Posted on Friday, 10th February 2023 by Dennis Damp

 Print This Post

Forward this to others that may find this information helpful.
They can sign-up to receive my free Retirement Planning Newsletter.

According to Janet Yellen’s memorandum to congress the U.S. Treasury will be unable to fully invest the portion of the Civil Service Retirement and Disability Fund (CSRDF) not immediately required to pay beneficiaries beginning January 19, 1923. The Postal Service Retiree Health Benefits Fund (PSRHBF) investments will be suspended as well until the debt ceiling is raised.

The Treasury announced temporary G Fund limitations until Congress raises the debt limit. According to the Thrift Savings Plan (TSP), “As of January 23, 2023, the U.S. Treasury was unable to fully invest the Government Securities Investment (G) Fund due to the statutory ceiling on the federal debt.”

The Treasury Department describes the debt limit as the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.

The debt limit does not authorize new spending commitments. It simply allows the government to finance existing obligations that government made in the past. If a compromise isn’t reached, a government shutdown could occur.

G-Fund Impact

The TSP stated on their website that G Fund investors remain fully protected and guaranteed by the federal government. This statutory guarantee has effectively protected G Fund investors many times over the past 30 years. G Fund account balances will continue to accrue earnings and will be updated each business day, and loans and withdrawals will be unaffected.

Preservation of capital is the G Fund’s investment objective along with generating returns above those of short-term U.S. Treasury securities. Currently, short term 8-week Treasuries are yielding around 4.65% and the G-Fund yielded .34% in January. As the Federal Reserve continues to raise rates, our G-Fund rates will follow suit. If the current .34% rate is maintained through this year it would result in a yield of over 4%.

Updates

National Debt Crisis

The IRS collected $4.1 trillion in 2021 and refunded $1.37 trillion for a net collection of $2.973 trillion dollars after refunds. The federal government spent $6.82 trillion dollars in 2021 by borrowed 56.5 cents of every dollar it spent! The federal reserve simply made a book entry for this deficit spending and then purchased that amount of our Treasury bonds to fund the government and flood the country with cash; driving inflation through the roof.

Their excessive spending hasn’t Improved since I wrote “Unreasonable Expectations – The Debt Crisis”  January 2021 when the COVID crisis was the excuse for the shortfall.

The Treasury can use special measures to avoid a US payments default. They have until June of this year before we would default on our debt. Our representatives have time to put their heads together, compromise, and come up with realistic ways to cut spending and fund the government. Hopefully, common sense will prevail for the good of the country.

TSP Installment Payments Update

A number of our newsletter subscribers didn’t receive their scheduled installment payments in January as we mentioned in our last newsletter. The TSP posted this clarification on their website last week.

“The TSP has a programming issue that is preventing some participants from setting up installment payments in the amount they desire. We are in the process of addressing this issue. In the meantime, a temporary work-around is for you to request partial withdrawals instead of installment payments until we fix the programming issue. Note: The minimum amount for a partial withdrawal is $1,000, and you must wait at least 30 days between requests.”

I-Bond Interest and Taxes

Madeline asked when she should expect to receive a 1099-INT statement from the Treasury for the I-Bonds she purchased last year. A 1099 is only sent out after you redeem your savings bonds at treasurydirect.gov or sent bonds to them for redemption. If you cashed your paper savings bonds at a local bank, that bank should provide you with your 1099.

You can elect to pay annually if desired. The advantages of savings bonds are that you don’t pay state tax on the interest earned and your interest income is tax deferred until you cash them in.

Savings Bond 1099 Guidance

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.

Tags: Debt Ceiling, Debt Crisis, Government Spending, TSP Investments
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

Comments (0)|  Print This Post

Posted on Friday, 3rd February 2023 by Dennis Damp

 Print This Post

Updated 5-10-2025

Forward this to others who may find this information helpful.
They can sign up to receive my free Retirement Planning Newsletter.

It’s a good time for those planning their retirement to assess their financial situation and take the necessary steps to secure their future. Federal employees have received higher cost-of-living adjustments (COLAs) over the past few years, including an 8.7% increase for CSRS and a 7.7% increase for FERS employees in 2023.

Thrift Savings Plan Considerations

Contributions

The Thrift Savings Plan (TSP) elective deferred contribution limit for 2025 is $23,500 for FERS employees, with an additional $7,500 catch-up contribution available for those aged 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.

Under a change made in SECURE 2.0 Act, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63 who participate in these plans. For 2025, the higher catch-up contribution limit is $11,250; these contributions can reduce your annual income tax while you are still working.

Social Security Tax Limit and Medicare Premiums

Higher earners will pay Social Security taxes in 2025 on earnings up to $176,000, and Medicare premiums for Part B increased slightly this year to $186.00 per month for most who have signed up for Part B.

BLUE Book (Benefit Summary Booklet) – Updated 5-10-2025

Request an updated retirement benefits booklet through https://www.servicesonline.opm.gov. All retirees receive a comprehensive multi-page pamphlet 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 clicking on “Request Booklet.” You now have the option to request a download version to expedite delivery.

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 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, including personal statistics such as your CSA number, monthly benefit, survivor benefits, life insurance elections, contributions, and tax information. It also provides details on how to contact OPM, COLA adjustments, and other relevant information, as well as instructions on updating your address.

If you haven’t signed up for OPM’s Services Online, you can still request a copy from OPM by calling 1-888-767-6738. However, be aware of long wait times, and they occasionally use an automated reply that states, “We are receiving an extremely high call volume; please call back later.”

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.

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

Comments (0)|  Print This Post

Posted on Friday, 20th January 2023 by Dennis Damp

 Print This Post

Federal annuitants typically receive their updated Annuity Statement, with the COLA increase added, early January. OPM’s 1099 R Tax Forms aren’t available until the end of January by regular mail while my Social Security’s SSA 1099 from was received January 10^th!

Download Your Forms Now

Registered users of OPM’s Retirement Services Website can download their Annual Annuity Statement and 1099R form now. I downloaded mine this week.

OPM sends out updated annuity statements anytime there is a change that affects our annuity. Next month we will receive another paper statement showing FEHB healthcare and FEDVIP premium changes. The February statement is already posted and available for download on their retirement services website.

New statements are sent out throughout the year whenever there are changes to checking/savings allotments, income tax withholding, and long-term care insurance, etc.

The annual statement provides annuity and benefit information for you and your family. It includes the annuitant’s Claim number, the amount withheld for each item deducted from your annuity payment, and your gross and net payment. It specifies the monthly survivor annuity currently payable in the event of the annuitant’s death and includes an annual Notice of Survivor Annuity Election Rights. You will also find OPM contact information.

If you misplace your annual statement, download a copy from the website along with the instructions. They outline how to make benefit elections such as applying for a survivor election for a spouse you marry after retirement, survivor annuity elections for a former spouse, OPM contacts, and other information.

Retain Copies for Your Records

I keep the most current Notice of Annuity Adjustment in my retirement folder and include a copy in our estate binder along with OPM’s annuity and FEGLI insurance verification forms that OPM sends out upon request. You can also download them from OPM’s Services Online site. This is an important document and should be readily available if you or your survivor need to contact OPM or require benefit clarifications.

OPM’s Online Services

You must be registered to use OPM’s Retirement Services Website. If you aren’t registered review the latest changes to signing up for this service, they added an extra layer of security. It doesn’t take long; however, you may have to wait for your password to be sent via regular US mail and that can take several weeks.

Other Tax Forms

Many banks and brokerage house’s 1099 reports are also available online for download early. Treasury Direct doesn’t send copies. You must download your Treasury’s OID and 1099 INT statements from your online account. They are typically available mid-January. If you have complex investments, your brokerage 1099 statements could be delayed until mid-March or later.

Tax Preparation Software

I’ve used TurboTax software for decades. It’s intuitive and walks you through the entire process, double checks your work, and they allow you to file online. This software can also download and integrate your brokerage accounts into your tax return, saving considerable data entry time.

There are a number of free online filing services available through the IRS and several of the tax preparation services. The IRS allows you to file online at no cost if your annual income is less than $72,000. You will have to file your State taxes separately.

Take advantage of OPM’s Online Services to download your 1099R to file your taxes early, need to replace a lost 1099R, or to obtain other important retirement forms and reports.

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.

Tags: 1099 R Forms, Annuity Statements, OID Forms
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (2)|  Print This Post

Posted on Saturday, 14th January 2023 by Dennis Damp

 Print This Post

The December 2022 Consumer Price Index (CPI) dropped .1%, the first drop in the CPI since December of 2020. A sign that inflation may be improving slightly. However, year over year inflation was 6.5%, still high by any standard. Wages, consumer goods, food, and housing remain high.

The Federal Reserve is expected to continue increasing rates this year in an attempt to achieve their 2 percent target core inflation rate. Many feel this target is unrealistic and it may end up much higher. There is still considerable uncertainty in the markets today.

Rates Are Rising

Finally, CD rates are rising enough to compete with Treasury Bills, they aren’t quite high enough to beat I-Bonds yet. Treasury Bills continue to offer a safe haven for our cash with decent yields. There are still challenging times ahead for investors with the country bordering on a recession and market volatility continues to be disconcerting for most.

There are other ways to economize and save for those planning their retirement and retirees alike.

CDs Are Catching Up

Locally, many credit unions and regional banks are offering between 4 to 5 percent for 9 month to 2 year CDs enticing account holders back to the fold. Not bad, considering only a short time ago they were offering less than 1%!  I’m staying with 8-week T- Bill ladders for now; they are yielding 4.523% presently. You can have the Treasury reinvest them for you for up to two years. I believe the Federal Reserve will continue to raise rates to tamp down inflation for some time yet.

When rates start to level off, it may be the time to move to longer term CDs or consider investing in 26 or 52-week T-Bills, or Treasury Notes that are issued in 2,3,5,7 and 10-year durations to lock in attractive yields.

I-Savings Bond Rates 

Now is the time to pick up more I-Bonds, you can purchase $10,000 in I-Bonds through Treasury Direct each year. If married, both can purchase up to that limit. Plus, you can buy up to $5,000 in paper I-Bonds with your tax return. I intentionally overpaid my quarterly estimated federal taxes the year before and was able to buy paper I-Bonds with my return. I’m not sure yet if I overpaid enough this year to purchase more.

The current I-Bond composite rate is 6.89%, still well above what you can get elsewhere. This new rate runs through April 30, 2023. As I mentioned in an earlier article on this subject, you can’t cash them in for one year. Plus, if cashed in within the first five years you will lose 3 months interest.

My I-bonds issued in 1999 have a 3% fixed rate, these are earning 9.4% now! They earned over 13% from May 1 to October 31 of last year! Can’t beat that.

If you purchased an I-Bond by no later than April 30^th of this year, you’ll receive the 6.48% for six months from the date of purchase, the rate will change after that to the new rate announced this coming May for the next six-month period.

Treasury Bill Rates Continue to Rise

My article titled “Ditch your Bank’s Low Savings Rates” describes the advantages of Treasury bills compared to bank and credit union rates. I wrote the first article on this subject last March when my bank’s savings rate was .04%; it is currently 1%, still well worth moving the majority of my savings to T-Bills.

Today you can earn around 5% on a 52-week T-Bill, the shorter-term 8-week Bills, as noted in the following chart, are earning 4.523%!

If you purchased $50,000 in the 26-week T-Bill issued on 1/5/2023 that’s earning 4.892%, the Treasury withdrew $48,7777 from your account. On the maturity date of 7/6/2023 they will deposit $50,000 back into your account for a $1,223 gain.

Had you had this amount deposited in a bank money market account paying 1%, like mine, you would have earned only $250!

Summary

With the new year beginning, it’s an ideal time to pick up more I-Bonds if you have the cash to do so. They grow tax deferred over time and I’ve held I-Bonds since they initially offered them in 1998.

Now that CD rates are improving, and if you can lock up your discretionary savings for 9 months to 2 years or longer, they are an option to consider. You can cash CDs in before maturity, however the penalties can be significant. I’m waiting until rates level off and maintaining my 8-week T-Bill ladders until that time.

The U.S Treasury updated their website and it is now more reliable. However, contacting them by phone is tedious with very long wait times. Plus, they aren’t accepting email questions now either unless you have an open ticket with them.

Print out your T-Bill transactions and retain a hard copy for your records. I print the screen for each new purchase and reinvestment.

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.

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

Comments (0)|  Print This Post

Posted on Friday, 6th January 2023 by Dennis Damp

 Print This Post

Forward this to others that may find this information helpful.
They can sign-up to receive my free Retirement Planning Newsletter.

According to Gallup, three-quarters of Americans, including majorities of all party groups, are dissatisfied with the nation’s direction.

The Current State of Affairs

Many reading my column are seniors or those fast approaching that milestone. Everyone, regardless of age, is impacted by today’s runaway inflation, out-of-control spending, random violence, crime, open borders, extremist agendas, and the general ineptitude of those governing us today.

Those on the left and right, from both parties, are to blame. Why can’t they govern, compromise, and do what is best for the country instead of steadfastly working against each other to support oft misguided party leadership?

Each party stokes the fires of discontent to gain the advantage while we all suffer the consequences of their inaction. Lobbyists and special interests drive the agenda; the ones that give the most get their way, regardless of the harm they inflict along the way.

Term limits would change our governance dramatically, our representatives wouldn’t have to kowtow to leadership, and special interests to retain a lifelong job. They would be more inclined to vote their conscious, and what would be in the best interest of their constituents, rather than the party line.

Our representatives will only effect desired changes when those they represent express their concerns openly and through peaceful protests. Ultimately, we must vote them out of office if they continue to ignore the sad state of our affairs today. Our children and grandchildren will suffer the consequences if common sense doesn’t prevail.

Reflections 2022

Soon after retiring, workers discover there is more to life than a 9 to 5 job: places to go, people to meet, challenges to surmount, and adventures to plan. When I was in my mid-twenties, my wife and I discussed the advantages of federal service and the ability to retire early, as I did at 55 with 36 years’ service. I chose a federal job, after leaving the military, rather than a private sector job with an airline that eventually went bankrupt.

Even though I retired at age 55 from federal service, the business I established two decades earlier keeps me fully employed to this day.

Retiring early allows us to travel and do other activities that often aren’t feasible in your later years, as I can attest to. One of my regrets in life was deferring travel to desired destinations and certain activities to my golden years, not realizing the limitations age places on all of us.

It’s wise and prudent to save for retirement, at the same time, it’s important to set aside time and funds to enjoy the activities you and yours appreciate while younger and able. Life has a way of hurling curve balls at us and there aren’t any guarantees for what lies ahead, at any age.

And now – the Rest of the Story…

I enjoyed listening to Paul Harvey’s commentary in my youth with his telling tales of the day. He would finish his story after the last station break with this refrain, “and now the rest of the story.”  His melodic voice still pervades my thoughts to this day.

As I reflect back on my 73 + years, I’m amazed how dramatically things have changed over this relatively short span of time. An excerpt from the Preface of my memoir, “The Early Years, A Road Less Traveled” says it best:

“Life in the mid-twentieth century was all one could imagine of that time, a Forrest Gump world running at a snail’s pace. The only cell phone we encountered was in the comic strips when Dick Tracy was all the rage. Computers were relegated to large research facilities, filling huge rooms with vacuum-tube equipment racks emanating ambient light; illuminating the room’s interior.

Airplanes were becoming popular after World War II, but most relied on trains and trolleys to get where they needed to go. The middle class bought cars and homes at a feverish pace, yet most could only dream about living the “life of Riley,” an expression coined from an early 1950s TV sitcom. We watched Father Knows Best, The Donna Reed Show, and others that represented the ideal traditional family, infusing our dreams with visions of a stable, satisfying life surrounded by family and friends.

The traditional family was on parade—a working father, a stay-at-home mom, and two adorable children—yet cracks were forming in that foundation by the 1960s. The younger generation, my generation, made waves as we grew up in a world filled with conflict: the Korean War, Vietnam, the civil rights movement, and so much more. From this discourse the hippy generation and Woodstock were born along with the antiwar movement fomenting riots throughout the country.”

Today’s youth would be hard pressed to imagine a life without cell phones, Facetime, Netflix, and the Internet.  We had six TV channels growing up, no remotes, and you could only watch a show on the day it aired. Cartoons were relagated to Saturday mornings or you would have to attend the Saturday matinee at your local movie theater!  You couldn’t tune in any desired show at will, like you do today.

Many families didn’t have cars and walked or took trollies to their destination.  A sea change from today’s world where everyone is glued to their cell phone or social media and many families have two or more cars parked in their driveway.

A baffaling Contradiction 

Much has changed for the better, especially technologically these past 73 years; you would think that as civilization progresses, society would improve and crime, world conflicts, and social unrest would abate. The contradiction is that it hasn’t! That is the dilemma we face today.

There are no easy answers; all we can do is work to hopefully make life a little better for those who come after us. We must rely on our children, and our children’s children to do the same for each succeeding generation.

There is hope

People, since the inception of time have lamented the problems with the youth of their day. Aristotle proclaimed, “The beardless youth… does not foresee what is useful, squandering his money.” Socrates complained, “The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households…”

We may find the youth of today beyond hope but history proves us wrong every time. They grow up, accept responsibilities, and take over the world as we did from our parents. Life goes on, and when the pendulum swings too far in one direction a correction is sure to come.

I wish you and yours a happy, prosperous, and most of all, healthy NEW YEAR! A special thanks to my newsletter subscribers and blog visitors that have following my column for these past two decades.

Helpful Retirement Planning Tools

• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• TSP Considerations
• Medicare Guide
• Social Security Guide
• Budget Work Sheet
• Federal Retiree’s Master Contact List (PDF fill-in- form)

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.

Tags: 2022 Reflections, Reasonable Expectations, Retire Early, The rest of the story
Posted in ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION

Comments (0)|  Print This Post

Posted on Thursday, 5th January 2023 by Dennis Damp

 Print This Post

It’s the beginning of a new year and a good time for those planning their retirement to assess where they are financially, long before filing their retirement paperwork. Federal employees received a significant pay increase this year, 5.2% on average after factoring in locality pay. The 2024 pay charts are available for your review.

COLA 2024

More than 71 million Americans will see a 3.2% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2024. Social Security retirement benefits will increase on average more than $50 per month starting in January.

Federal retiree’s annuities under the Civil Service Retirement System (CSRS) receive the full 3.2% COLA increase while those under the Federal Employees Retirement System (FERS) receive 2.2%.

Thrift Savings Plan Considerations

Contributions

The Thrift Savings Plan (TSP) elective deferred contribution limit increased to $23,000 for FERS employees with an additional $7,500 catch-up contribution for those age 50. The annual additions limit is $69,900.

These limits define the contributions that can be made to defined contribution accounts like the Thrift Savings Plan (TSP) for the calendar year. Please note, this is a personal limit that applies to an individual’s aggregated contributions across all such accounts in a calendar year.

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 they will reduce your annual income tax while still working.

1099-R Update – TSP and Annuity

Our TSP 1099-R tax forms are issued for all plan withdrawals and typically arrive by late January. If you don’t receive your 1099-R Form in the mail by mid-February, call the TSP to request a replacement.

According to their website, it should be available in your “Secure Mailbox” by end of January. To get to your secure mailbox click on the circled bell in the upper right corner of the website

Annuity & Social Security 1099-Rs

Federal annuitants typically receive their updated Annuity Statement, with the COLA increase added, in late December. OPM’s 1099 R Tax Forms aren’t available until the end of January by regular mail while Social Security’s SSA 1099 forms arrive early to mid-January!

Registered users of OPM’s Retirement Services Website can download their January Annual Annuity Statement mid-December while the 1099R forms are available as early as mid-January.

Social Security Tax Limit and Medicare Premiums

Higher earners will pay Social Security taxes in 2024 on earnings up to $168,600, an increase from last year’s maximum amount of $160,200.

The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B beneficiaries will be $240 in 2024, an increase of $14 from the annual deductible of $226 in 2023.

BLUE Book (Benefits Summary Booklet)

Request an updated retirement benefits booklet through https://www.servicesonline.opm.gov late January to early February. This will ensure they include your 2024 FEHB and FEDVIP premiums. 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.”

Many annuitants order a copy each year with their updated benefits information and place the booklet in their retirement or estate planning file. You can also request a copy of the original booklet you received when first retired if you lost your copy and compare it to the most current version.

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.”

This booklet is a wealth of information and includes your personal retirement information: CSA number, annuity breakdown, survivor elections, benefit elections, etc. This website’s document section also provides quick access to your 1099-R forms for the past 5 years, and a downloadable annual and monthly annuity statements.

If you don’t have access to their services online call OPM at 1-888-767-6738. You can also 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.

Helpful Retirement Planning Tools

• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• Annuity Expectations – Before and After
• TSP Guide
• Budget Work Sheet
• Medicare Guide
• 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.

Tags: 1099R, Medicare Part B Premiums, Social Security 1099 Rs, TSP, TSP 1099s
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)|  Print This Post

Posted on Friday, 16th December 2022 by Dennis Damp

 Print This Post

Yes Virginia, there is a Santa Clause. This time of year, the Thrift Savings Plan (TSP) sends out participant’s Required Minimum Distributions (RMDs), and in early January our annuity statements will arrive reflecting an 8.7% for CSRS and 7.7% FERS COLA increase.

RMDs

The first year you are 72 or older and separated from service is called your first distribution calendar year. If you do not withdraw enough to meet the requirement during your first distribution calendar year, the TSP is required to disburse your first RMD to you by April 1 of the following year. That date is called your required beginning date, and it happens during your second distribution calendar year.

For administrative purposes, the TSP will issue this RMD on March 1 or the last business day before March 1 of your second distribution calendar year. Your RMD deadline for your second distribution calendar year is December 31 of that same year.

In the years that follow, you’ll receive your RMD in December if not withdrawn earlier. If you don’t take your first RMD by December of this year, you will receive two distributions next year; this could lead to increased Medicare Part B premiums the following year if you aren’t careful.

For additional RMD information refer to the following two articles that I wrote on this subject last year:

• Required Minimum Distributions (RMDs) – Are You Ready?
• RMDs Revisited – Clarification

ANNUITY STATEMENTS

Federal annuitants receive their updated Annuity Statement, with the COLA increase added, early January. In February, you will receive another Annuity Statement showing FEHB healthcare and FEDVIP premium changes. New statements are sent out throughout the year whenever there are changes to checking/savings allotments, income tax withholding, and long-term care insurance, etc.

The January statement provides annuity and benefit information for you and your family. It includes the annuitant’s Claim number, the amount withheld for each item deducted from your annuity payment, and your gross and net payment. It specifies the monthly survivor annuity currently payable in the event of the annuitant’s death and includes an annual Notice of Survivor Annuity Election Rights. You will also find OPM contact information.

Instructions are included for making benefit elections such as how to apply for a survivor election for a spouse you marry after retirement, survivor annuity elections for a former spouse, and others. This is an important document and should be readily available if you or your survivor need to contact OPM or require benefit clarifications.

1099 R TAX STATEMENT

Last year the 1099Rs were sent out mid-January. I received mine January 14^th. A portion of our federal annuity isn’t taxable, this document includes your gross and taxable amounts in block 1 and 2a. The amount withheld for federal income tax is listed in block 4 and block 5 lists employee contributions including our FEHB health care premiums. One of the more interesting blocks is 9b (Total Employee Contributions). I’ve been retired 18 years; what I paid into the system was paid out to me within the first two years! We have exceptional retirement benefits.

OPM’s RETIREMENT SERVICES WEBSITE

Your annual statement, 1099R form, insurance and annuity verification letters and much more is available on OPM’s Retirement Services Website. You must register to gain access. If you aren’t registered read the article titled “Connect to OPM’s Online Services” to understand the registration process and sign up. It doesn’t take long, however, you may have to wait for your password to be sent via regular US mail; that can take several weeks.

Starting in  2023 you can elect to receive your annual notice of survivor annuity adjustment along with your annuity statement and 1099R electronically from your Services Online account. The annual notice will be available for viewing in mid-December and the 1099R in mid to late January. You will receive an email from OPM when these documents are available.

To opt into electronic delivery, simply log into www.servicesonline.opm.gov and update your communication preferences in your Profile.

Helpful Retirement Planning Tools

• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• TSP Considerations
• Medicare Guide
• Social Security Guide
• Budget Work Sheet
• Federal Retiree’s Master Contact List (PDF fill-in- form)

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.

Tags: 1099R, Annuity Statements, CSRS, FERS, RMDs, TSP
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

Comments (0)|  Print This Post

Posted on Friday, 2nd December 2022 by Dennis Damp

 Print This Post

For most federal annuitants, FEHB Medicare Advantage (MA) plans will be the cheapest option next year. They combine low out-of-pocket healthcare expenses—sometimes $0 besides prescription drugs— with a Part B premium reduction. We’ll cover how they work, how much money you can save switching from popular FEHB plans, and who shouldn’t join an FEHB MA plan.

How They Work

FEHB MA plans require you to be enrolled in both an FEHB plan and Medicare Parts A and B. Most of these plans have $0 out-of-pocket costs for approved healthcare services from providers that accept Medicare, except for prescription drugs. All reimburse or reduce some or all the Medicare Part B premium.

Because prescription drugs will be the only significant out-of-pocket expense you’ll have, it’s important to carefully check each plan’s prescription drug formulary to see how much you’ll pay.

These FEHB MA plans offer advantages because you have dual FEHB/MA enrollment. For example, a married couple with one spouse younger than 65 could join one of the plans and rely on FEHB benefits for the younger spouse until they turn 65, with the older spouse enjoying the enhanced MA benefits from the beginning of the new plan year.

These plans’ benefit structure produces major cost savings compared to other popular FEHB plans.

Traditional Medicare Verses Medicare Advantage Part C

You can get your Medicare benefits through Original Medicare (parts A and B), or a Medicare Advantage Plan (Part C). If you have Original Medicare, the government becomes your primary health care provider and pays for most medical costs when you get hospital or physician services covered by Medicare. Your FEHB plan becomes your secondary provider and pays most of what Medicare doesn’t.

Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. Medicare pays these companies to cover your Medicare benefits.

For most beneficiaries, the government pays a substantial portion—about 75 percent—of the Part B premium, and the beneficiary pays the remaining 25 percent. When you enroll in a Medicare Advantage plan, the provider receives the 75% Medicare pays plus the FEHB premium, the MA plan becomes the primary provider.

These plans are able to profit and return a part of your part B premiums through efficiency improvements, requiring pre authorizations for certain procedures, and many plans limit care to their provider network.

How Much Money You Can Save

Checkbook’s Guide to Health Plans ranks all FEHB plan options, including FEHB MA, based on a total cost estimate that’s a combination of for-sure expense (premium) plus likely out-of-pocket costs you’ll face based on age, family size, and expected healthcare usage.

For example, the Checkbook Guide estimates that a D.C.-area couple enrolled in Medicare Parts A & B with income below $194,000 could save $7,990 in estimated total costs next year by switching from BCBS Standard to United Choice Primary Retiree Advantage.

The Consumers’ Checkbook Guide is available in print and online formats. Federal Retirement site visitors and newsletter subscribers can order the Consumers’ Checkbook Guide and save 20% by entering promo code FEDRETIRE at checkout. Online access is $13.95, the hard copy version is $16.95, or pay only $20.95 for both online and hard copy, less 20% with promo code.

OPM’s Plan Comparison Tool is another option you can use. It compares up to three plans side by side, however it isn’t as comprehensive as Checkbook’s Guide.

Where Are the Plans Available?

It depends where you live. Aetna Advantage Medicare Advantage is a PPO plan available nationwide, United Choice Retiree Advantage plans are in about half the country, and Kaiser Medicare Advantage plans are available on the West Coast, Hawaii, Colorado, Georgia, and Mid-Atlantic states. There are also MA plans offered nationwide by APWU and MHBP, and restricted-enrollment MA plans offered by Rural Carrier and Compass Rose.

There are additional FEHB MA plans for annuitants to consider in 2023. SAMBA High and Standard, NALC High, and Foreign Service are national PPO options, and UPMC Standard, Kaiser Standard Mid-Atlantic, and Kaiser Standard Georgia are HMOs.

How to Enroll

Enrollment in MA plans requires three steps that should be completed in the following order:

1. If you’re not already enrolled in Medicare Part B, apply at gov. You won’t be able to join an MA plan without first being enrolled in Part B. That takes the longest, so start here.
2. Enroll with OPM in the FEHB plan that corresponds to the MA plan you want to join.
3. After you’ve enrolled in the FEHB plan with OPM, wait a few days for OPM to update the insurance plan and then call the MA plan directly to enroll.

Who Shouldn’t Consider FEHB MA Plans

If you fall into one of the high-income categories—more than $97,000 for individuals or $194,000 for couples—Part B is of limited financial value due to the higher premium. With FEHB MA plans, you’ll get hit twice with Income Related Monthly Adjustment Amounts (IRMAA), which means you’ll be paying both a higher Part B and Part D premium.

Additionally, if you spend a large portion of time overseas, only one FEHB MA plan (UnitedHealthcare) provides reimbursement for routine overseas care. Of course, since you stay enrolled in an FEHB plan with any FEHB MA plan, you’ll always have the emergency overseas care coverage that every FEHB plan provides.

Other things to consider are the medical benefits and coverage associated with the plan, if pre-authorizations are needed for certain tests, and are providers in your area. Review the articles I wrote about issues that our newsletter subscribers encountered with their MA plans last year before:

• Medicare Advantage Plans (Heads Up for Upcoming Open Season)
• FEHB-Medicare Advantage Plans – Proceed with Caution

The Final Word

Unless you’re subject to higher Part B premiums due to your Modified Adjusted Gross Income (MAGI), FEHB MA plans are likely the least expensive plan option in 2023.

If you’re a higher-income beneficiary, you’ll be subject to higher Part B premiums equal to 35, 50, 65, or 80 percent of the total cost and may be required to pay Part D premiums.

The savings available to annuitants who join low-cost FEHB MA plans are significant. Even if you’re relatively satisfied with your existing FEHB plan, consider whether joining an FEHB affiliated MA plan will offer you comparable or better benefits than you’re currently receiving at a lower cost.

This article is a collaboration between Kevin Moss of Checkbook.org and Dennis Damp, host of www.federalretirement.net. Kevin Moss is a senior editor with Consumers’ Checkbook. Checkbook’s

Helpful Retirement Planning Tools

• 2023 FEHB Plan Selection Guide
• Blue Cross Blue Shield Basic to GEHA Standard Plan Comparison – 2023
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Medicare Guide
• Budget Work Sheet
• Social Security Guide
• Retiree Master Contact List

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, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

Comments (0)|  Print This Post