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Hunkered Down for the Duration – A Retiree’s Perspective

Posted on Tuesday, 24th March 2020 by

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Everyone young and old is dealing with this crisis as best they can. The majority reading this column are either retired or planning their retirement and of the older generation. The ones most susceptible to the Coronavirus.  Like the rest of the country that isn’t providing essential services, my wife and I are at home waiting for the worst of this disaster to pass.  Yet, I would say to the younger generation, “Welcome to Our World.”

 

 

I was listening to a talk show recently and one of the hosts called her elderly aunt to ask how she was getting along. Her aunt replied that life wasn’t much different than usual. The older generation is used to being at home for extended periods and have set routines.

I’m elderly! …. That snuck up on me. Some may consider me ancient at 70. I don’t feel a day over 39. Like Jack Bennie back in the day. Jack was a 20th-century comedian who portrayed being a miser, played his violin poorly, and claimed to be 39 years of age, regardless of his real age. I recall watching him on TV in the 1960s. He would cock his head to the side, and with a smirk on his face proclaim he was 39, again! My mother loved his act.

Sorry, I got a little off track.  Getting back to the subject; retirees often buy in bulk to reduce trips to stores and overall costs if they can afford to. I typically buy the large packaged paper products at Sam’s Club every three months or so and we do the same with the staples we use. We didn’t have to run to the store to stock up, we naturally do it on a regular basis. I also work from home, and have since 2004 when I retired from the FAA. I’m use to isolation.

The hard part for many my age is the separation from our children and grandchildren. We use face time frequently and keep in touch through Facebook, text messages, and phone calls. We especially miss our we little ones. Yet, we understand that the older generation is most susceptible to this disease and keep our distance.  We keep debating whether or not to visit them and then we consider that all of our children are working in essential services and out and about. Our daughter is in the middle of it all as a critical care respiratory therapist, my son works in the banking industry. Both are able to watch their children through split work schedules and some work from home options for one.

There is so much to keep us occupied and productive even while ordered to stay at home. Each day my wife and I spend time working on one home project or another; cleaning out and organizing closets and storage areas, house work and exercise.  A little each day goes a long way. I’m power washing our driveway and sidewalks this week. My wife still walks over 10,000 steps daily, I’m down to an average of 7,000 steps a day during the winter months. We do most of our walking indoors.

There’s a Swedish word for decluttering for the older generation: dostadning, a hybrid of the words for death and cleaning. Essentially, retirees go through their house and declutter so that when the time comes, their heirs won’t have an unimaginable task ahead of them. I watch Mike and Frank, hosts of American Pickers on HGTV. They search through mountains of what I consider junk accumulated over a lifetime to find a few nuggets of recoverable treasure.  When I see this, I cringe for the children who will inherit this mess. I’ve been working on decluttering for several years and for me this also includes developing comprehensive estate planning instructions for our loved ones.  So much to do and so little time to do it.

My home business still keeps me busy; responding to retirement questions, researching and writing articles, updating website content, and other typical tasks. Then when you add in managing investments, working around the house; there is little time left over at the end of the day.  I also learned to cook in retirement to give my wife a welcomed break, several days each week, after 50+ years of marriage and actually enjoy that too.

I can understand how the younger generation may be going stir crazy when they were use to the hustle and bustle of life and now must stay at home.  For those providing essential services there is no down time and with schools closed those families are struggling to find viable childcare options. For those who are at home and find they live from pay check to pay check, review your finances and possibly work up a budget to see where the money is going and ways to save when you start back to work.

There are always productive things that I can find to do. Often, mundane tasks, yet things that need to be done eventually. When I address tasks that I hate to do or would typically put off until tomorrow; at the end of the day I realize what I did this day can potentially make my life easier when life returns to normal. For those planning their retirement from federal service, it would be a good time to explore your options.

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My last article discussed the stock market crash and my thoughts on the subject. I plan to follow that up with a discussion of how my conservative investments faired compared to the major indexed in the next article. Hopefully, we will be able to return to a semblance of order soon. A long term economic shutdown would result in severe consequences for all.

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 Planning Tools

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.

Posted in ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, WELLNESS / HEALTH

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The Investment Dilemma – Walk, Don’t Run to the Exit

Posted on Monday, 16th March 2020 by

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I’ve written many articles over the years, during good and bad times, focusing on preservation of capital for retirees and those close to retirement. A common sense approach to investing that protects the assets you accumulated during your career.

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The recent stock market crash, due to the Coronavirus proliferation, has devastated retirement accounts across the nation. The Sky is Falling, the Coronavirus article I wrote last week discussed these stock market gyrations. The fix for this pandemic may be more devastating than the disease itself. Our lives are now fundamentally changed for whatever time it takes to get through this, due not only to the disease but to social distancing, and all that goes along with that dynamic.  

If you are one of those who stayed fully invested in the market or have a large percentage of your retirement savings invested in stocks, ETFs, and mutual funds, you are naturally worried.  Many retirement accounts are down considerably and if your portfolio isn’t on life support you may feel like you are. For those who were invested in fundamentally sound investments, there is life after the crash. However, keep your seat belts on. The return to sanity, and company profitability, may not be nearly as fast as we would like.  

Our economy was fundamentally sound prior to the Coronavirus pandemic proliferation. That doesn’t mean it will be a quick return to normal and new stock market highs after this battle is fought. With the supply chain disrupted and companies shut down for extended periods, profits will suffer and stock value impacted. All segments of the economy are affected and we don’t know for how long at this point. What I do know is that with time this pandemic will be in the rearview mirror and life will return to normal. Maybe, a slightly different normal with a new awareness of just how fragile our world can be at times like this.

This pandemic has not only shocked the markets, it brought us all back to the reality of life: Times are not always good, markets don’t go up forever, and life as we know it can change on a dime. With over a ten-year bull market run, many became complacent relying on the ever-increasing DOW and S&P Indexes to comfort them along the way. Plus, many were lured into dividend paying stocks because of extremely low interest rates that were great for borrowers and a nightmare for savers; especially retirees living on a fixed income. Those extremely low rates are now back with us.

The market indexes fall when Investors of all stripes see storms on the horizon and sell off holdings to limit their losses. Automated algorithm trading accounts for 50% or more of the trading volume on the exchanges today. They initiate trades based on set parameters established by their creators and often cause the dramatic swings in the markets we are becoming accustomed to.

Generally, experts suggest that within six months of the start of an epidemic the stock market recovers. Hopefully, this crisis will follow suit. There is considerably more disruption involved with this pandemic. However, after the new case curve flattens and people get back to work our economy will eventually recover. Unfortunately, we don’t know when that might be at this time.

Even though retirement account balances are down, if you are invested in high quality dividend paying stocks or mutual funds that hold them, your income should continue uninterrupted in most cases. Some companies with high debt and compromised balance sheets may have to cut their dividend. However, most companies fight to keep their dividends even if they have to borrow to pay them at times. It doesn’t matter if AT&T for example is selling for $28 or $40 a share, it currently pays a dividend of $2.08 per share yearly or 52 cents per quarter to stock owners regardless of the current stock price. This has been the norm in the past; this pandemic, and the fallout associated with it, could change this scenario.  

Things seem dire right now due to the human fight or flight response. Today, many would prefer to run, and as fast as they can. Six months to a year or more from now, you may regret taking that action. As I write this on the morning of March 16th the market just opened, down over 2000 points and it was automatically shut down due to circuit breakers established to curtail panic and algorithm selling. The DOW closed down 2,999 points for the day! By far the largest single day point drop in history. 

If you were caught during this crisis with considerably more invested in the market than practical for the circumstances ask yourself these questions:

  • Do you need the funds in your retirement account NOW to live on?
  • Do you currently have sufficient income from annuities, Social Security, and savings to live comfortably until the market recovers?
  • Does stock market volatility keep you up at night?
  • Are your current investments conservative and include a fair percentage of fixed income investments?

The answers to the questions above may help you focus on your personal situation. Only you can answer them and determine what is best for you and your loved ones. If you have sufficient income now but the market is keeping you up at night, consider converting your investments to a more conservative mix after the market rebounds. Possibly allocating a greater percentage of your total assets to fixed income (bonds, CDs, and cash).  TSP participants can consider the G Fund or L Income Fund options.

I recently talked with one of our newsletter subscribers. She asked about CD Ladders. When her husband passed away, their stock investments had appreciated considerable during the bull market. She was concerned that the market would crash and converted the accounts to laddered FDIC insured CDs. A smart move that many retirees today wish they would have made prior to this downturn.

The country is in panic mode with investment accounts dropping precipitously. The descending account balances can feel almost like what one would experience with the loss of a loved one. Especially when you factor in the changes to our daily routine including the uncertainty surrounding this event. With a significant loss, it is often recommended not to make major changes until you had time to grieve.

I wrote the following articles over the past 4 years that you may find informative.  These articles were written when the market was pushing ahead and when the market corrected 10 percent at one point. When reading them, consider the circumstances at time they were written.

I present my perspective on the day’s current events in my column. These are simply my thoughts and observations as a retiree on significant issues of the day and I’m not a financial planner. Talk with a professional if you need assistance such as Hefren Tillotson, a Pittsburgh based financial planning firm. Explore their website for additional information and for all things financial. They can work up a comprehensive Retirement Master Plan for prospective local clients.

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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.

Posted in ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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The Sky is Falling! The Coronavirus – What to Do.

Posted on Sunday, 15th March 2020 by

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The Coronavirus is now center stage and deservingly so. This invisible antagonist has upended our world for the near term: schools and businesses closing, event cancelations – including literally all sporting events, the stock market on retreat, social distancing, and empty shelves at local stores.

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Thankfully, we finally have all hands on-deck in government. Republicans and democrats are cooperating and providing a unified front to help the country combat this national emergency. There are a few exceptions with some still trying to seek the high ground and putting party ahead of common sense.

There is reason to be concerned. Initially, there were those who thought the drastic steps taken were unnecessary and an over reach. According to the Center for Disease Control (CDC), the 1918 influenza pandemic was the most severe pandemic in recent history. It was caused by an H1N1 virus and spread worldwide during 1918-1919. Over 500 million people at the time or one-third of the world’s population became infected with this virus. The number of deaths was estimated to be at least 50 million worldwide with about 675,000 occurring in the United States!

My wife lost an uncle to the 1918 pandemic and it’s a wonder that more didn’t succumb to the disease. There were few if any medical remedies at the time to fight these infections.

According to recent reports the most susceptible are older adults who have serious chronic medical conditions such as heart disease, diabetes, and lung disease. If you are at a higher risk the CDC recommends following these guidelines:

  • Stock up on supplies.
  • Take everyday precautions to keep space between yourself and others.
  • When you go out in public, keep away from others who are sick, limit close contact and wash your hands often.
  • Avoid crowds as much as possible.
  • Avoid cruise travel and non-essential air travel.

During a COVID-19 outbreak in your community, stay home as much as possible to further reduce your risk of being exposed.

This newsletter is targeted towards those planning their retirement and retirees, the most vulnerable group. It is best to avoid shaking hands when greeting others and maintain a safe social distance during the flu season. Actually, it would be best to suspend hand shaking all together. The CDC estimates that during the 2018–2019 flu season 35.5 million Americans got sick with influenza, 16.5 million people went to a health care provider for their illness, 490,600 were hospitalized, and 34,200 died from influenza!  If we stopped hand shaking and stayed home when sick there could possibly be a significant drop in flu infections and deaths overall each and every year.

The fallout from this pandemic is all around us and personal, upending our daily routine. Most retirement account balances have cascaded downward at an alarming pace.  I tracked the stock market during this event and the DOW dropped 29% from a high of 29,568 in early February to a fast tracked low of 21,200 on March 12th when the markets fell almost 2000 points in one day! It did feel like the sky was falling that day. Many panicked and sold into the down market driving it ever lower.   I wrote several articles concerning ways to sleep at night when the markets are in a frenzy. They may help those who don’t know which way to turn on days like this:

In these two articles I talk about ways to minimize the downside on retirement accounts. The TSP is a great place to invest. The L Income fund invests just under 80% in the two bond funds with the remaining distributed in the C, I and S funds.  It allows for appreciation long term that is designed to offset inflation and maintain your account balance even in times of turmoil. You can also invest in the G Fund that is guaranteed never to fall in value. I only wish there was a G Fund equivalent available in the private sector for other retirement accounts.

In 2008 the L Income Fund decreased 5.09% when the market fell off the cliff and dropped in value over 50%. The very next year the L Income fund gained 8.57%. It took the broad market years to recover.  If stock market gyrations are keeping you up at night explore ways to protect your assets from future market shocks.

The key is to not panic, use common sense, and make sound decisions based on your personal situation. This event will pass like previous pandemics and life will return to normal.

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 Planning Tools

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.

Posted in ANNUITIES / ELIGIBILITY, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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SECURE ACT UPDATE – RMDs at Age 72

Posted on Thursday, 5th March 2020 by

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The new Setting Every Community Up for Retirement Enhancement, the SECURE Act, was signed into law last December.  There are significant changes to how our retirement savings are accessed and taxed. We all need to be prepared for this new reality and take the necessary steps to comply with the rule changes.

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

This article discusses RMDs and how they relate to our TSP accounts under the new rules. Follow-up articles will discuss other changes such as the elimination of the Stretch IRA for non-TSP retirement accounts, part-time employees 401(k) participation improvements, and new annuity information that all retirement managers must now provide to participants.

The TSP is updating their guidance for RMD withdrawals and taxes. They posted the following notice on their website:

“The SECURE Act, which passed on December 20, 2019, changes the age at which you have to start taking required minimum distributions from 70 ½ to 72. The law excludes people who turned 70 ½ on or before December 31, 2019.” They also caution site visitors that their current RMD Advisory Notice has not been updated for the new law.

RMD Changes

The Internal Revenue Code now requires that you receive a portion of your TSP account (your “required minimum distribution” or “RMD”) beginning in the calendar year when you become age 72 and are separated from service. If you are a beneficiary participant, your deadline for beginning to receive required minimum distributions depends on whether your spouse died before or after his or her required beginning date. Beneficiary annuitants should contact the TSP at 1-877-968-3778 for clarification if needed.

Any withdrawals you make while subject to RMDs will be used to satisfy the requirement. If the total amount of your withdrawals does not satisfy the requirement, the TSP will automatically issue a supplemental payment for the remaining amount before the deadline each year.

The TSP sends out reminders, I received mine on January 1, 2020 along with a copy of their TSP Withdrawal and Required RMD brochure. It listed my required RMD for 2019, which I took last year, and for 2020. Retiree’s 2020 required RMD is determined by the total amount in their TSP account on the last day of the previous year.

Use the TSP online tool to request withdrawals from your TSP account. Log into your account and select withdrawals from the side memu. Depending on your circumstances and the type of withdrawal you request, you may be able to complete this transaction entirely online. The form is the TSP-99.

It’s beneficial that the TSP automatically sends your RMD if you don’t provide guidance. The IRS assesses a large penalty for those who neglect or simply forget to take their RMD.

Required minimum distributions cannot be transferred or rolled over. This means that if you make a withdrawal of any kind in a year that you are subject to an RMD and you request a transfer of all or any portion of that withdrawal, the TSP will first calculate and distribute any RMD amount due directly to you before making a transfer.

Anyone that turns 70 ½ starting in 2020 is subject to the new rules and don’t have to make their first RMD until age 72. I turned 70 last May. Anyone that was 70 ½ in 2019 is subject to the old rules and must continue to withdraw an RMD at 71 and each year thereafter.

All TSP participants received their 2019 Annual Statement late last month. It is a wealth of information and even provides a lifetime annuity estimate based on your end of year TSP balance. They also list your personal rate of return for the past 12 months.

The TSP initiated mandatory second level account verification for enhanced online security. When you access their site at www.tsp.gov they send a one-time TSP identity verification code to your email address or send a text message to your cellphone. You have to enter this code in the appropriate box on the website to gain access. If you call, you must provide a verification number, using this same method, to the TSP representative before they will provide personal information about your account. If you don’t have an email account or mobile phone that accepts text messages, you can’t access the online site. Individuals without this capability must call the TSP. They will ask specific questions to verify that the caller is the owner of the account.

Scheduling A Retirement Benefits Seminar

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Schedule A Seminar in Your Area

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Helpful Retirement Planning Tools / Resources

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

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.

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

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Retiree Reflections 2020

Posted on Friday, 21st February 2020 by

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I typically write a short article each year about revelations in my life related to retirement. A break from the benefit issues I most often discuss. Another eventful year has passed and as always, with various trials and tribulations along the way.

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Last year I signed-up for Social Security and am glad that I waited until age 70. Waiting more than doubled my benefit. Fortunately, I had 29 substantial earnings years and my Windfall Elimination Penalty (WEP) was minimal. According to the Social Security Administration, 90% of Americans begin collecting Social Security retirement benefits at or before their full retirement age. On average 45% start at age 62, the earliest age. Many have no choice and need the income in retirement to survive month to month. Only 3.7% wait until age 70.

I can tell you from first hand experience that the time from age 62 to 70 was a blur, it passed by at lightning speed. If you are approaching age 62 and considering applying for Social Security, read the article I wrote on this subject last year titled “Should I defer Taking Social Security Until Age 70.”

Last year I was required to take my first RMD at age 70 ½ and wrote an article titled “Managing Your Required Minimum Distributions (RMDs).” However, under the new SECURE ACT passed by congress the age that individuals must begin taking RMDs increased to 72 from 70½. I missed the cutoff by one year and still must take another RMD this year at age 71. The Thrift Savings Plan (TSP) is currently looking into how the SECURE Act will affect participants and our RMD withdrawal options. We will update you as more details are finalized.

Now, the downside to increased retirement benefits and the requirement to take Required Minimum Distributions (RMDs) at age 70 last year increased my Income Adjusted Medicare Premiums for my wife and I. Just a fact of life, I’m not complaining. I’m blessed to still be on this earth, enjoying life with my wife and children, and spoiling our young grandchildren.

I completed one of my major bucket list items that I’ve had on the back burner for many years. The Early Years; A Road Less Traveled, a memoire of my life up to age 30 took me on an enjoyable journey. A full year’s immersion through my mother’s correspondence, family history, old photographs, school records, letters from my wife when I was is the military, and others I wrote over the years to family members. Many treasured family photographs are included in this work. The draft’s first edit was recently returned and I’m looking forward to completing the book layout and design this year.

Another major milestone; my wife and I celebrated our 50th wedding anniversary last year! FIFTY YEARS; where did the time go? Writing my memoire was a tribute to our life together and brought back many fond memories of those early years. My mother only spent 16 short years with my father; he died when I was 22 months old in 1951, leaving my mother with 4 small children to raise on her own.

Lastly, I negotiated a great deal on a new metallic black cherry 2020 Chevy Traverse LT3 model last December. Plus, Costco was offering a $700 gift card if you purchased a new Chevy through their auto referral program. After test driving several Fords, a Lincoln Aviator, Kia Sorento, Toyota Highlander, several GMs, and Buicks, I couldn’t pass up the Traverse. Actually, from my perspective the Traverse LT3 performance, trim levels, and options far exceeded the Buick Enclave’s.

It’s ride, with 20-inch wheels and quiet tuned suspension takes the road like a luxury car. The All Wheel Drive (AWD) function is unique. You can select 4 wheel, 2 wheel or off road drive functions. The infotainment system is intuitive and easy to use unlike several other manufacturer’s complex systems. The 360-degree rear view camera with cross traffic alert is unbelievable. You actually see your car as if the cameras are flying overhead. it makes parallel and backup parking easy and safe. After backing up, when you start heading into your parking space the display changes to a front view. 

 

 

This car also has a HD rear view camera option that allows a clear rear view even with passengers in the back seats and cargo packed up to the ceiling!

 

 

The one downside was the start stop feature that can’t be disabled in this model. Many, if not most manufacturers are incorporating this feature. Essentially, the car engine turns off under certain circumstances at full stops to save gas and improve mileage. As soon as you take your foot off the break, the engine restarts seamlessly. I’ve found ways around it; if you shift the transmission to (L) select shift on the console just before stopping, the engine doesn’t shut down. Also, I anticipate red lights a head and slow down to avoid stopping which I believe also saves gas. Some manufacturers have switches to disable this feature which I would have preferred.

I was able to negotiate 17% off the MSRP sticker price! They also offered me $6,000 for my 2009 Traverse with 60,000 miles on the odometer, $2,500 over the book trade-in value, and I had them include pin stripping. I have a GM credit card and was able to apply $1,500 of the points towards the purchase. All in all, a great deal for a car that was just released several months before. The $700 Costco card was the icing on the cake.

I almost gave up on American cars over the past decade. However; their quality and performance has improved, and prices are often negotiable. I still love the old American classic cars. Their unique styles, two tone paint jobs, and chrome trim made them a sight to behold.

We were on vacation recently and I started counting the number of American cars to foreign models in the parking lot. I was surprised to find that only 2 out of 10 were American made. Now, I understand that many of the foreign models are assembled in the USA and that a percentage of the parts are manufactured here. Still, it was sad to see the difference from when I walked the streets of Wilkinsburg growing up. Foreign cars were far less prevalent back then and often considered rust buckets and lower quality. A sea-change from today.

I’m looking forward to the year ahead: family time, travel, and new projects. They say 70 is the new 50! I only wish that was true.

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 / Resources

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.

Posted in BENEFITS / INSURANCE, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE

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Determining Your 2019 Total Health Insurance Premium Payments

Posted on Friday, 14th February 2020 by

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Rosemary wrote me last week because she wasn’t sure where to find the total healthcare premiums that she paid in 2019. She needed the totals to file her taxes.

Your best option is to log on to OPM’s Online Services. Select Annuity Statements, and then select the payment dates you wish to review in the top right corner of the screen. It will list all deductions from your annuity by line item. Once you go back to a 2019 statement just multiply each of your monthly insurance premiums by 12 to come up with your total premiums for 2019.

If you aren’t registered to use OPM’s site read the article titled “Connect to OPM’s Online Services” to understand the registration process and sign up.

You will also find all of our your FEHB healthcare premiums paid in 2019 on your 1099 R form if you are retired. Look at block 5. This is only for your FEHB plan premiums. To determine what you paid for Dental and Vision Care go to https://www.benefeds.com and log in to your account. If you don’t have an active account, register to gain access.

You can view all of your 2019 payments and total paid for the year for Dental, Vision Care, and Long-Term Insurance. Just click on “View Payment History” for each of these insurance programs, select 2019 for the year, and add them up.

Tax time is fast approaching and if you haven’t received your 1099 R yet, or need a duplicate copy you can print one out on OPM’s site or call OPM at 1-888-767-6738 to have a copy sent by snail mail.

Scheduling A Retirement Benefits Seminar

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Schedule A Seminar in Your Area

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Helpful Retirement Planning Tools / Resources

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

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.

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

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Converting Unused Sick Leave (FERS & CSRS)

Posted on Friday, 7th February 2020 by

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Fortunately, the National Defense Authorization Act for Fiscal Year 2010 authorized FERS employees to use their unused sick leave balances to increase their retirement annuity. Prior to this Act, only CSRS employees were able to use their unused sick leave balances in their annuity calculation. Until this act was passed, federal employees hired under the FERS system had little incentive to save their sick leave.

Federal Employee Retirement Benefits Seminars – Check Availability

It can be confusing when converting unused sick leave with over 2087 hours, one year of sick leave, on the books. Steven accumulated over a year of sick leave and wasn’t sure how to determine the total time he could apply for his target retirement date. If you have over 2087 hours of sick leave, subtract 2087 from the total and look up that number on the Sick Leave Conversion Chart to determine the additional months and days of creditable sick leave time to add to your annuity calculation. If you are lucky enough to have over two years subtract 4174 from the total.

For example, say you have 2745 hours of total sick leave at the time you retire. Subtract 2087 leaving 658 hours of additional sick leave to account for. The sick leave conversion chart does not list every number between 0 and 2,087–there are gaps. If a figure on the chart doesn’t correspond exactly to the total hours of unused sick leave an employee has at the time of retirement, use the next highest number.

When you look up 658 on the chart, find the number closest to 658. You will find 655. Since you have 658 go to the next number on the chart which is 661. The number 661 converts to 3 months and 24 days giving you 1 year 3 months and 24 days of unused sick leave. Only years and full months of service are used for the annuity computations.

In this example you may wish to delay your retirement long enough to earn an additional full month of sick leave. The other option is that you will be able to use 24 days of sick leave before retirement and still have 1 year and 3 months to apply towards retirement. If you use more than 24 days in the example, you would lose a full month of credit and have 1 year and two months of creditable sick leave. When I retired, I left 16 hours on the books over a full month just to be safe.

Typically, those planning their retirement would select several target retirement dates and request annuity estimates from HR. Our 2020 Leave and Schedule Excel Chart helps federal employees determine their estimated annual and sick leave balances for each target retirement date.  This chart can be placed on your desktop, add your earned leave each period for all leave categories. The Excel chart automatically calculates leave totals. Here are several links that can help you better understand the process:

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 / Resources

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.

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

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Interim Retirement Checks & Retirement Application Processing Delays

Posted on Friday, 24th January 2020 by

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New retirees are subject to interim annuity payments and many don’t know what to expect when they first leave federal service. Federal employees must have sufficient cash available and be financially prepared when retiring to allow OPM to complete a final adjudication of their claim.

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

OPM processed retirement applications in 62 days on average in November of 2019, the latest data we have available. However, they can take up to a year to process a retirement application if information is missing or problems are encountered. From December of 2018 through November of 2019 OPM processed 102,929 retirements. Retirement application submissions typically increase January through March of each year. Last January OPM received 13,264 applications

Many are receiving interim payments for less than they anticipated due to a number of factors. OPM states that annuitants will receive approximately 90% of their expected NET monthly payment, less federal income tax withholdings. NET payments equal what is remaining after deducting health care and life insurance premiums from the gross amount. My interim monthly payment was 30% less than what I eventually received after my application was processed. It took OPM 90 days to process my application when I retired over a decade ago. Some have reported receiving much less due to extenuating circumstances.

FERS retirees need to be aware of the fact that OPM doesn’t include the FERS Supplement in the interim payment because they don’t have the data available until the retirement is completely processed. OPM reported that a number of factors cause reduced interim payments or prevent OPM from initiating interim payments. These factors include:

  • Court orders that are on file at OPM. Court orders can contribute to as much as a 50% reduction in interim payments. Check out our Divorce Forum for clarifications and informative articles on this subject.
  • Part time service
  • Unpaid military deposits
  • When a redeposit wasn’t paid for refunded service creditable towards disability retirement
  • Employees entitled to special retirements for LEO, FF, ATC or other special retirement programs
  • CSRS offset applicants
  • Non-deduction service performed after 10/1/1982 creditable under CSRS where the deposit has not been paid in full
  • Deposits have not been paid for FERS creditable non-deduction service
  • VA part time direct medical solutions (DMS)physicians, including doctors, scientists, and surgeons
  • Refunded service creditable towards CSRS non-disability retirement ending on or after 3/1/1991 where the deposit has not been paid
  • Excess LWOP
  • Service that is unverified or missing
  • Where an insurable interest survivor election is made
  • When no survivor election is made
  • Receipt of military retired pay

Here are a few things to consider when you are planning to retire:

  • Caution- Do This Before You Retire
  • Thoroughly complete and review your retirement forms. OPM previously reported that 23 percent of all claims received are missing one or more records and 11 percent are not received during the first 30 days. FERS employees must complete the SF-3107 form, CSRS employees must use the SF-2801 form.
  • Send in your paperwork, if at all possible, 3 to 6 months in advance of your planned departure date. This isn’t possible with VERAs because they typically have a much shorter window of opportunity to apply. (Keep a complete copy of your application for reference)
  • Thoroughly review the package that your personnel office sends you. Check your SCD date, military time, and other pertinent data and make needed corrections.
  • Review What to Expect the First Three Months After I Leave.  If anticipated actions in this normal time line don’t correlate with your situation contact your personnel office and OPM immediately. This step can keep your personnel office and OPM on track.
  • Set aside sufficient funds, six months minimum, for bills and emergencies and have other savings and investments that you can tap if processing delays are extreme. Read How to Be Financially Prepared When You Retire.
  • If you have a divorce decree make sure OPM received a copy at the time of the divorce. Visit our Divorce Forum For more information on this issue. An improperly processed divorce decree can dramatically decrease interim and full annuity payments.
  • When contacting OPM about your retirement payments before you receive your claim number, contact your former payroll office first for the date your records were transferred to OPM. Your payroll office should provide you with the number and date of the Register of Separations and Transfers. You will also need your Payroll Identification Number.

Use our “Federal Employees Retirement Guide” to help you through the process. It takes time to compile your application and review all of the options available to you.  Once you elect an option and your application is adjudicated, many of your benefit elections are irrevocable.

Scheduling A Retirement Benefits Seminar

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Schedule A Seminar in Your Area

Federal Employee Benefits Advocates (FEBA) provides comprehensive benefit briefings for Federal employees so they can make informed retirement decisions. Briefings include information on CSRS or FERS Retirement Annuities and all insurance programs including Medicare, the Thrift Savings Plan (TSP), Social Security, disability and other relevant retirement planning topics.

Helpful Retirement Planning Tools / Resources

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

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.

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

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