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Take a Walk on the Wild Side

Posted on Thursday, 18th August 2011 by

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As a youngster growing up in northern Indiana, wildlife consisted of skunks, raccoons, deer and opossums and I did not find them particularly interesting since their natural setting was usually lying in the middle of the road lifeless.  But that changed in 1980 while I was enjoying a training assignment in Oklahoma City.   I stumbled across a marathon showing of Marty Stouffer’s Wild America program as part of the local Public Broadcasting System’s annual fund raiser.  It was the first time I had watched or even heard of the program but I was fascinated by all the stories being told showing the behavior of not only creatures I was familiar with but also some I had never seen or heard of.  My cat took the trip to Oklahoma with me and Wild America mesmerized her as well to the point she thought she could catch the birds as they soared across the television screen.  I spent my entire Saturday watching those programs.  From then on I was hooked on watching wildlife.

I wanted to be able to go out and watch some of those creatures myself so I relocated to Colorado in 1987.  It would be hard to find a better place to go for a hike and view wildlife in the lower 48 states than Colorado.  Every weekend was a vacation to see Big Horn Sheep, Elk, Mountain Goats, Deer, Prong Horn and smaller creatures that live in the mountain habitat.

Mountain Goats reside in alpine habitat and often can be spotted walking sure footed along sheer steep mountain sides.  I could always count on finding them on Mount Evans just an hour west of Denver.  If you drive to Summit Lake, stop and patiently look around you’ll spot them.  They dig and graze in the mountain tundra often with a kid next to them.  Adults display beautiful white fur from their head to their shoulders with the rest of the body in the process of sheading a heavy coat from winter.  The little ones are sometimes playful and active near their grazing mothers.  I usually have to stifle my urge to sing the The Lonely Goat Herd from The Sound of Music when I see them.

I lived near a favorite spot of Big Horn Sheep, Waterton Canyon National Recreational Area along the South Platte River.  There is a road for walking and bike riding that goes back 6 miles to a damn and it is not only home to many of the Big Horn Sheep but is also a great place for fly fisherman.  If a road trip and exploring a mountain town is more to your liking, you can find Big Horn Sheep as you travel to Georgetown on Interstate 70.  They often graze on the north side of I-70 along the sheer mountain sides.  Color variation is limited and the Big Horn Sheep tend to blend in very well.  To spot them look for their white behinds on the mountain side.  If you want to sit and watch them there are several areas to pull over and safely get out of the car and take photos or watch with a good set of binoculars.  It can be interesting if they are on the mountain side looking precarious on little ledges sticking out from the sheer rock face surrounding Georgetown.

The Rocky Mountain National Park is a great place to see large herds of Elk and to watch mating behavior during the fall rut.  People come from all over the country in late September and early October for the rutting season.  A bull Elk sounds a warning referred to as bugling while watching over his harem of females during the rut.  If the bugling does not prevent a challenge from another male, they face off and interlock their antlers and jockey for position to determine who will win the harem of females for mating.  This can be dangerous, so watch from a distance.  The Elk are easiest to see on the east side of the park about a 15 minute drive in from Estes Park.

Moose are another treat you can find inside the national park.  You’ll need to go to the west side of the National Park taking Trail Ridge Road from the east side of the National Park over the highest point in the park to the west side between the Bowen Baker Trailhead and the west entrance to the park.  You will need to be observant to spot a Moose because they are not easy to spot.  You’ll need to watch the wet areas with Willow brush that stands about 5 or 6 feet high.  They are usually alone which makes them harder to find.  You may find them by pulling over where other cars have stopped to see what the fuss is about.  If you can find one in the water it makes for great photos especially if the light allows for good reflections.  The best time to spot activity is early hours around dawn and as the sun is setting at dusk.  Make sure you take good binoculars to view the wildlife.

Eagles are easiest to find if you are familiar with the sound they make.  If you hear them vocalize look at high perch points to see if you can find the Eagle.  Click on vocalizing at this link to hear a bald eagle to assist you in knowing what to listen for. http://www.thebigzoo.com/Animals/Bald_Eagle.asp

I don’t want you to think those are the only wild animals that reside in our western states.  After all mountain lions and bear also live there along with rattle snakes and other creatures you may not want to run across.  If you do plan a trip to the back country of the west on your American Safari, be sure to stop at park visitor centers and check to see if they have any warnings posted for these more dangerous animals.  Visitor centers also have information on what to do to avoid or protect yourselves should you find yourself in the vicinity of a bear or mountain lion.  Read the literature before going on your first hike so you know how to respond should you have an unexpected encounter.

If you have children going on an American Safari can be a great way to learn about our country and the diversity of wildlife it holds, especially if you live in the eastern United States.

Here are some web links to assist in planning an American Safari vacation.

http://wildlifehotspots.com/

http://www.iexplore.com/activity/Safari/North+America

http://www.wildlifeviewingareas.com/

http://wildlife-viewing.gordonsguide.com/search.cfm?country=US

http://www.realadventures.com/g1339_wildlife-safari-tours-united-states.htm

http://www.soft-adventure-tourism.com/Wildlife-National-parks.html

Request a Retirement Benefits Summary Analysis from a local independent adviser. A sample analysis is available for your review. This service is not affiliated with the author or www.federalretirement.net.

Learn more about your benefits, employment, travel, 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

The information provided may not cover all aspect of unique or special circumstances. Travel policies and packages are subject to change without notice. To ensure the accuracy of this information, contact travel providers and hotels at the time of your bookings to confirm pricing, itinerary, and all costs. The comments and observations are limited to the author’s personal experience and your results may vary significantly. This article and replies to comments are not intended to substitute for professional travel services. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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TSP PANIC! The Sky is Falling… or Not.

Posted on Thursday, 11th August 2011 by

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A site visitor close to retirement wrote that his TSP was considerably less than it should have been because he didn’t understand the TSP options and mismanaged his account throughout his career. Don’t let this happen to you.

It feels like a rerun of the 2008 recession with the Dow at the time of this writing down 2,152 points, 19% in the past three weeks. The TSP C fund has dropped in line with the S&P’s 18% freefall and if you had $100,000 in your C Fund it would be down to $82,000, a dramatic drop by any standard. I mentioned in my February article that I converted my entire TSP to the G Fund because of the uncertainty in the markets and I was concerned that a major market correction was eminent. Nothing goes up forever, and with the meteoric stock market rise a correction was around the corner.  Then when you factor in the unrest in the Mideast, the national debt crisis, S&P’s downgrade of our nation’s debt from AAA to AA+, and the banking crisis in Europe, you have the makings of a chaotic financial tsunami!

Our leaders will finally have to tackle the mounting debt crisis before it collapses our system and I believe they now have the mandate, will, and courage to do so. Even with all of this uncertainty America is still a safe haven, by comparison, to almost any other country. Yet, there is a rough road ahead and we all must be prepared.

First things first, DON’T PANIC! The sky isn’t falling even though our investment accounts are temporarily on a downhill trajectory. Remember Annie’s song in the musical by that name:

“The sun will come out tomorrow
So you gotta hang on ’til tomorrow
Come what may…”

The sun will come up tomorrow and thankfully it always does. Historically, all major market sells offs reverse direction over time. The ones who panic and transfer out of equity funds after the market has already dropped off appreciably suffer the consequences. They often wait to get back into equity funds after the market recovers and they enter into a vicious cycle that drains their accounts with each new market swing.  I abide by the following principles that help me in times like these:

  • Be prepared so when disaster arrives all of your eggs aren’t in the wrong basket
  • Don’t make drastic changes during major market moves
  • Invest conservatively when you are within 5 years of retirement

During the October 1987 stock market crash a friend of mine was on the phone until midnight with his broker selling all of his mutual funds. He lost 50% of his investments overnight. Had he stayed the course, his account would have fully recovered in less than six months! It’s hard to fight against the panic that ensues during a major market down turn when everyone is saying the sky is falling. It takes discipline to stay the course.

That being said, it all comes down to timing and what funds you should be in and when. Those anticipating retirement, that aren’t familiar with investment principles, would best be served by investing in one of the Life Cycle or the G Funds. The life cycle funds were designed for those who don’t have the time or inclination to follow and understand the markets and investment strategies. If you plan to retire between 2015 to 2024 the L 2020 fund may be right for you.  Currently the L 2020 funds are invested 36% G, 7.4% F, 20.8% C, 9.6% S, and 16.6% in the I Fund. Each quarter the fund adjusts to a more conservative mix as you approach the year 2020. The largest investment is in the G Fund that is guaranteed to never decrease in value. This mix will fluctuate much less than the S&P 500 or Dow index.

The L Income fund or the G Fund may be a good fit for those within 2 to 3 years from retirement if you will need to start withdrawing your TSP when you leave. The L Income fund offers a conservative fund mix that allows for some growth. They invest 74% G Fund, 6% F, 12% C, 3% S, and 5% in the I Fund. With the majority of the L Income Fund in the G and F bond funds your exposure to the broader market is limited and the swings will be much less dramatic.

If you are mid career or earlier select a more aggressive fund such as the L 2030 fund to maximize your retirement savings long term. Remember, you are investing each pay and you will be dollar cost averaging your investments over time. When markets drop off your contributions buy more of the funds that decreased in value the most.

Visit our retirement financial planning section for additional helpful information. I’ll discuss ways to better understand the markets and your TSP investments in an upcoming article for those who wish to be more active with their THRIFT investments.

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

Request a Retirement Benefits Summary Analysis from a local independent adviser. A sample analysis is available for your review. This service is not affiliated with the author, www.federalretirement.net or Bookhaven Press LLC.

Visit our other informative sites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Posted in UNCATEGORIZED

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Is A Voluntary Early Retirement (VERA) in Your Future?

Posted on Tuesday, 26th July 2011 by

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Updated 2/10/2024

When I attained 25 years of service at age 44, I felt a great sense of relief. I knew that with 25 years of creditable service I would at least be eligible for an early retirement, and I could apply for a VERA and VSIP if offered.

The FAA received VERA authority in the mid 1990s during a major reorganization and I applied for the option and was denied. My position was not included in the initial offer. I was a little apprehensive when I first applied, and my wife had major reservations because my annuity would have been a fraction of what it would have been at age 55.

First and foremost, look before you leap if offered a VERA. Determine if you can afford to retire and determine what you will do to occupy your time after you leave. I applied knowing that I had another fulltime job waiting for me with my publishing business.

Voluntary Early Retirement Authority (VERA)

VERA provides agencies the option to offer voluntary early retirement when restructuring as well as when downsizing. The voluntary early retirement provisions are the same under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS).

The use of VERA is an option for increasing voluntary attrition in agencies that are undergoing substantial organizational change (e.g., reduction in force, reorganization, reshaping, delayering).

Besides providing an incentive for employees to voluntarily retire or resign to avoid potential reduction in force (RIF) actions, the agency may also offer VERA to employees in safe positions that could then provide placement opportunities for employees occupying surplus positions.

Voluntary Separation Incentive Payments (VSIP)

The Voluntary Separation Incentive Payment (VSIP or buyout) Authority allows agencies to offer lump-sum payments to employees who are in surplus positions or have skills that are no longer needed in the workforce, as an incentive to separate.

Under VSIP, agencies may pay up to $25,000, or an amount equal to the amount of severance pay an employee would be entitled to receive, whichever is less. Employees may separate to accept VSIP by resignation, optional retirement, or by voluntary early retirement, if authorized.

VSIPs are an option for increasing voluntary attrition in agencies that are downsizing or restructuring. Besides providing an incentive for employees to voluntarily retire or resign to avoid potential reduction in force actions, the agency may also offer VSIP to employees in safe positions that could then provide placement opportunities for employees holding surplus positions.

Overview & Eligibility

VERA and VSIP programs allow federal agencies that are reorganizing or downsizing to offer early outs rather than lay employees off through a Reduction in Force (RIF). Agencies find it easier to offer early outs to those who wish to leave than to layoff federal employees.

Early outs reduce the potential for RIF’s because younger employees subject to layoffs generally receive lower pay and benefits than the senior employees that would be eligible for early retirement.

Agencies often offer Voluntary Early Retirement Authority (VERA) to employees without a Voluntary Separation Incentive Payment (VSIP). In this case you can retire early and receive benefits however no incentive payment of up to $25,000 is offered for you to do so.

To apply for an early out employees must be at least age 50 with 20 years of service or any age with 25 years of creditable service. If you are offered an early out, with or without a buyout, thoroughly understand the program and its impact on your finances, benefits, annuity, and retirement before applying.

If you apply and your VERA is approved, you must leave by the date specified. This tends to play havoc with plans to sell back the maximum amount of accrued annual leave or the ability to round out your sick leave to an even month by the date of departure.

Pay close attention to the CSRS penalty that may apply. If the CSRS employee is under age 55, this calculation is reduced by one-sixth of one percent for each full month he/she is under age 55 (i.e. 2% per year).  There isn’t a penalty for FERS service.

The FERS Social Security Supplement

The FERS Social Security Supplement applies under VERA for those who are at their MRA when they retire up to age 62. However, if the retiree goes back to work, the Social Security earnings limit applies. In 2024, you can earn up to $22,320 without having your Social Security benefits withheld. But beyond that point, you’ll have $1 in benefits withheld per $2 of earnings.

The limit is much higher if you’ll be reaching your Full Retirment Age (FRA) in 2024. In that case, you can earn up to $59,520 without having benefits impacted. From there, you’ll have $1 in Social Security withheld per $3 of earnings.

Early Retirement Positions

Those employees under the special 20-year retirement system, LEO, FF, ATC and NWC, can apply for a VERA if offered. If you don’t have 20 years vested in the special 20-year retirement system you will not receive the enhanced retirement benefits. With less than 20 years in the covered services their annuity would be based on the regular retirement formula.

Many under LEO, FF, ATC and NWC have regular federal civil service time as well. For example, if an air traffic controller (ATC) is age 53 and has 24 years of creditable service for retirement, but only completed 17 years of ATC covered service, the controller’s retirement would be based on the regular retirement formula because he hadn’t completed 20 years under the ATC system.

So close but so far away… A site visitor’s agency was offering early outs however he was just a few months shy of the required 25 years of service. He wanted to apply his accrued annual leave to his service date to qualify. Unfortunately, annual leave can only be used with RIFs or a discontinued service retirement when an employee is involuntarily separated or has a redirected reassignment outside of their commuting area.

Military credits can be used to qualify for a VERA

You need a minimum of 5 years of civilian service to be eligible for a civilian retirement annuity.  However, after the 5 years is met, the military service is creditable towards years of service for all the other voluntary retirement eligibility requirements: MRA +10; MRA +30; 60 years old with 20 years of service; and the VERA requirements – age 50 with 20 years of service or any age with 25 years of service. Review all eligibility requriements for FERS and CSRS retirement.

One major consideration, especially for those leaving in their 40s and 50s, is what you will do when you retire. Most will look for other employment and it is important to stay active and involved. Go to our recently updated Jobs Center to find employers that are specifically looking for retired feds with experience, including links to the top 68 federal contractors.

Many companies seek out retired federal workers because of their extensive experience in many areas. Explore your options before you sign on the dotted line, especially since you will more than likely need supplemental income with an early retirement. Our job listings consolidate national listings for all occupations and in all sectors.

Complete details for VERA and VSIP programs:

Helpful Resources:

Learn more about your benefits, employment, travel, 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 Websites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, EMPLOYMENT OPTIONS, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, UNCATEGORIZED

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How to Avoid a Retirement Nightmare and Retiree Job Opportunities

Posted on Thursday, 7th July 2011 by

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How to Avoid a Retirement Nightmare

We continue to receive reports of significant OPM retirement paperwork processing delays and insufficient partial interim pension payments. A site visitor sent a frantic message to us last week asking for assistance after receiving notice from OPM that he will receive an interim payment of 30% of his full annuity for up to 6 months. His interim  payments are considerably less than his living expenses and he stated that he may lose his home because he can’t afford to pay his mortgage payment.

Unfortunately his situation is not uncommon today. Things may get worse as more feds elect to retire due to proposed benefit changes and potential agency downsizing initiatives.  Many federal employees, especially those under CSRS, tend to ignore financial planning all together and expect their annuity to supply all of their retirement needs. This is a false assumption and can lead to dire consequences for those who take that path.

A recent survey reported that 58% of baby boomers are concerned about not having sufficient funds for retirement and only 39% crunched the numbers to determine if they would have sufficient income in retirement. Talk about living life on the edge! I personally would be an emotional wreck not having at least an idea and a basic retirement plan prepared for this life changing event called retirement.  You can download our free report titled How to be Financially Prepared When You Retire to explore where you stand financially. Share this report with others in your organization.

Why are interim payments so much less than expected in some cases?

  • There may be a divorce decree at the root of the problem.  Many federal employees that went through divorce years ago never completed the necessary paperwork after their lawyers completed the legal side of the matter. Ann Ozuna, our Divorce and HR Forum Host, reported in her recent article that, “Whether you are the “fed” or the “former spouse”, if you have retirement, insurance benefits or TSP benefits which were divided or assigned in the divorce decree, your work is not done when the ink dries at the courthouse.”  She also warns feds “If your decree was a long time ago and you have not sent off the decree/order to be “accepted for processing” at OPM, do not wait until retirement. “  OPM may reject the decree if it doesn’t conform to their specifications as outlined in her article titled Federal Benefits in Divorce – After the Decree, NOW What.
  • The retiree didn’t obtain an official estimate of their retirement benefits before leaving. Believe it or not, some actually ignore this critical step and run estimates based on their retirement plan eligibility requirements without doing all of the needed due diligence. There are many things to consider; prior military service and credits, how part time work factors into the equation, your service comp date may have been incorrect, and many more factors determine the actual amount that you will receive from Uncle Sam when you leave. Your agency’s HR department provides estimated annuity payment calculations upon request from what is documented in your Official Personnel File (OPF). Even though they have your OPF you still need to review, question, and verify everything. SCD dates should be confirmed; especially if you worked for several different agencies throughout your career.
  • Other reasons annuitants receive lower total compensation than anticipated include things such as lower than expected Social Security Supplement payments for FERS employees. It is often much less than expected as I discussed in my May 2011 column. Also, individuals who returned after a break in service may have neglected to buy back their prior federal time; the list goes on and on.

Most federal employees can’t rely exclusively on their federal annuity in retirement to maintain their standard of living. Thankfully most have TSP accounts, savings accounts, savings bonds, certificates of deposit, stocks and bonds to bolster their income in retirement. If more income is needed you can always go back to work in the private sector and maintain 100% of your federal annuity without penalty.  It is always best to prepare for the unexpected and have cash reserves to get you through tough times such as when OPM takes too long and provides too little upfront when you first retire. This is one reason why I feel so strongly about paying off your mortgage before you retire.

Retiree Job Opportunities

We continue to receive postings to our jobs board for many positions that are targeted specifically towards federal retirees. You will find new job vacancies from staffing accountants, accounting assistants, health service administrators, several forest and land management positions, airport advertising manager and many more jobs that you will find of interest. We provide free postings for employers that are seeking to recruit and hire highly qualified and talented federal retirees. Check the job listings out to see if there are any in your area.  There isn’t a retirement annuity penalty for federal retirees that are reemployed in the private sector. You can also explore rehired federal annuitant opportunities.

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

Request a FREE Retirement Benefits Summary Analysis from a local independent adviser. A sample analysis is available for your review. This service is not affiliated with the author, www.federalretirement.net or Bookhaven Press LLC.

Visit our other informative sites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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

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Federal Benefits in Divorce – After the Decree, now what?

Posted on Wednesday, 6th July 2011 by

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Whether you are the “fed” or the “former spouse”, if you have retirement, insurance benefits or TSP benefits which were divided or assigned in the divorce decree, your work is not done when the ink dries at the courthouse.  First of all, you will need fuzzy seal “conformed” copies of your decree and any augmenting retirement or TSP orders; you get these from the courthouse where your divorce was finalized.  If any part of the TSP or the retirement was divided, you will need at least three.  Both the fed and the former spouse will need these copies.  Add one more copy if the fed was required to keep life insurance in effect by the decree.

Attorneys can send off copies of your decree/order(s) to the appropriate places or you can do it yourself.  If you are having the attorney do it, be sure they send off “conformed” copies, not just ones from the copier.  Whomever does the mailing, it should be sent by either priority mail with signature confirmation required, or certified mail.

If your decree was a long time ago and you have not sent off the decree/order to be “accepted for processing” at OPM, do not wait until retirement.  Take action now before retirement in case OPM interprets your decree differently than you intended or your decree/order is not deemed acceptable.  In a case like this, you will need to go back to court and get an amended decree/order and then send that one in to the agency which did not accept it.  Once accepted, you will receive a letter acknowledging your decree/order and explaining how it will be implemented.  Keep a copy of this letter with your copies of your decree/order(s) in a safe place.

If your decree states that a follow-on order will be written or a QDRO or a Domestic Relations/Retirement Benefits Order will be written, be sure that is done immediately by an attorney or other service familiar with the OPM or TSP acceptable wording.  Your federal benefits are NOT subject to a law called ERISA so no references to that law should be in there.  Check the contents of the order personally before it is filed with the court to see that it says what the decree says and does not award anything not specifically mentioned in the decree.  Once this order is signed and filed, any “extras” stuck in the order are likely to be paid out, even if they were not in the original decree.

The “fed” should send a conformed fuzzy seal copy of the divorce and any implementing orders involving the retirement to the OPM Court Orders Branch, PO Box 17, Washington DC, 20044.  Include a cover letter with your return address requesting that the order be declared a COAP, court order acceptable for processing.  OPM will review and send you a letter back stating the method they will use to compute the payments out of the retirement to the former spouse, address the existence of any survivor benefits for the former spouse and who will be paying for them and acknowledge any language prohibiting or sharing a refund of contributions.  In the absence of any decree/order language to the contrary, the retired fed will have the cost of any survivor benefit awarded taken out of the fed’s remaining part of the retirement.

If the “fed” is required to give survivor benefits in a court order, the retiring fed will need a fuzzy seal copy of the order(s) to send in to OPM with the retirement application.  The former spouse will need a fuzzy seal copy of the order(s) to send to OPM to apply for benefits when the “fed” retires.  Former spouses need to keep OPM advised of address changes between the date of divorce/order acceptance and the date the “fed” retires.  The former spouse will need to send a written statement to the OPM Court Orders Branch at that time with the fuzzy seal copy of the decree/order, their current address, and a statement that they are the person (DOB/SSAN) in the order and that they have not remarried before age 55.  OPM will then request the former spouse banking information to set up direct deposit.

The “fed” should change designations of beneficiary for unpaid compensation (unused leave and the last paycheck), the retirement system (CSRS or FERS contributions), and life insurance with their agency unless the decree requires that the former spouse be kept as a beneficiary.  Forms needed are:

  • SF1152, for unpaid compensation
  • SF 2823 for Life Insurance
  • SF3102 or SF2808 for Contributions to the Retirement Fund (FERS or CSRS)

These forms are available at http://federalretirement.net/retireforms.htm under the forms list.

  • TSP3 for Thrift Savings Plan Account

The TSP designation of beneficiary form is  completed with witnesses’ signature on 2 pages and faxed or mailed to the address on the form.

These forms must be done in hard copy as the fed’s signature needs to be witnessed.

Former spouses who are on the federal health plan will come off 31 days after the divorce is final.  Notification can be made by the fed to the agency or the former spouse to OPM.  Even though the fed may still have family coverage to cover children, the former spouse cannot remain on the plan.  The former spouse can request Temporary Continuation of Coverage (TCC) for 3 years, paying 102% of the total premium (federal and employee shares) of a single federal health plan.  If a survivor benefit is awarded in the decree/order, the former spouse may apply for Spouse Equity Temporary Continuation of Coverage, allowing the former spouse to elect a single federal health plan and remain in the federal health plan system as long as they meet OPM requirements and pay 100% of the total premium (federal and employee share).  TCC must be requested within 60 days from the date of divorce in writing to the fed’s employing office, or to OPM if the fed is retired, by the former spouse who also sends along one of the “conformed” copies of the decree/orders.  The folks at TCC will send back election forms for the former spouse to make a choice and start paying for the health plan.  The former spouse may elect a different health plan and will pay the total premium rates for a single person for the plan s/he selects.  Former spouses need to pay attention to the deadlines in all correspondence.  These deadlines cannot be waived. For more information on divorce and its impact on federal employees benefits visit Ann’s Divorce Forum.

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

Request a Retirement Benefits Summary Analysis online at http://federalretirement.net/assistance.htm.  A benefits specialist will prepare a personal retirement analysis detailing your total benefits and expenses verses total retirement income from all sources. A sample analysis is available for your review.

Visit our other informative sites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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

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TSP Conversions, I Bonds Revisited & Updates

Posted on Monday, 20th June 2011 by

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TSP Conversions and Taxes

The key to what taxes, if any, are due is in the type of IRA that you wish to convert to.  When you rollover any investment account that hasn’t yet been taxed (TSP, traditional IRA, 401k) to an after-tax investment account, such as a Roth IRA, taxes must be paid to Uncle Sam at the time of the rollover.  If you want to avoid being taxed on the entire rollover amount, you can leave the funds in TSP (provided the amount is over the minimum) or roll the account over to a Traditional IRA.

Before electing to rollover the entire amount out of TSP you should consider the administrative expenses of the new investment.  If you leave a minimum balance of at least $200 in TSP and keep the funds in a pretax account (traditional IRA), you will be able to roll funds back into TSP if you elect to do so.  Also carefully examine the withdrawal reasons and age for withdrawal, as they are different in TSP than other IRA type accounts.

The 10% early withdrawal penalty does not apply to payments after you separate from service during or after the year you reach age 55. Therefore, if you retire at age 55 or later you don’t pay the 10% penalty. However, the mandatory tax withholding on all eligible rollover distributions of $200 or more paid in a single year is 20%. The 20% is tax withholding, not actual tax due; therefore, when you file your annual Federal income tax return, you may be entitled to a refund of a portion of this amount, or you may be required to pay an additional amount.

Additional Resources:

I Bonds Revisited

Are you earning close to 5% on your CDs today? I mentioned in previous columns the benefits of I Bond investing and just how easy they are to purchase and last month the current rate increased to 4.6%! Much better than what you can earn on CDs today.  You can purchase I Bonds online at www.treasurydirect.gov or you can purchase paper copies through your local bank by completing a PD F 5374 form (available at banks). With Treasury Direct you don’t receive a paper bond, all of your holdings are listed online in book entry and you purchase the bonds through direct deposit from your personal bank account. The Treasury will send bonds in the mail if you purchase paper copies through your local bank.

Why I Bonds! First and foremost the yield is indexed to inflation which we all know is here with more on the way. Just consider what we are paying for a pound of coffee, gasoline, and just about everything else today. As inflation increases I Bond Yields follow suit and are locked in for 6 months at a time and readjusted semiannually every May and November.

I Bond investment rates are based on a fixed and inflation rate. The original I Bonds, first issues in 1998, had a fixed rate of 3.4% whereas today the fixed rate is zero percent. You add the two rates together to determine the  current yield and the original first issue I Bonds are earning 8%, 3.4% (fixed rate) + 4.6% (inflation rate)! I started buying I Bonds when they first came out through payroll deduction.

Even with today’s zero fixed rate I continue to buy I Bonds because inflation is projected to be with us for some time. The I Bond inflation rate alone is better than what you can get anywhere else for a fixed income investment for the most part. There are a few things to consider before buying I Bonds:

  • The annual purchase limit per person is $5,000 in paper bonds and $5,000 through the online Treasury Direct program. You and your spouse can purchase a total of $20,000 a years if you purchase them separately. Typically a married couple adds each other as the “Pay on Death” beneficiary designation for each bond purchase or you can add your children or whomever you desire as beneficiary.
  • You can’t cash I Bonds in for the first year.  If you cash them in the first five years a penalty consisting of the current 3 months interest is assessed. They mature in 30 years.
  • You are allowed to defer claiming the interest income for tax purposes until you cash them in.
  • I Bonds are exempt from local and state taxes, another benefit which raises the effective yield.
  • Unlike E Bonds I Bonds are purchased at face value.

The Treasury is trying to encourage paper bond holders to convert them to the Treasury Direct book entry system and they have a tool you can use online to effect this change. I prefer having both online book entry and paper bonds available just in case the Treasury Direct web site goes down for an extended time. If you only have an online account, you can’t cash in any of your bonds if the site is malfunctioning or unavailable.

There are other options for purchasing Treasury Inflation Protected securities such as the Exchange Traded Fund (ETF) stock symbol TIP. These can be purchased through any stock broker for a small fee. There are no purchase limits and you can trade them daily just like stocks. Morningstar reports that, “IShares Barclays TIPS Bond is ideal for investors looking for easy and low-cost access to Treasury Inflation-Protected Securities. TIPS’ principal is linked to changes in the Consumer Price Index and provides an effective hedge against inflation in an investor’s portfolio relative to standard Treasury bonds.”  The current yield on TIP is 3.8%.

Updates

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

Request a FREE Retirement Benefits Summary Analysis from a local independent adviser. A sample analysis is available for your review. This service is not affiliated with the author, www.federalretirement.net or Bookhaven Press LLC.

Visit our other informative sites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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

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Six Years and Counting, Social Security Supplements, TSP penalties, & More

Posted on Thursday, 26th May 2011 by

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Six years and Counting

I’ve been retired 6 ½ years now and just turned 62… I’m eligible for SOCIAL SECURITY!!! I attended my nephew’s graduation party last week and for the first time understand how my aunts and uncles felt during similar events back in the 60s, 70s and 80s. Now Mary and I are in their shoes experiencing life’s constant ebb and flow and I might add I’m enjoying the perspective. Retirement and aging are good things as life renews and families experience life’s many twists and turns.

Unlike previous generations, many retirees today are healthy enough to stay active and involved. Opportunities abound for those willing to seek them out and staying active and healthy opens so many doors for all of us today. A recent report shows that retirees are scheduling more elective knee and hip surgeries than ever before to retain their strength and stamina. When I was 25 I told my wife I wanted to retire at age 55 to pursue other interests, travel, and grow a business and we are doing all of those things and more and I thank God every day for our good health and fortune.

Actually, I take on too many things. Just love doing about anything and everything within reason. I have too many hobbies, too many business ventures and too many irons in the fire and intend to keep things hot as long as I’m able. In preparation for our upcoming family reunion I was able to scan all of my Uncle Jack’s family slides from the 60s and 70s and will give all of my cousins a DVD with those precious memories this summer.  The slides were aging and some cracked so I had to get this done before it was too late. I purchased an “Imagelab” slide and negative scanner for $90 and went to work on the project. It was easy to do, took about a week to scan 2 cases of slides but it was well worth the effort. Most everyone that retires commits to compiling a photo album from drawers full of photos and slides accumulated throughout a life time, only a few succeed. However, scanners are making it much easier for all to do and I now hope to go through all of our old slides and photos this winter to finish the project.  I also have a drawer full of family history to organize.

After 6 years my government career is now securely in my rear view mirror and as time goes on more activities and time fade that picture a bit more with each passing year. However, I will always look back on those times, friendships, and experiences with fond memories and Mary and I focus on what lies ahead: More challenges, more opportunities, and the fascination of discovery around every corner, LIFE is a BLAST!

Social Security Supplements

Social Security Supplements paid to FERS retirees are often misunderstood and this supplement is less than what many expect. If you meet certain requirements, you will receive a Special Retirement Supplement which is paid as an annuity until you reach age 62. This supplement is somewhat similar to the Social Security benefit earned while you were employed by the Federal government. However, since 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.  Therefore, the FERS Supplement is often significantly less than your Social Security benefits. The supplement ends at age 62 even if you elect to wait to apply for Social Security benefits.

You may be eligible for a Special Retirement Supplement if you retire:

  • After the Minimum Retirement Age (MRA) with 30 years of service;
  • 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.

TSP Penalties

A site visitor asked if she could use her TSP at retirement to purchase a home in full without having to pay an early withdrawal penalty if she is under age 59 ½. She plans to retire at age 57. After she contacted the TSP they advised her that 20% would be withheld from all payouts.

If you retire at age 55 or later there isn’t an early withdrawal 10% penalty and when you retire you can take a one-time lump sum payment for any purpose. Paying off your mortgage makes a huge difference when you retire providing you with more cash to work with plus you will save a good amount of interest whenever you pay off a loan early. All withdrawals are subject to federal taxes because the money in your account wasn’t taxed when earned. A minimum of 20% is withheld by the TSP from all withdrawals for federal tax purchases. Here is a link to the TSP Tax brochure, review page 4 for specifics. https://www.tsp.gov/PDF/formspubs/oc97-17.pdf

If you plan to pay off your mortgage when you retire it makes sense to increase your monthly mortgage payments now. Simply add the next month’s principal payment, or any amount that you can afford, to your current monthly payment to buy down the loan principal.  Call the mortgage company to find out what you next month’s principal payment is or ask them to provide an amortization schedule that lists each monthly interest and principal payment for the duration of your loan.  By paying more now, before retirement, you will have less to pay off when you retire and you will also become accustom to living on less before you leave.

 

Updates

  • COLA Update – NARFE reported the following on the 2012 COLA: “The CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) increased by 0.78 percent for the month of April 2011.  The new CPI-W index figure is now 221.743, which is 2.9 percent above the 2008 third-quarter average of 215.495, which is the base figure for determining the next COLA.  Thus, the CPI-W has surpassed the level needed to trigger COLA payments for 2012.  But because the relevant months for measurement are July, August, and September of this year, we will not know until then whether the CPI-W remains at a level high enough to trigger a COLA, and we will not know until then the magnitude of any COLA.”
  • How to be Financially Prepared When You Retire (FREE Report) – Site visitors requested a downloadable report outlining the retirement financial planning process that we offer online. Please copy and distribute this report to anyone interested in determining what they will have to live on in retirement.
  • 2011 Federal Employees Leave Chart – This free leave chart is available and we will soon have the 2012 calendar posted. This free and easy to use Leave Chart can be used to track your leave and work schedule. Pass it on to others in your organization.
  • We launched a new web site this week, www.nukejob.net for those exploring careers in the nuclear field. The site offers abundant resources including extensive job listings for anyone interested in these high paying careers and jobs.

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

Request a FREE Retirement Benefits Summary Analysis and receive a personal retirement analysis. A sample analysis is available for your review. This service is provided by independent agents that are not affiliated with www.federalretirement.net or Bookhaven Press LLC.

Visit our other informative sites

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 articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

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

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Capturing Your Travel Memories

Posted on Monday, 16th May 2011 by

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A Journal is a Great Way to Remember

I often plan to keep a journal when I travel but to be honest I either never put pen to paper or I start and capture a couple of days and then… well nothing.  When I have planned a particularly fun vacation with friends or the travel plans take me to an exotic or historical area I am more inclined to keep a journal before going to bed each night as a way of remembering the activities, people and adventures or discoveries of the day.

My most recent travel journal covered a vacation with my partner to Venice Italy and Greek Cruise.  We met some extremely fun people from Scotland, Australia and the English Channel Islands.  I filled pages with stories from evenings on the ship with our new friends.  One evening we attended the ship’s Karaoke show.  Our Australian friend stood up to dance and sing along with one poor sole who had lost track of the chorus and she was able to help her regain her composure, while another singer was so difficult to listen to our Scottish friend commented “where’s Ted Bundy when you need him?”.   It wasn’t always easy to understand our Scottish friend but his wife assured us that we probably didn’t want to hear everything he had to say.  We laughed so much on that cruise and my journal is a great reminder of the fun we had and the friends we made on that ship.

You will also find your journal to be a useful tool when going through photos to add a caption and notes on who is in the photos.  Another benefit in writing a journal is remembering the great places you had a memorable meal at and those places you want to make sure you never eat at again.  I enjoyed Venice enough that there is no doubt I’ll return to visit again and my journal will help me avoid a really bad restaurant while helping me recall some great places to shop and eat that I want to enjoy again.

Another favorite journal I have is from an Alaska cruise tour in 2004 that I went on with three friends.  The notes in that journal keep fresh all those discoveries in Denali National Park and the train ride getting there.  We saw just about ever wild animal you can see in Denali.  Grizzly Bears, including a mother with 3 cubs, Dall Sheep, a Wolf, a Lynx, a herd of Caribou and a few little rodents that hide in the rocks.  The photos taken and the journal really take you back to that moment and you feel like you’re back sitting on the bus and taking it all in.

Traveling across Alaska is quite an adventure in itself.  You have never seen wilderness until you’ve gone by bus through remote areas of the state.  We were there during Moose hunting season and they were scarce, almost as if they knew they needed to hide.  We did see two that quickly disappeared in the tall brush on our way from Denali to the Wrangell St. Elias National Park region.  We also found some great fruit pies along the road and a restaurant that served up a home cooked meal for our 8 hour ride that covered a mere 110 miles.  The mountain vistas were breath taking, the air cool and crisp and the peaceful sounds of nature on that ride made it worth it!  Of course being greeted at the lodge with a glass of wine didn’t hurt either.

A journal will bring those special travel memories back to life years later.  I remind myself of this when at the end of the day I reflect on the activities, laughs and discoveries.  Because late that evening when you’re exhausted from the day’s activities it is so much easier to say “I’ll write in my journal tomorrow morning”.  But when I fall into that trap that’s when I often end up losing interest in making notes about that special place I’ve been exploring or remembering the great time I’m having with my friends.  All in all a journal is priceless at the end of a special vacation.

Request a FREE Retirement Benefits Summary Analysis online at http://federalretirement.net/assistance.htm.  A benefits specialist will prepare your personal retirement analysis detailing your total benefits and expenses verses total retirement income from all sources. A sample analysis is available for your review.

Learn more about your benefits, employment, travel, 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

The information provided may not cover all aspect of unique or special circumstances. Travel policies and packages are subject to change without notice. To ensure the accuracy of this information, contact travel providers and hotels at the time of your bookings to confirm pricing, itinerary, and all costs. The comments and observations are limited to the author’s personal experience and your results may vary significantly. This article and replies to comments are not intended to substitute for professional travel services. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Posted in UNCATEGORIZED

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