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Borrowing to Pay the Mortgage

Posted on Thursday, 17th October 2013 by

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I would say that anyone who has to borrow to pay their mortgage is in trouble, wouldn’t you! Can you imagine having to borrow not only to pay the mortgage but to just make the interest payments on your credit cards and other debt? Fortunately the government shutdown is over and everyone should be back to work shortly. However, the bad news is that with all of the hype over passing a clean continuing resolution (CR) and allowing government to continue to borrow 40 cents of every dollar it spends can’t be good for any of us long term. If a typical family tried to do this they would be bankrupt within the year and lenders would toss them out of their office. I wrote an article titled “Is This Coming Your Way & The National Debt Crisis” last year that describes the debt crisis by comparing it to a typical family’s income and expenses that you may find revealing.

Government should be setting an example of sound fiscal policy not of reckless abandonment and the sad fact of the matter is that most just don’t realize just how dire this situation is. If government doesn’t get spending under control and focus on putting people back to work the negative impacts will ripple through all of society.  The glimmer of hope that came out of this past several weeks is that the President stated many times that if congress passed a clean CR and extended the borrowing limit he would be willing to sit down and negotiate on any subject. I hope that he and congress follow through prior to early next year when this all could happen again.

The 16 day shutdown is like a shot across the bow of a ship; a near miss never less a shock to the system. I read several stories about federal employees that were furloughed struggling without their biweekly pay coming in on time. I went through a number of shutdowns while in federal service and was sent home as non essential twice.

One story focused on a family of four where the federal worker was in his 50s with kids in College and bills coming in that he couldn’t pay on time. The family was living pay check to pay check and struggling to get by during this 2 week period. I can certainly understand the stress this family was going through. Fortunately, furloughed federal workers will eventually receive back pay and in effect received extra paid days off. Not bad considering that many in the private sector simply were laid off without any hope of back pay.

What these stories highlight is that many simply aren’t prepared for the unexpected and have little to no savings set aside for a rainy day. Sure we have secure jobs in the federal sector but that doesn’t mean we shouldn’t be fugal, live within our means, and save for that rainy day that will eventually come our way. All workers, especially those in their 50s and close to retirement, should have savings set aside for emergencies and retirement, other than their THRIFT plan, even with kids in school. That is why retirement and financial planning is so critical and should be addressed early in ones career. If you were in the same boat as the story line relayed above it’s time to get serious about financial planning strategies and retirement planning.

A fellow worker once said to me that he didn’t have to put anything aside for retirement because of his CSRS annuity and his THRIFT Plan savings. Not so, sure the CSRS annuity can be generous however you never know what is coming your way and the costs of everything is increasing. I mentioned in a recent column that in the past few months our home owners and car insurance premiums increased over 30% and our real estate taxes were just raised 30% as well. That was unexpected and a huge hit especially for someone on a fixed annuity and/or Social Security considering that retirees are expecting up to a 1.5% COLA next year!  They just announced that federal employees will receive a 1% pay increase in January.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 or human resource professional where appropriate. Neither the publishe

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

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Making Retirement Work For YOU

Posted on Saturday, 5th October 2013 by

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I retired in 2005 at age 55, almost 9 years ago! Honestly, I wouldn’t have retired if I didn’t have 35+ years of service at the time and an avocation, my business to fall back on.  Had I stayed I would be retiring with 45 years and a maxed out annuity.

What I enjoy about hosting my federal employees retirement planning site is talking with so many retirees that are truly making retirement work for them and their families. Take Frank for instance, he retired around the time I did and since then has traveled extensively recently returning from a three week tour of Europe staying two weeks in Italy at a friend’s villa and then took a one week bus tour of Rome, Pisa, Verona, and Venice. His next adventure will take him to Portugal! Frank and his family truly enjoy traveling and he spends a lot of time with family and friends .

Nancy, our Travel Forum host, loves cruises and frequently visits the west coast, Hawaii, and Europe plus she is planning an African safari.  Another recent retiree, Janet, a friend from my old job in Pittsburgh, traveled to London with her husband to attend the Pittsburgh Steelers’ game. What a way to start off retirement.    

On the flip side there are those who retire to grow a small business or non-profit. Randy Baldwin did just that, his business Just Write Laser Engraving specializes in unusual and unique gifts for retirees, fund raisers, corporate, military, and others. He devotes full time to his business. He also had a side business while still in government that made ink pens out of about any material. He made three pen sets from a wood hammer handle that was the only thing that I had from my father who died in 1951 when I was a year and a half. I display the pen set in my office along with a FAA retiree logo coffee mug from his current company.  

Another excellent example of a federal retiree’s entrepreneurial spirit is Ann Ozuna a former federal personnel specialist and our HR and Divorce Forum host. Ann took an early retirement in 1996 and founded Personnel Solutions Federal Benefits Counseling located online at www.TheFederalRetirementLady.com. She assists individuals in understanding all their federal retirement options as well as individuals and attorneys with interpreting the OPM divorce rules.

Many retirees devote time to their church and charities while others pursue every hobby imaginable including gardening, cooking, coin collecting, sports, watch and clock collecting, you name it and a retiree is enjoying their time and they consider it time well spent.  Anything other than work for this group and I can understand that. I’ve been working non-stop since my early teens, over 50 years of continuous non-interrupted work. Why do I do it? Basically I still enjoy the challenge of getting up each morning and coming to work and today that means going downstairs to my home office after I make a pot of coffee for my wife and take out the dog.  However, that being said there is a time to slow down and simplify one’s life and turning 65 is a major milestone that is fast approaching for me. 

One of my co-workers, many years ago, planned to retire early and devote his time to outdoor activities from fishing to farming. Unfortunately health issues got in the way and he was never able to fulfill his dreams.  The key to a successful retirement is planning and knowing upfront before leaving what you intend to do and are able to do, and if you are financially, emotionally, and physically prepared for your new adventure. Take time to plan your exit and use our retirement planning site to help you through the process.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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 FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION, Travel

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FEHB and the Unexpected Consequences of the Affordable Health Care Act

Posted on Thursday, 12th September 2013 by

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This is a follow-up to my last article which talked about the potential impact the new health care legislation may have on our FEHB plans. I was going to title this article “The Unintended Consequences of the Affordable Health Care Act” however that really isn’t the case. Those who drafted this plan knew full well the consequences even though few if any of our representatives read the plan including Nancy Pelosi who famously stated in a press conference that “we have to pass the law to find out what is in it.”  It is the workers and retirees that find this unexpected and not sure which direction this will take, the impact on our health care services, and how much it is going to cost all of us.

Unfortunately new laws are often drafted through second and third parties that have vested interest and agenda and receive little scrutiny.  I personally down loaded the law and the language was confusing to say the least and open ended leaving the details for new agencies to develop. Now thousands of pages of regulations have been written as the plans are being implemented and modified as problems and issues arise.  

There is much uncertainty among all groups concerning the impact going forward as evidenced by delays, granted exceptions, and objections that arise. Three major unions that supported implementation stated in July that “the Affordable Health Care Act will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”  The administration is considering offering subsidies to union members and if that does happen the costs for the Affordable Care Act will increase dramatically. Subsidies are reserved for low income families in the new law.   

I understand that many in the Congress that must join public exchanges this year and are eligible for retirement are considering retiring now so they can retain their FEHB coverage after they leave. It’s too soon to tell how many will take advantage of that option.  The downside that I discussed in “The FEHB Program and the Affordable Care Act” is that as employees leave the FEHB program the pool of ensured drops and costs go up. Even if all federal employees are moved to local public exchanges federal retirees could still remain in the FEHB program. However, the FEHB program would lose over half of their participants, more than 2 million workers.  Remaining retirees could conceivably see their FEHB costs double or triple in a few short years.  

Recently over 300 companies including IBM, Dupont, and Caterpillar announced that they are moving Medicare eligible retirees to privately run local exchanges to cut costs. The companies are providing fixed payments through health retirement accounts that retirees can use to buy coverage. The privately run exchanges such as Extend Health offer polices from various insures similar to the FEHB program with a broad range of options, deductibles, and features. The privately run exchanges are not affiliated with the public exchanges that start in October and are administered by the government.  Company’s health care costs are skyrocketing and this move eliminates their cost to administer the program for retirees.

The Wall Street Journal reports that “only 28% of large companies that offer health benefits to employees offered retiree coverage in 2013, down from 34% in 2006 and 66% in 1988.”

I mentioned in my last article that many companies were eliminating coverage for spouses if they are employed. This can cause significantly higher costs for couples with children because one spouse would have to retain family coverage even though the spouse isn’t covered. The uncovered spouse would have to purchase single coverage though their employer or a local exchange.  In this case couples with children would be paying a penalty!  So far I’ve heard nothing about this spreading to the federal sector, at least not yet.

It is just too early to tell how this will all shake out but I must say I’m apprehensive and fear that the excellent medical care and services we now receive may be compromised.  My preference is to stay in the FEHB program. Maybe it’s just because the FEHB has worked well for my family for over 4o years now. The old saying “If it isn’t broke don’t fix it” may apply here.  

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION, WELLNESS / HEALTH

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FEHB Program Affordable Care Act Impact

Posted on Friday, 30th August 2013 by

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Many federal employees and retirees alike are concerned about being forced out of the FEHB program and into local health care exchanges that are mandated by President Obama’s Affordable Care Act. I’m not sure why it was called the Affordable Care Act when in reality insurance costs have already increased considerably across all sectors since the law was first passed. How can you insure 30 million more Americans, allow adult children to stay on their parent’s coverage until age 26, dramatically expand Medicaid coverage, and force insurers to accept anyone for coverage regardless of pre-existing conditions and not expect costs to skyrocket. Plus they took over 500 million dollars from Medicare that many seniors rely on to fund the new Affordable Health Care Act. It takes a huge amount of money to do that and it has to come from somewhere. Whether private insurers or government eventually places all coverage under a single government payer system costs will by necessity increase dramatically and there would be rationing of care as many predicted.

Many suggest that even after full implementation of the Affordable Care Act there will still be 30 million American’s without health care coverage, although a different group than the 30 million that were not covered prior to this new program. The new law is forcing many companies to not cover spouses who work elsewhere and to convert employees to part time because they can’t afford the costs and penalties.  This may, in part, be the reason why the majority of all new jobs created over the past 5 years are part time or lower paying service jobs!

The Legislative branch will be forced out of the FEHB program and into local exchanges this year. Many are asking why the federal sector’s Executive Branch shouldn’t follow suit and enter local exchanges like the rest of the county.  The FEHB program has served both active federal employees and retirees for generations and I personally would prefer retaining our existing coverage. I’m sure most reading this column would agree.  

Now that the Legislative Branch (Congress) is forced to enter local exchanges outside of the FEHB program there will be over 34,000 less participants in our FEHB program sharing the cost of our insurance coverage. Less participants in any plan result in higher overall costs for participating members.  They are chipping away at our benefits and possibly targeting us for inclusion down the road, only time will tell.

The good news is that organizations like NARFE and others are lobbying Congress to continue FEHB coverage. Also, the 34,000 less participants is a very small percentage of the total covered under the FEHB so the bite won’t initially be much if anything at first. Also, there is still talk of adding Plus 1 coverage which would lower costs for many if not most retirees and employed empty nesters.

Insurance costs in general have been skyrocketing this past year. Our home owners insurance increased 20%, auto insurance 35%, and our local school taxes may be increased by as much s 33%. I’m not sure what the new FEHB premiums will be but my guess is that they aren’t going down!   I looked at my insurance policies to determine where the increases came from and discovered that our auto insurance bodily injury coverage increased 37% alone and that too may be a function of the new Affordable care Act. New FEHB rates will be announced soon and only time will tell if we will be forced to abandon the FEHB program. Thankfully NARFE is fighting the good fight and if you aren’t a member consider joining. They need all the funds they can get to lobby Congress and protect our benefits.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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FERS Annuity Supplement Eligibility and Earnings Limitations + Annuity Projection Update

Posted on Friday, 9th August 2013 by

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Many FERS annuitants that retire before age 62 are eligible for an annuity supplement that will end when they reach age 62.  You may be eligible for a Special Retirement Supplement if you retire:

  • At age 60 with 20 years of service; or
  • Upon involuntary or early voluntary retirement (age 50 with 20 years of service, or at any age with 25 years of service) after the U.S. Office of Personnel Management determines that your agency is undergoing a major reorganization, reduction-in-force (RIF) or transfer of function. You will not receive the Special Retirement Supplement until you reach your MRA.

The FERS Supplement is often significantly less than your Social Security benefits due to the fact that the formula for the Special Supplement assumes a working life of 40 years, each year of FERS service is worth one-fortieth of the estimated Social Security benefit.   

There are income limitations. However, your current earnings before retirement, your annual leave lump sum payment, pensions or annuities, capital gains from investments, interest and dividends not resulting from trade or business, and a VSIP payment if offered do not count towards your income limit and will not affect your supplement payment. Your earnings will be verified through a computer match with the Social Security Administration’s earning file and your annuity supplement will be reduced $1.00 for every $2.00 by which you exceed the exempt amount of $15,120 for 2013.  The earnings limit is adjusted yearly and applies to earnings received in the current year after retirement and after you reach the Minimum Retirement Age (MRA).

Here is a list of earnings that apply towards the reduction:

  • All wages from employment covered by social security.
  • All cash pay for agricultural work, domestic work in a private home, service not in the course of your employer’s trade or business.
  • All pay, cash or non-cash, for work as a home worker for a non-profit organization, no matter the amount. (The social security $100.00 tax test does not apply.)
  • All pay for work not covered by social security, if the  work is done in the United States, including pay for:

o   Family employment,

o   Work as a student, student nurse, intern, newspaper and magazine vendor,

o   Work for States or foreign governments or instrumentalities and

o   Work covered by the railroad Retirement Act.

Regardless of what income is called or who receives it, if it is actually wages for services you performed or net earnings from self-employment you secured, it must be included in applying the earnings test.

We have more information on the social security supplement available online that you will find helpful including links to the Annuity Supplement Earnings Report.

UPDATE: The spreadsheet that we provided in last weeks article titled Projecting Your retirement Annuity and Survivor Benefit was updated by Frank Cullen last week. There were two small calculation errors in the survivors column that were fixed thanks to a readers input.  Download the updated spreadsheet and forward it to others in your department that are planning their retirement.

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at  https://fedretire.net to read all forum articles.

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Helpful Retirement Planning Tools
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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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 UNCATEGORIZED

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Projecting your Retirement Annuity & Survivor’s Benefit

Posted on Thursday, 1st August 2013 by

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Everyone planning their retirement needs to know how much they will have to live on in retirement and how much their spouse’s survivor benefit will be. Frank Cullen, a retired federal manager, friend, and former associate, sent me a comprehensive spreadsheet prior to my retirement that projected my annuity and survivor benefit for the next 40 years. I was reviewing my paperwork recently and discovered that the projections would have been right on had we not missed COLA payments for two years. Frank’s spreadsheet accurately determines your projected monthly and annual annuity, based on a selected growth rate, with and without survivor benefit for forty years and your projected survivor’s annual and monthly annuity.

Frank’s spreadsheet also provides a list of annual COLAs going back to 1975 and he calculates the average 2, 5, 10 and 38 year COLA growth to give you an idea of what to use in your estimate. When I ran my numbers back in 2004 I used 2.5% and that came very close to the actual grow rate for that period. The most recent 10 year average that includes the two years that we didn’t receive an increase was 2.6% for those in the CSRS program. The average over the past 38 years is 4.1%. During the past 38 year period we had COLAs ranging from as low as 0% for two years to as high as 14.3% in 1980!  

You can download and use Frank’s Projected Annuity Calculator to project your annuity growth for you and your spouse. This spreadsheet is tailored to CSRS employees that elect full survivor’s benefits however with a few minor modifications and manual calculations FERS employees will also be able to use the spreadsheet. For FERS employees the projected annuity without survivor benefit will be the same; just enter your annuity estimate, enter your age, year of retirement, what you consider to be a realistic growth rate, and the spreadsheet will calculate your annuity for the next 40 years! The column reserved for your projected annuity with survivor benefits will be slightly lower since the maximum spousal benefit is 50% for FERS, not the 55% for CSRS. Also, the full FERS annuity will cost the retiree a little more because FERS employees pay 10% of their annuity for a full survivor’s benefit where CSRS pay just under 10%. FERS COLAs are also weighted and adjusted down when the COLA exceeds 2%.

Frank revised and updated the spreadsheet for our site and included the password for those who are familiar with the Excel program. If you are in the FERS program and can work with Excel you will be able to tailor it to the FERS program by simply changing the calculations that are now set for CSRS.

Download the spreadsheet to estimate your annuity and survivor benefit. If you have questions about the spreadsheet functions Frank provided his email address on the spreadsheet. I’m not that familiar with Excel. Frank was our regional FAA expert and he often provided unique and helpful spreadsheets for many of our operational programs.  I would like to thank Frank for taking time to update and provide this helpful resource for our site visitors and newsletter subscribers.

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at  https://fedretire.net to read all forum articles.

Visit our other informative sites

Helpful Retirement Planning Tools
Distribute these FREE tools to others that are planning their retirement

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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Protecting Your Most Valuable Retirement Asset – Your Home

Posted on Friday, 19th July 2013 by

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We purchased a 9 year old home last year and the seller thankfully included a home warranty. Since we moved in we used the home warranty services many times saving us thousands of dollars in repairs. Recently, I renewed the contract and had to call them out shortly thereafter.

When we were purchasing our new home the inspector found a few things that the seller’s repaired however he missed so much more. My wife and I wonder why we paid for the home inspection after encountering so many problems after moving in. Unfortunately, even what appears to be a well maintained home often has underlying problems that you only uncover after moving in.

During the first year the home warranty service replaced the garbage disposal, main furnace blower motor, whirlpool tub motor and pump, counter top gas range, kitchen sink faucet, and initiated two furnace repair calls. The total repair cost would have exceeded $2800. 

Shortly after renewing the service the family room fan, mounted 22 foot high, had to be replaced. Again, the warranty service paid for the new fan and replacement. The repair service estimated that it would have cost me at least $600 to do the work had we not had the warranty service. They used a HUGE ladder, a Little Giant, and it took three men to set it up and maneuver it in place. When they were setting it up it started to fall and they stopped it just inches from crashing through our large palladium window.

This was my first experience with American Home Shield (AHS) services and I must say I was impressed. They offer home sellers a special $460 price for their Core Coverage Plan to get their foot in the door. We paid $60 for each service call the first year and the second year it increased to their standard $75 fee and it cost us $611 for their FlexPlan Combo or $51 per month for single family homes under 5,000 sq. ft. I already made up most of that cost with this first repair.

The Core Coverage includes heating, AC, ductwork, plumbing including whirlpool tubs, plumbing stoppages, water heaters, electrical, built-in microwaves and dishwashers, garbage disposals, ranges, ovens and cook tops and more. The FlexPlan Combo also includes their Service Plus and Coverage Plus packages and includes everything from ceiling fans, garage door openers, telephone, doorbells, smoke detectors, improper installations, refrigerant recovery, and mismatched systems! You can add coverage for your clothes washer, dryer and refrigerator for an additional charge.

As with all services there are drawbacks. You can’t choose who they send however if a preferred service company is on their list they will consider your request. You must request a preferred company when you initially report the problem. When our gas cook top was malfunctioning they sent Sears to repair it. Two of the four burners weren’t working. They ordered parts three times and we initially received broken parts. Finally AHS authorized a replacement and we went out and purchased a new unit from Sears. I had to initiate a replacement request with them and it took over a month from when we first reported the problem to being reimbursed for a new cook top. 

I typically check service company ratings on Angies List and the majority had ratings similar to most others in the area. You can visit the AHS site at www.ahs.com to explore what they have to offer. There are other warranty services companies however you need to compare their programs to what AHS has to offer. Many of the service techs that they sent thought highly of their services and found AHS reasonable and responsive.   

AHS covers much of the home however you still can incur major expenses to repair broken water, sewer and gas lines. In our area Dominion Products and Services, Inc. offers inexpensive line replacement and restoration coverage and you simply pay the additional charges through your electric utility. We pay $20 a month for full coverage and this also includes the gas line inside the house. Dominion also offers water heater replacement and furnace and AC repair at reasonable costs. You can enter your zip code on their site at https://dominionenergy.com/en/home-protection to determine if they offer services in your area or call your local utility company to see what is available. Initially I ordered Dominion’s water heater replacement coverage before renewing my AHS coverage. After reading the brochure they sent their program only covers water heaters up to 60 gallons, we have a 75 gallon water heater.

With both programs we are covered for most repairs and we don’t have to worry about the cost or who to call when a problem arises. I also maintain a list of preferred service companies in our area for things not covered such as roofers, window repair, general maintenance, and lawn services.

So far we are ahead of the game considering that many service companies are now charging over a $100 an hour plus parts. Check out these services in your area for peace of mind and to control your costs. 

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at  https://fedretire.net to read all forum articles.

Visit our other informative sites

Helpful Retirement Planning Tools
Distribute these FREE tools to others that are planning their retirement

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 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, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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FEGLI Clarifications and Coverage Verification

Posted on Saturday, 6th July 2013 by

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I’ve received many emails over the years from annuitants, spouses of deceased annuitants, and estate executors that weren’t aware of the annuitant’s coverage and/or beneficiaries. A number of annuitants forget what coverage they elected (if any) or who they designated as beneficiary.

There are a number of things that you, your spouse, and estate executor need to know about the FEGLI coverage that you elected to continue in retirement.  Unfortunately, when you sign up for FEGLI coverage you don’t receive an insurance policy like private insurance companies provide.  This isn’t much of a concern until after the annuitant or covered family member dies.  The spouse or estate executor may not be aware of the FEGLI coverage amount, elected beneficiaries, or how to submit a claim.

KEEP A COPY OF THIS ARTILCE WITH YOUR RETIREMENT PAPERWORK AND ESTATE PLAN.
Forward this article to others in your organization that may benefit from this information.

I kept a copy of my retirement paperwork when I retired including my SF-2818 FEGLI elections, copies of beneficiary forms, and I added these forms to my estate planning documents. Even with this paperwork it is best to contact OPM at 1-888-767-6738 to request a “Verification of Life Insurance” (VOLI).  The verification will list specifics about your coverage and other pertinent information.  When requesting a (VOLI) also request a copy of their FEGLI Retiree Phamphlet R1 76-12 and an Annuity Verification. Many banks require an annuity verification form to process loans including home equity loans. The OPM specialist will ask you for your CSA/CSF or SSN number when you call.

The annuity statement is also available through OPM’s online services at www.servicesonline.opm.gov and you can download a copy of R1 76-12 as well. If you haven’t signed up for this service request access when you call OPM and they will send you your initial log-in information to get you started.  This service provides duplicate 1099-R statements, allows users to set up allotments, change federal and state tax withholdings, and more.

I requested both forms by phone recently and my wait time was 15 minute. It typically takes 3 to 5 business days to receive the forms by mail. OPM recently changed their hours of operation and the earlier you call the better chance you have of getting through. I called at 8:00 am.

Additional helpful FEGLI facts and information:

  • FEGLI is term insurance that does not have a cash value
  • MetLife underwrites the insurance
  • The plan’s administrator is the Office of Federal Employees’ Group Life Insurance. They settle claims and you must report the death of the policy holder and/or covered family members to them directly to initiate a claim and receive payment.  Many incorrectly assume that when they notify OPM of an annuitant’s death they are also initiating a FEGLI claim.

Contact the plan administrator at (1-800-633-4542) to initiate a claim.

  • If an annuitant elects the 75% reduction for their basic coverage when they turn 65 their basic coverage is free. Basic coverage is your salary rounded up to an even thousand dollars with an additional two thousand added. If your salary at the time you retired was $68,798, your basic coverage would be $71,000. If the 75% reduction is elected your coverage drops 75% to $17,750 starting at age 65 and you are covered for life.  Even if you have sufficient private insurance coverage I recommend keeping your basic coverage when you retire and elect the 75% reduction. It’s free when you turn age 65! That’s what I did when I retired in 2005 and I turn 65 next year.
  • Living Benefit payments are available to those who are terminally ill and have a documented medical prognosis showing a life expectancy of no more than nine months. You are eligible to elect a Living Benefit if you are an employee, annuitant, or compensationer and you are enrolled in the FEGLI Program. Employees can choose a full or partial Living Benefit. Annuitants and compensationers can elect only a full Living Benefit.
  • FEGLI basics
  • Understanding FEGLI Coverage
  • Evaluating Your Insurance Needs
  • Canceling FEGLI coverage  (Caution)
  • FEGLI Forms  (Beneficiary Changes, etc.)
  • Request a Retirement Benefits Summary & Analysis from a local adviser. Includes projected annuity payments, income verses
    expenses, FEGLI, and TSP projections.

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at  https://fedretire.net to read all forum articles.

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The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. 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 or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

 

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

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