview.

              Request a  Federal Retirement Report™  today to review your 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

              Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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                Posted in EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS

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                Posted on Thursday, 19th October 2017 by

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                Many annuitants change to a lower cost FEHB plan because most plans waive the majority of the deductibles, copayments, and coinsurance payments when you sign up for Medicare Part A & B.

                One of our newsletter subscribers contacted me about the change to Blue Cross Blue Shield Basic for 2018.  The FepBlue.org site states, “If you have the Basic Option, you can get a $600 Medicare Reimbursement Account (RMA) if you have Medicare Part A and B. You must use this account to pay your Medicare Part B premium. Each member on your contract with Medicare Part A and B is eligible to earn $600. ”  That’s $1200 a year for a Self Plus One enrollment when both have Medicare! To obtain the reimbursement you must provide proof that you paid Medicare premiums in 2018 by submitting copies of your Social Security Checks, bank or COLA statements, or canceled checks.

                Blue Cross Blue Shield will provide additional information about the RMA accounts later this month. I called their information number and the representative said they hadn’t published the specifics yet.

                The Advantage of Signing Up for Medicare

                When you sign up for Medicare they become your primary provider while your FEHB plan becomes the secondary. Medicare pays first and then your FEHB plan pays a portion if not all of the remaining bill for you. Most FEHB plans pass on those cost savings to their members by waving many of your deductibles, copayments and coinsurance requirements.

                This time of the year those 65 or older receive many offers in the mail and on TV and social media for Medicare Supplement Plans. When you sign up for a Medicare Supplement Plan your only option is to cancel your FEHB plan, you can’t suspend coverage. I wrote two articles,  CAUTION – Don’t Lose Your FEHB Coverage and FEHB Suspensions that discuss the severe consequences a number of our readers suffered by doing so. The suspension article provides a detailed list of things you must know before making this move. Many Medicare Supplement Plan brokers don’t understand the FEHB program and end up selling you a product that doesn’t provide the comprehensive coverage you now have. If you know of anyone considering leaving the FEHB program forward this article to them.

                Here are links to two provider’s Medicare Brochures:

                This summary compares the 2018 premiums, significant changes, and discusses what to expect when you sign up for Medicare A & B. There are many other plans to consider. I used these two nationwide providers because BCBS has the most subscribers and GEHA has one of the lowest premiums for their standard plan.  You should also use OPM’s Compare Plans tool that will be available soon for 2018.

                Costs

                The GEHA Standard Self Plus One Plan charges $255.92 monthly, $3,071.41 a year while the BCBS Basic Self Plus One Plan charges $372.32 monthly, $4,467.84 a year; $1,396.43 more than the GEHA plan. However, if both members in the BCBS plan have Medicare A & B and establish a RMA account their annual costs decrease to $3,267.84, just $196.43 more than the annual GEHA costs.

                There are other costs to consider. For example, you will find that BCBS Basic limits deductibles, copayment, and coinsurance waivers for Medicare enrollees to in network providers while GEHA Standard includes waivers for both in and out of network providers according to page 106 of their brochure plus they pay doctor visit copayments. According to the BCBS 2018 Pamphlet, page 146, You must use Preferred Providers in order to receive benefits” for the Basic plan and on page 142 it states, “Under basic option we will waive copayments and coinsurance for care received from covered professional and facility providers.” Here is where it does get complicated. When you are enrolled in Medicare you can go to any provider. Just be aware that some plans may not waive deductibles, copayments, and coinsurance fees for out of network providers and that can be expensive. Check Section 9 of your FEHB plan brochure to verify coverage.

                Medicare Part B Premiums add to your monthly healthcare costs which for 2017 was as low as $134 to as high as $428.60 due to Medicare’s Part B income adjusted premiums.  Many paid less than the $134 last year, approximately $109, due to the hold harmless clause that prohibits Medicare premium increases when COLAs are very low. To qualify for the lowest Part B premium those filing an individual tax return must have a Modified Adjusted Gross Income (MAGI) of $85,000 or less and married couples $170,000 or less.  Gross Income (GI) is calculated before MAGI. Gross Income (GI) is total income earned through wages, dividends, interests, royalty and rental, business income, capital gains, and others. MAGI is calculated by adding back certain deductions such as tax free municipal bond and student loan interest, tuition, rental loss and IRA contributions to name a few.

                Total monthly health care premiums for those on Medicare and enrolled in the Self Plus One plans featured in this article are listed below:

                • BCBS Basic ($372.32) GEHA Standard ($255.92)
                • FEDVIP – Vision & Dental Coverage (Varies depending on plan)
                • Medicare Part B ($134 per person for those without an income adjustment)
                • FLTCIP – Long Term Care (Varies considerably depending on plan)

                For a Self Plus One enrollment the total cost for coverage would be $372.32 for BCBS, $134 times 2 or $268), plus the cost of your FEDVIP and FLTCIP. I pay $50 a month for FEDVIP plus $165 for FLTCIP for my wife and I. Here is what you would pay monthly using my cost for FEDVIP and FLTCIP assuming both signed up for Medicare B:

                • BCBS – ($372.32 + $268 + $50 + $165 = $855.32)
                • GEHA – ($255.92 + $268 + $50 + $165 = $738.92)

                If BCBS members apply for and receive $600 each per year under a Medicare Reimbursement Account (MRA) their adjusted monthly costs would be reduced to $755.32.

                My wife and I elected to retain our original long term care policy and accepted the major reduction in coverage last year. We each pay around $80 per month. Many feds pay considerably more for their long term care premiums.

                2018 Major Changes

                BCBS Changes

                • The significant change for BCBS Basic is the $600 Medicare reimbursement account (MRA).
                • When Medicare Part B is primary, your copayment for Tier 1 (generic) anti-hypertensive drugs obtained through the Mail Service Prescription Drug Program is now $5. Previously, your copayment for the Mail Service Prescription Drug Program was $20. (See page 106.)
                • Your copayment for Tier 2 preferred brand-name asthma drugs obtained at a Preferred retail pharmacy is now $35 for each purchase of up to a 30-day supply ($105 copayment for a 90-day supply). Previously, your copayment was $50 for each purchase of up to a 30-day supply ($150 copayment for 90-day supply). (See page 106.)
                • There are a number of other prescription drug changes for various tiers. (See page 16.)
                • Other changes are listed on page 16 of the brochure for the Basic plan and changes for the BCBS Standard and Basic plans are listed on page 17.

                GEHA Changes

                • When you are enrolled in the Standard Option, your external hearing aid benefit has increased to $2,500 per person every three years if you are an adult, or $2,500 annually for your child up to age 22. See page 44. BCBS offers the same reimbursement.
                • GEHA will begin using the Advanced Control Specialty Formulary (ACSF) which may reduce your out of pocket costs but will limit your options for filling medication because they require step-therapy and adherence to a strict formulary. The ACSF requires you to use a preferred specialty drug before using a non-preferred specialty drug. The ACSF may change quarterly. Please see Section 5(f) Prescription benefits, page 78, for additional information concerning the ACSF.
                • There are a number of prescription drug changes for various tiers. (See page 15.)
                • Other changes are listed on page 15 of the brochure.

                For a complete list of changes for both plans review section 2 of each brochure. Here are links to the two PDF files:

                Observation

                Most federal annuitants are hesitant to sign up for Medicare Part B due to the additional cost and what appears to be duplicate coverage. I personally know a number of retirees that are now paying large copayments and coinsurance fees because they didn’t sign up for Medicare Part B at age 65. In one instance, Pat the wife of a man I worked with for many years, is now in her late 70s. At age 65 her husband decided not to sign them up for part B. Pat called me 6 months ago asking if it was too late to sign up for Part B. She required full body scans that she was paying a $1700 copayment each time she had the scan done. She was also paying other high coinsurance fees.

                Pat could still sign up however for each year she delayed signing up Medicare charges a 10% penalty and in her case it would have cost her 140% more for her coverage, over twice what a person that signs up for Part B at age 65.

                If you review coinsurance and copayment costs within your current FEHB plan you can see where the costs could be prohibitive for major medical problems. For example, in the GEHA Standard Plan those who don’t have Part B would have to pay a $15 copayment for a PPO primary care physician visit; a $30 copayment to see a specialist for covered office visits and 15% of other covered professional services including X-ray and lab.  If the service is provided by a Non-PPO the member has to pay 35% of covered professional services.  If your procedure is at a Non-PPO and costs $5,000 you would be required to pay the first $350 deductable and then an additional $1,750, your 35% share of the costs. With Part B these fees are waived. Reference page 125 of the 2018 GEHA Plan Brochure.

                Summary

                There are advantages to researching your FEHB plan benefits when enrolled in Medicare. One of the advantages of the GEHA Standard Plan when compared to the BCBS Basic Plan is the fact that with Medicare A & B GEHA benefits are the same whether or not your provider is in their network. There are many other considerations to take into account when signing up for any plan. Those who use a large number of prescription drugs must review reimbursements to see which plan will cover the most and if you need special procedures ensure the provider you select offers the services you need. There is more to your selection than meets the eye. Take your time this open season to thoroughly review your options and costs.

                Request a  Federal Retirement Report™  today to review your 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

                Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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                  Posted in BENEFITS / INSURANCE, ESTATE PLANNING, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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