Posted on Friday, 3rd February 2023 by Dennis Damp
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It’s the beginning of a new year! A good time for those planning their retirement to assess where they are financially, and take the necessary steps to secure their future. Federal employees received a significant pay increase this year, 4.1% across the board with a .5% locality adjustment. The 2023 pay charts are available for your review.
Thrift Savings Plan Considerations
Contributions
The Thrift Savings Plan (TSP) elective deferred contribution limit increased to $22,500 for FERS employees with an additional $7,500 catch-up contribution for those age 50 and over. If you aren’t currently contributing up to these limits, consider increasing your TSP contributions this year by at least one or two percent of your pay. Even with inflation continuing to soar, now is the time to invest prudently for your future. Your take home pay will still increase year to year with this modest contribution increase.
Your contributions are tax deferred until you withdraw them in retirement and these contributions will reduce your annual income tax while still working.
TSP 1099-R Update
Bill Morell, received his TSP 1099-R last week in the mail. I’m still waiting for mine to arrive. If you don’t receive your 1099-R Form in the mail by mid-February, they advise calling the TSP to request a replacement. Apparently, the new TSP service provider only has records for participants from 16 May 2022 through 31 December 2022 for the 2022 tax year.
According to their website, your 1099-R Form should be available in your “Secure Mailbox” by end of February. To get to your secure mailbox click on the circled bell in the upper right corner of the website. I am finding the new TSP site rather difficult to navigate. For example, they should have a direct link to tax records!
TSP Withdrawal Issues
Mark, a newsletter subscriber, sent me a message outlining the problems he is having with scheduled withdrawals. Some participants did not receive their January monthly withdrawals. The TSP informed Mark there was a system wide glitch and for him to call back February first. I was unable to contact TSP to obtain more information about the problem.
Social Security Tax Limit and Medicare Premiums
Higher earners will pay Social Security taxes in 2023 on earnings up to $160,200, an increase from last year’s maximum amount of $147,000.
Medicare premiums for Part B actually decreased slightly this year after a 14.5% increase the year before!
BLUE Book (Benefit Summary Booklet)
Request an updated retirement benefits booklet through https://www.servicesonline.opm.gov. All retirees receive a comprehensive multi page booklet titled, “Your Federal Retirement Benefits” from OPM when they retire. My booklet is 28 pages long. Request your updated copy by selecting the Document Section, the last item listed on the Dashboard’s main menu and click on “Request Booklet.”
If you haven’t signed up for OPM’s Online Services, follow the sign on guidance in my article titled, “OPM Services Online Access Changes.” Their website’s document section also provides quick access to your 1099-R forms, and a downloadable annual and monthly annuity statements.
Many annuitants order a copy each year with their updated benefits information and place the booklet in their retirement or estate planning file. If you lost your original copy, request a copy of the original booklet you received when you first retired to compare it to the most current version.
This booklet is a wealth of information and includes personal statistics including your CSA number, monthly benefit, survivor benefits, life insurance elections, contributions and tax information, how to contact OPM, COLA adjustments, other information and how to update your address.
If you haven’t signed up for OPM Serivces Online, request a copy from OPM by calling 1-888-767-6738. However, several newsletter subscribers reported that an automated reply answers stating, “We are receiving extremely high call volume, please call back later.” I tried calling several times throughout the day for several days and received this message every time.
You can email them at retire@opm.gov or send a written request to the U.S. Office of Personnel Management, 1900 E Street, NW, Washington, DC 20415-1000. I sent OPM an email last month to confirm it was still usable, they replied back a week later stating, “You may direct your questions to this email. Please be sure to include your CSA number, name and details of how we can help you.” OPM advises, “the internet is not a secure environment for transmitting personal information via email.”
Helpful Retirement Planning Tools
- Retirement Planning for Federal Employees & Annuitants
- The Ultimate Retirement Planning Guide – Start Now
- Which Way is Up – A Retiree’s Conundrum
- Is the Stock Market Keeping You Up at Night?
- TSP Guide
- TSP Considerations
- Budget Work Sheet
- Social Security Guide
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.
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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (0)
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