Posted on Friday, 2nd February 2024 by Dennis Damp

A Federal Employee’s Dilemma

Is the grass greener on the other side? Humm, maybe, depending on the circumstances, yes and no!  If you’re referring to Ireland, yes, their grass is literally greener than most. When it comes to a career change proceed with caution, especially when considering federal employment’s exceptional pay and benefits.

In my late forties, I needed a change after spending 10 years in the same position. Early outs were on the table, and I considered applying. Thankfully, I stayed the course and transferred to another position within the same agency that was a good fit for me and my fellow workers.

What Was I Thinking

At first glance it was a no brainer to take an early out, I had a profitable part time business up and running, and a place to hang my hat when I left. My wife reminded me of what we committed to when I was just 25 years old and at a crossroad in my career. An excerpt from my memoire The Early Years, A Road Less Traveled follows that succinctly represents why I stayed the course. At the time, I was working for the Department of Defense with the Air National Guard.

Where it All Started

“I found an announcement for a GS-856-7/11 electronics technician position with the FAA at Phillipsburg, Pennsylvania, 145 miles northeast of Pittsburgh.

The position offered a small pay increase initially. However, promotions were automatic to the GS-11 grade as long as the applicant passed their training program and obtained the required equipment certifications. The GS-11 pay was considerably higher than what I was making with the Air National Guard. It would take me two years to reach the GS-11 grade or longer, depending on school availability. There was a significant risk, if I failed the schools I would be terminated!

That same week, I visited the USAir hangar at the airport and talked with their personnel office. I was at a fork in the road. At the Pittsburgh airport, the road to the left led to the FAA’s air-traffic control tower, while a right took you to USAir’s maintenance hangar.

If I worked for USAir, we wouldn’t have to move, their equipment was similar, and I’d been doing the same type of work for the past five years. The job with the FAA required a move and a considerable amount of training for new ground-based systems, but it had significant promotion potential and much higher pay after two years.

We agreed that the FAA was the best path for us, and I applied for the position in mid-September 1975. I already had five years of combined military and federal service, and if I stayed with the federal government, I could retire at age fifty-five with thirty-five years of service.”

True to our early commitment, I retired at age 55 with a generous annuity. Had I taken an early-out or moved to the private sector just 7 years earlier my annuity and benefits would have been greatly reduced.

Contradiction

I’m not saying a move to the private sector isn’t best for you and your particular circumstances. Leaving federal service, especially after devoting the majority of your work years to federal service, requires considerable forethought before proceeding. I wrote an article for Clearance Jobs titled, “Should I Stay or Should I Go Now? Leaving the Federal Government for the Private Sector.”

I state in the article, “If you are thinking about a move to the private sector, explore the opportunities and evaluate your federal retirement options. You may be able to take advantage of an immediate or deferred retirement.”

Opportunities are abundant in the private sector for highly skilled federal workers and annuitants that have the experience many companies and contractors seek out today. Sometimes their offers are hard if not impossible to resist and you never know what lies ahead unless you follow that path. If you take that path, go with your eyes open and research the impact and implications thoroughly.

Conclusion

Even though I stayed in federal service to full retirement, I understand why others would choose to leave and pursue an alternate path. Government, due to arduous and often times conflicting rules and regulations, can stymie creativity.

Successful government employees that find ways to make things work in this environment are the ones who succeed. It may be difficult but certainly not an impossible task. Another consideration is time in general.

If you are in your late 40s or early 50s with 20 to 25 plus years of service, your full retirement date isn’t that far down the road! If you leave federal service under these circumstances, ten years later you may question why you didn’t wait to make a move when you were in your high earning years at the time, and socking money away in your 401K and retirement fund!

Fortunately, Federal Employees that leave federal service may be eligible for an immediate or deferred retirement and able to retain or transfer their TSP retirement plan to an IRA or new employer’s plan.

If you are considering leaving federal service, I highly recommend you read and print a copy of Tammy Flanagan’s article titled “Planning a career change in 2024?.”  This comprehensive article provides a summary of the things you MUST know about your benefits if you are contemplating leaving federal service.

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• 2024 Federal Employee’s Leave Chart
• Medicare Guide
• Social Security Guide

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: Changing jobs, Deferred Annuities, Federal Civil Service, FERS, FERS Retirement, Leaving Federal Service
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Posted on Friday, 26th January 2024 by Dennis Damp

The Social Security Administration was the first to send out forms again this year.  Our 1099 R Tax Forms typically aren’t available until the end of January to early February by regular mail. Registered users of OPM’s Retirement Services Website can download their Annuity Statement and 1099 R forms now.

1099 Forms

I received my SSA-1099 January 9 and downloaded my 1099-R from OPM January 16^th.  Many of our 1099-INT forms are now arriving from banks and credit unions. For those who purchased Treasury Bills, Notes, and Bonds online at www.TreasuryDirect.gov or cashed in savings bonds on their site, your 1099-INT and OID statements are now available for download.

If you cashed in paper savings bonds at your local back, the cashier gives you a receipt showing the amount of interest earned. This receipt isn’t your 1099, the bank or other financial institution will send you a 1099-INT for the bonds you cashed in.

I cashed in several thirty-year paper EE savings bonds last year and received a consolidated 1099-INT form this January from my bank listing the EE savings bond interest separately in box 3 of the 1099-INT form.

When selling a second home, the closing firm typically provides the seller and the IRS a copy of the 1099-S form. This form shows the gross proceeds and any real estate taxes paid the year of the sale. Any capital gains must be reported on your tax return.

Brokerage Forms

Brokerage firms typically send out their Tax Reporting Statements showing interest, dividends and capital gains or losses towards the end of January to mid-February, later for more complicated accounts. Their consolidated statements include 1099-INT, DIV, MISC and a 1099-B for proceeds from broker and barter exchange transactions.

Annuity Statements

Federal annuitants typically receive their updated Annuity Statement, with the COLA increase added, late December.

OPM sends out updated annuity statements anytime there is change that affects our annuity. Next month we will receive another 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.

This document 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 provided on how to make 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.

Estate Planning

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 these forms from OPM’s site. This is an important document and should be readily available if you or your survivor need to contact OPM or require benefit clarifications.

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

Summary

Many banks and brokerage house’s 1099 and DIV reports are also available online for download early. Treasury Direct doesn’t send out print copies. You must download your Treasury’s OID and 1099 INT statements from your online account.

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 $79,000 or less. You will have to file your State taxes separately.

Turbo Tax offers a similar free tax filing service for those returns with limited credits and filed using IRS Form 1040 only. Roughly 37% of taxpayers are eligible for this free service.

Take advantage of OPM’s Online Services to download your 1099-R to file your taxes early, need to replace a lost 1099-R, or to obtain other important retirement forms and reports. The filing season for 2023 tax returns starts on January 29, 2024. The IRS will begin processing tax returns on that day.

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• Retirement Planning for Federal Employees & Annuitants
• The Ultimate Retirement Planning Guide – Start Now
• Deciding When To Retire – A 7-Step Guide
• 2024 Federal Employee’s Leave Chart
• Medicare Guide
• Social Security Guide

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, 1099-DIV, 1099-INT, 1099-S, Federal Employee's Annuity Statements, Free Tax Filing Services, SSA 1099
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 19th January 2024 by Dennis Damp

I was required to take my first RMD at age 70 ½ several years ago before the laws were changed. Under the SECURE 2.0 Act in 2023 the required withdrawal age increased to 73. Several newsletter subscribers asked for an update on TSP annuities, RMDs, and withdrawals in general.

Rachel stated, “While the new TSP site is nice – I was very use to the old system and get lost in the new one, so many more options I get lost.” She wanted to know more about annuities. Jaynee wanted to know if it would be best to wait until late December to withdraw her first RMD and how to withdraw the funds.

RMDs, the Basics

The IRS Code requires that you receive a portion of your TSP account (your “required minimum distribution” or “RMD”) beginning when you reach a specific age as noted on the following chart and are separated from service.

If you are a beneficiary participant, your deadline for beginning to receive RMDs depends on whether your spouse died before or after your spouse’s required beginning date for RMD payments.

Find your applicable age and required beginning date:

If the total amount of your withdrawals and distributions doesn’t satisfy your RMD, the TSP will issue a supplemental payment for the remaining amount before the deadline each year.

Other financial institutions including brokerage houses typically notify you on their website and/or in writing of the amount to be withdrawn each year. You will have to initiate the withdrawals to avoid the IRS excise tax of 25% of every dollar not withdrawn. This penalty is reduced to 10% if you file a timely correction with payment within two years.

Required Withdrawal Amount

The TSP calculates the amount you’re required to receive using your age, your traditional balance at the end of the previous year and the IRS Uniform Lifetime Table. Your RMD calculation includes only your traditional balance, and only distributions from your traditional balance will count toward satisfying the RMD amount.

With traditional TSP, your contributions go into the TSP before tax withholding, which can potentially lower your current income tax rate. But when you take money from your traditional TSP, you’ll pay taxes on both your contributions and earnings at the income tax rate of the year you make the withdrawal.

To determine your RMD, log-in to your TSP account and click on “Withdrawals and Rollovers.”  You can initiate a withdrawal of any type, including an annuity, in this section. A “Minimum Distribution Notice,” providing the withdrawal amount for the current year, is sent out in early January to all particiants that are required to take a RMD, mine arrived January 11.

The Security and Exchange Commission provides an online RMD calculator if you want to run the numbers yourself.

Your First RMD

The first year you are separated from service and reached your applicable age or older is called your first distribution calendar year. If you don’t withdraw your RMD from your traditional balance 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.

If you receive TSP installments, your installments from your traditional balance will count toward satisfying your RMD. If your installments, combined with any subsequent distributions you might make, do not meet the required amount from your traditional balance, the TSP will send a supplemental payment from your traditional balance in March of the following year to satisfy your RMD before the April 1 deadline.

For those who wait until the following April to take their first RMD, you will be required to take a second RMD by December 31^st of that same year. Taking two RMDs in one year may increase your Part B and D Medicare premiums if your Modifed Adjusted Gross Income (MAGI) requires an Income Related Monthly Adjustment Amount (IRMAA).

Distributions

There are three basic methods of withdrawing money from your TSP account as a separated or beneficiary participant: installments, partial/total distributions, and annuity purchases.

The TSP suggests, “Before you decide to take money out of your TSP account, we recommend that you consider how your decision may affect your future needs. If you are retiring or retired, you should think about when you will actually need the money in your TSP account and whether the distribution choices you make will provide enough income throughout your retirement years.”

TSP Installments

You can choose to receive installments from your account monthly, quarterly (every three months), or annually. You may schedule a date up to six months in the future for these installments to begin. Your payments will continue, unless you stop them, until your total account balance equals zero. (The minimum duration is one year.)

This is true even if you choose to have the installments come from your traditional balance first or from your Roth balance first. When you run out of money in your chosen source (traditional or Roth), payments will continue from the source you didn’t choose.

There are two ways of setting the installment amount: installments of a fixed dollar amount and installments based on life expectancy.

Partial or Total Distribution

You can receive a distribution of all or part of your TSP account. Partial distributions must be at least $1,000. There is no limit on the number of partial distributions you can take, but we will not process more than one in any 30-day period. You are allowed to take a partial distribution of part of your account even if you’re currently receiving installments. (Taking a total distribution will stop your installments.)

Purchase an Annuity

You can use all or part of your TSP account to purchase a life annuity through their outside vendor. Purchasing an annuity means that you pay now to receive monthly payments that last for the rest of your life (or, if you choose a joint life annuity, the lives of you and your joint annuitant).

The money you use to purchase a life annuity is no longer managed by you. It’s not like your TSP account, an IRA, a CD, or a bank account. You give up your money and the control of it in exchange for guaranteed lifetime monthly payments.

If you choose this option, the TSP will purchase an annuity for you from their annuity provider. Once purchased, your annuity is not part of your TSP account, and you cannot change or cancel the purchase. The minimum for an annuity purchase is $3,500. The minimum applies to your traditional balance and your Roth balance separately.

• Review the TSP Annuity Fact Sheet for additional information.

Find the TSP Information You Need

The new TSP website offers considerable guidance. However, until you understand how their website is structured, it is difficult finding the information you need. Unfortunately, the only way to get to the general information about anything and everything to do with your retirement savings account is to search for that information on their site – BEFORE SIGINING IN!  It’s a two-tiered system with a comprehensive account section integrated into the main site.

Use the search box in the upper right corner, just to the left of the Log-in button, on www.tsp.gov to locate the specific information you need. The search box located on the site after signing in will only search your personal account information.

• There is also a “Chat with AVA” feature on every page in the lower right hand corner as presented below. It is a typcial chat bot where you enter a key word or term and it replies with canned answers.  It isn’t as comprehensive as the search box on the main site and provides snippits of information without many links to the detailed reports you need. You can experiment with it as well.

Chat with AVA Logo

Rachel wanted information on annuities, a search for that title on the main site presented the listing as noted below:

The above screen shot only shows three of the fifty plus entries for you to review.  The same search after log-in shows no results.

Helpful TSP Links

Here are links to helpful guidance that you can review for various situations that you may encounter. Bookmark or print them out for your retirement and estate plans.

• TSP Annuities Fact Sheet
• Taking Money from Your Account, Including RMDs
• Tax Rules About TSP Payments
• TSP Distributions

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• TSP Guide
• Budget Work Sheet
• 2024 Pay Tables
• 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
• 2024 Federal Employee’s Leave Chart
• Medicare Guide
• Social Security Guide

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: TSP Annuities, TSP RMDs, TSP Site Search Tip, TSP Withdrawals
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 5th January 2024 by Dennis Damp

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.  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.

This booklet is a wealth of information and includes your personal retirement information: CSA number, annuity breakdown, survivor elections, benefit elections, etc.

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 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.

You can also request a copy by calling OPM at 1-888-767-6738 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: 2024 COLA, Annuity, Medicare Premiums, Retirement Account Limits, TSP 1099-Rs
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Posted on Friday, 15th December 2023 by Dennis Damp

I like to close out each year with a few last-minute updates and observations. My next article won’t be published until early January. Time to celebrate the holidays and just sit back and relax awhile.

The Clock Keeps Ticking – Thankfully

The older I get, the faster time flies by. In our youth most couldn’t wait until we were 16, graduated high school, and finally reached 21!  What was the rush? During those early years we lamented why others were at those milestones and not us.

From my mid-teens on, life was and still remains a blur, too much to do and too little time to do it. Even in retirement, retirees often ponder how they ever found time to work.

Rarely a day goes by where I’m not occupied with family activities, writing columns, running the business, working on projects, managing finances, workout routines, and unfortunately numerous doctor’s appointments.

Maybe, it’s time to take the lyrics seriously from “Feelin’ Groovy,” one of Simmon & Garfunkel’s songs: “Slow down you move to fast, you got to make the morning last, just kicking down the cobblestones, looking for fun and feeling groovy.”

Not sure about feeling groovy at my age but it’s certainly time to slow down and take life easy for a change. Actually, that’s my 2024 News Year’s resolution.

Fortunately, early this year, I got a head start on next year’s resolution. I stop for coffee several days a week with new-found friends to discuss this, that, and everything in between. An interesting interlude with an eclectic group consisting of Bob, Gary, Dave, and Craig. A welcomed break to decompress and put things into perspective.

Thrift Savings Plan (TSP) Connectivity Issue

When I recently tried to connect to TSP.gov, and to log on to one of my healthcare provider’s sites, they appeared to be down. The Thrift Savings Plan (TSP) support line confirmed the site was up and running. I reviewed my computer’s security and virus protection software and didn’t find any problems. This was occurring on all three of my computers.

I called McAfee. They suggested I turn off their Virtual Private Server (VPS); low and behold I was able to connect. If this is happening to you. Verify that a firewall app or other VPN app is not conflicting with your McAfee or other virus protection software’s VPN. 

VPNs are full-featured Virtual Private Networks that protect you as you surf the internet.

According to McAfee, “A VPN replaces the IP address of your device with a different IP address, effectively hiding your location. It uses advanced AES (Advanced Encryption Standard) 256-bit encryption by default. This encryption protects your data by preventing others from reading it as it passes over the internet.”

It also provides anonymous browsing; advertisers trying to serve ads targeted or based on customer behavior aren’t able to obtain your browsing or search habits through conventional means.

2024 Annuity Statements Available Now

OPM posted our January 2, 2024, annuity statements on servicesonline.opm.gov December 11, 2023. The statement provides your monthly annuity amount based on the 2024 COLA of 3.2% for CSRS and 2.2% for FERS annuitants.

The health benefits and Federal tax withholdings annotated on this statement are based on 2023 withholdings. A Notice of Annuity Adjustment will be sent out later in January that reflects health benefit rate changes. These changes will also be reflected on the February 2024 online annuity statement. 

The 2023 1099-Rs are typically posted on this site by mid-January, mailed copies should be received by no later than January 31. 

New Computer Purchase

I was putting off purchasing a new office desktop for some time, my main system was 6 years old and slowing to a crawl. Each time I update to a new system it takes a considerable amount of time and effort to set everything up and transfer software and data.

New Dell Computer up and Runing

The transfer wasn’t as cumbersome as anticipated and I was up and running in 3 days. My new All-in-One Dell Inspiration 7000 Series is blazing fast. It comes with a 27″ Touchscreen Infinity Edge FHD (1920 x 1080) Display, NVIDIA® GeForce MX550, camera, 32GB memory, 1TB Solid State Drive (SSD), and Intel Wi-Fi 6E (2×2/160) Gig+, Windows 11 Home, and Bluetooth 5.2! That’s a mouth full.

With my old system it would take 5 minutes or more to bring up my Quickbooks accounting software, the new system loads it in 20 seconds!

Costco had it listed for $1,499 online. When I went to the store it was marked down to $1,099. I asked the store manager why the online price was considerably higher; he stated it was the shipping and the units in the stores were marked down for clearance. Clearance items at Costco are marked down to the dollar amount followed by 97 cents. I couldn’t pass up the deal.

All-in-Ones are compact and easier to set up. When you purchase a desk top tower you often have to purchase the display, camera, microphone, keyboard, and mouse separately. Plus, I didn’t want to craw around on the floor hooking up the tower to all of the ancillary equipment.  Most computers today, including desktops with towers, don’t come with a DVD drive much to my displeasure.

If you are contemplating the purchase of a new computer, ensure the new SSD drive is of sufficient size to accommodate all of your data, future updates, and software. The laptop, that I purchased December of 2020, had a meager 128 GB SSD drive with a one tetri bite (TB) of traditional hard drive storage.

All of the operating system goes on the main SSD drive and before you know it, the drive is full. I worked with Dell to move as much of my laptop data as possible to the hard drive but it is still a problem. If you purchase a minimum of 512 GB for your SSD drive or larger it will work more efficiently, and the SSDs load superfast. You won’t be disappointed.

Correction

In my previous article, the date of maturity for the 13-week T-Bill I mentioned was incorrect. The maturity date is 2/1/2024. Here is the corrected paragraph:

“If you invested $50,000 in a 13-week T-Bill issued on 11/2/2023 that is earning 5.488%, the Treasury withdrew $49,319 from your account. On the maturity date of 2/1/2024 they will deposit $50,000 into your account resulting in a $681 profit.”

My newsletter posts are published concurrently on our blog at www.fedretire.net. The corrections can be viewed there.

My newsletter subscribers and blog visitors are my de facto editors; your input is much appreciated. Please don’t hesitate to let me know if you find an error that needs corrected or that I missed something. I appreciate any and all feedback that I receive.

Wrap Up

Another year gone by at lightning speed, a year older, and hopefully wiser, not sure about that last one yet. I believe I wrote more articles this year than in any year previously, so many changes and so much to talk about.

This was especially true during open season where 17 FEHB providers set up Medicare Prescription Drug Plans (MPDP), and many new Medicare Advantage (MA) plans were established by others. Then you add in the substantial changes and cost increases for Long Term Care and so much more.

I revised and sent out our updated 2024 Federal Employees Leave and Schedule spreadsheet for those still working and planning their exit. Another year-long feature explored fixed income investing and the benefits of Treasury Bills, Savings Bonds, and CDs.

Several articles received a lot of attention this year including Pandemonium and Insecurity – The Jackels at Our Gate, and This, That, and Other Things – Nothing but the Truth. Sometimes I feel compelled to speak out about controversial subjects.

All this while tax season is fast approaching with even more changes coming our way. Change is a fact of life and happening at warp speed these days.

I wish all of my newsletter subscribers and site visitors a joyous holiday and a happy, healthy, and prosperous NEW YEAR.  My best to you and yours always.

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.

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

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Posted on Friday, 8th December 2023 by Dennis Damp

I started purchasing Treasury Bills in early 2022 to increase our returns due to the extremely low interest rates banks, credit unions, and CDs were offering at the time. The Federal Reserve kept interest rates artificially low far too long.

After a decade of near zero interest rates, those on fixed incomes were losing money hand over fist as they watched their savings evaporate year after year.

Fixed income investments offer decent yields today that are (FDIC) or (NCAU) insured or purchased direct from the U.S. Treasury. They remain in favor due to the uncertainty in the equity markets and inflation is still well above the Federal Reserve’s target rate.

Treasury Bill Rates Continue to Outperform

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 in March of 2022 when my bank’s savings rate was .04%.

You can currently earn over 5% on all T-Bills. My last reinvestment for 13-week T-Bills yielded 5.488% on 11/2/23 and my 8-week Bills reinvested at 5.412% on 11/21/23.

If you invested $50,000 in a 13-week T-Bill issued on 11/2/2023 that is earning 5.488%, the Treasury withdrew $49,319 from your account. On the maturity date of 2/1/2024 they will deposit $50,000 into your account resulting in a $681 profit.

Had you had this amount deposited in a bank savings account paying 1%, you would have earned $124.99.

The Federal Reserve hasn’t increased rates for several months now and inflation may be here for longer than expected. Rates have leveled off somewhat, and it may be the time to move some of your cash to longer term CDs or consider investing in 52-week T-Bills, or Treasury Notes that are issued in 2,3,5,7 and 10-year durations to lock in higher yields.

Treasury Bill Investment Rates

Savings Deposits and CDs

According to the Federal Deposit Insurance Corporation (FDIC), the national average savings account rate is still only 0.45% as of October 2023.

Many online banks, credit unions, and regional banks are offering competitive rates for savings accounts and CDs from 3.5 to 5 percent and higher in many cases. Most higher rate CDs in my area are for terms from 6 to 15 months. A good deal compared to just a year ago when most rates were less than 1 percent and they are FDIC or NCAU insured.

Recently, after discussing our bank’s low money market rates with an account representative, they increased our money market rate to 3.5% for the next 13 months. Still well below what Treasures and CDs are offering. Yet, an incentive to keep more funds in our local account for unexpected expenses.

I was able to lock in 15-month CDs at two local credit unions for 5.75%. Clearview CU offered this rate through November 4^th for new money and my primary credit union matched their offer!

The 30-year average gain of the S&P 500 is 7.1% after inflation. These CDs have no market risk if you stay under their insured limits. It was a no brainer to move some of the funds I was cycling through the Treasury to this attractive yielding investment.

Yes, rates can continue to rise, or if inflation is truly tamed as the administration predicts, they may languish at the current levels for some time before the Treasury changes course and begins lowering rates.

I-Savings Bond Rates 

I Bonds issued November 1, 2023, to April 30, 2024, earn 5.27%. This includes a 1.3% fixed rate. Still a great rate for one of the safest investments available. You can’t cash them in for one year. Plus, if you redeem them within the first five years you lose three months’ interest. Savings bonds are easy to purchase and are maintained in an online account with Treasury Direct.

I-bonds issued in 1999 have a 3% fixed rate, they are earning just under 7% now, the 3 percent fixed rate and the 3.97% inflation rate for the new issue I-bonds.

If you purchase an I-Bond by no later than April 31, 2024, you’ll receive the 5.27% for six months from the date of purchase. The rate will change after that to the new inflation rate announced this coming May plus any fixed rate your previously purchased bonds may have.

Summary

Now that CD rates are improving; if you can lock up your discretionary savings for 6 to 15 months or longer, they are a viable option. CDs can be cashed in before maturity, however the penalties can be significant. Treasury Bill rates are moderating down a bit, not much but you can see the trend on the above chart. Brokerage firms like Fidelity and Vanguard also offer access to national FDIC insured CDs at reasonable yields.

If you are unfamiliar with purchasing fixed income assets through your broker, their fixed income department will walk you through the process. They are very helpful.

Short term T-Bills provide impressive yields considering how many banks continue to low ball their savings rates for established accounts. These banks are betting on the reluctance of many to move their savings and checking accounts elsewhere.

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

If you are reluctant to move your savings to Treasury Bills, CDs, or higher paying accounts elsewhere, there are still options for you to earn higher rates.

Schedule an appointment with a representative from your bank or credit union and negotiate a higher rate for your savings and money market accounts like my wife and I did last month. It pays to speak up and insist on a fair rate of return for your hard-earned money.

Helpful Retirement Planning Tools

• Financial Planning Guide for Federal Employees and Annuitants
• TSP Guide
• Budget Work Sheet
• 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
• Medicare Guide
• Social Security Guide

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: CDs, Certificate of Deposits, I Bonds, Savings Bonds, T-Bills, Treasury Bills
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Posted on Friday, 1st December 2023 by Dennis Damp

I’ve spent most of my time evaluating our health care options this past two months. This year’s focus was on the new Medicare Advantage (MA) plans offered by GEHA and the Medicare Prescription Drug Plan (MPDP) offered by Blue Cross and Blue Shield and 16 other providers. So much to consider and research before staying the course with our current plans or moving to a new option.

Observations

Medicare Advantage (MA) Plans with their Part D prescription coverage offer considerable savings. I outlined the GEHA MA plan benefits in my article titled, Comparing FEHB Plans to their Medicare Advantage (MA) Option.

It would seem the best of both worlds, Part B subsidies that increase monthly Social Security checks, lower prescription costs, gym memberships, and other attractive benefits. Unfortunately, there are drawbacks, especially for those with health issues that often require pre-approvals for tests and medical procedures.

Who Pays for Added Benefits and Subsidies?

According to the Medicare website, “Medicare Advantage is a Medicare-approved plan from a private company that offers an alternative to Original Medicare for your health and drug coverage. These “bundled” plans include Part A, Part B, and usually Part D.”

To provide the same level of services and extended benefits, they must reduce costs, operate efficiently, and review the medical necessity of tests and procedures ordered by your doctor.

In most cases, you can only use doctors who are in the plan’s network and in many cases, you may need to get approval from your plan before it covers certain drugs or services. This added layer of approvals and subsequent appeals can delay tests and procedures for critically needed services.

Feedback

I received a number of replies to my request for input about FEHB MA plans.

One of our newsletter subscribers opted into the Mail Handlers Standard MA plan last fall. He did extensive research and finalized the decision using the CHECKBOOK’s FEHB plan comparison service. His wife had extensive medical expenses due to unexpected heart disease after enrolling.

They paid nothing for her procedures or hospital stay. Their prescription costs range from $0 to $50 for 90-day periods. Just two were $50 because they are new brand name drugs.  He is satisfied with the plan and staying enrolled for 2024.

Note: Order Checkbook’s guide at Guidetohealthplans.org and save 20% by entering promo code FEDRETIRE at checkout. The online and print Guide is available.

Dona’s husband had his first knee replaced without incident. At the time they were enrolled in the Aetna FEHB plan before the MA option was available. Medicare was their primary provider.

They signed up for one of the FEHB sponsored MA plans and all went well the first year. Her husband’s other knee required replacement and his doctor submitted the request for approval to his Medicare Advantage plan office. A week before the scheduled surgery, his custom knee was denied.

They appealed the decision, and it was turned down again. Another off-the-shelf orthotic device was submitted; they had to cancel the operation again. Dona transferred back to the their original FEHB plan during the next open season.

Dan agrees that the GEHA MA plans look very attractive! He was enrolled in BCBS Basic and has evaluated other plans because of increasing premiums.

He is switching to GEHA Standard this year and signing up for their MA plan after considerable research. He stated, “Between the savings in monthly premiums, being able to drop my FEDVIP Dental plan and my COLA for next year I will be looking at around a $400 increase in my retirement check each month.”

A blog visitor replied, “I too have been a GEHA Standard enrollee for many years and I was very interested in the new MA advantage plan. It all looked good until I started checking the in-network providers.”

He went on to say, “Not a single quality hospital in my area is included in the network (and only about 1/2 of my physicians). Yes, I know that you can ask the provider to accept payment from UHC and that you also have the option of paying the bill directly and then being reimbursed but do I really want to be bothered with that every time I have a test or need a service from one of the non-network providers.”

He is going to explore other MA plans in his area or stay with GEHA standard.

What Option is Best for You, MA or MPDP?

After weighing all of the factors and exploring plans, the Medicare Prescription Drug Plan (MPDP) is an attractive choice for me and my family. Even though I would be subject to a Part D income-related monthly adjustment amount (IRMAA), it would still provide significant prescription savings overall as I noted in my previous article.

Unfortunately, it is only offered by 17 plans in 2024 and GEHA isn’t one of them. I won’t abandon my GEHA plan to take advantage of it, I’m satisfied with their Standard plan and its low monthly self plus-one premium of $326.79. Changing to BCBS Basic, which offers this feature, would increase my monthly payment by $186.91 to $517.13.

With the MPDP, Medicare A & B remains your primary provider and the FEHB plan picks up all of your copays, coinsurance and deductibles. You typically don’t have the pre-approval issues that you may experience with MA plans.

Drug costs are much lower under Part D, especially with the added enhancements included by your FEHB plan, and you are able to pick it up without a late enrollment penalty!

Hopefully, GEHA and others will offer the MPDP option in 2025.

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Conclusion

Most are drawn to the FEHB MA options for the cost savings. Who wouldn’t want your PART B Premiums reduced and, in some cases, eliminated? Then you add in the significant prescription cost savings, and other benefits.

Initially, I felt it worth the risk to sign up for the MA option due to the ability to opt out at any time during the year and return to your original FEHB plan. Dona, one of the respondents to my query about MA plans, mentioned they switched back to their original plan after having the problems with getting her husband’s knee replaced.

She stated, “He got his new card and assumed all was ok and he was out of Medicare Advantage.” The plan still had her husband partially enrolled in the MA plan and she proclaimed, “Getting this corrected was a nightmare process that took months and months and many calls to finally fix. He once again had to delay his knee surgery.”

Yes, the MA plans are attractive and may be a good fit for you and yours. Take your time to explore the options, review the information provided by each carrier, and call to ask questions that you need the answer to before enrolling.

Good health is fleeting and you never know what is around the corner at any age. I’ve been back and forth on the issue of signing up for an MA plan all year. I’ll be staying with my GEHA Standard plan again this year, and hope they will offer the MDPD option during the 2025 open season.

Previous Open Season Articles

• Comparing FEHB Plans to their Medicare Advantage (MA) Option
• The FEP Medicare Prescription Drug Program (MPDP) Part 1
• Prescription Drug Coverage and MA Plans in 2024 – Part 2
• 2024 FEHB Plan Selection Guide – Which Plan is Best for YOU

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: BCBS PDP, FRHB MA Plans, MA, Medicare Advantage, Medicare Prescription Drug Program, MPDP, PDP
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, WELLNESS / HEALTH

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Posted on Friday, 24th November 2023 by Dennis Damp

This article compares the Government Employees Health Association (GEHA) Standard Plan to their new MA Option. You will have to review the specific plan of interest to ensure it covers the services you need for the upcoming year.  

Open season closes December 11, we have less than two weeks to decide whether to stay the course or move to another potentially lower cost plan with the benefits and services needed. Today, with the rising cost of everything, it is an essential and time-consuming task.

The FEHB Medicare Advantage Conundrum

Many Federal Employee’s Health Benefit (FEHB) plans offer a Medicare Advantage (MA) option that appears to provide considerable savings and expanded benefits for federal employees and annuitants. I’ve been a GEHA Standard plan subscriber for the past 10 years; they provided exceptional services and low-cost benefits without fail all these years.

What can their MA Standard and High option provide that I don’t already have? Much to my surprise, their MA options appear to provide considerably more benefits than I had imagined and decided to outline them here for our newsletter subscribers and website visitors.

Who is on First and What is on Second (Abbott and Costello)

There are two GEHA MA plans this year, a standard and high option both managed by United Healthcare, one of the largest healthcare providers nationwide. I’ll focus on the Self Plus One Standard option for this review. The standard monthly premium is $326.79 and the High option costs $540.95.

Actually, GEHA’s standard premium is one of the lowest available and they provide comprehensive coverage and great service overall. There aren’t any additional premiums required when you opt for their Medicare Advantage offerings. Stange but true. Plus, both plans provide a Part B subsidy, $75 for the Standard Plan and $100 for their High Option.

Just the Facts Please

There aren’t any additional premiums for the MA options PLUS your Part B premiums withheld by Social Security decrease by either $75 or $100 for both you and your spouse.

In other words, if you file a joint tax return with a modified adjusted gross income of less than or equal to $206,000 your Part B premium would be $174.70 for each of you. If you are enrolled in the Standard GEHA plan, Social Security will reduce your Party B premium by $75 to $99.70 and your Social Security check will increase by $75 for both you and your spouse!

According to GEHA’s letter sent October 4, 2023.  “Enrollment is voluntary. Annuitants (and/or their eligible dependents) may opt in or out of the enhanced level of benefits at any time throughout the year.” You don’t need to wait until the next open season to move back to your original plan.

With that cavate, there seems to be little risk. If you aren’t satisfied you can opt out and return to your original GEHA plan and revert back to traditional Medicare Part A and B.

GEHA Standard MA Advantages

The following list highlights some of the major benefits of the FEHB MA Standard option:

• The MA plan provides a $75 Part B premium subsidy
• Free gym membership
• Over-the-counter item allowance of $40
• No need to coordinate benefits between Medicare and GEHA
• Eliminates the annual Medical out-of-pocket maximum of $6,500 / $13,000
• Provides 30 additional acupuncture visits per year
• Unlimited speech and occupational therapy visits
• No copayment for durable medical equipment
• Zero copay for routine podiatry
• $2,500 hearing aid allowance, limited to UnitedHealthcare hearing network providers

To clarify, the GEHA MA option is a national PPO plan and enrollees pay $0 deductibles, copays, and coinsurance as you currently have under the Standard GEHA plan. This includes $0 for preventative services, physician office visits (primary and specialists), hospital visits, emergency room or urgent care, and ambulance service.

Medicare advantage enrollees will receive a new medical card that you must provide to your doctor’s receptionist during your next visit, and to the pharmacy where your prescriptions are filled. Keep your GEHA card as well, you must remain a GEHA member to enroll in their UnitedHealthcare managed MA plans.

Prescription Drug Tiers (A Significant Advantage)

Once you elect a MA plan, a Medicare Part C Plan, you are automatically enrolled in Medicare Part D drug coverage. Those over 65 and new enrollees in the GEHA Medicare Advantage plan may receive a Late Enrollment Penalty Letter for Part D from Social Security. If you receive this notice, call the plan to let them know it was received. You will not be penalized for a late Part D enrollment when sighing up for a FEHB sponsored MA plan.

Secondly, if you decide to opt out of the program you will not be penalized for Part D late enrollment if you should decide to reenroll down the road.

Significant prescription cost savings

If the actual cost of a drug is less than the normal cost-sharing amount shown on the following chart for that drug, you only pay the actual cost, not the higher cost-sharing amount. I’ve paid less than a dollar for some generic prescriptions.

GEHA provides supplemental drug coverage in addition to your Part D prescription drug benefit when you sign up for their MA plans. The drug copays in this section are for drugs that are covered by both your Part D prescription drug benefit and your supplemental drug coverage.

The Standard GEHA plan cost for a Tier 2 drug is 40% ($250 max) compared to a straight $40 copay under their MA option. I researched two prescriptions that my wife and I were prescribed recently and was amazed at the savings.

Drug Cost Comparisons

• Jardiance TAB 10MG, $80 for a 90-day supply for the MA plan compared to $500 with GEHA Standard
• Advair HFA AER 115/21, $40 MA, $157 per month under the GEHA Standard Plan

Check the cost of your prescriptions under the GEHA Standard MA plan. Compare them to the GEHA Standard non-MA plan costs or call GEHA and they will provide the costs for you.

GEHA Standard MA Plan Prescription Drug Costs

Pharmacy out-of-pocket maximum

When your total out-of-pocket costs (what you pay) reach $3,500 you will not pay any copay or coinsurance.

Cost Savings Analysis

You may run into difficulties if you’re required to pay a higher Part B and D premium based on your income due to the income-related monthly adjustment amount (IRMAA). The increased premium payments are based on your Modified Adjusted Gross Income (MAGI).

Only 7% of those on Medicare pay an income adjusted amount for their part B and D premiums.

Most required to pay an IRMAA will be in the first bracket, those filing an individual tax return with a MAGI of greater than $103,000 but less than or equal to $129,000, or those filing a joint return with a MAGI greater than $206,000 but less than or equal to $258,000.

Once you move to a bracket that requires an IRMAA, those enrolled in an MA plan would also pay Part D IRMAA premiums as well.  However, for those in the first bracket, that would only amount to $12.90. Let’s work up the numbers.

The Numbers Game

For this analysis a couple is filing a joint return with a MAGI of $212,000. They are in the first IRMAA bracket and their premiums will be as follows:

• $326.79 – GEHA Standard FEHB for Self Plus One
• $489.20 – Part B premium $174.70 plus an IRMAA of $69.90 ($244.60). Each person will pay $244.60. After the Part B subsidy of $75 is applied, $169.60 would be deducted from each of your Social Security checks monthly.
• $25.80 – Part D premium, the IRMAA, $12.90 times two, for each person. The $12.90 will also be deducted from each of your Social Security checks every month.

The couple’s total premiums will be $841.79. This is adjusted down by the Medicare Part B subsidy of $75 per month for each member, two in this case. Social Security will reduce your part B premium by this subsidy therefore increasing each of your Social Security checks by $75.

Essentially, this reduces your total monthly premium by $150 to $691.79. Then factor in your lower prescription drug costs and the additional benefits such the $40 over-the-counter item allowance and the elimination of the annual medical out-of-pocket maximum. Lots to consider.

Dental and Eye Care Potential Savings

You will also find generous dental and eyecare benefits that may allow you to drop or reduce your FEDVIP coverage. Compare you FEDVIP plan coverage to the GEHA Standard MA plan benefits to see if that is feasible for you.  I would reduce my healthcare benefit costs by another $75 if I dropped my FEDVIP coverage. Here is a link to additional services provided under this MA Plan:

• Additional Services

Compare Plans

Use OPM’s FEHB Plan Comparison Tool and Consumers’ Checkbook 2024 Guide to Health Plans to find the best FEHB plan for your needs. The Consumers’ Checkbook Guide is available in print and online formats.

Checkbook’s Guide helps active and retired federal employees find a FEHB plan that meets their needs at a cost they can afford. By answering a few questions, a personalized cost estimate is provided for each plan that includes the premium plus expected out-of-pocket costs.

For retirees, Checkbook’s Guide provides a yearly cost estimate for every FEHB plan with Medicare Part A only and a separate estimate with Medicare parts A and B. This allows users to see which plans coordinate best with Medicare, the cost reduction of adding Medicare Part B, and whether the FEHB plan offers Medicare Part B premium rebates.

Federal Retirement readers can order Checkbook’s guide at Guidetohealthplans.org and save 20% by entering promo code FEDRETIRE at checkout. The online and print Guide is available now.

Use these two excellent tools to drill down to and find the plan best suited for your personal situation. Review individual FEHB brochures, they provide the plan’s official statement of benefits.

Precautions

I wrote an article earlier this month that talked about issues hospitals, especially in rural areas were having with certain MA plans. If you missed the article, click on the link below to review it, and read the Caution Section.

• Prescription Drug Coverage and MA Plans – Part 2

There are always exceptions and it is best to talk with your primary providers to ensure they accept the MA plan you are enrolling in. According to one article I read, “a growing number of hospitals and health systems nationwide are pushing back and dropping some or all contracts with the private plans altogether.”

Use the following link to see if your providers are in their network:

• https://retiree.uhc.com/geha/find-a-provider

The FEHB MA plans appear to be more robust and hopefully less susceptible to these issues, more research on my part is needed to confirm this. If anyone reading this has experienced problems with their FEHB MA plans, please let me know so that I can relay them to our subscribers and blog readers.

Summary

I’ve been hesitant to switch to a MA plan since they were first introduced under the FEHB umbrella several years ago. Knowing that you can opt out of the GEHA MA program at any time, and revert back to a standard GEHA Self Plus One plan with Medicare A and B is one of the major deciding factors for me. After a little more research on my part, I may sign up before open season ends on December 11^th.

The only reservation is the potential for referrals that may be required under the MA plan for services such as MRIs and various tests that are needed as we age.

Another consideration is that retiree’s income can change each year due to retirement plan RMDs, increased interest and dividend income, and unanticipated capital gains, that could increase your IRMAA in the out years.  If that is the case you can always opt out and return to the Standard GEHA plan. Those in higher IRMAA tiers could end up paying more for their coverage even with Part B subsidies.

I talked with Camille Hemmerich, one of the GEHA UnitedHealthcare Customer Service Advocates this week to verify a number of issues. She was very helpful and we discussed most of the above to one degree or another.

Call their help line at 1-844-491-9898 for clarification that you may need and to sign up. They are available from 8 a.m. to 8 p.m. local times, 7 days a week or visit www.geha.com/MedicareAdvantage.

When you call, be prepared to answer questions to confirm your identity and determine which MA plan you are eligible to enroll in. Camille was able to answer all of my questions to my satisfaction and backed up her replies with references.

Overall, the more I research this option the more attractive it appears to be.

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: FEHB, FEHB MA, FEHB Open Season, MA and Part B, Medicare Advantage Plans
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, UNCATEGORIZED, WELLNESS / HEALTH

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