Normally, federal annuitants don’t received their 1099R Tax Forms by regular mail until the end of January or the beginning of February. If you are registered to use OPM’s Retirement Services Website your 1099R is now available for download. I visited the site on January 16, 2019 and was able to download my copy that I will use for my 2018 tax return.
Complete Your 2018 Taxes Early
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
To get a head start on your taxes visit OPM’s web site and download a copy. You must be registered to use the site. If you aren’t registered read the article titled “Connect to OPM’s Online Services” to understand the registration process and sign up. It doesn’t take long, however, you may have to wait for your password to be sent via regular US mail and that can take several weeks.
Many bank and brokerage 1099 and DIV reports are also available online and can be downloaded from your accounts. This can expedite the completion of your tax return. The government shutdown may slow things down this year since the IRS will not process paper tax returns until after the shutdown is over. However, the postal service will still post mark your paper filed return. Any tax return postmarked by the due date will be considered filed on time by the IRS. Even if the shutdown is ended soon processing delays can be expected.
I’ve personally used Turbotax software since they first issued this helpful software package. It’s intuitive and walks you through the entire process, double checks your work, and they allow you to file online. This software can also download and integrate your brokerage accounts into your tax return, saving you much time.
Take advantage of OPM’s early 1099R online availability if you wish to file early or simply need to replace a lost 1099R.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
This shutdown is the longest in history and if the parties can’t agree on funding border security this shutdown could go on for some time. The Washington Examiner reported, “Some 30 Democratic lawmakers left the government shutdown behind Friday on a chartered flight to Puerto Rico for a winter retreat with 109 lobbyists and corporate executives during which they planned to see the hit Broadway show “Hamilton” and attend three parties including one with the show’s cast.”
Making Ends Meet
Our representatives should stay in Washington until government is funded. We the people should insist that anytime Congress refuses to come to the table and forces a shutdown, our representatives must not be paid for the duration. They should also NOT receive back pay like all other feds will receive, make them pay for their inaction and inability to do their job.
Fortunately, there are ways for furloughed employees that don’t have sufficient resources and savings to bridge the gap until their back pay is restored.
Credit unions and other financial organizations are coming
together to help furloughed federal workers make it through the government shutdown.
The Allegent Federal Credit Union in
Pittsburgh is offering low-cost short-term loans plus they initiated a NO COST “Skip A Pay” service for all
federal employees affected by the shutdown. Furloughed employees should contact
their local credit union for similar low and no cost assistance.
Here is a short list of things furloughed employees can do if
they are having a difficult time financially during the shutdown:
Furloughed employees may be able to file for unemployment compensation, those who are not working. However, be aware that once your backpay is restored you must pay back the unemployment compensation that you received.
The Credit Union National Association announced that credit unions across the U.S. are providing assistance to the affected employees. Some of the programs included:
Zero percent APR interest signature relief loan for 12 months signature relief loan
Pay Disruption Assistance Program with mortgage loan forbearances, loan and credit card payment deferments, and short-term low rate loans
Online member portals with special furlough loans
Preexisting loan deferred payment opportunities for up to 60 days
Cash advances of up to 90% of federal employee’s regular monthly pay. Contact your local utilities and ask them what programs they have for situations like this. I called several utilities in my area and they have a budget option plus offer other ways to assist such as their Customer Assistance Program (CAP).
If you aren’t able to make your mortgage or car payment contact the lender immediately to let them know before the payment is due. They may have programs available that will help you avoid a late payment or they could offer a short-term loan to help.
The National Active and Retired Federal Employees Association (NARFE) partnered with the Federal Employee Education & Assistance Fund to offer $100 grants to active federal employee NARFE members who are not receiving a paycheck during the current shutdown as a result of being furloughed or working in excepted status. Members can APPLY online. You will need to provide documentation of your furlough or excepted status. FEEA will contact you with any questions, and will let you know if your request is approved or denied. You must be a NARFE member in good standing and your membership status will be confirmed with NARFE. For questions, please contact me at execdir@narfe.org.
Articles concerning assistance for furloughed federal employees.
I suggest calling your representatives and let them know it’s time to get back to the table and pass a budget. They need to do what’s good for the country and do their jobs. This has gone on far too long.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
OPM issued a FACT SHEET covering the impact on federal
employee benefits and pay as a result of the government shutdown. The following
excerpt explains the impact on employee’s pay and benefits.
FACT SHEET: Pay and Benefits Information for Employees Affected by the Lapse in Appropriations
Government Shutdown Briefing
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
This information covers pay and benefits matters that may be important to employees if the lapse in appropriations continues past payroll processing deadlines. Payroll deadlines vary from agency to agency, so the actual timing of when an employee’s pay and benefits may be impacted will vary.
This information is only for employees who are:
Furloughed (a type of nonpay status), or
“Excepted” from furlough (i.e., continuing to
work and earn pay, but their pay is delayed until appropriations are authorized).
Employees who are
“exempt” from the lapse in appropriations (e.g., because they are not paid from
annually appropriated funds) are not impacted.
Furloughed employees: You cannot receive pay during a lapse
in appropriations if you are furloughed, and Congress will determine whether
you will receive retroactive pay for furlough hours.
Excepted employees: You are entitled to be paid for hours
worked, but you cannot receive pay until funding is provided.
ANNUAL AND SICK LEAVE
ACCRUAL
Any leave you had previously scheduled during the lapse
period is cancelled, so you won’t be charged leave. In addition, per OPM guidance, if you had
properly scheduled “use-or-lose” annual leave that you weren’t able to use
because of the lapse in appropriations, that leave must be restored to
you. Your agency will provide
instructions on any action you may need to take.
Furloughed employees: You won’t accrue annual and sick leave
during the furlough once you’ve been in a nonpay status for 80 hours (for
full-time employees with a regular 80-hour biweekly tour of duty). Congress may, however, authorize retroactive
accrual of leave.
Excepted employees: You will continue to accrue leave, but
accrued leave will not be available for use until funding is provided.
RETIREMENT
No retirement deductions will be made if you aren’t
receiving pay. Generally, a period of
nonpay status will have no effect on an employee’s retirement-creditable
service or high-3 average pay unless the nonpay status is for more than 6
months during the calendar year.
ALLOTMENTS FROM PAY
Since no allotments can be made if you’re not receiving pay,
you may want to review your allotments to determine whether you’ll need to make
alternative arrangements (e.g., if you are using allotments to pay loans, alimony,
etc.).
UNEMPLOYMENT
COMPENSATION
Furloughed employees are eligible to apply for unemployment
benefits, but excepted employees working on a full-time basis are generally not
eligible. Employees who wish to file should do so with the Unemployment Office
for the state where the employee worked (i.e., last official duty station prior
to furlough).
Please be advised, however, if Congress authorizes retroactive pay for furloughed employees, you would be required to pay back any unemployment benefits you received, in accordance with State law. For more information see OPM’s Pay-Leave Guidance and the U.S. Department of Labor’s Unemployment Compensation for Federal Employees website, https://oui.doleta.gov/unemploy/unemcomp.asp.
FEDERAL EMPLOYEES
HEALTH BENEFITS (FEHB)
FEHB coverage continues even if you don’t receive a paycheck. Your share of premiums will accumulate and be withheld later when the lapse ends and employees can be paid.
FLEXIBLE SPENDING
ACCOUNT (FSAFEDS)
Your FSAFEDS payroll deductions stop when you don’t receive pay. You remain enrolled in FSAFEDS, but you can’t be reimbursed for eligible health care claims until you return to pay status and your payroll deductions can be made. Payroll deductions will be subsequently collected to match your annual election amount.
Eligible dependent care expenses incurred during the lapse
in appropriations may be reimbursed up to whatever balance is in your dependent
care account—as long as the expense incurred allows you (or your spouse, if
married) to work, look for work, or attend school full-time.
FEDERAL LONG TERM
CARE INSURANCE PROGRAM (FLTCIP)
Your coverage will continue.
However, if you usually pay your premiums through payroll deduction, and
the lapse period is less than three consecutive pay periods, your accumulated
premiums will be withheld when the lapse ends and employees can be paid. Otherwise, Long Term Care Partners will begin
to bill you directly for premium payments.
You must pay those bills on a timely basis in order to continue your
coverage.
FEDERAL EMPLOYEES’
GROUP LIFE INSURANCE (FEGLI)
Coverage continues for up to 12 consecutive months of nonpay
status, but premiums are collected only for pay periods for which you receive
pay.
FEDERAL EMPLOYEES
DENTAL AND VISION INSURANCE PROGRAM (FEDVIP)
Your coverage will continue.
However, if the lapse period is less than two consecutive pay periods,
your premiums will accumulate and be withheld later when the lapse ends. If you do not receive pay for two consecutive
pay periods, BENEFEDS will begin to bill you directly for premium
payments. You must pay those bills on a
timely basis in order to continue your coverage.
Employees enrolled in their agency child care subsidy
program should contact their agency HR office for information about payments.
EMPLOYEE ASSISTANCE
PROGRAMS
Employee Assistance Program (EAP) services can be helpful in
providing confidential counseling with experienced, licensed counselors, and
many EAPs can provide access to legal and financial consultation services. Contact your agency’s EAP office to determine
what services might be available to you.
OTHER CONSIDERATIONS
Some mortgage, loan, credit and utility providers have
indicated that customers may qualify for alternative arrangements. Please contact your providers for more
information.
Note: This guidance should not be considered time and attendance instructions. Guidance on documenting time and attendance will be provided by each agency and payroll provider.’
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
OPM sent out a notice of annuity adjustment in late December
to all annuitants and survivor annuitants. I received mine on December 22. This
document, the first for 2019, includes your new monthly payment resulting from
our recent 2.8% COLA Adjustment. There’s a lot of important information
included on this form and I keep them in my retirement folder for future
reference, along with all correspondence received from OPM.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
This document is a wealth of information, it lists your
previous and new year’s gross annuity with all deductions and so much more.
First, you should know that your 2019 deductions may change shortly due to
health care premium changes resulting from the recent FEHB Open Season.
You may receive a new Notice of Annuity Adjustment in February listing federal
dental and vision care premium increases. The current notice does list your
primary FEHB plan increase in a statement under the Notice of Annuity
Adjustment Chart. Also, anytime you initiate a change to your checking/savings
allotments, state or federal tax withholdings, or anyone of 89 deductions or
additions listed on the back of this notice, you will receive a new annuity
adjustment in the mail.
The first adjustment that we receive each year also includes
the monthly survivor annuity currently payable in the event of your death to
your spouse. It actually lists the gross monthly amount payable to your named
spouse. This is listed just below the Adjustment table on the form. This form
also includes your retirement claim number and suggests having this number
available when contacting OPM about your retirement benefits.
I typically highlight the key information on this form and place a copy with my estate plan. You will also find valuable information about your survivor elections on the back of the form along with OPM contact information and a list of the codes used for deductions and additions.
Enter your new 2019 annuity values provided on this notice in our updated Projected Annuity Calculator. My annuity has increase over 33% since I retired in 2005. This calculator lets you project annuity growth through 2059!
Those who elect a survivor’s benefit can calculate their total value without the survivor election using the data provided by this notice. For example, if your spouse’s monthly survivor annuity currently payable in the event of your death is $2,750, multiply that number by 12 to determine the spouse’s annual benefit, $33,000 a year in this example.
If you elected a full survivor’s benefit your spouse receives
either 55%
for CSRS or 50% for FERS annuitants full annuity amount for life. To elect a full survivor annuity for your
spouse your annuity is decreased by 10% for FERS and just under 10% for CSRS annuitants.
To determine your full CSRS annuity amount, without the spousal
election deduction, divide $33,000 in this example by .55 (CSRS) which equals
$60,000 a year. Use 50% for a full FERS
survivor’s benefit. Many annuitants assume their spouse will receive 50% or 55%
of what they are currently receiving yearly. The surviving CSRS spouse receives
55% and the FERS spouse receives 50% of what your total annuity would be
without a survivor annuity election. This is also the amount a federal annuitant
would receive if their spouse dies while the annuitant is retired.
Another way to look at this is that the surviving spouse for a CSRS annuitant will receive approximately 60% of what the couple receives prior to the annuitant’s death when the annuitant selected full survivor benefits. A surviving spouse for a FERS annuitant will receive about 55% of what the couple receives prior to the annuitant’s death when the annuitant selected full survivor benefits.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
Many retirees and survivor annuitants call OPM to change direct deposit information and become frustrated because they can’t get through, their line is busy most of the time. OPM services 2,113,414 federal annuitants, 523,737 survivor annuitants plus postal service retirees as well.
It is easy to change monthly annuity payments from one financial institution to another if you understand your options. Direct Deposits will continue to be received by the originally selected financial institution until OPM and the U.S. Treasury are notified by the payee that the payee wishes to change the financial institution receiving the Direct Deposit.
It’s recommended that the annuitant maintain accounts at both financial institutions until the transition is complete. Don’t close your original account until after the new financial institution receives your first Direct Deposit payment.
If you are already receiving your federal benefit payment by direct deposit, and would like to have your payments sent to a different account use the procedures that follow to make the change. Recently, OPM and the U.S. Treasury made changes to the program including updating the link to the SF 1199A form.
To enroll in Direct Deposit or to change your enrollment to a new account, OPM needs to know the routing number of the financial institution and your account number. The financial institution will provide this information or you can locate this information on the checks you use.
Fax an SF 1199A form to 724-794-6633. This form can be obtained from your financial institution or you can print out a copy online. (The bank must sign the form)
Mail an SF 1199A form to OPM, Retirement Operations, PO Box 440, Boyers PA 16017-0440.
Call OPM at 1-888-767-6738. Please be sure to have your bank routing number and account number handy.
OPM’s line is frequently busy, call early and often throughout the day to get through and you must have your retirement claim number or Social Security number available.
Using OPM’s Retirement Online Services makes changes like this easy, you can make this change online after registering for the free service. I signed into my account, see following graphic, and clicked on Direct Deposit. The blacked-out areas hide my personal account information. All you have to do is click on change and enter your new bank routing and account numbers. When you access the Direct Deposit page it will state what date your change will take effect in the last line above your personal data.
The menu to the left on the Services Online graphic show all that you can do once registered. You can obtain duplicate copies of your 1099 R statement, print out a statement outlining all of your life insurance coverage, initiate or change allotments, increase or decrease state tax withholding, print out a statement of your annuity that you can provide to lenders for loans, and much more. It is worth the time and effort to register for this service.
To register you must call OPM and they will send you access information in the mail. Yes, I know it’s difficult contacting them by phone. What I do is dial their number, if its busy I hang up and immediately click on redial, I typically get through in several minutes using this technique. Expect long wait times, I’ve waited on hold for up to 45 minutes.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
The wild stock market swings are heavy on the minds of investors today, especially for those approaching retirement and retirees living on a fixed income. It is even more problematic if you depend on Thrift Savings Plan (TSP) and other retirement account withdrawals. Market volatility is uncomfortable to say the least when you see what you worked a lifetime saving shrink dramatically, sometimes overnight. I wrote several articles about coping with market fluctuations and how to shelter your nest egg from the coming storm.
I don’t care how seasoned of an investor you are, market volatility is a concern and all ponder the ramifications of a major correction. The S&P on December 6, 2018 was on course to have its worst performance in 7 years! The following chart, excerpted from the TSP website, shows the current year and last 12-month fund performance. The ultra-conservative G Fund has outperformed all but the C fund over the past 12 months.
Reviewing this chart confirms 2018 did not perform as many had suggested at the beginning of the year. The returns are meager and could worsen if December stock market performance doesn’t improve. After 10 years of gains it is what can be expected. At the beginning of the year many talked about how foreign stocks were undervalued and should perform well in 2018, just the opposite happened as the market dynamics changed. The concern from this point on is where is the market heading over the short and long term.
These changes aren’t of much concern to those who have decades to grow their retirement accounts. It’s those approaching retirement and retirees in general that can’t wait out a major correction or pending recession. Downturns create an atmosphere where many defer retirement until their investments recover unless they took measures beforehand and moved to more conservative low beta investments as I discussed in my article titled, “Is the Stock Market Keeping You Up at Night?.”
In the referenced article I state, “Over the past 120 years there has been many recessions and of course the great depression that started in 1929. From the early 1900s on there have been four major recessions with the longest recovery period from 1929 to 1955, 25 years! The average recovery period was 16.5 years. The shortest recovery period lasted only six years from 2009 to 2015. What most of us have experienced since 1985 are bull markets interrupted with one recession running six years from 2009 to 2015. Yet, the most recent recession always seems so much worse than earlier periods since it is fresh on our minds.” It’s the recovery periods that give those approaching retirement and retirees pause.
The good news is that over time good investments recover as outlined in the following TSP Annual Return Chart excerpted from the TSP website.
It took almost 4 years for the C fund to recover the loss. The C Fund in 2008 lost $369.90 for each $1,000 invested dropping the balance to $630.01. In 2009 the C Fund gained 26.68% increasing the balance to $798 Then in 2010 the C Fund increased 15.06% increasing the balance to $918.17 then in 2011 the 2.11% gain increased the balance to $937.54. Finally, in 1012 the 16.07% gain raised the balance of that original $1,000 to $1,088. The International (I Fund) didn’t recover until 2013. Many investments in 2008 and 2009 dropped 50% or more and it took many years for those to fully recover their losses
A well-diversified core portfolio can provide the balance you need to whether stock market volatility. However, the more conservative you are the faster the recovery will more than likely be. Yes, we all are concerned when markets fall dramatically but it isn’t the end of the world. It’s the beginning of a new reality and one that we have to deal with. Most reduce their investment risk if they will need to withdraw from their retirement accounts to live comfortably. Plus, they may sleep better at night knowing their account balances will be there when needed.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
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Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
I wrote an article late last year titled “Where Are You Now! Looking at The Numbers” that helped readers evaluate their finances and determine if they had sufficient resources to live comfortably pre and post retirement. We provide extensive financial planning guidance to help anyone from a new hire to a retired annuitant evaluate and assess their financial strength. I mentioned in last year’s article, “few evaluate their finances until their checks start to bounce or they are so much in debt they can’t dig themselves out.” One of the leading causes of divorces today is due to finances and not living within your means.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
I recently developed an 8-page Budget Work Sheet that helps individuals and couples determine where they stand pre and post retirement. The worksheet guides you through listing your income from all sources, loans and debts, utility costs, insurance premiums, monthly savings and investment contributions, and miscellaneous expenses. An individual or couple will know what they are bringing in each month, their total expenses, and where they stand financially.
This worksheet isn’t an excel spreadsheet, it’s a pdf file that you can download and print out. Just lay it out on the table for you and your spouse/partner to fill out together with pen or pencil. It evokes discussions and doesn’t require sitting at a computer to complete. This way everyone knows firsthand where the household money is being spent and how much is needed each month to make ends meet.
Working couples often neglect to balance the books so that each party equitably supports the household to the degree possible. When this happens, it places an unfair burden on whomever is paying the bills and can lead to marital discord.
This work sheet includes a Common Expense column for working couples that reveals how much is needed monthly to support the family. Many newlyweds enter marriage without sufficient financial planning, they are in love and neglect to address the elephant in the room; making financial ends meet. Of course, this is natural to a certain extent especially for the very young. My wife and I are a prime example. We married young, my wife was 19 and I barely 20, while I was in the military earning a measly $98 a month! That was about one third of the minimum wage back then. We flew to Biloxi Mississippi with a few hundred dollars in our pocket, no car, and not knowing what laid ahead. Yet, we persevered and flourished. Most starting out like this end up divorced early on.
Fortunately, federal employees have great benefits, good pay, and are generally older and wiser than the very young at heart. Yet, they too often enter a relationship with blinders on and neglect to take the necessary steps early on in their relationship to right the ship and balance the financial load placed upon them.
This worksheet allows individuals and couples to evaluate pre and post retirement expenses, there are columns for both entries. For example, under LOANS / DEBT there are four columns as noted on the excerpted table below. If you pay off your mortgage when you retire the post-retirement column would show zero dollars for your monthly mortgage payment. We extend that to common expenses both pre and post retirement for couples to determine what expenses to share when both have income. In this case the mortgage would be a common expense pre-retirement and zero dollars post-retirement.
A car loan could be considered an individual expense if both have a car and income. Tailor the chart and add additional common charges if relevant. I highlighted the expenses that most would consider to be shared by working couples. A single person wouldn’t need the common charges identified because there would not be anyone to share the costs with. This process works for everyone.
Common expenses show the amount needed each month from working couples to pay the household bills, save for a rainy day and how much is spent on each line item. If you are a married couple and one is a stay at home mom or dad the working spouse generally earns enough to take care of business and keep things running. Married working couples, each earning about the same, could equally split the common expenses. When one partner is still working and another a retired annuitant the division would be decided by the pair as to what each can contribute based on all income sources; salary, pension, Social Security, 401k distributions, etc.
This exercise helps working couples share expenses equitable when both have sufficient income to contribute. At the very minimum, it effectively reveals total income to expenses so that you can see if you have anything left after paying the monthly bills.
Another key benefit of completing the worksheet is to discover where all of your money is going each month. Much of the younger generation today don’t know how to balance a checkbook. They use their debit cards until they are rejected for insufficient funds. Then, they go online to see what their balance is and wait for the next paycheck or transfer money from a savings account if they have one.
After completing the worksheet, you will know where and what you are spending your money on and be able to evaluate ways to trim costs. Possibly drop unnecessary cable options, program your HVAC thermostat to reduce utility expenses, replace incandescent bulds with LEDs, cut down on your trips to Starbucks, change to a lower cost cell phone service, and so on. There are many ways to economize today.
It’s a good idea for couples to open a joint checking account in addition to their individual checking accounts. If both are working, each would deposit their share of the common expenses in the joint account each payday for the bills. The excess in the joint account would accumulate for emergencies and discretionary items or you can set aside emergency or vacation savings in a separate account. This way, the person paying the bills should have sufficient funds each month to pay the bills. Even if only one person is working a joint account is necessary so both can pay bills and sign checks.
This is a dynamic process, expenses and income change over time. It’s imperative to revisit your worksheet at lease once a year or whenever there is a major change such as a pay raise, someone retires, or for younger couples when a child is born.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
Helpful Retirement Planning Tools / Resources
Distribute these FREE tools to others that are planning their retirement
Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
Open season starts November 12th. There are tools available to evaluate provider options and help you select your 2019 plan. Use the following resources to make an informed decision for you and your family’s health care needs.
Request a Federal Retirement Report™today to review your projected annuity payments, income verses expenses, FEGLI, and TSP projections.
Obtain Copies of Plan Guides
Active Employees
Request hard copies of desired plan brochures through your benefits coordinator. If you don’t know who that is talk with your supervisor.
Request copies direct from the plan providers. I requested and received brochures direct from GEHA and Blue Cross Blue Shield weeks before they were available on the OPM site.
Annuitants (Retirees)
Sign up for FEHB Open Season Online – This site is devoted to federal annuitants. Request plan brochures to be mailed to your home address or you can download brochures to your computer. You must register to use this site and annuitants can change enrollments online.
Compare Plans – Use OPM’s FEHB Plan Comparison Tool. Compare costs and benefits of up to 4 plans side-by-side. It is easy to use and will show you the differences between plans with only a few keystrokes. OPM advises, “The information contained in this comparison tool is not the official statement of benefits. Before making your final enrollment decision, always refer to the individual FEHB brochures. Each plan’s FEHB brochure is the official statement of benefits. Items marked with an * must be completed before advancing to the health plan comparison.”
Annuitants can change plans online at FEHB Open Season Online. The online service is easy to use and you can track your change submissions.
Call Open Season Express 1-800-332-9798.
Send regular mail (Postmarked no later than final date of Open Season) to:
Office of Personnel Management
Open Season Processing Center
P.O. Box 5000
Lawrence, KS 66046-0500
When sending requests by mail clearly state your Open Season request. If you are making an enrollment change, be sure to tell OPM the plan you want, the type of coverage (Self Only or Self and Family), and the enrollment code. You must include your annuity claim number and social security number on your request. If you are choosing Self and Family coverage, we will also need your dependent and other insurance information as specified in the instructions mailed to you at the beginning of Open Season.
Federal Employees Dental and Vision Insurance Program (FEDVIP)
Dental and vision benefits are available to eligible Federal and Postal employees, retirees, and their eligible family members on an enrollee-pay-all basis. Enrollment takes place during the annual Federal Benefits Open Season in November and December. New and newly eligible employees can enroll within the 60 days after they become eligible.
Register online at www.BENEFEDS.com to review and download plan brochures, use their plan comparison tool, and to initiate a change or cancel enrollment. I compared several plans this morning using their comparison tool. If you aren’t a registered user sign up now. You will be able to review your Dental, Vision, Long Term Care and Flexible Spending accounts. Enrollees can initiate changes during open season, when there is a life event change, or to cancel coverage at any time.
For enrollment/premium questions regarding dental and vision insurance, contact BENEFEDS at 1(877)888-3337.
Medicare Impact on FEHB Plans
Review the following articles that describe the impact Medicare has on your FEHB provider payments.
Disclaimer:Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that retirees, potential and existing investors conduct thorough investment and benefit research of their own, including detailed review of OPM guidance for benefit issues and for investments the companies’ SEC filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.
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