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Posted on Saturday, 18th September 2021 by

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The older generations, including retirees and those still working and planning their exit, have a vast collective voice that is often ignored or relegated to background noise by the news media, big tech, political parties, and others. The older generations have ways to effect change to a greater degree than most realize.

Change Nothing, Nothing Changes
Only a small percentage of the population garners media and social platform attention through radical means, yet this group receives the vast majority of the press coverage and social media banter. You would think our world is about to disintegrate when you listen to the events of the day and the constant fighting between the extremes. Cable News Networks fan the flames of discontent with aggressive show hosts unwilling to moderate their views or listen to anything other than what they want to hear. Instead of seeking compromise and understanding, many agitate viewers to further divide the country, increase their viewer share and most importantly to them, advertising revenue.

No matter what news program or commentary show you watch, they lead with a story to keep you hanging on to the end; we keep listening, and as Paul Harvey would say, “stay tuned for the Rest of the Story.”

Retirees and the older generations have many things to be concerned about and can voice their support or dissatisfaction with their participation when necessary, and most importantly with their wallets and feet. Most, busy with life, can’t run the streets as those who spew discontent in our cities and elsewhere. Yet, we can’t fight every injustice and must focus on areas of interest; hopefully others will pick up the gauntlet and work to make their voices heard.

Seeds of change go both ways, some good and others downright dangerous. Let me preface this discussion by saying this is meant for everyone, conservatives to liberals and everything in between. This isn’t expedient for just one group.

What can we do to effect change and make a difference? We can’t expect someone else to save the day, all must play a part in the grand scheme of things to express their dissatisfaction with whatever they perceive to be unfair or could cause us all harm down the road. Many feel compelled to speak out about perceived injustices, policy matters, especially with the political divide we suffer through on a daily basis, yet so many stay silent and expect others to save the day.  Some express the sentiment, “What can I really do to make a difference, I’m a small fish in a large pond.”

I realized a long time ago that I may be a small fry when compared to CEOs, high flying politicians, the uber rich, and so many others; collectively (the small fries) have a RESOUNDING VOICE that will be heard.  We all must become activists in our own way.

Those who followed me for decades know I’m getting on in years  ̶  thought I’d never say that  ̶   and have to use more subtle ways to get my point across. I express my point of view, dissatisfaction with a course of events, corporate CEOs, politicians, and others by either telling them what I intend to do or already have emphatically done about it or suggest how they strayed from what I expect of them.

For example, when Twitter and Facebook began censoring free speech and banned certain individuals from using their services, I immediately closed my Twitter accounts. Initially we kept our Facebook account open to keep in touch with close family and friends. However, I refuse to click on any ads placed on Facebook and if you have the same concern about any web site you visit refuse to click on their ads. That is how they generate income and the more people that click the more they get paid. If enough people stop clicking, the advertisers move elsewhere. Recently, they shut down a gold star mother’s account because she criticized the President for the death of her son during the Afghanistan fiasco. She has every right to express her opinion, she lost her son!

Recently, I discovered that a national bank that I use instituted discriminatory un-American, and politically motivated practices that I highly disagreed with. I wrote the CEO to advise him that I was moving all of our investments to another brokerage house, cancelling our credit cards and advising him that he should expect many others to withdraw their funds as the wasteful spending and these practices are exposed. Many companies are becoming political activists instead of corporate fiduciaries as they should be. Yes, it took time and patience to change to a new broker but for me it was worth it.

When I find a company that is more concerned about political activism instead of their products/services, employees, and shareholders, I go elsewhere. Yes, it’s a small step but collectively it can and will make a difference over time.  This goes for restaurant chains, big box stores, and many others. We have to speak with our feet and wallets to get attention and we have the power to do it.

If I own stocks in a questionable company and decide to maintain the stock position for whatever reason, I vote against the CEO and officers that support the issues in the proxies they send out before their annal meeting.

There are many ways to make our voices heard.

  • Pick you battles and approach them based on what you can handle, baby steps at first to get your feet wet and then expand from there. If you try to take on the world, burnout and frustration will soon follow.
  • Join and support associations and groups that will fight for all of us. I contribute regularly to certain groups that I know are fighting the good fight.
  • Withdraw support by boycotting corporations, big tech, and the media that are going in what you believe is the wrong direction or misleading their customers.
  • Participate in local school board meetings to check that the curriculum being taught meets with your values as a parent or grandparent. Many parents discovered during the COVID epidemic that the schools were moving from education to indoctrination and worse in some cases.
  • Make your representatives aware of your feelings about the way things are going in your community and nationally. Even though they may not support your positions they represent us and if enough come forward to complain it will get their attention. If that doesn’t work, help to vote them out of office next election.

VOTE – if you can’t get to the polls, apply for an absentee ballet. Some states are sending out mass ballets. Take advantage of them; send them in if you have any doubts about getting there on election day or vote early if that is possible in your state. Many states don’t require an ID or proof of residency when sending in ballots so shred or tear up the ones laying around the house so they won’t be used illegally.

Participate with your local party to get the vote out, obtain voter registration lists and go door to door in your immediate vicinity to help anyone vote that may need it; let them know just how much their vote counts. Most getting out the vote initiates are left to huge phone banks that repeatedly call the same number over and over again. They should devote those dollars to support volunteer visits to as many residences as possible in their district to provide voter guides and to get out the vote.

Many may feel detached from the problems. For example, you may not be in one of the border states that local residents claim are being inundated with illegal immigrants, many infected with COVID, or far from the cities rampant with crime. Complacency isn’t the answer.

27 Page retirement Planning Report

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

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

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Posted on Sunday, 12th September 2021 by

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The Office of Personnel Management (OPM) announced changes in FEGLI premium rates effective the first pay period beginning on or after October 1, 2021. These include changes to premium rates for Employee Basic Insurance, Option A (most age bands), Option B (most age bands), Option C (most age bands), and Post-Retirement Basic Insurance. The Basic Rate increased slightly. However, The good news is that many rates actually decreased! This is a great time to reevaluate your insurance needs; an open enrollment period often follows a rate increase.

Request a 27 Pager Retirement Planning Report

Basic Changes (Annual basic pay, rounded up to the next even $1,000, plus $2,000)

The basic option premiums per thousand dollars of coverage increased slightly from $0.15 to $0.16 bi-weekly. An annuitants Basic Insurance costs are determined by the option you select when you turn 65 and take either a 75% reduction, a 50% reduction or decide to keep full coverage in retirement. If you elect no reduction when you retire the rate is $2.5967 before age 65 and $2.25 after age 65. The 75% reduction before age 65 is $0.3467 and reduces to no cost after 65. The 50% reduction will now cost $1.0967 before and $0.75 after age 65.

Option A Changes ($10,000 of Insurance)

Option A Standard Insurance is a fixed $10,000 amount. When you retire it reduces 2% a month, $200, starting at age 65 until it reduces to $2,500. It is free starting at age 65. The rate for <35 and 60+ stayed the same, all of the rates from age 35 to 59 decreased substantially. The bi-weekly rate for those 45-49 decreased from $0.70 to $0.60 and for those 60+ it remained $13.00 monthly.  At age 45 you would only pay $0.60 a pay for $10,000 in coverage starting this October.

Option B Changes (Salary Multiples) Up to 5 times your salary

The amount of coverage is determined by multiplying your final annual basic pay rate rounded to the next higher thousand by the number of Option B multiples that were in effect for the five years of service immediately before your retirement or the entire periods of service during which these multiples were available to you, if less than five years

The only age group that increased for Option B was the 80+ group. The old rate was $5.72 monthly per $1,000 of coverage; the new rate is $6.240 per thousand.  All of the other age group rates dropped as much as 10 percent or more. Even with these decreased premiums under age 80, the cost for Option B multiples more than doubles from $0.18 bi-weekly per thousand dollars of coverage at 55-59 to $0.40 bi-weekly per thousand at age 60-64. In retirement it will cost an annuitant $3.90 per $1,000 of coverage monthly from age 75-79 and that increases to $6.24 monthly per $1,000 in coverage 80 and over!

For example, if your base pay was $60,000 when you retired and had 5 multiples, your total coverage would be $300,000, 5 x $60,000. Premiums continue after age 65 and the current premiums are $1.04 per thousand dollars of coverage at age 65. In this example the annuitant would be paying $315 per month to retain this coverage. From age 70 to 74 the premiums increase to $1.863 and the monthly premium would increase to $558.90 per month. Premiums increase again to $3.90 per thousand from age 75 to 79, and top out at $6.24 from age 80 on. At age 80 the annuitant would be paying $1872 a month at current premium levels! It should be noted that premiums are subject to change. View our FEGLI rate charts for the new rates.

FederalRetireReport.com provides a 27-page federal employees retirement planning report that does help those who purchase their report find lower cost private insurance for Option B multiples if desired.

Option C Changes (Up to 5 multiples) $5,000 per spouse and $2,500 for each child under 22

When you retire you elect either a full reduction benefit or no reduction. If you elect full reduction your multiple coverage will stay in force until you reach age 65. At age 65 the premiums stop and your coverage reduces 2% a month for 50 months when coverage ends. All of the C Family Option premiums decreased except for those in the 75-79 and the 80+ groups. The maximum you would pay for each multiple increased to $16.90 at 80+.  This coverage would cost a worker $2.43 bi-weekly for each multiple. If you carried three multiples ($15,000 of insurance for a spouse) into retirement it would cost $6.13 per multiple or $18.39 per month at age 65-69.

Review our updated rate tables to see how much your premiums will change.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

Posted in UNCATEGORIZED

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Posted on Friday, 3rd September 2021 by

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When can I retire? A question asked often by those approaching retirement age and by those early in their career who have the foresight to think ahead. It isn’t as simple a decision as reaching your eligibility date, especially if you haven’t prepared early in your career to have the assets necessary to make this transition. These 7-steps will help you determine when you can realistically retire.

New Life, Old Like Photo

1) Retirement Eligibility

For FERS employees, those hired starting January 1 of 1987 to the present, FERS eligibility is determined by your age and number of years of creditable service. In some cases, you must reach a prescribed Minimum Retirement Age (MRA) to receive civil service retirement benefits. If you leave federal service before you reach full retirement age and have a minimum of 5 years FERS service you can elect to take a deferred retirement. Basically, those with 30 years of service and reach their MRA, anyone who has 20 years at age 60, or as little as 5 years of federal service at age 62 can retire immediately.

CSRS eligibility is based on your age and the number of years of creditable service. Those with 30 years of service at age 55 and anyone who has 20 years at age 60, or as little as 5 years of federal service at age 62 can retire immediately. If you are CSRS Offset, the regular CSRS rules described in the CSRS Eligibility Section apply to you.

A special 20-year retirement system is available for certain designated positions under both retirement systems. This system allows employees to retire sooner, with just 20 years of service. This early retirement system is offered for those who work in air traffic control, law enforcement, fire fighters, and nuclear weapons couriers.

There are special eligibility requirements for certain conditions under both systems for early optional, discontinued service, and disability.

2) Annuity / THRIFT Income

The annuity calculation is different for CSRS and FERS. The FERS retirement annuity is based on your length of service (which includes unused sick leave if you retire on an immediate annuity) and “high-3” average pay. The high-3 average pay includes locality pay and annual premiums for standby duty and availability if applicable. Other pay such as differentials, overtime, allowances and others are not included. The annuity is 1% of your high-3 average pay times years of creditable service.  If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is used rather than 1%.

The CSRS annuity is based on your length of civil service (which includes unused sick leave if you retire on an immediate annuity) and “high-3” average pay. The high-3 average pay includes locality pay and annual premiums for standby duty and availability if applicable. Other pay such as differentials, overtime, allowances and others are not included. Your yearly basic annuity is computed by adding:

  • 1 1/2 percent of your “high-3” average pay times service up to 5 years;
  • 1 3/4 percent of your “high-3” pay times years of service over 5 and up to 10; and
  • 2 percent of your “high-3” pay times years of service over 10.

Once you establish several tentative retirement dates, request annuity estimates from your HR department.

The TSP 401K savings plan is another lucrative benefit that most take advantage of, especially when you consider that FERS employees receive a 5% match. I only know of one person that I worked with that didn’t participate in the TSP plan. Your contributions while working are tax deferred and the maximum TSP contribution for 2021 is $19,500. If you are over age 50 an additional $6,500 catch up contributions are allowed.

There are a number of withdrawal options and you can annuitize your savings for a guaranteed monthly payment if desired. Your annual TSP annual statement provides an annuity estimate plus a summary of the plan’s previous year’s performance.  Many federal employees that retire with 25 to 30 years of service can retire with a million in their accounts and more if they maximize their contributions early in their career.

3) Social Security

There is much to consider before signing up for Social Security. By waiting until full retirement age or to age 70 your monthly check will increase dramatically, often times doubling from what you would have collected at age 62.  For married couples, it’s important to plan who takes Social Security first to maximize benefits long term and for estate planning purposes.  FERS employees that retire before age 62 may be eligible for a Social Security Supplement check. I wrote a series of articles on this subject that you will find helpful:

4) Pre & Post Retirement Living Expenses

Just because you are eligible and wish to retire doesn’t mean you will have the income/resources needed to live comfortably or to maintain a desired retirement lifestyle. Some have medical conditions and/or other expenses that prevent them from retiring until they get on a more solid foundation.

Use our budget work sheet to evaluate your family’s pre and post retirement total income and expenses. This work sheet identifies common expenses that can be shared when both partners have assets and/or are working to equitably support the household. It will also help younger married couples or those living together determine their total combined income and expenses.

We also have an extensive Retirement Cost Analysis section on our website with a free downloadable spreadsheet, specifically designed for federal retirement. It evaluates pre and post retirement expenses and income including a column for the survivor. A sample completed spreadsheet is posted on the site for your review. I developed this spreadsheet when I retired.

5) Other Consideration

Planning together makes sense and if one takes charge of the planning process it’s important to review the plan and obtain suggestions and recommended changes from your significant other.  There are many factors to consider such as which benefits to carry into retirement, when to sign up for Social Security and Medicare, the impact of Medicare Part B premiums if you elect to sign up for Part B, and so much more. Medicare Part B premiums are income adjusted and can impact your planning. Here are links to several Medicare articles that you will find informative:

6) Best Date to retire

The end of the month works best for FERS employees in many cases. Under the FERS system your retirement begins on the first day of the following month. This is also allowed for non-voluntary CSRS retirements.

For the most part, voluntary CSRS retirements are best the first three days of the month and your annuity will start on the next day. If you retire on the 3rd of the month, you will get paid through the 3rd and your annuity will start on the following day. Your first annuity check will be for a partial month, less the three days you worked. However, if you choose to leave on the 4th or later your annuity won’t start until the first of the following month.

There are other considerations such as adding accumulated sick leave and annual leave buy back. Use the following links for more detailed guidance on this subject. One of the links is to Tammy Flanagan’s annual “Best Date to Retire” article. I consider her article the ultimate resource for this subject.

7) Making the Numbers Work

After the first review you may need to fine tune your analysis before taking the leap and sending in your retirement paperwork.  This isn’t unusual; a detailed review will uncover assets and benefits you simply overlooked. There are options to consider that can make the transition from workplace to retirement feasible such as: deferring retirement to a later date, possibly working part time, review and eliminate unnecessary expenses, or moving to a lower cost of living area.

It’s never too early to start your planning. When I left military service, I chose working for the FAA rather than in the same job I had in the military with the airline industry. The private sector job initially paid more. I mentioned to my wife that if I stayed in government, I could retire with 35 years of service at age 55 and my military time would count towards retirement. That was a major deciding factor for me at a very young age.

Take your time and evaluate your personal situation to make the best decision for you and your loved ones.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Wednesday, 18th August 2021 by

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Our 2022 Leave Chart & Schedule Tracker is now available for federal employees to track their schedule, annual and sick leave, comp, and credit hours used. Our updated 2022 Excel Leave Chart is designed for active federal employees that are planning their retirement and need to establish realistic target retirement dates. This spreadsheet also helps federal employees maximize their annuity through prudent management of their leave balances.

2022 Leave Chart & Schedule Tracker

Please share our 2022 leave chart with everyone in your organization. It does include the new Juneteenth national holiday. The chart tracks all leave balances and you are able to annotate your work schedule on the chart as well. Simply download the spreadsheet to your desk top for easy availability.

Download the 2022 Leave Record Chart

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 or your IT department may have to allow the form to pass without restrictions. We also included a newer slsx workbook version that you can use if you have problems with the earlier version.

A Microsoft Office consulting firm advised us that If the spreadsheet only opens in the protected view status and the newer slsx version doesn’t correct the problem talk with your IT staff. Some agencies increase their security settings to lock out certain documents based on set parameters. We include several hyperlinks in our spreadsheet to link users to additional supporting information such as our sick leave conversion chart and that may be the cause.

Request a Personalized 27 Page Federal Planning Report

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

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

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Posted on Friday, 6th August 2021 by

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Your annuity, a defined benefit retirement plan, is determined by the retirement system that you are in, either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Approximately 2 percent of current federal employees are under the old CSRS / CSRS Offset system, the FERS program was established in the 1980s.

Annuities are based on years of service, unused sick leave, your survivor annuity election, and the benefits you carry into retirement. All FERS and some CSRS retirees are eligible to collect a social security benefit. Thrift Plan (TSP) participants can also add additional income through various withdrawal options including annuitizing their THRIFT savings. FERS employees who retire After their Minimum Retirement Age (MRA) with 30 years of service will receive a Special Retirement Supplement which is paid as an annuity until you reach age 62 and become eligible for Social Security.

All in all, a very generous retirement system for all who take steps to build their retirement accounts, such as maximizing your TSP contributions, and taking advantage of the catch-up contributions for those over 50.  Click on the links listed above to estimate your annuity for both retirement systems.

What to Expect After You Leave

Your first retirement check should arrive on or about the first of the month following your separation. For example, if you retire by no later than the 3rd of January your first check should arrive on or about the first of February. You will receive approximately 70 to 80% of your estimated annuity until OPM verifies and processes your retirement application. When I retired from federal service, my first full annuity check was deposited in my account three months after leaving.

Typically, the leave that you sell back will be paid within 6 to 8 weeks in a separate check. When you start receiving your regular retirement check OPM will send you a highly informative pamphlet that outlines your personal retirement plan including benefit elections, general guidance, contact information, your personal “CSA” or “CSF” retirement account number, and survivor’s information. OPM sends out updates to this pamphlet as changes occur. Keep this booklet with your estate plan and make sure it is easily accessible for your spouse and/or loved ones. You MUST use your retirement number for all correspondence with OPM.

After retirement there are a number of ways your income can increase. First and foremost is the annual Cost of Living Adjustment (COLA). This isn’t a given, since 1999 there were three years where COLAs weren’t paid, 2010, 2011, and 2016 due to a negative CPI. However, COLAs ranged from a low of .3 percent in 2017 to a high of 4.8 percent in 2009. The COLA for 2022 is expected to be approximately 5 to 6 percent due to significant inflation resulting from excessive government spending and other pandemic related factors over the past year.

Another option to increase retirement income is to delay Social Security benefits. Your benefit increases substantially if you wait to file for benefits until your full retirement age or age 70. The benefit of waiting until age 70 is that for each year you delay applying for Social Security beyond your full retirement age, your benefit increases by 8%! Plus, your Social Security benefit continues to grow if you earn additional income during this time.

Many work in retirement to supplement their retirement income. There are hiring signs at most establishments these days and the starting pay is often $15 or more an hour to attract workers. Federal retirees can work at any private sector job without impacting their annuity. However, if you return to the federal sector as a rehired annuitant, your pay will be reduced by the amount of your annuity in most cases.

Request a Federal Retirement Report

Retirement planning specialists provide a comprehensive Federal Retirement Report™ including annuity projections, expenditures verses income, with a complete benefits analysis. This comprehensive 27-page benefits summary will help you plan your retirement.

Request Your Personalized Federal Retirement Report™ Today

Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Thursday, 22nd July 2021 by

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A number of our newsletter subscribers commented on my article titled, “Unexpected Medical Expenses.”  Several stand out and need further clarifications. One of particular interest was from Richard, he will turn 65 later this year and wanted to know if the drug manufacturer’s “savings card” that he now uses would be accepted after signing up for Medicare A & B.

Prescription Drug Discount Cards, available from various providers, may be able to find you a lower price than your insurance co-pay. Anyone can use them regardless of whether they have commercial insurance, Medicare, Medicaid, or any other type of insurance. They list the cost of your prescription at most of the pharmacies in your area so you can compare prices. If your FEHB plan’s cost for a certain drug seems high, compare them to one of the following discount card issuers:

I’ve used these when a drug I needed wasn’t on my plans formulary list and I wanted a specific drug, not a generic alternative.

Manufacturer’s coupons offer significant savings but often have stringent acceptance criteria. I ran into this issue several times since signing up for Medicare. Many of the manufacturer’s coupons can only be used when your prescription drugs are covered by a private insurer, not government programs like Medicare.

After signing up for Medicare I tried to refill my prescription for Asmanex Twisthaler, a medication I use to control asthma. The prescription was a covered formulary drug at the time and my copay without the discount was $120, with coupon, $60. The manufacturer disapproved the discount. The pharmacist ran it through twice without success and because it was the weekend, they couldn’t call their customer service department for clarification. The pharmacist said the coupons could only be used for private insurance. I had to explain to them that I had private FEHB insurance through GEHA for prescription drugs, not Medicare D. The pharmacist called the manufacturer on Monday and it was approved by phone.

If you run into a similar situation, let them know your prescriptions are covered by a private FEHB insurer, not by Medicare Part D and have them call the customer service department for assistance. Apparently, whenever the pharmacist logs in to the coupon site and selects Medicare as primary, the online system rejects the request.

As long as the drug is on your FEHB’s approved formulary list the manufacturer’s coupon should be accepted. Check with your pharmacist just to be certain. GEHA dropped Asmanex from their approved formulary awhile back. After this happened the manufacturer’s coupons were rejected and my FEHB plan offered alternatives. Proceed with caution when first using other medications. The side effects could be pronounced. One of the alternatives I tired caused an angioedema incident. If the approved alternatives aren’t effective, file an appeal with your provider to allow the use of the original prescription.  Now that Asmanex is not on my provider’s approved formulary list the coupons don’t apply and I would have to pay the full cost for the prescription, $324 in this case, if the substitutes don’t work and an appeal is rejected.

Another hidden Medicare cost is their income adjusted Part B premiums. I covered this in a recent article titled What is Medicare’s IRMAA Premium Adjustment?” The cost for Part B increases dramatically when your total income exceeds certain limits. Monthly premiums range from a low of $148.50 to as high as $504.90 per month! Many aren’t aware that the Modified Adjusted Gross Income (MAGI) that is used to determine what premiums you pay includes capital gains, taxable interest, tax-exempt interest, dividends, annuity income, wages, business income, and IRA distributions. If your income is close to one of the higher premium thresholds take care when taking capital gains, etc.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 9th July 2021 by

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One of our subscribers was blindsided by an unexpected FEHB plan copayment after reaching age 65.  His copayment for a wellness visit increased from $30 previously to $170 and his FEHB provider stated that they only pay after 65 for what Medicare would pay even if you aren’t enrolled in Medicare.

Under the FEHB law, providers must limit their payments for inpatient hospital care and physician care to those payments you would be entitled to if you had Medicare. Your physician and hospital must follow Medicare rules and cannot bill you for more than they could bill you if you had Medicare. Outpatient hospital care and non-physician-based care are not covered by this law, regular Plan benefits apply.

The patient is responsible for their deductible, coinsurance, or copayments depending on each plan’s criteria. One of the major advantages of signing up for the traditional Medicare plan, Parts A and B coverage, is that most FEHB plans waive the copayments, deductibles and coinsurance for hospital and physician care. Some plans even provide reimbursement for some of your Medicare Part B premiums. You are not responsible for any charges greater than the equivalent Medicare amount and the law prohibits a hospital from collecting more than the equivalent Medicare amount. There are exceptions to this rule that you must be aware of.

A physician who does not accept Medicare assignment may not bill you for more than 115% of the amount Medicare bases its payment on, called the “limiting charge.” The Medicare Summary Notice (MSN) form that you receive from Medicare will have more information about the limiting charge.

A physician may opt-out of Medicare and ask patients to sign a private contract agreement that allows them to bill directly for services ordinarily covered by Original Medicare. This is different than a non-participating doctor, and to avoid unexpected charges ask your physician if he or she has opted-out of Medicare. Should you visit an opt-out physician, the physician will not be limited to 115% of the Medicare-approved amount. You may be responsible for paying the difference between the billed amount and your FEHB provider’s regular in-network/out-of-network benefits.

Some plans, especially the lower cost options, don’t cover out-of-network medical expenses. For example, the Blue Cross Blue Shield Basic plan only covers treatment from preferred providers. Under their Basic Option, you must see Preferred providers in order to receive benefits. If you go to a doctor or facility that is not in their network you are responsible for the entire bill if not covered by Medicare. Medicare typically picks up about 80% of your costs. If you have Medicare, your FEHB plan covers much of what Medicare doesn’t pay.

My wife and I are enrolled in GEHA’s standard Self Plus One Plan and since enrolling in Medicare 7 years ago, we haven’t paid any copayments, coinsurance or deductibles for hospital or physician care even with major surgeries. GEHA’s standard plans cover both in and out-of-network providers. I wrote an article comparing GEHA’s Standard Plan to the BCBS Basic Plan that you may find informative.

There is much to consider when you become eligible for Medicare. Review Section 9 of your Providers FEHB Plan Guide and Medicare Benefits Guide to ensure you are getting the coverage you need. I wrote a series of articles on this subject that you may find helpful when deciding on whether or not to sign up for Medicare when you turn 65:

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

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

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Posted on Friday, 25th June 2021 by

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Earlier this year the Thrift Savings Plan (TSP) launched a redesigned website. Concurrently, they announced significant account access and security changes, additional L Fund options, and the ability to submit certain TSP forms online after logging into your account. They sent out a message from the executive director to all participants last February announcing these significant changes.

For those still working and contributing, I encourage you to increase your contributions each year by at least half of your annual cost of living increase. The maximum TSP contribution for 2021 is $19,500 and if you are over age 50 you can add an additional $6,500 catch up contributions. Promotions are another ideal time to increase contributions. The more you contribute the less you pay in annual taxes since your contributions are tax deferred. Secondly, you will build a substantial balance for when you retire. Many with 25 or more years of service will retire with a million or more in their account if they maximize their contributions early in their career.

You can use a similar approach, as I did, to retire mortgage free and increase your retirement savings significantly.

After this update, when you first login to your TSP account using your original account number and password, you will be prompted to setup a user ID before you can access your account information. There is “USER ID FOR LOGON” setup instructions to the right of the Login Form. To improve security, you no longer use your actual account number and must establish a user ID and an updated password for your account. This is similar to what Medicare did several years ago when they established individual account numbers instead of using the person’s Social Security number as their Medicare account number.

They also ask for a phone number and will send either a text message to your cell phone or they will call you with a 5-digit login verification code that you must enter to access your account.  I must admit the secondary verification can be a nuisance if you go into your account frequently. However, it does add another layer of security for your account.

I published an article titled Account Access Instructions last March that outlines how I keep track of all of our account access information. These TSP access changes need to be available in your estate plan for your spouse and heirs. When login IDs and passwords change, I generally add any changes in pen until my next major update which is generally every three years.

Under account statements, you can download quarterly and annual statements, print out a 1099 R form for any distributions taken, and generate a Verification of Account (VOA) statement that may be required for certain financial transactions. Account balance statements are also available for any date you choose.

Under “Upload a TSP Form” you can complete one of several forms, scan and convert it to a PDF form, and send it to the TSP for certain actions such as the TSP-3 form required for designation of beneficiary or the TSP-99 form for withdrawals.  Complete details on the form upload process are available on the TSP site.

A significant change was the establishment of 5-year Lifecycle (L) Funds to closely match your target retirement date. They now offer L funds starting in 2025 going out to 2065 in five-year increments. The TSP sends out informative annual updates each January that details your account activity for the past year. They provide an annuity estimate based on your current account balance, past year and recent quarter change in value, with a five-year history of gains on the first page.

Your beneficiary elections are listed on page three of the annual report. If you need to make changes, you can now send in a TSP-3 beneficiary form electronically while accessing your TSP account. Another interesting entry on your annual summary is your lifetime TSP contribution. It shows just how much your TSP has grown since you retired. Page five lists the past 1, 3 and 5-year performance for each fund. I add this annual summary to my estate planning binder after I review it each year.

The TSP is changing with the times and for the most part the improvements are noteworthy and beneficial. Take advantage of their low fund expense fees, some of the lowest in the industry, and grow your retirement account significantly over time.

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Find answers to your questions: The best time to retire, retirement income vs expenditures, FEGLI options and costs, TSP risks and withdrawal strategies, and other relevant topics. Determine what benefits to carry into retirement and their advantages. You will also have the opportunity to set up a personal one-on-one meeting with a CERTIFIED FINANCIAL PLANNER.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. 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.

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

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