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Postal Service Health Benefit (PSHB) Providers Announced

Posted on Friday, 3rd May 2024 by

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OPM Released a list of conditionally approved Postal Service Health Benefit (PSHB) Program carriers for their new centralized health care system. The new PSHB program will cover almost two million USPS employee’s and their family members starting in 2025.

Postal Reform Act

The Postal Service Reform Act (PSRA) of 2022 requires that OPM establish this new health care program, which will provide coverage for 1.9 million employees, annuitants, and their eligible family members beginning January 1, 2025.

There are 32 carriers approved for this new program, and they offer a mix of fee-for-service and health maintenance organizations, all are contingent upon successful benefits and rate negotiations.

Plans vary from nationwide to specific regions and all of them have provided health care insurance under the Federal Employees Health Benefits (FEHB) Program. The PSHB Program will cover roughly 20 percent of the total current FEHB population.

Medicare Part B Requirement

There are two sets of rules to follow concerning Medicare Part B enrollments, one for those still employed and another for annuitants. The rules are also based on age at the time of retirement.

The requirement to sign up for Medicare Part B is limited to postal employees that retire on or after January 1, 2025, and are under 64. You WILL BE required to enroll in Medicare Part B when you become entitled for Medicare Part A (typically at age 65) to remain enrolled in a PSHB plan.

Review my article titled “FEHB Adding Medicare Part B Requirement for (PSHB) Plans” for complete details about this new requirement.




PSHB Review

The Postal Service Health Benefits (PSHB) Program is a new, separate program within the Federal Employees Health Benefits (FEHB) Program. It will be administered by the Office of Personnel Management (OPM) which will provide health insurance to eligible Postal Service employees, Postal Service annuitants, and their eligible family members starting in 2025. PSHB Program coverage will replace Federal Employees Health Benefit (FEHB) Program coverage for these groups.

Postal Service members will be able to view coverage details and make changes during the upcoming 2024 Open Season, which is aligned with the FEHB Program. Most Postal Service employees and annuitants will be offered a 2025 PSHB plan that is equivalent to their 2024 FEHB plan option.

As stipulated in the PSRA, if an enrollee’s FEHB carrier is not participating in PSHB, that individual will be automatically enrolled in the lowest-cost, nationwide PSHB plan that is not a high-deductible health plan and does not charge an association or membership fee. All such automatic enrollments will be a PSHB plan of the same enrollment type (self only, self and family, or self plus one) as the 2024 FEHB plan.

Conditionally Approved PSHB Carrier List

Carrier Name / Plan Type

Health Maintenance Organization = HMO, Fee-for-Service = FFS

  1. Aetna: HDHP, Aetna Direct, Aetna Advantage / HMO
  2. Aetna: Open Access HMO and Aetna Saver / HMO
  3. Aetna: CDHP and Value / HMO
  4. American Postal Workers Union (APWU) Health Plan / FFS
  5. Blue Cross Blue Shield (BCBS) Service Benefit Plan / FFS
  6. Capital Health Plan / HMO
  7. CareFirst BlueChoice / HMO
  8. Government Employees Health Association (GEHA) Employee Organization / FFS
  9. Government Employees Health Association (GEHA) Indemnity Benefit Plan / FFS
  10. Health Alliance Plan of Michigan / HMO
  11. HealthPartners / HMO
  12. Hawaii Medical Service Association (HMSA) / HMO
  13. Independent Health Association, Inc. / HMO
  14. Kaiser Permanente – Colorado / HMO
  15. Kaiser Permanente – Fresno California / HMO
  16. Kaiser Permanente – Hawaii / HMO
  17. Kaiser Permanente – Northern California / HMO
  18. Kaiser Permanente – Northwest / HMO
  19. Kaiser Permanente – Southern California / HMO
  20. Kaiser Permanente – Washington Core / HMO
  21. Kaiser Permanente – Washington Options Federal / HMO
  22. Kaiser Permanente – Georgia / HMO
  23. Kaiser Permanente – Mid-Atlantic / HMO
  24. Mail Handlers Benefit Plan / Fee-for-Service
  25. Medical Mutual of Ohio / HMO
  26. National Association of Letter Carriers (NALC) Health Benefit Plan / FFS
  27. Rural Carrier Benefit Plan / FFS
  28. TakeCare / HMO
  29. Triple-S Salud / HMO
  30. UnitedHealthcare Insurance Company, Inc. – Choice Plus Primary / HMO
  31. UnitedHealthcare Insurance Company, Inc. – Choice Plus Primary WF / HMO
  32. UPMC Health Plan / HMO

Summary

The PSHB program begins January 1, 2025 and all current postal employees and annuitants will be required to select one of the available PSHB plans during the 2024 health care open season. The plan brochures will be available in October for your review.

As stated earlier, the requirement to sign up for Medicare Part B is limited to postal employees that retire on or after January 1, 2025, and are under 64. You WILL BE required to enroll in Medicare Part B when you become entitled for Medicare Part A (typically at age 65) to remain enrolled in a PSHB plan.

This is a significant change from the FEHB plan and most will look for lower cost PSHB plans to offset the additional costs of Medicare’s income adjusted Part B premiums.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, 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 information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

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Down But Not Out – Imagine if This Was You!

Posted on Friday, 12th April 2024 by

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

Our national debt was $15.5 trillion in 2012 when I first addressed this issue, today it has more than doubled and exceeds $34 trillion! Federal budget deficits will continue this year, according to CNBC, as the government borrows over $1 trillion dollars every 100 days.

The National Debt

The national debt consists of public and intragovernmental debt owed by Uncle Sam. Public debt is what the government owes to bond holders including American citizens, international investors, and foreign governments that buy our bonds. U.S. citizens own the majority of the national debt.

Currently, the national debt is just over $34 trillion, it was $32 trillion in 2022 and it reached and has since exceeded 100% of our gross domestic product (GDP). GDP is the value of all finished goods and services made during a specific period within a country. The last time we attained this lofty perch was during WW II and it is unsustainable according to most economists.

I’ll Gladly Pay you Tuesday for a Hamberger Today

Some reading this column may not understand the subtitle for this section, I defer to Wimpy from the Popeye cartoons.

Uncle Sam spent $7.66 trillion last year, their total net cost, according to the Treasury’s 2023 Executive Summary and only took in $4.465 trillion from tax and other unearned income. In other words, approximately 42 cents of every dollar spent was borrowed in 2023. This is a long-term trend and according to the U.S Treasury, it’s unsustainable. Review page 7 of the Treasury’s 2023 Executive Summary Report.

This outrageously high borrowing rate is continuing again this year! It’s insane, and I can’t for the life of me understand why they don’t offset spending shortfalls with realistic cuts across the board, slash obsolete programs, and offset any new programs with cuts elsewhere, like the private sector and all of us have to do.

We all know firsthand just how wasteful government can be, many reading my column worked in the system for decades.

Everyone is impacted by out-of-control spending and neither political party is immune to spending beyond our means.

The State of the Economy

Our economy isn’t in the best of shape though you wouldn’t know it from the stock market highs we’ve seen recently. This is due, in part, to excessive federal spending that appears to be driving the market higher while middle America suffers with out-of-control inflation, especially for the essentials: housing, food and fuel.

Many analysts believe that the market’s recent strength also reflects expectations of a major change in Federal Reserve (Fed) monetary policy. Traders were anticipating multiple interest rate cuts this year that seem to have evaporated recently.

Tech sector growth, seven stocks, attributed to the majority of the market gains in 2023!

Is This Sustainable?

The following chart depicts the scope of the problem and unfortunately the predicament we find ourselves in today. This chart compares the United States’ budget and spending to that of an average American family.

The first table lists government budget statistics for 2023. These figures were obtained from the Treasury’s 2023 Executive Summary.

  • United States Tax Revenue: $4,465,600,000,000
  • Total Spent: $7,882,800,000,000 (Treasury’s total net costs)
  • New Debt: $3,417,200,000,000 (Debt needed to cover expendatures)
  • National Debt: $34,600,000,000,000 (Doesn’t include unfunded liabilities)

Now, remove eight (8) zeros and imagine it’s a household budget as noted below. The title for each entry was changed to a related household category:

  • Annual family income: $44,656
  • Money the family spent: $78,828
  • New debt: $34,172 (Borrowed in the Current Year)
  • Outstanding debt: $346,000

The $346,000 could include credit cards, home mortgage, and car loans. However, the interest would be prohibitive. For example, consider the average total interest paid on the debt at 7%. Credit card and auto loan interest can be much higher. The yearly interest alone would consume $24,220 or 54% of their annual family income. Totally unsustainable.

The Money Supply

Thankfully or regrettably depending on how you look at it, the Federal Reserve is able to add trillions to our money supply by simply making a book entry which drives inflation higher. They purchase Treasury notes, bills and bonds if the government can’t sell them at auction.

This is somewhat disconcerting on many levels. The government must keep interest rates artificially low in order to service the debt and pay interest to the bond holders. Otherwise, we could default on our obligations and devastate the world economy.




The Impossible Dream

How long could a family continue doing this without going bankrupt and insane to boot? Having unmanageable debt would drive me CRAZY. The government knows this is a problem but continues to ignore the issue.

Imagine having a $100,000 loan and you decide it’s best to borrow more each year to make the payments on your outstanding debt. This simply can’t work.

We may be down but not out! A balanced budget amendment would restore our financial health and ensure future Congressional bodies won’t break the bank.

You frequently hear about ten-year budget reduction plans passed by congress. What they don’t tell you is that after the next election, the new congress is not obligated to continue with those plans and often ignores them completely. If you must balance the budget every year, this wouldn’t be an issue.

Conclusion

Our representatives MUST be fiscally responsible and do what is best for the country instead of focusing on what they need to do to get re-elected. Term limits would allow them to focus on just that, instead of blindly supporting the party line on either side of the aisle.

Many consider elections de facto term limits. If that is the case, why did both parties fast track the twenty second Amendment after President Franklin D. Roosevelt died at the end of World War II?

The 28th amendment states, “No person shall be elected to the office of the President more than twice.” Roosevelt was elected four times as president! Both parties supported it because POWER CORRUPTS when unchecked, and the eight-year precedent set by Washington guards against tyrannical rule.

This is what we are experiencing with our legislatures, too much unchecked power. We need a twenty eighth amendment limiting congressman to six 2-year terms and Senators to two 6-year terms.

In my opinion we don’t have a revenue problem; we have a chronic spending problem!

I wrote several articles that discuss ways to protect what you worked a lifetime to accumulate. You may find these interesting. Some were written several years ago, take that into account when reading them:

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, 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 information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in BENEFITS / INSURANCE, ESTATE PLANNING, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, WELLNESS / HEALTH

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Is Working in Retirement A Necessity Today?

Posted on Friday, 5th April 2024 by

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Considering today’s high cost of living, it’s no wonder why many retirees are looking for jobs to make ends meet.

A visit to your local grocery store brings this home when we walk out with two small bags of groceries for $100. Meat, coffee, and just about everything is simply off the charts. We picked up 6 cupcakes at a local grocery for Easter and they cost $8.99.

My wife and I made a rare visit to McDonalds, it cost over $18 for two hamburgers, a medium fry, and one small drink. A good friend stopped at Taco Bell with his wife and daughter recently; the bill was $40!

It’s no wonder why many, if not most, retirees choose to cook their meals at home today. One of the few ways to save is to buy in bulk at Sam’s Club or Costco. Walmart is even getting expensive.

Stuck in Neutral

I feel sorry for those looking to buy their first home or downsize with mortgage rates over 7 percent considering the outrageous cost of housing today. We looked at a new connected patio home last month. The price for a 1500 square foot, three bedrooms, two bath home was just over $450,000, $300 a square foot! That was the starting price.

Retirees wanting to downsize are hesitant to do so because of the high cost of new homes and rental costs are literally through the roof, yet we see apartment construction everywhere you turn today. Do we really think inflation is coming down for life’s essentials? Prices always go up must faster than they come down, if ever.

Abundant Employment Opportunities

Fortunately, there is no shortage of jobs for skilled federal annuitants. Private sector employers actively recruit highly qualified and skilled federal annuitants and federal employees approaching retirement.

Government employees and retirees are sought out by corporate America due to their exceptional skills, education, security clearances held, and knowledge of their agency or federal programs.

Updated Jobs Board

Full and part time job vacancies are available nationwide in most occupations. Visit our Jobs Center  and use our free Jobs Board to start your search.

Opportunities exist for those looking to supplement their retirement income or to start a second career. We provide this job listing service specifically for companies that are seeking to hire retired federal workers.

We changed the format recently and focus on major employers across the country such as Walmart, Home Depot, and others. A list of the websites and career centers is available for the top 68 companies that hire contractors for the federal sector. Companies can also post their vacancies on our site for their critical hiring needs.




Current Listings

Northrop Grumman has over 1800 vacancies currently listed and employs over 100,000 worldwide. They provide pioneering technologies and create revolutionary technology to connect, advance and protect the U.S. and its allies. If you are interested in working overseas, they deliver products and services to customers in 25 nations.

Jobs range from administrative to highly technical positions to address problems in space, aeronautics, defense and cyberspace for their customers worldwide.

Review our master list of the 68 largest companies that hire contractors to explore opportunities in your area.  There are many thousands of positions currently available.

Large American Corporation Recruiting Sites

We provide links to large corporation recruiting sites that you can search by location and desired occupation. These companies have stores within commuting distance to most metropolitan areas: companies like Walmart, Target, Ace Hardware and others. To find other jobs in your areas we link to CareerBuilder.com that provides free job searches for the entire country.

Salary Impact on Your Annuity

A federal retiree’s annuity is not reduced when returning to work for private sector employers. Federal retirees can return to federal service under the Rehired Annuitant Program. In most cases this will impact and reduce your annuity. However, certain rehired annuitant positions offer waivers for critical hard to fill positions, allowing the applicant to retain their annuity and new salary in full.

Making Ends Meet – Earn More or Cut Costs

Summary

Should I Stay or Should I Go? Leaving the Federal Service for the Private Sector

There are abundant opportunities to work for contractors. While working with the FAA I’ve seen many retirees came back to work as contractors with companies such as Booz Allen, Lockheed Martin, and others.

Those interested in working for a contractor after retirement should explore their options early and look for opportunities on the company’s website. Many of these jobs require you to have a security clearance before you retired from federal government.

If a contractor job isn’t a good fit for you, explore private sector jobs in all occupations or if you feel inclined, you may be able to return to federal service as a rehired annuitant.

Use our jobs board and job-hunting resources to get started and search for opportunities of interest.

There are two primary ways to make ends meet, either go back to work or use our budget spreadsheets to evaluate your expenses and cut costs.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, 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 information contained herein should not be considered investment advice and may not be suitable for your situation. 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, EMPLOYMENT OPTIONS, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Retirement Progression – One Day at a Time to Infinity

Posted on Friday, 15th March 2024 by

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I felt liberated from the day-to-day work schedule of the past 40 plus years when I first retired, and I see this excitement in new retirees that I encounter.  Most, with some reservations, feel such a sense of elation when they walk out the door for the last time and realize their new life begins NOW.


Free at Last!

What will this new life look like? Whatever you envisioned about retirement will come to fruition only if you pre planned and take the necessary steps to make retirement work successfully for you and yours. What will you do, from activities, travel, hobbies and everything in between.

You have to have a plan, so you won’t be adrift in this new world. Did you accumulate the assets (funds) that will support the lifestyle you desire?

The Beginning

I don’t recall a time when I wasn’t working. As a teenager, I did everything I could find to put money in my pocket and help out at home. Actually, I started in my pre-teens selling all occasion cards door to door and foraging for pop bottles to cash in at the grocery store for 2 cents a bottle. I started my first business at age 16!

To this day, much to my chagrin, I still get up before sunrise, 6 am sharp like clockwork 7 days a week, make coffee and toast for my wife and I, let out and feed the dog, and then off to my office.

Habits are hard to break. At least now, I go out for coffee with friends several days a week, then either back to work, run errands, spend time with family, work on home projects or hobbies. I’m currently restoring a 1910 Model T Ford dash mount brass clock.

1910 Rim Wind Model T Ford Brass Clock

As much as I would like to change my routine, possibly sleep in, or slow down, something pops up: website upgrades, technical and software issues, article deadlines, replies to queries, managing investments, family matters, or a home project that can’t be put off. Wish I had the stamina and health I had earlier in life!

In our twenties, we did things without hesitation, married at 20; together for 55 years now, and bought our first house at 22. As time passed, we moved 12 times over the years. We had two wonderful children, and now they are approaching retirement over the next 10 to 15 years, and there are three grandchildren to nurture and help them on their way.

The Journey

Thoughts of retirement started early. At 25 my wife and I discussed which career path to take and we decided to stay in government so I could retire at 55, which I did. However, the path diverged along the way as it does with life in general. So many obstacles to overcome, and options to consider throughout life for all of us.

Fortunately, federal service offers many benefits only dreamed about in the private sector: eleven paid holidays, early retirement options, a substantial pension to rely on, a Thrift Savings plan similar to a 401K, health care carried into retirement, Social Security with FERS supplements for early retirement under age 62, and so much more.




Incremental Changes

All retirees come to realize that life is finite; as we age, there is more in the rear- view mirror than what lies ahead. Dr. Phil used a poignant tool to drive this home to those later in life that had more plans than time left to achieve them or were procrastinating about key decisions in their life.

His staff would layout a wide tape measure on the stage floor, about 40 feet long, and marked in equal length increments from 1 to 100. He asked the person to stand on their age facing 100 on the tape.

Then he asked them to turn around and look at what was behind them. A 78-year-old had put off cleaning out their home and downsizing for over a decade much to his wife’s displeasure. This demonstration acutely illustrated that there wasn’t that much time left and shortly after the show he cleaned out his home and moved.

I’ve made substantial but incremental changes knowing full well the constraints of time and circumstance have upon all of us. I’ve sold off three quarters of my business over the past decade, no longer have employees and payroll to contend with, and this year my last of 28 books was just listed as out-of-print; I don’t intend to write or publish another.

Even though my early morning routine hasn’t changed, I spend more time enjoying retirement and what it has to offer. My focus is on reducing clutter in our lives, updating estate plans, consolidating accounts, simplifying investments, and relishing life in general.

Retirement Life

All retirees have the same thing in common. We want to live comfortably within our means and enjoy the time we have left with our family and friends. To do that, we must have what we need to make this happen and organize our lives to reduce tension and anxiety while pursuing our retirement goals.

First Things First

Establish a new routine and retirement activities. After you feel comfortable in your new skin so to speak, review your estate and financial plan, if you haven’t already, to smooth the way for your heirs.

Many retirees set up their estate and financial plans long before they retire. It is wise to reevaluate your plans after you leave federal service to ensure they will continue to meet your needs or require revisions. Beneficiary designations can change or one of your heirs may have passed on, etc.

Updated estate and financial plans add a sense of security for the retiree and confirms that a surviving spouse and their heirs won’t be blindsided when the time comes.

Are you able to manage and simplify your financial accounts for your survivor/heirs or do you need the help of a financial planner? Preservation of capital is a major concern and may impact how your money is invested after retirement.

Procrastination Breeds Discontent and Inaction

After putting your estate, finances, and final arrangements in order, simplify your life where it is most needed. Do you have too much on your plate and need to pare down your activities or commitments? Are health issues a concern?

Reduce clutter in your life starting with your home if you haven’t already done so. If you try to do it all at once, you will more than likely fail miserably, and continue to ignore the obvious.

Start with the area in your home that causes you to cringe whenever you enter that space, show progress, and move on the to the next area that needs your attention.

Begin with one small area or room, divide the contents into three piles: items to keep, another for throw away, and a pile for items to sell, donate, or give away. Take the items to be donated to Goodwill or to wherever, sell what you can on Ebay or Facebook Market or take it to the local Thrift store for a consignment sale. Then sort, organize, and store the items you are keeping.

Conclusion

Don’t leave retirement to chance, proper planning and discussions with your significant others can make the difference between a happy and healthy retirement to one of despair and frustration.

Helpful Retirement Planning Tools

Visit our other informative sites:

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

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Fixed Income Investment Update – Bonds & More

Posted on Friday, 8th March 2024 by

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Much to my surprise, most banks and credit unions continue to offer paltry yields on their savings and money market accounts. It’s disappointing considering they are using our money to fund customer’s mortgages at 7 percent and higher or new car loans up to the high single digits.

Fixed income continues to hold its allure for retirees and those who want to earn 5 percent or higher returns on their cash and savings without risking a major loss. Yes, the stock market does offer the potential for higher gains, but it doesn’t come without considerable risks for those approaching retirement and retirees alike.

A Little Doesn’t Go a Long Way

Many banks continue to offer .04% to maybe 1% tops on savings and checking accounts. Higher rates are available if you look around or negotiate a better rate with your bank. These low rates would earn you a measly $4 to $100 per $10,000 of savings for the entire year!

Moving that $10,000 to a 5.2% four, eight or 13-week Treasury Bill would earn you $520 over the year! Quit a difference. You can select auto reinvestments with Treasuries for up to two years and auto reinvestments can be canceled at any time if you need the funds. The rates change for each new issue, over the past year the yields have averaged over 5 percent.

It appears that the Federal Reserve intends to hold rates at the current levels for longer than most financial pundits anticipated. With this country’s huge national debt, I’m not sure anyone can predict where inflation and the market will end up if government doesn’t stop their excessive spending and balance the national budget.

Treasury Bill Rates Holding Steady

My article titled “Ditch your Bank’s Low Savings Rates” describes the advantages of Treasury bills compared to bank and credit union rates.

Today you can earn just over 5% on a 4, 8 or to 13-week T-Bill, the 26-week T-Bills are currently paying 5.065%. My last 13-week T-Bill investment yielded 5.368% on February 2, 2024 and my 8-week Bills reinvested at 5.418% on January 1, 2024.

If you invested $25,000 in a 13-week T-Bill issued on 2/1/2024 that is earning 5.368%, the Treasury withdrew $24,665 from your account. On the maturity date of 5/2/2024 they will deposit $25,000 into your account resulting in a $335 profit.

Had you had this amount deposited in a bank savings account paying 1%, you would have earned $62.50!

Treasury Bill Investment Rates




Purchasing Treasury Bills, Notes, and Bonds

Visit TreasuryDirect.gov to register, explore the options, and start purchasing Treasury bills, notes, and bonds, TIPS, and savings bonds. You are buying direct from the government and eliminating the middle man; there aren’t any fees charged for purchases.

Most brokerage accounts offer clients access to Treasury auctions and will purchase them for your account; the longer-term notes and bonds can be sold on the secondary market if needed. Here is more information on the Treasury’s programs:

CDs and Savings Bonds

According to the Federal Deposit Insurance Corporation (FDIC), the national average savings account is only paying 0.47% as of February 2024. A slight increase from my last update on this subject.

Many online banks, credit unions, and some regional banks are offering competitive rates for savings accounts and CDs from 3.5 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 just moving above 1 percent and they are FDIC or NCAU insured.

I was able to lock in 15-month CDs at two local credit unions late last year for 5.75% 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. I moved some of the funds I was cycling through the Treasury to this attractive yielding investment. In hindsight, I could have moved more.

Currently short-term Treasury T-Bills rates have dropped a bit, but still above 5%. Rates may stay close to 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.

I-bonds issued in 1999 had 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.




Market Observations

The stock market is soaring and it reminds me of the dot-com bubble back in 2000. According to Wikipedia, “Historically, the dot-com boom can be seen as similar to a number of other technology-inspired booms of the past.” The previous booms and subsequent crashes were related to many of the new technologies of their time, railroads, TVs, computers.

During the dot-com crash, many online shopping companies failed and shut down. Today, the same over exuberance for tech and artificial intelligence (AI) in general appears to be on that same trajectory.

Actually, AI isn’t new, it started shortly after computers were first developed. Today, they are dressing it up, and repackaging it to gain an advantage and drive stock multiples through the roof, and it’s working, just my perspective.

All companies down the road will benefit from these innovations in one way or another. If that is true, why aren’t the 493 other stocks in the S&P benefiting from the AI revolution and the growth in the index isn’t more broadly distributed? Will it take a recession to force the issue?

I’m not a financial analyst, just an observer and there seems to be some correlation to prior booms and subsequent busts. Especially when you consider that the top 7 stocks of the S&P index accounted for 29% of the index’s market value last year!

According to Goldman Sachs’, the Magnificent Seven stocks gained 71% during 2023 while the other 493 stocks in the S&P added just 6%. Overall. This streak has extended into 2024 at a feverous pace. These seven stocks include: Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA).

Technology including AI and IT stocks growth has exploded and many believe this is only the beginning. I’m somewhat skeptical, time will tell if a major correction or recession is on the horizon.

Summary

As a retiree, I prefer to invest in the safety of Treasuries, CDs, and conservative stocks, mutual funds, and market leaders that have been around for many decades, pay dividends, and have sound fundamentals. Many retirees set aside a small portion of their investments for the more aggressive growth stocks, mutual funds and ETFs of the day.

Now that CD rates are improving; if you can lock up your discretionary savings and investments 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.

Short term T-Bills continue to 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 funds from their savings and checking accounts elsewhere.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, 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 information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Updated Guidance, Clarifications, & Observations

Posted on Friday, 23rd February 2024 by

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I’ve written hundreds of articles for our newsletters and blogs and updated our Federal Employee’s Retirement Planning Guide frequently over the past 20 years. Even though we update our sites as needed, our blogs, newsletters, and at times our websites are time sensitive.

Due to federal regulations, benefits, and financial planning guidance changes, over time, our earlier released articles become outdated. A good example of this is the recent article titled TSP RMDs & Withdrawals Plus Site Navigation Tip. I’ve written several articles about RMDs over the years; each article outlined major changes.

Our Updating Process

I link to the most recent article on a subject from our retirement planning site’s relevant section. At times I also update the older articles and note the date of revision at the beginning of the article. For example, I wrote an article titled, Medicare and FEHB Options – What Will You Do When You Turn 65? (Part 1) December 12, 2014.

This subject is a critical one for those approaching 65; instead of writing a new article on this subject, I updated the article 10/20/23 on our blog. I annotate that date at the top of the article as noted on the following screenshot. The article posting date remains 2014 with the revised date at the beginning of the article.

If you are reading older articles that haven’t been updated as noted below, be aware that things may have changed and proceed with caution.

Newsletters & Blog Differentiation

All of our newsletter articles are published concurrently on our blog at www.fedretire.net. I link our Retirement Planning Guide’s relevant sections to each blog article where appropriate. When newsletter subscribers send an email about a potential correction or I discover an error, I research the issue and if warranted make the change in the blog, and notify our newsletter subscribers of the correction in the next article I send out.

Currently I’m going through the older articles and either purge them from the article index if no longer relevant, update them, or write another article to cover the subject more thoroughly. All in all, an arduous task that I take on incrementally.

Newsletter Links & Article Listings

I occasionally receive an email from a newsletter subscriber reporting the article links are disabled. Contact your organization’s IT department if the links are inactive, they can remove the restriction after confirming the email is secure.

This happens more frequently with military organizations than others. If the links are not active in your email newsletter, go to our blog at www.fedretire.net, the links will be active there. The blog article has a print icon in the upper left corner of the page if you want a hard copy.

Master Article Listings

We post a master article Index on our site and also provide direct access to all of the articles on our blog from the most recent back to 2009. The master article index is alphabetized to the highlighted text in each article title. You can access all of my articles on our blog by author listing. Click on the title to view and read the entire article.

You will find articles posted for all 12 of the writers listed under the Author’s Listing sidebar on our blog that we worked with over the years.




Retirement Planning Guide 

I developed and launched www.federalretirement.net in 2004, the year I retired. During my last year of service, I attended two agency sponsored retirement planning seminars and came back with more questions than answers.

This site helps federal employees and retirees find the information they need to make informed decisions about their retirement and provides abundant resources targeted to your specific needs. We are constantly updating and adding features to assist federal employees and retirees alike.

A search box is located at the top of every page, use it to find specific information. The search results provided by Google often list advertisers (Sponsors) at the top of the results listings. All of the search results below the sponsor’s links are direct to our site and will provide the information you seek.

Observation

Over the past few years Google and other search engines are placing numerous paid sponsor ads, paid search, listings at the top of most search results. Recently, Artificial Intelligence (AI), basically Rich Snippets, completely block the native search results so fewer people can click through to our sites.

Until these changes, our site pages for federal employee’s retirement planning key words and phrases were listed towards the top of page one search results and many found our site for the information they were seeking.

Currently, due to these search engine algorithm changes, the best way for others to learn about our sites and services is through referrals from our site visitors and newsletter subscribers. If you know of others that would benefit from our services, please forward our newsletters or send them a link to our retirement planning website and blog.

Direct links from an organization’s websites or servers, possibly listed under Retirement Planning Resources, would also be much appreciated.

Conclusion

Federal laws and regulations are subject to change. The ultimate resource is your personnel or HR office and of course OPM regulations and federal laws. We often link to critical OPM and other government official guidance on our web site.

Active federal employees should talk with their HR retirement specialist before making critical decisions. Use our site and articles to research options and to better understand the ramifications of your choices

Your HR specialist is the only one who has access to your electronic Official Personnel Folder (eOPF) and can help you with your retirement application and initiate any desired changes.

Download your eOPF before you leave federal service and retain a copy in case you have issues down the road. I didn’t have that option when I retired. Retirees must contact OPM for benefit guidance.

If you are looking for retirement planning information, go direct to the sources: OPM, Social Security, Medicare, our website and blogs, and those of our competitors to name a few.

If you are planning to retire this year review the articles “CAUTION – Do This Before You Retire” to ensure continuity after you leave and follow our Ultimate Retirement Planning Guide to start you on your retirement journey.

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

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Estate Planning Guide Revisited – Setting up Your Plan

Posted on Friday, 9th February 2024 by

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Shanaz, one of newsletter subscribers, wrote, “I have been trying to read the ‘Estate Planning Guide’ from the link you have provided in your newsletter. Is it possible for you to email the document so I can read it without distraction from all the ads.”

The guide is only available online and I removed the majority of ads and reduced the frequency to improve our site visitor’s experience. Personally, ads that rotate and are imbedded in the content are distracting to say the least. I also updated the guide and checked the links to the resources we include.

My goal with our retirement planning site, blog and newsletter, is to provide federal employees and annuitants with the answers and clarifications they need to make informed benefit decisions.

Estate Basics

Your personal estate is simply all of the property you own, tangible and intangible, and valued at its current market value. The planning that is needed doesn’t require you to be a mathematical wiz or rocket scientist, anyone with average intelligence can plan their estate, even without an attorney for smaller and less complex plans. The vast majority of estates are much smaller than the 2024 federal estate tax limit of $13,610,000!

The key is to have the proper references and resources to help you through the process. I developed and used the 11-part guide to complete my first estate plan in 2004. The 11-sections take you through the entire process. At the time I used NOLO’s Will Maker Plus to complete all of the documents. NOLO’s interview process walks you through every step, removing all of the guesswork.

As my business grew, I eventually hired an attorney to complete our updated wills, trusts and other documents ten years later. I still had much to complete over and above the obvious documents the attorney provided.

More Info Please

Even after hiring an attorney there is considerably more information needed to complete your estate plan. Our guide will assist you with the additional data collection that is necessary for your heirs to know where everything is: contacts, insurance policies, investments, obligations, monthly bills, annuity information, detailed final arrangements, online login user names and passwords, etc.

None of the documents an attorney provides includes this personal information; if you don’t compile it, your heirs will have a difficult time managing the estate, no matter what the size.




Getting Started

Start by visiting our Estate Planning Guide, read the introduction and then click on the 11-Part Guide link under the page menu.

The guide reflects What I did to finalize my estate plan that is needed regardless of whether or not you hire an attorney to draft your wills, trusts, health directives and powers of attorney. These documents can be economically completed for smaller and less complicated estates using Quicken Will Maker Plus 2024.

Their Will Maker Plus version walks you through creating your wills, health care directive, final arrangements, durable power of attorney, letter to survivors, living trusts, and transfer on death deeds. All in one downloadable package for Just $139, a drop in the bucket compared to an attorney’s $300 or more hourly fee.

I suggest using Nolo’s Executor’s Bundle to help you through the process.

Conclusion

After receiving the request from Shanaz, I evaluated the ads rotating on our sites. I had auto ads activated. With this feature, Google ads are rotated to areas most frequented by our site visitors. I turned off this feature for the Estate Planning Section so site visitors will be able to use the guide to develop your plans with few distractions.

I also reduced auto ads for the entire Federal Employee’s Retirement Planning site. A limited number of fixed ads will still display; without them we couldn’t continue to offer this free service. We don’t require registration to use our site or collect any personal data.

Even if you have an estate plan, it’s best to review it on a regular basis. I update my information binder as needed, more frequently if major changes are needed.

To find information on our website, use the top menu bar, click on the item of interest and a dropdown menu appears. You can also use the search box in the upper right-hand corner of every page. Use our site to find the information you need to better understand your retirement benefits and so much more.

Helpful Retirement Planning Tools


Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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

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Considering Your Options – Should You Stay the Course?

Posted on Friday, 2nd February 2024 by

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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


Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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