Federal Employee's Retirement Planning Guide - Civil Service Financial Planning Resources

Many CSRS Retiree’s Social Security Checks Increasing Soon

Posted on Wednesday, 26th February 2025 by Dennis Damp

The Social Security Fairness Act repealed the windfall elimination provision and the government pension offset last November, and impacted CSRS retirees are waiting for their Social Security checks to increase.

You are eligible for Social Security benefits if you accrued 40 quarters (10 years) of employment where Social Security payments were withheld. The Windfall Elimination Provision reduced the CSRS Social Security benefits if you had less than 30 years of “substantial” coverage and are collecting a CSRS federal retirement benefit.

Payments to Start

The Social Security Administration (SSA) will Start paying retroactive benefits the week of February 24, 2025. This will increase monthly benefit payments to people whose benefits have been affected by the WEP and GPO.

When a beneficiary is due retroactive benefits, they will receive a one-time retroactive payment, deposited into the bank account SSA has on file, by the end of March. This retroactive payment will cover the increase in their benefit amount back to January 2024, when WEP and GPO no longer apply.

Social Security benefits are paid one month behind. Most affected beneficiaries will begin receiving their new monthly benefit amount in April 2025 (for their March 2025 benefit).

What to Expect

Anyone whose monthly benefit is adjusted or who will get a retroactive payment will receive a mailed notice from Social Security explaining the benefit change or retroactive payment.

Beneficiaries may receive two mailed notices: the first when WEP or GPO is removed from their record and the second when their monthly benefit amount is adjusted for their new monthly payment amount. You may receive a retroactive payment before receiving the notice.

In certain complex cases that can’t be processed automatically, SSA must spend additional time manually updating the records and paying both retroactive benefits and the new benefit amount.

Social Security advised those eligible for a refund and increased benefits to wait until April to inquire about the status of their retroactive payment since these payments will be processed incrementally throughout March.

Refunds will vary depending on factors such as the type of Social Security benefit received and the amount of the person’s pension. According to Social Security, “Some people’s benefits will increase very little while others may be eligible for over $1,000 more each month.”

Summary

WEP did not significantly reduce my Social Security benefits because I had 27 years of substantial earnings, primarily through my business. I should receive a letter soon outlining what to expect. The Act applies to benefits you get on your own record (retirement or disability benefits) and to your spouse’s or surviving spouse’s benefits on another person’s record.

SSA published a comprehensive update that addresses most situations; visit their update page for complete information.

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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

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OPM Requests All Employees Report Accomplishments ASAP!

Posted on Sunday, 23rd February 2025 by Dennis Damp

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All federal employees received an email from OPM on Saturday requesting they reply with a list of last week’s accomplishments. Elon Musk first mentioned this on X, and OPM sent the email shortly thereafter. The deadline to reply is 11:59 p.m. Monday, February 23!

This has created anxiety and a flurry of activity across the entire federal sector, and everyone is on edge. Read the full story about this issue and what to expect over the next few days!

Additional information – DOGE and federal downsizing:

Sign up for a complimentary retirement planning session
and a FREE retirement planning report

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.

Tags: DOGE. OPM Email, Elon Musk, Feds Reporting Accomplishments
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Social Security Income Tax Elimination Update

Posted on Thursday, 13th February 2025 by Dennis Damp

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Approximately 50% of retirees pay taxes on their Social Security benefits, compared to less than 10% in 1984!

Thomas Massie (R-KY) reintroduced H.R. 1040, the Senior Citizens Tax Elimination Act. It was referred 02/06/2025 to the House Committee on Ways and Means. This bill assists seniors by eliminating the double tax on Social Security benefits. This bill supports President Trump’s campaign to eliminate this unfair tax for seniors.

Representative Daniel Webster (R-FL) co-sponsored this legislation, stating, “For decades, seniors have paid into Social Security with their tax dollars. Now, when many seniors are on a fixed income and struggling financially, they are being double-taxed because of income taxes on their Social Security benefits.

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As the Congressional Research Service reports, “Before 1984, Social Security benefits were exempt from federal income tax. Congress then enacted legislation to tax a portion of those benefits, with the share gradually increasing as a person’s income rose above a specified income threshold.”

Today, up to 85 percent of a senior’s Social Security benefits are taxable under this draconian law. They should expand this proposal to eliminate the Income Required Monthly Adjustment Amounts (IRMAA) that apply to Medicare Part B and D payments. Why should many seniors pay up to four times more for the same benefit?

If passed, this act would amend the Internal Revenue Code of 1986 to terminate the inclusion of tier I railroad retirement benefits and Social Security benefits in an individual’s gross income starting in 2025 (tax returns filed in early 2026).

New Executive Order Pushes for Federal Workforce Reduction: What It Means for Government Jobs

Alternative Proposal

The Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simple Taxes (RETIREES FIRST) Act was introduced by U.S. Senators Roger Marshall and Marsha Blackburn, proposes significant changes to Social Security taxation, promising financial relief for millions of retirees. This proposal dramatically raises the income thresholds as noted below:

Raising the provisional income threshold to $34,000 for single filers and $68,000 for married filers. (the provisional income threshold for single fliers is presently $25,000 and $32,000 for married filers)
Updating the thresholds annually to prevent bracket creep and protect retirees from inflation’s impact.
Simplifying tax rules to maintain a single 85 percent inclusion rate for benefits exceeding the new thresholds, simplifying the filing process, and reducing confusion for seniors.

Summary

These bills are long overdue. They will hopefully be reconciled and make it to the floor for a vote. Both bills require revenue neutrality; other government-wide cuts would make up the difference. With DOGE finding excessive spending, waste, and abuse in other government agencies, there should be more than sufficient funds to compensate for any lost funds.

One reason the WEP and GPO programs were repealed is the tens of thousands of phone calls that constituents made to their representatives. This week, I intend to call mine to express my support for these bills.

The Future of Federal Telework: New Rules, and What Comes Next in the Return to In-person Work

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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.

Tags: Social Security, Social Security Tax Elimination, Social Security Taxes on Income, Taxes, Taxes on Social Security
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Medicare Prescription Drug Plan (MPDP) Opt-Out Update

Posted on Friday, 7th February 2025 by Dennis Damp

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Since writing the article “Medicare Prescription Drug Plan Fiasco – The Continuing Saga,” I’ve received over 40 emails and comments from site visitors experiencing the same issues; several are paying considerably more for their prescriptions under the MPDP plan. You can review all of the comments on our blog, they follow the article mentioned above.

This started last November, and many are still waiting for a resolution. We received letters from Social Security last Wednesday stating, “We will no longer deduct your prescription drug coverage income-relate monthly adjustment amount from your monthly benefit.” They are refunding the penalty and Part D premiums we paid in January this month.

Our Medicare online accounts also show that my wife and I do not have a Part D premium being deducted from our Social Security checks.

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What Caused the Problem?

From my discussions with multiple sources, GEHA enrolled all Medicare-eligible members in the MPDP program even though members initially had until early December to opt out of the program. This caused mass confusion for those wishing to remain with GEHA’s prescription drug coverage, and this triggered actions by Social Security and Medicare to enroll us in Part D.

Many of us filed appeals with Social Security and OPM’s OIG and contacted our representatives. Hopefully, this won’t create more issues as these entities go back and forth between OPM, Medicare, and Social Security.

Initial Contacts and Actions Taken

When I first became aware of the problem, I submitted an appeal to Social Security and, shortly thereafter, filed a complaint with OPM’s OIG. If your issue hasn’t been resolved, use the OIG’s online complaint form to file a complaint regarding fraud, waste, abuse, or mismanagement within OPM’s programs and operations.

The complaint form is the preferred method for submitting a complaint; however, you may also submit your complaint by calling the OPM OIG Hotline Number: 1-877-499-7295.

I also submitted this issue to my senator and Congressman. If you don’t need to register a complaint with them now, write down your representative’s contact information if you need assistance. We elected them, and they are one of our first lines of defense when we have an issue with a federal agency.

GEHA Response or Lack Thereof

My first call was to GEHA, and they forwarded me to one of their prescription drug customer service representatives. As I explained in my first article, they didn’t offer a resolution other than to call Silver Script again.

Medicare’s website showed that my wife and I were scheduled to pay a Medicare Part D premium through December 2025, and Social Security advised us that we had to pay a penalty plus late payment fees for Part D that we didn’t have.

After numerous calls to GEHA without resolution, I requested that GEHA’s public relations office set up an interview with the person responsible for their MPDP option and the opt-out process. They didn’t reply to my email request.

I made one final call to GEHA’s prescription drug customer service representative last week, and she was very helpful and empathetic. She has talked with hundreds in the same situation and assured me that all would be taken care of shortly.

Summary

I intended to write a follow-up article after my wife’s Social Security check arrives on the second Tuesday in February. Many people had asked for an update, so I thought it best to send one out as soon as possible.

It appears that our Part D premium has been canceled. We should know soon if they caught it in time for this February’s checks. Plus, Social Security has to send out a change notice since they notified us on January 3 and again on the 6^th that we were enrolled in Medicare Part D and they were withholding premiums and late penalties from our checks.

I really don’t know why mine got changed back to where it should have been from day one. We haven’t received feedback from any of those we contacted.

If your Medicare account still shows Social Security will be withholding Part D premiums, and you opted out of their MPDP program, you may wish to file a complaint with OPM’s OIG and go the same route I did. Possibly make one more call to GEHA; hopefully, you will reach the same very pleasant representative I talked with last week.

Many suggested moving to another provider during the next open season. I’m staying with GEHA, and as I stated in the previous article, they have provided exceptional healthcare services at reasonable costs over the past 11 years.

Hopefully, whoever was responsible for this fiasco is no longer with the company. Plus, most other FEHB providers already offer MPDPs; you may have the same issues if you change to another company next open season.

The Obligations and Realities of Returning to In-person Work

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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.

Tags: GEHA Opt-Out, IRMAA, Medicare Part D, MPDP, MPDP Opt Out, Part D Penalities
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Tax Forms and Annuity Statement Availability

Posted on Friday, 31st January 2025 by Dennis Damp

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

Update

My last article on taxable earnings included transposed numbers. The statement should have read, “Higher earners will pay Social Security taxes in 2025 on earnings up to $176,100, an increase from last year’s maximum amount of $168,600.” I corrected this on the blog article.

1099 Forms

I received my SSA-1099 on January 14th and downloaded my 1099-R from OPM in mid-January. Many of our 1099-INT forms are now arriving from banks and credit unions. TSP has your 1099-R forms available for download by the end of January.

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 cash in paper savings bonds at your local bank, 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 cash in.

When selling a home, the closing agent typically provides the seller with a copy of the 1099-S form. This form is sent to the IRS and shows the gross proceeds and any real estate taxes paid in the year of the sale. Any capital gains must be reported on the 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 in early January, with the COLA increase added.

OPM sends out updated annuity statements anytime a change affects our annuity. We will receive another statement showing FEHB healthcare and FEDVIP premium changes in February. New statements are sent out throughout the year whenever there are changes to checking/savings allotments, income tax withholding, long-term care insurance, etc.

This document provides information on annuities and benefits 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.

This form provides instructions on how to make benefit elections, such as applying for a survivor election for a spouse you marry after retirement or survivor annuity elections for a former spouse.

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 “Connect to OPM’s Online Services” to understand the registration process and sign up.

Summary

Many banks and brokerage houses’ 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, walks you through the entire process, double-checks your work, and allows you to file online. This software can also download and integrate your brokerage accounts into your tax return, saving considerable data entry time. I purchase a copy of Turbo Tax every December and add tax documents, including 1099s, as they come in to save time.

Several free online filing services are available through the IRS, as well as several tax preparation services. The IRS allows you to file online for free if your annual income is $84,000 or less. You will have to file your State taxes separately.

Turbo Tax offers a free tax filing service for Simple 1040 returns (no schedules except for Earned Income Tax Credit, Child Tax Credit, and Student Loan Interest Credits). Roughly 37% of taxpayers are eligible for this service.

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

Helpful Retirement Planning Tools

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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.

Tags: 1099 R Forms, Annuity Statements, Blue Book, Social Security SSA 1099, Thrift Savings Plan 1099-R, TSP
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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OPM Orders Return to in-person work – Accepting Deferred Resignations

Posted on Wednesday, 29th January 2025 by Dennis Damp

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According to OPM’s memo dated 1/28/2024, the President requires that employees return to in-person work. The Presidential directives issued this past week are intended to restore accountability for employees with policy-making authority, restore accountability for senior career executives, and reform the federal hiring process to focus on merit.

Deferred resignation availability is limited to all full-time federal employees except for military personnel of the armed forces, employees of the U.S. Postal Service, those in positions related to immigration enforcement and national security, and those in other positions excluded explicitly by your employing agency.

Agency heads will be the final arbiters for those eligible, determining which positions within their organizations are critical.

Should I Accept a Deferred Resignation?

There is much to consider, and with the limited time available, you must gather all the facts and fully understand the ramifications of your decision. OPM published the email notice on their site with an informative FAQ to review before replying.

I highly suggest reviewing the FAQ and then evaluating your financial situation and related benefits, such as whether you can take a deferred or immediate annuity. Sign up for the January 30th free Deferred Resignations seminar, starting at 7:00 pm (EST). Subsequent seminars on this subject will be announced on this site.

In the late 1990s, my agency received the Voluntary Early Retirement Authority (VERA) with a Voluntary Special Incentive Payment (VSIP) for specific occupations. I considered taking it, but after determining my dramatically reduced annuity, I decided it wasn’t a good fit, and in the end, my position was not included.

Individuals who resign through this program are generally not required to work during the deferred resignation period except in rare cases as determined by your agency.

Mass Confusion

Personally, agencies should have sent emails only to those they deemed eligible. OPM will be flooded with emails, and their staff is having difficulties providing services to retirees. Whenever I call OPM, I get a recording saying, “Call back later.”

Currently, it takes several weeks for them to reply to an email. I can only imagine the panic at OPM as they scramble to handle this influx and process the associated paperwork for those who accept the deferred resignation offer. They are currently having difficulties processing several thousand retirement applications each month.

This may not be an issue initially because the Executive Order will likely be challenged in the courts, and the time frame for implementation and offer could change dramatically.

Many positions would not be eligible for this program, including critical care medical specialists, air traffic controllers, technical and system specialists, certain automation specialists, law enforcement personnel, and critical IT positions.

Deferred Resignation Process

The program begins January 28 and is available to eligible federal employees until February 6. According to the memo, “If you resign under this program, you will retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in-person work requirements until September 30, 2025 (or earlier if you choose to accelerate your resignation for any reason).”

If you wish to resign after reviewing the contents of the memo and FAQ, select “Reply” to this email. You must reply using your .gov or .mil government account. Replying from a private email address will not be accepted. Type “Resign” into the body of this reply email and Hit “Send.”

If you didn’t respond to the email and wish to accept the deferred resignation offer, you may do so by following these steps.

Send an email to hr@opm.gov from your government account. Only an email from your .gov or .mil account will be accepted.
Type the word “Resign” into the “Subject” line of the email. Hit “Send”.

You will receive an email confirming receipt with additional information on next steps. Given the volume of emails, this confirmation email may take up to 72 hours. You should retain the record of your resignation email.

Preparing for the Inevitable

I anticipated this mass exodus shortly after President Trump was elected. My early January article, “A Potential Federal Retirement Tsunami – The DOGE Impact,” outlines the downsizing options and retirement benefits available to all employees.

The article describes FERS, CSRS, and early retirement options and how the government implements VERA and VSIP authorizations within their agencies to reduce the impact on federal employees.

VERA and VSIP authority are often used to avoid Reduction in Force (RIF) action. The Deferred Resignation package would be far more generous since applicants would receive up to seven months of pay plus benefits through September 2025!

Sign up for a complimentary retirement planning session
and a FREE retirement planning report

Resources to Get You Started

There are many options to explore, and anyone that the DOGE may impact needs to thoroughly assess their situation, including a cost analysis for pre and post-retirement to see what you and yours will have to live on.

The following informative articles, guides, spreadsheets, and schedules will help you assess your personal situation:

Summary

Employees must evaluate their situation closely using the resources listed above and our Federal Employees Retirement Planning guide.

Leaving federal service may seem appealing at first. The only way to ensure it’s right for you and yours is to perform a thorough Retirement Cost Analysis and proceed with caution. One of the advantages of deferred resignation is that you will have eight months to explore other employment options and put away funds to keep you solvent once you leave. Plus, your benefits will continue to accrue until you leave federal service.

Another major advantage is that if you have 5 years of creditable service, you can take a deferred retirement at age 62. With 20 years of service, you can retire at age 60, and FERS employees can retire at their Minimum Retirement Age with as little as 10 years of creditable service.

You don’t have much time to make your choice, so use that time wisely and thoroughly evaluate your options.

If you change your mind after sending your resignation email, employees have the right to request rescission of their resignation at any time, and the employing agency will need to review such rescinding requests.

The program’s objective is to consolidate and/or reassign roles quickly and, in many cases, place employees on administrative leave, which would likely serve as a valid reason to deny recission requests.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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.

Tags: Deferred Resignations, Deferred Retirement, DOGE, Early Retirement, Federal Employee Deferred Resignations, FERS Retirement, VERA, VSIP
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Preparing for the New Year and 2025 Updates

Posted on Friday, 24th January 2025 by Dennis Damp

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For those planning their retirement, it’s a good time to assess where you are financially long before filing your retirement paperwork. Federal employees received an overall 2 percent pay raise, factoring in locality pay. The 2025 pay charts are available for your review.

Sign up for a complimentary retirement planning session
and a FREE retirement planning report

COLA

More than 71 million Americans will see a 2.5% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2025. Starting in January, Social Security retirement benefits will increase on average by $45 per month.

Federal retiree’s annuities under the Civil Service Retirement System (CSRS) receive the full 2.5% COLA increase, while those under the Federal Employees Retirement System (FERS) receive 2%.

Thrift Savings Plan Considerations

Contributions

The Thrift Savings Plan (TSP) elective deferred contribution limit increased to $23,500 for FERS employees with an additional $7,500 catch-up contribution for those age 50. The annual additions limit is $70,000.

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

If you aren’t contributing to these limits, consider increasing your TSP contributions this year by at least one percent of your pay. Your take-home pay will still increase yearly 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 you are still working.

TSP 1099-R

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.

They are currently available in your “Secure Mailbox.” I downloaded mine mid 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 in late December, with the COLA increase added. OPM’s 1099 R Tax Forms aren’t available by regular mail until the end of January, 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 in mid-December, and the 1099R forms are available now.

Social Security Tax Limit and Medicare Premiums

Higher earners will pay Social Security taxes in 2025 on earnings up to $176,100, an increase from last year’s maximum amount of $168,600.

The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.

BLUE Book (Benefits Summary Booklet)

Request an updated retirement benefits booklet through OPM’s Services Online from late January to early February. This will ensure they include your 2025 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.

Many annuitants order a copy yearly with 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 you first retired if you lost your copy and compare it to the most current version.

Summary

I typically download my 1099-R tax forms as soon as they are available and enter them into Turbo Tax which I buy at Sam Club or Costco in late December. 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.”

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

If you can’t access their services online, call OPM at 1-888-767-6738. You can also email them at retire@opm.gov or send a written request to the U.S. Office of Personnel Management, 1900 E Street, NW, Washington, DC 20415-1000.

Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor jobs.

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.

Tags: 1099 R Forms, Annuity Statements, Benefits Blue Book, COLA, Medicare Premiums, Social Security
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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Medicare Prescription Drug Plan Fiasco – The Continuing Saga

Posted on Friday, 10th January 2025 by Dennis Damp

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Christmas came early for those subject to the WEP and GPO provisions but not for those who opted out of GEHA’s MPDP plan. Many, including my wife and me, opted out of Silver Script’s Part D (EGWP) Medicare Part D Prescription Drug plan offered by GEHA in late November, and we received a confirmation letter from them dated 11/28/2024.

EGWPs, or Employer Group Waiver Plans, are Medicare Advantage plans offered by employers or unions to retirees. Private insurance companies manage these plans and are often exempt from specific rules that apply to individual Medicare Advantage. This applies to the MPDP option.

We stayed with GEHA’s standard plan, and after opting out of their MPDP plan, we assumed all was well and that our prescription drug coverage would continue to be covered by GEHA, not Medicare Part D.

Who’s on First and What’s on Second

This subtitle is from Abbott and Lou Costello’s hilarious comedy routine. The head doesn’t know what the foot is doing, and one group passes the blame to the other. We discovered mid-December that we were enrolled in Part D, and the opt-out process failed! The situation has been back-and-forth for over a month without resolution.

We received three sets of GEHA medical and dental cards and a set of Silver Script Medicare Rx cards at various times over the past six weeks. The most recent GEHA set arrived yesterday.

One contradicted the other, and Silver Script, when first contacted, said that GEHA inadvertently enrolled all members in the Silver Script plan. I don’t know if this is true; I only know that members have suffered the consequences of their incompetence, whoever it may be.

I’ve talked with Social Security, Medicare, Silver Script, and GEHA and tried to contact OPM unsuccessfully. Each time I’ve called OPM over the past few weeks, their recording states, “We are experiencing very high call volume. Please call back later.”

Battling With the Giants

I visited the Medicare site after Silver Script advised us the second time that we were not enrolled in their program. Our Medicare site page showed that we were enrolled in Parts A, B, and D with GEHA, and the UMR insurance company identified as secondary providers. No one, including Medicare or GEHA, could tell me why UMR was listed as a secondary provider or what services they covered; we never signed up with UMR.

This was especially upsetting, considering GEHA implemented the MDPD option without asking members if they wanted to enroll in a Medicare Part D prescription drug program at an additional cost for many. Instead, they asked members to opt out, and the opt out process isn’t functioning properly.

After contacting GEHA several times about these issues, I couldn’t get anyone to understand the gravity of the situation or take actions to correct it.

Silver Script, after contacting them for the third time, assigned another task number to research the issue again. A week later, Medicare Part D was removed from our online Medicare accounts. However, when we went to our online Medicare payment details, they showed us paying a Part D IRMAA through December 2025.

Medicare customer service suggested we contact Social Security immediately because IRMAAs were scheduled to be deducted from our checks for the entire year.

The Last Straw

My wife and I received Retirement and Disability Insurance letters from Social Security on January 6^th advising us that they were deducting past-due Part D prescription drug coverage income-related monthly adjustment amounts from our Social Security checks and a penalty for past-due Part D premiums! Our Social Security checks are being reduced by a Part D IRMAA plus additional penalties for late Part D payments!

I immediately called Social Security as Medicare suggested and was on hold for over an hour until the line died. The next morning, I called again and waited on hold for over two hours.

After discussing the issue with the specialist, she stated she could do nothing. Our only option was to file an appeal for each of us, including documentation to support that we had not enrolled in a Part D Plan and why we should not have to pay a late penalty.

I spent several hours writing the appeal and had to convert the opt-out letters we received confirming that we opted out of the Silver Script EGWP plan to a PDF file. Later that afternoon, I submitted the appeal online with attachments. You can also submit it via regular mail with copies of your documentation.

Conclusion

Several newsletter subscribers have experienced similar problems and are still unsure if it is resolved. According to one of Social Security’s support specialists, a typical appeal can take several months to over a year to work its way through their system.

My wife and I will pay monthly Part D premiums and an additional penalty for some time even though we aren’t enrolled in Part D. They assured me these payments would be refunded if the appeal was settled in our favor.

Silver Script confirmed again that we were not in their system and to use the GEHA cards we received. The card with CVS Caremark listed at the lower right corner of the card, and UnitedHealthcare Choice Plus Network is directly below the CVS designation.

I called GEHA’s CVS Caremark prescription drug services today and talked with Rhonda. I said, “Help me, Ronda.” Her name reminded me of that song from the 1960s,” and she did. She was helpful, pleasant, and confirmed that I was in their system.

I’ve always commended GEHA for its excellent service, customer support, and reasonable rates. Since signing up for Medicare ten years ago, my wife and I haven’t paid any out-of-pocket costs except for prescription drugs.

GEHA’s and Silver Script’s lack of attention to detail was disappointing when they rolled out this new MPDP program. The administrator for this rollout didn’t realize the disruption it could cause if mishandled or that members who opted out are now paying IRMAAs. Their Social Security checks are less than last year! This could go on for many months.

I intend to stay with GEHA and hope this is simply a one-off, not indicative of the company’s current state of affairs. They have served my wife and me well over the years.

UPDATE

Read the update to this article, the issue that I experienced was corrected in early February.

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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.

Tags: EGWP, GEHA, Medicare, MPDP, Part D IRMAAs, Social Security
Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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