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Posted on Saturday, 12th September 2020 by

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We can expect a smaller COLA increase for 2021. The final number will be released on October 13th.  The August issue of Kiplinger magazine estimated an increase of 1.2% while others suggest a much lower figure of .44%. Both projections are much lower than the 1.6% we received last year.

Projected COLA Going Down

The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

According to the Socials Security Administration, a COLA effective for December of the current year is equal to the percentage increase (if any) in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective. The fourth quarter isn’t used to determine the upcoming year’s COLA because that number isn’t available from the Bureau of Labor Statistics until mid to late January. Our COLAs are adjusted on January 1 before the 4th quarter data is available.

2020 Health Care Open Season (2021 Coverage and Premiums)

The 2020 Federal Employees Health Benefits (FEHB) open season will run from November 9 through December 14, 2020.  Each year Open Season runs from the Monday of the second full workweek in November through the Monday of the second full workweek in December. Health care service providers are required to submit benefit and rate proposals for the contract term beginning January 1, 2021 on or before May 31, 2020. OPM generally completes negotiations in August so we should have updates and new rates in Early October. When they are published, I will send out a message to all subscribers.

During the annual Open Season, eligible employees can enroll, change plans or plan options, change enrollment type, or cancel their enrollment for FEDVIP and the FEHB Program. Employees can also re-enroll or newly enroll in FSAFEDS.

We will have 10 new plan options in FEDVIP for a total of 23 dental plan options and 10 vision plan options in 2021.  More information on the new plans will be released shortly by OPM.

OPM encourages all carriers to thoroughly evaluate options every year with a focus on improving affordability, reducing costs, improving the quality of care, and protecting the health of their enrolled populations. Any proposed benefit enhancements must be offset by proposed reductions so that premiums are not increased due to benefit changes. Premium increases are inevitable for most participants again this year and some anticipate they will increase significantly due to the COVID-19 pandemic. Last year the average rate increase was 4%.

Retirees can connect to FEHB Open Season Online to review brochures, pricing and submit changes starting in early November. You can actually chat with a Customer Service Representative using their “Live Help” feature.

Since many federal employees have been working from home due to the pandemic, OPM and your agency HR office is working on ways to get plan information to you expeditiously.

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.

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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 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, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 4th September 2020 by

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I know its early, open season doesn’t start until November. However, it is a good time to start thinking about your 2021 health care needs now. Open season is just around the corner.

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

I recently talked with Kevin Moss from checkbook.org, a company that helps individuals find the best service—and avoid the worst services in many areas, including our Federal Employees Health Benefits (FEHB) plan offerings.  Kevin is signing up to be a guest writer for our blog; he and I will also collaborate on FEHB open season articles for our Federal Employee’s Newsletter and blog. I look forward to working with him to provide our site visitors and subscribers the most current and up-to-date information available for the upcoming open season.

OPM’s plan comparison tool is very helpful, however it still leaves much to be desired. There are comprehensive private sector plan comparison tools available that will help you make informed decisions on which plan is best for you and your family.

Checkbook’s Guide to Health Plans and their online plan comparison tool are specifically designed for federal employees. I’ve run several comparisons using both the OPM and Checkbook tools and am impressed with the results.

The Checkbook comparison tool breaks down all of your costs including the total cost if you are paying Medicare Part B premiums, cost reductions for FEHB plan Part B reimbursements if available, and anticipated average, low or high healthcare expenses.  It also provides the total costs if retirees only subscribe to Medicare Part A! I don’t believe you will find this information easily anywhere else. They also offer 23 dental coverage costs compared to only 7 listed on the OPM tool.

Checkbook publishes an annual guide that gives you vital information and shows you how much money you can save by changing—or by staying in—your health care plan. It summarizes thousands of facts about the plans to simplify your choice. It comes in both print and online versions. The 2021 guide will be available at the beginning of Open Season on November 9th, but you can pre-order the Guide now at Guidetohealthplans.org. You must register to use the site; $11.95 for online access to the guide and comparison tool, $11.95 plus shipping for a print copy of the guide, and $15.95 for both online access and print copy plus shipping. However, Federal Retirement readers can save 20% on the Guide by entering promo code FEDRETIRE at checkout. Active federal employees can check to see if they can access this portal through an agency subscription.

The printed and online guide are very useful. They break down costs by employees under 55 in both the GS and Postal Pay systems, those over 55 to age 64 and costs for annuitants with or without Medicare.  They provide guidance on cost sharing, coverage features, and rate the quality of service providers. All in all, an exceptional service for a reasonable price that not only can save you money but provide piece of mind when deciding which plan is best for you.

Survivor’s Checklist Update: We were able to format our Survivor’s Checklist to a fill-in PDF format. If you downloaded the original PDF version last week, it is now available as a fill-in form. Download the updated Survivor’s Checklist version for your personal use.

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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 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, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Posted on Friday, 28th August 2020 by

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Retirees generally worry about finances and health issues, not whether or not I’ll be safe when I go out and about.  I was talking recently to an 80-year-old veteran who just purchased his first firearm, a revolver. He was using a walker and not in great health.

Yes, a COVID-19 vaccine will save lives and help to restart our economy; hopefully, sooner than later. However, the return to the rule of law is the only cure for civil disobedience and anarchy.

It’s no wonder that gun sales are through the roof and ammunition is in short supply. If we call 911 and no one responds we are left to our own devices. In St. Louis a mob broke down the gate to a community and threatened the occupants. The home owners called 911 without success and took the matter into their own hands. The husband and wife brandished their guns to encourage the rioters to leave. Those who destroyed personal property and threatening harm weren’t arrested, the home owners were charged!

Elderly store owners are being brutally attacked for trying to protect the small businesses that sustained them throughout life. One 70-year-old women was kicked to the ground and attacked with a 2 x 4; another owner was beaten senseless because he used a fire extinguisher to dissuade the mod from looting his store.  An 80-year-old woman, using a walker on a New York City street, was sucker punched by a young punk who had been arrested many times before and simply let go by the authorities because of their catch and release policy. These aren’t isolated instances; this is happening across America!  There are videos of these atrocities and the criminals are getting away with this. The mobs are working their way into the suburbs and calling out residences in the dead of night to leave their homes and turn them over to the mob or they will burn them down! 

Our society is under attack from far-left Marxist. The riots and unrest in places like Seattle, Portland, New York, Chicago, and now to Kenosha are designed to create division and sow seeds of discontent. The federal agents protecting federal property in Portland stood down weeks ago, yet the rioting continues unabated even though you hear little about this on the major news networks. A CNN reporter this week was in Kenosha at night with a backdrop of businesses on fire and reported that the demonstrations were mostly peaceful!  The Portland police and their State Police have not been able to stop the violence.  This week in Portland, the mob tried to seal the doors to a district police office and then set the building on fire with the occupants inside!

There are pockets of this movement throughout the states and many liberal governors and mayors are fueling this unrest with their encouragement, inaction, and inability to deal with criminal behavior on every level. Instead of calling out the National Guard they stand their police forces down and then strip them of their ability to not only defend themselves but the citizens they are sworn to protect! Just recently, the Kenosha County Board requested 1500 national guard with police powers to be called out to quell the riots.

This is a sad testimony to how many Americans are out-of-touch with reality and the rule of law. They have lost their moral compass that has guided this nation since its inception. We embolden mobs when we ignore criminal behavior which encourages others to follow suit.

The Marxists have hijacked the BLM movement. Do Americans care about black lives? YES, we care about ALL lives. Do Americans care about law and order? YES, the vast majority want to live in peace and harmony. Is anyone exempt from complying with our laws? NO.

When you are stopped by the police and resist arrest, tackle officers to the ground, take an officer’s weapon, run to a car and reach inside for a weapon, what do you expect the police to do? Ask them to please stop, call a social worker to reason with this person? You can expect a bad outcome with bad behavior. The police must defend themselves and the community they serve, and they only have a few seconds to react.  

Yes, there are bad actors on both sides of the equation. Kneeling on the neck of an incapacitated person for nine minutes was outrageous and that person was charged. So too is the act of resisting arrest! Live to fight another day, comply and if injustice is evident fight it in court, not in the streets. 

I said this in a previous article and it is worth repeating here: “This country has come a long way; this isn’t the 1850s or the 1960s. Seventeen percent of all marriages in 2017 were mixed race, in 1967 only 3 percent of marriages were interracial. Just look at our TV shows, soap operas, sports teams, movies and more. Diversity and inclusion rules. In the cities we see African American mayors, governors, and in some cases such as Atlanta I believe over half the police force is minority. More minorities were employed before the pandemic than any time in history. The graduation rate for minorities is rising and Obama was our President!”

Anything is possible in America today; regardless of your race, color, creed, or national origin. What determines an individual’s destiny is self-determination, drive, personal motivation, and desire to succeed; no matter what obstacles lay ahead. America gives us all that opportunity.

Helpful Retirement Planning Tools

Request a Federal Retirement Report™ to review 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 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 LIFESTYLE / TRAVEL, SURVIVOR INFORMATION

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Posted on Saturday, 22nd August 2020 by

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Estate planning is a sensitive issue and many avoid the subject until it’s too late. This can and will compromise your heir’s benefits, or at least delay them when they will be needed most.  It’s never too late to start. It is advisable to compile this information long before it will be needed, and the earlier the better. You can always update/revise your plans as time and circumstances dictate.

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

Our checklist is not all inclusive and is meant to provide essential information needed by survivors when an annuitant first dies. If the information isn’t compiled beforehand, heirs can collect the data as they work through the check list. However, it is advantageous to compile information ahead of time to make things easier for your family.

We recently expanded our Survivor’s Checklist to four pages and added additional content to help heirs retain their benefits through this difficult time.  The checklist includes procedures for reporting a death to OPM, lists critical contact numbers for the TSP, OPM, FEGLI, Social Security, Medicare, the records center, and others.

For those who haven’t collected this critical data, there is no time like the present to start. Download the form and add your personal information such as final arrangement contacts, attorney, will and trust location, and attach letters of instruction, a survivor’s report, list of bank and brokerage accounts, contact lists, and other essential data.

There are two versions available, a Word and PDF file. You can download the PDF file or use the Word file that you can expand and tailor to fit your personal situation.  Share these with your family and friends.  We are designing a comprehensive fill-in PDF format for a future release.

Survivor’s Checklist (PDF Version)
(Word Version)

Memoir Available

“The Early Years, A Road Less Traveled.”  is now availabe. This book, my 28th in a life long series of books will probably be my last, and a fitting close to my book writing career. It was two years in the making.

My story is that of an average person living life, at times, in what many would consider difficult circumstances. I represent what one can do with so little, and go so far, even when the world expects so little of you. This is a story of life’s struggle to not only make ends meet but to eventually succeed beyond what most others would have thought possible due to a family’s early misfortunes. My story provides a perspective of that ordinary life and how anyone with drive, motivation, and desire can make their dreams come true in America with hard work and perseverance.

Ordering Information

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 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, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 14th August 2020 by

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Many federal employees, including myself, purchased paper savings bonds though payroll deduction until paper bonds were discontinued eight years ago. Savings bonds mature after 30 years.  If you own bonds that are thirty or more years old, they no longer earn interest and should be cashed in. Many banks and credit unions no longer redeem them. 

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

Taxes are due on the interest earned when savings bonds are cashed in, and bonds held to maturity appreciated in value considerably. For example, a $500 series EE bond purchased on January 1, 1993 for $250 is worth $617 today and is earning 4%. The series EE bonds were sold at half face value, so it was purchased for $250, not $500. This bond is three years from maturity and a 4% yield is almost impossible to get anywhere today.

Fortunately, PNC, my local bank, still redeems bonds. If your local bank or credit union refuses to cash in your bonds, the process is tedious to say the least. you must download and complete the FS Form 1522 from Treasury Direct. You can also request a form by calling 844-284-2676 or email a request to savbonds@fiscal.treasury.gov.  All of the bonds you are cashing in must be listed individually on the form and if you need more space, attach either a list or FS Form 3500. The original form only has space for 10 bonds.

Here is the tricky part, the form must be signed by the bond holder in the presence of a certifying officer. Typically, you take the form to your local bank and have them place a medallion stamp on the document. Yes, it is a convoluted process, it was so much easier when everyone could simply redeem them at your local bank.

Follow the instructions on the form and mail the completed form with your bonds to the Treasury. Make sure you mail them to the correct address. Here are the two addresses listed on the form:

  • Series HH or Series H savings bonds:

Treasury Retail Securities Services, PO Box 2186, Minneapolis, MN 55480-2186. (Phone: 844-284-2676–toll free.)

  • All other securities:

Treasury Retail Securities Services, PO Box 214, Minneapolis, MN 55480-0214. (Phone: 844-284-2676–toll free.)

After processing, the Treasury will deposit the proceeds into your bank account and send you a notice of interest earned for tax purposes. The last time I cashed in mature bonds I received a tabulation of the interest earned from the bank teller.

What I recommend is finding a local bank or credit union in your area that still redeems savings bonds even if you have to open an account with them, it is so much easier.

That being said, you can buy savings bonds and Treasury notes, bills, and bonds electronically on  www.treasurydirect.gov. As a TreasuryDirect account holder, you can purchase, manage, and redeem bonds directly from your web browser. Explore the site before registering for a new account.

I still purchase inflation indexed “I bonds” and TIPS online through Treasury Direct to protect a portion of my retirement savings. Another option is to purchase inflation-protected securities through a mutual fund such as Vanguard Inflation-Protected Securities (VIPSX). This fund has a Morningstar Analyst Rating of Gold with 4 stars. 

It is easy to sign up for a Treasury Direct account and to redeem or purchase new bonds. The funds go into or out of your designated bank account. Just remember that you can’t redeem savings bonds until you owned them for at least a year.

Those in their early to mid-career may wish to consider EE bonds. Currently, they only pay .10% interest. However, if you hold them twenty-years they are guaranteed to double in value which is approximately a 3% annual return.

Memoir Update – Now Available

My memoir titled “The Early Years, A Road Less Traveled.”  is now availabe. This book, my 28th in a life long series of books will probably be my last, and a fitting close to my book writing career. It was two years in the making.

My story is that of an average person living life, at times, in what many would consider difficult circumstances. I represent what one can do with so little, and go so far, even when the world expects so little of you. This is a story of life’s struggle to not only make ends meet but to eventually succeed beyond what most others would have thought possible due to a family’s early misfortunes. My story provides a perspective of that ordinary life and how anyone with drive, motivation, and desire can make their dreams come true in America with hard work and perseverance.

The book is available from Bookhaven Press. The Preface, Chapter One, and Epilog are available online if you wish to read them. This is a limited production.

Helpful Retirement Planning Tools

Request a Federal Retirement Report™ to review 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 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, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Posted on Friday, 31st July 2020 by

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Often as we age, health concerns take center stage and many times sideline our plans and dreams. A fact of life for retirees and those approaching retirement. Actually, this can happen at any age and it’s imperative we seek out competent medical help to get us back on our feet and enjoying life again.

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

Thankfully, federal and postal employees have the Federal Employees Health Benefits (FEHB) program available for our medical needs. They offer a large selection of reasonably priced plans to consider. However, having the best plans available doesn’t afford us the best care, we have to be proactive and seek out the most competent providers.

In most cases we are referred to specialists through our primary care provider (PCP) or we search our healthcare plan’s directory for specialists in our area. It’s frustrating when we don’t receive the answers we need from our doctor or there isn’t a clear-cut path forward for treatment. Often, we continue working with doctors and specialists even when we lack confidence in them. They are trained professionals, who are we to question their judgement.  

A disease doesn’t always warrant a standard treatment due to unique patient characteristics and underlying conditions. This is why second opinions are essential if you are uncomfortable with your treatment. We all deserve compassionate care. If your doctor or specialists isn’t responsive to your concerns, doesn’t offer a reasonable prognosis, or isn’t willing to address your questions it’s time to find another provider.

This has happened to me and my wife on many occasions.  I was diagnosed with Atrial Fabulation (A-Fib) in 1996. My PCP referred me to a local cardiologist, and after wearing a Holter monitor for several days they immediately recommended blood thinners and other caustic heart medication. After researching the subject, and discovering the significant side effects of the proposed drugs, I decided to seek a second opinion.

My wife was listening to a local radio show that suggested taking magnesium to restore a normal heart rhythm; I started taking it immediately and found a competent electrophysiologist for a second opinion.  I have what is called paroxysmal fibrillation, my heart goes in and out of normal rhythm.  Fortunately, magnesium has been successful in restoring my heart rate to normal during attacks. My new doctor suggested that I would only need blood thinners if my heart rate doesn’t return to normal in three to six hours.

My wife was diagnosed with glaucoma in her 40s. Her intraocular pressure (IOP) increased to the high 30s the first year of treatement, normal is 10-21 mm Hg. Her first doctor transferred Mary’s case to his associate and stated that she had the worst case of glaucoma he had ever seen. He insinuated that she would be blind in 6 years if they can’t reduce the pressure.

Mary spent several years there and every time she went in for a checkup, they pushed aggressive surgery. I discovered there was a new less invasive treatment called the SLT. A laser application that lowers IOP dramatically for some patients. I scheduled an appointment with the UPMC Eye Center in Oakland for a second opinion shortly thereafter.    

Twenty-five years later Mary still has her sight thanks to Doctor Joel Schuman. He performed numerous diagnostic tests to understand the full extent of her condition and established a realistic course of treatment.  Mary participated in numerous studies to help them develop an advanced Optical Coherence Tomography (OCT) test, a non-invasive tool that takes pictures of the back of your eye. After her doctor moved to New York, she again sought out a second opinion when complications arose.

Don’t hesitate to seek a second opinion if you are uncomfortable with your current course of treatment. You need to work with someone who is confident, professional, contemplative, explains procedures and conditions in laymen’s terms, and goes out of their way to make the patient comfortable. It is a relief when you leave a doctor’s office knowing that you found someone you can trust, who understands your condition, knows what path must be taken, and proceeds with caution.

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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 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, SURVIVOR INFORMATION

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Posted on Thursday, 23rd July 2020 by

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Office of Personnel Management Announces 60 Day Period for Changes to Flexible Spending Accounts (FSAFEDS)

To assist with the nation’s response to the COVID-19 pandemic, Internal Revenue Service (IRS) Notice 2020-291 provides increased flexibility with regard to mid-year elections under Section 125 cafeteria plans related to employer-sponsored health coverage, health Flexible Spending Arrangements (health FSAs), and dependent care assistance programs.

Beginning July1, 2020, OPM is permitting FSAFEDS participants a 60-day limited period during which certain mid-year changes can be made to their existing elections. Although the COVID-19 pandemic is the reason for these additional flexibilities, participants do not need to be directly affected by COVID-19 and do not need to experience a Qualifying Life Event (QLE) or provide any documentation to make changes.

FSAFEDS Permitted Changes

Increase or Decrease Election in HCFSA, LEX HCFSA, and DCFSA

During the 60-day limited period, all participants who have enrolled in a 2020 Health Care Flexible Spending Account (HCFSA), Limited Expense Health Care Flexible Spending Account (LEX HCFSA), or Dependent Care Flexible Spending Account (DCFSA) will be allowed to make a one-time change (increase or decrease) in the amount of their annual election in each FSA account in which they are enrolled. In accordance with IRS guidance, the election change is effective prospectively, on the first pay period after approval by FSAFEDS. Accordingly, participants cannot receive a refund of allotments from pay they have already made to their FSA account(s) year-to-date. In addition, participants cannot decrease their election below the amount already allotted to the FSA account OR the amount already reimbursed for eligible expenses, whichever is greater.

This 60-day limited period to increase or decrease the FSAFEDS election should not be confused with the existing opportunity to increase or decrease DCFSA or HCFSA elections through September 30 based on a QLE such as cost or coverage changes in childcare or elder care. This 60-day limited period affects both HCFSAs as well as DCFSAs, does not require the participant to establish a QLE, and does not preclude a participant from submitting a QLE change before or after submitting a change during this 60-day limited period, provided the QLE is submitted no later than September 30, 2020.

Extended period to both incur eligible expenses and claim reimbursement of unused 2019 DCFSA amounts until December 31, 2020

Participants who made an election to a DCFSA for the plan year ending December 31, 2019 had until March 15, 2020 (the “grace period”) to incur eligible DCFSA expenses. Claims for reimbursement of these expenses was due by April 30, 2020, the deadline for submitting claims from the previous plan year. Any funds not used during the grace period are normally forfeited. An extension of this period is being allowed this year on a one-time basis. Specifically, participants who made an election to a DCFSA in the plan year ending December 31, 2019, will now be allowed to both incur eligible expenses and claim any 2019 funds remaining in their DCFSA account until December 31, 2020. The extended claim period is automatic for qualified participants.

HCFSA and LEX HCFSA carryover amount from 2020 into 2021 increased to $550

IRS Notice 2020-334 allows an increase in the carryover amounts for HCFSA and LEX HCFSA from $500 to $550. Participants may now carryover up to $550 of unused amounts in their HCFSA and LEX HCFSA remaining at the end of 2020 into 2021, if they re-enroll for the 2021 DCFSA allotments made in 2020 may be increased or decreased during the 60-day limited period, but the grace period for incurring eligible DCFSA expenses with respect to these funds will expire March 15, 2021 and claims for reimbursement will be due by April 30, 2021plan year. This increased carryover amount of $550 will continue in place for plan years beyond2021.5

How to submit election changes

Participants to contact FSAFEDS by visiting www.FSAFEDS.com or by calling 1- 877-FSAFEDS (372-3337) to take advantage of theseFSAFEDS Program flexibilities, or for questions and additional information.

Article by Shawn McCoy

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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 information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

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Posted on Friday, 17th July 2020 by

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This is a challenging time for all and uncertainty abounds. When we listen to the morning news, we hear of new setbacks in our fight to get back to normal; whatever that may end up being. Unfortunately, we are fighting a war on several fronts: from the pandemic to national unrest, and fueled by a political divide. Many businesses, small and large, and their employees will eventually lose this battle, they don’t have the resources to remain in business if we don’t jump start the economy.

 

 

Our children are now the pawns in this ongoing war: should they be in school or shelter in place. What would cause less harm? That debate rages on and I can only hope that reason prevails. This situation impacts all of us.

I believe there are still many reasons to be hopeful, even with all of the confusion that surrounds us. America will persevere over time as we always have in the past. Life goes on with challenges but unabated for many while those in certain industries have many obstacles to overcome and are suffering greatly.

Observations

Many retirees never used an ATM, a bank drive through or wore a mask in public before the virus attacked. Masks are now mandatory and actually I don’t mind them to a certain extent, I look 15 years younger with my mask on; most couldn’t tell if I’m 55 or 71 when I’m wearing it!  Who knows, I may get carded at Lowe’s the next time I buy a can of spray paint!

Prior to the arrival of COVID 19, retirees often preferred using cash unlike the younger generations that rely so heavily on their ATM and debit cards. I visited Walmart yesterday and all of the self-checkout kiosks limited transactions to credit or debit cards. They only had one check-out lane open for cash customers and the line was very long. I bit the bullet, and used my bank card. I do use cards for large purchases and to fill up at gas stations.

Cards may be a safer bet at times, when you consider that circulated hard currency is handled by many others. Yet, I would never want to live in a cashless society. It would strip us of our privacy and allow those controlling the cards, government and large companies, to track our every move and know absolutely everything about us.  Plus, how would you pay at small venues such as garage sales, farm markets, and so many other places.

Many companies are limiting transactions to cards due to an apparent coin shortage.  Shortly after the crisis started, my wife and I rolled over $700 worth of coins that we deposited in two large jars over the past 10 years. I’m sure many others did the same. If we all turned them in, now that the banks are opening back up, I believe the system would be flush with coins again.

Doctors and hospitals are back in business for the most part. My cardiologist appointment went smoother than expected. I left a half hour yearly to beat the traffic. The drive downtown, on what would have normally been a busy work week, was uneventful. Hardly any traffic at all. Upon arrival, the hospital staff took my temperature and I was asked if I had exposure to Covid 19 or was sick lately. Only one other patient was in the waiting room and every other chair was turned around and unusable. They took me in for the exam 5 minutes after arriving and I left the office 10 minutes after my normal scheduled time! To reduce contact, they take everyone as soon as they can to get them back on their way. I recall sitting in waiting rooms for up to 5 hours in the past and I like this new expedited, and coordinated scheduling.

With the restaurants closed many that frequently dinned out were forced back to the kitchen! My wife and I share the cooking and eat in most of the time, maybe eating out once or twice a month and mostly takeout. This wasn’t an issue for us. However, so many were blindsided by this change. Today, you can’t hardly buy a can of Campbell’s soup at our local grocery store, packaged meal selections sell out shortly after being stocked, and canned goods are flying off the shelf.  Before this started, I was considering purchasing stock in Campbell Soup (CBP), analysts gave them a thumbs down because most millennials were moving away from packaged and processed foods. The same with Kraft Foods. Today it’s a whole different world in just three short months. Campbell Soup is rated #1 for timeliness by Value Line and has a dividend yield of 2.8%, Kraft yields 3.35%.  I purchased General Mills (GIS) instead, still a good choice and it yields 3.2%.

Working from home is and will continue to be a preferred method for many companies and individuals alike. The benefits are tremendous from my perspective.  Worker satisfaction, childcare flexibility, some businesses report improved productivity, considerably less time on the roads which reduces accidents and stress for commuters, and improved air quality. Plus, communicable diseases like the everyday flue would be less likely to spread since many will by default be socially distancing. Companies could reduce their leased-space, have lower overhead expenses and the list goes on and on. Of course, there are downsides as well, with a reduced need for office space those companies owning those properties will have challenges, the downtown stores and restaurants that services workers will also suffer. It is a sea change from how we worked in the past.

I completed a major milestone this month, a memoir titled “The Early Years, A Road Less Traveled.”  This book, my 28th in a life long series of books will probably be my last, and a fitting close to my book writing career. It was 18 months in the making. The book chronicles my family’s early years up to age 31.

The road I traveled was paved with constant change—11 moves before the age of 16—poverty, hardship, challenges, and heartache. Yet, that formed my character and ambition; It made me who I am today.

 

 

The Early Years will be available from Bookhaven Press later this year. The Preface, Chapter One, and Epilog are available online if you wish to read them.  This is a limited production.

Times are changing and at warp speed today. Just think about where we were just 100 years ago, most transportation was still by horse and buggy! The industrial and technological changes are mind numbing when you think about it. Change is inevitable and a constant; without it we stagnate.

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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 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 FINANCE / TIP, LIFESTYLE / TRAVEL, SURVIVOR INFORMATION

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