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How the National Debt Negatively Impacts Retirees & Updates

Posted on Tuesday, 3rd May 2011 by

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We haven’t received COLAs because gas, utilities, food, health care premiums, tuition, and airfares haven’t increased for two years now; RIGHT? Are you paying less for much of anything these days! The inflation rate would equal 10% or higher if the Consumer Price Index (CPI) included food and fuel increases like it did in the 1980s!

What prompted me to research and write this article was stopping for gas at our vacation destination in early May and shelling out $80 to fill up a 20 gallon gas tank! I provided links to source material throughout for anyone interested in reading more detailed information about the various issues. With prices like this I can truly appreciate Nancy Holston’s April article titled Vacation Plans and Rising Gas Prices.

Most retirees are by necessity frugal and attempt to live within their means. Unfortunately, our government has lost sight of these principles. According to CBS News our government borrows on average 4 billion dollars a day, 167 Million dollars an hour to fund about half of everything they spend annually!

How long could anyone survive like this? Our government representatives in both parties continue to spend irresponsibly and borrow more as if there was no tomorrow and that the bills will never come due. Albert Einstein described insanity as “doing the same thing over and over again and expecting different results.” Whether it’s our education system that is failing our children or the financial insolvency that could wipe out not only retiree’s life savings but bankrupt our children’s future as well; we must change course.

I’m not an economics major. However, from my perspective our excessive debt and Quantitative Easing can and will lead to dramatic price increases and retirement savings losses. Aren’t we already seeing this even though the administration tells us inflation and the increasing money supply isn’t a problem?

Our 14 trillion dollar debt and increasing money supply, along with international unrest, are devaluing the dollar. Naturally oil, gold, silver, and everything else costs more because our dollar is worth less, currently 26.3% less than it was worth just 10 years ago. What this means to retirees like you and me is that all of our savings and our annuity, that isn’t keeping pace with true inflation, will only buy three quarters of what it could buy in 2001. To add insult to injury earnings on CDs and other investments are less than 1% in most cases today. Why would a bank pay to use our money when they are borrowing all they need direct from the Federal Reserve at near zero percent and then lending it to us, at much higher interest rates, for car loans and mortgages?

When the President says that we have no control over oil and gas prices I cringe thinking about our out-of-touch energy policy. This country has a 300 to 500 year supply of oil if we would only be allowed to drill for it. New discoveries in North Dakota, Montana, offshore, Alaska and elsewhere are there for the taking if this and previous administrations supported drilling and refinery expansion in the United States. This would also create hundreds of thousands of new jobs. We could easily become more energy independent while we fine tune and improve renewable energy technology to assume more of our energy needs down the road. This is a HUGE issue considering that a good portion of our national debt can be attributed to imported oil. The Alaska pipe line is running at half capacity because of exploration restrictions and yet we suffer double digit gas price increases almost weekly now. Some expect gas to climb to over $5.00 a gallon by summer and some European countries are paying $6 to $10 a gallon now. We simply can’t afford this? During our early May 2011 vacation trip we found gas as high as $4.15 a gallon on the east coast.

Our energy policy is also attributing significantly to escalating food prices. There are huge subsidies for ethanol production that turns corn into fuel at prohibitive costs. We are subsidizing ethanol production over the farmers needs to feed their live stock and corn is an international staple. Due to this initiative, food prices worldwide have escalated causing riots in many countries.

The inflationary impact on retirees is magnified especially when you consider the low savings rates available today and the hopefully temporary suspension of COLAs. Will our government wait until we are rationing gas or bankrupt before allowing companies to resume oil production and expand refinery capacity in this county? I support viable clean energy alternatives but first things first to get our country back on track. The only way this will change is if we make Washington stop the insanity with our votes, calls, and letters to our representatives.

UPDATES:

  • New HR & Divorce Forum – We receive a number of questions each month from federal employees and annuitants that are contemplating divorce and need guidance on how to protect their assets during the settlement. Ann Ozuna is hosting our new HR and Divorce Forum to answer questions you may have on this subject. Ann is a retired CSRS Personnel Management Specialist who founded Personnel Solutions Federal Benefits Counseling upon her own retirement from federal service in 1996. If this area is of interest read Ann’s first article titled How an Annuity & the TSP Are Divided in a Divorce and sign up to receive her monthly newsletter.
  • TSP Withdrawal Tax Withholding – Arlena asked if you can use your TSP at retirement to purchase a home in full or will you get the 20% penalty if you are not age 59 1/2?
    Answer: You can avoid the penalty if you wait until you retire at which time you can take a onetime lump sum payment. Paying off your mortgage makes a huge difference when you retire giving you considerably more cash flow to work with plus you save significant interest costs 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 from all withdrawals for federal tax purchases. Review page 4 of the  TSP Tax brochure for specifics.If you are several years from retirement it makes sense to increase your monthly mortgage payment by an amount equal to the next month’s principal payment to  buy down the loan if you have discretionary funds available. You can call the mortgage company to find out what your next month’s principal payment is or they often provide an amortization schedule that you can use. This way you will have less to pay off  on your mortgage when you retire. By doing this you will become accustom to living on less; typically in retirement most have less income then when they were employed. This will get you accustomed to  living on less before you retire.

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 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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How an Annuity & the TSP Are Divided in a Divorce

Posted on Friday, 29th April 2011 by

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On the Divorce Issues and Retirement Impact section we discussed in general how your federal benefits are property up for division in divorce. Here are some of the specifics:

OPM must have all the information it needs in your decree or order to divide your retirement.  Therefore you must specify “gross annuity”, “net annuity,” or some other easily computable description of your CSRS or FERS annuity amount.  You can allocate a flat dollar amount, a percentage or an amount determined by a formula to your former spouse.  If you are using a formula, all the numbers or dates to be used in the formula must be “readily determined” from information available to OPM.  OPM alone will determine if your decree and orders are a “Court Order Acceptable for Processing” (COAP).  There are specific paragraphs your attorney can use from the “Handbook for Attorneys” to carry out what has been agreed upon.


A popular method of division is “half of the value of retirement at the time of separation/divorce” or something along those lines.  OPM usually interprets this as a “Prorata share” of the retirement check upon the fed’s retirement.  In this case, the date of marriage and date of separation (if different from date of divorce and being used as the ending date of the marriage instead of the date of the decree) must be stated in the orders.  OPM does not go back and figure a second hi-3 as of the date of separation/divorce to compute this number unless you are very specific in language as to not include any salary increases following the date of divorce/separation.  OPM will calculate the length of the marriage in months, the length of the career in months and divide to determine how many months the marriage and career overlapped.  Prorata share will give the former spouse half of the percentage this number represents.

The longer the fed works after the divorce, the smaller the marital portion of the career will be; however, the high three salary may increase with any promotions of pay increases, yielding an equal or greater dollar amount for the former spouse.

For example: John and Jane Doe married on April 19, 1994 and separated on July 3, 2010.  They have agreed to use the date of separation as the marriage ending date.  John began his federal career on February 2, 1991 and is planning to retire under FERS at the end of 2011 at age 61.  John’s High 3 Average is $65,324.  John has agreed to give Jane “half of the value of the retirement” as of the date of separation and survivor benefits but does not specify the amount of the survivor benefit; the decree is silent as to who pays for the survivor benefit.

  • The length of the marriage is 182 months; John’s career is 250 months long (days are dropped not rounded).  This means that 72.8 percent of John’s career he was married to Jane.  As they decided that she should get “half” of the value of the retirement for the duration of the marriage, Jane gets 36.4% of John’s retirement while he is alive.
  • John’s FERS retirement comes out to $13,606.99 a year or $1,133.92 a month; Jane then will receive $412.74 each month for the first year.  As his amount is increased by COLA over the years after he turns 62 so will hers be unless the decree specifies no COLA to her.  The monthly cost for the survivor benefit will also rise.

Survivor benefits have a cost in retirement.  Since the decree does not specify an amount (full or partial), OPM will assume a “full survivor benefit”, which costs 10% of John’s monthly annuity.  Since John is FERS, the choices are “full” or “partial”.  Upon John’s death, Jane will actually get an increase to 50% of his retirement.  Any subsequent spouse which John may acquire before his death will become an “insurable interest” with an age-defined additional cost for her to have survivor benefits (and keep the health insurance) upon John’s passing.  John must specifically elect this “insurable interest” annuity for his new spouse at retirement or within 2 years from the date of marriage after retirement.

In this example John’s gross retirement check of $1,133.92 a month is reduced by the costs of the survivor benefit ($113) and Jane’s portion ($412.74), leaving him only $608.18 a month before deductions for his own health benefits, life insurance, or taxes.

This is but one of the more frequently used ways a retirement can be divided.  We will discuss other ways in future articles.

Now, on to TSP.

John had $224,875 in all his TSP funds on the July 3, 2010.  As he had government service before the marriage, he should carefully watch the wording of his decree/order to insure it awards a portion of the account accrued during the marriage, not the balance as of their separation date.  In order to determine this amount, he will have to contact TSP to get the value of the account on April 19, 1994.  Only the difference will then be subject to division.

TSP requires a separate order to permit them to send Jane the amount awarded to her in the decree.  Jane can elect to have the money moved in a taxed or non-taxed way directly with TSP.  The TSP order does not have to wait for the employee to retire for the former spouse to send it to TSP and receive payment.

If the decree says “subject to gains and losses”, TSP will apply the actual fund rates to the amount awarded.  If you’re your decree is silent on this point, there will be no further adjustment.  If you have outstanding loans, be sure to decide if the indebtedness is to be split or credited to one side or the other of the ledger in your negotiations to determine the amount or percentage to be specified in your decree.

If you or your attorneys are preparing your divorce decree and orders, be sure you understand what will happen to your benefits.  Pay particular attention to any pen and ink changes that may be made when the paperwork is sent to the “other side” for signature.  You should send a certified copy of the decree and all the orders relating to your retirement to the OPM Court Orders Branch shortly after everything is finalized by “trackable“ mail and then hang on to all correspondence you get back in a fireproof safe or safe deposit box.  You will also need a certified (fuzzy raised seal) copy to send in with your retirement application if there are survivor benefits awarded in your decree, so get two copies while you are at it.

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 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 ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION, UNCATEGORIZED

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Interim Retirement Check Issues, Ordering Flags & Presidential Letters, and Updates

Posted on Thursday, 21st April 2011 by

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Richard retired last December and he is still receiving only partial monthly annuity payments. Unfortunately, he is only receiving 38% of his estimated annuity payment, too little to pay for daily expenses without digging into his savings. Retirement processing can take six months or more and for those planning on retiring soon be prepared for extended delays and potential problems with your claim. In Richard’s case he called OPM and discovered that his account was entered incorrectly in “Court Ordered” status even though his ex-spouse waived her rights to his government retirement. That is why his partial payment was so low.

When I retired in 2005 my estimated check was 70% of what I eventually received. Read the time line I published online titled “What to expect the first three months after you leave” to understand what you can expect while your claim is being processed. Be aware that processing of your claim may take longer today.

If you need to contact OPM about your retirement payments before you receive your claim number, first contact your former payroll office to find the date your records were transferred to OPM. Your payroll office should provide you with the number and date of the Register of Separations and Transfers. You will also need your Payroll Identification Number. This OPM FAQ can also answer many of your questions. Call OPM at 888-767-6738 if you have issues with your retirement processing and are experiencing delays. OPM is reporting an average processing time as of February 2011 of 19 weeks if there are no problems with your application.

Ordering Flags and Presidential Letters (Retiree Gift Options)

Flags make great gifts for retirees.  You can order flags that have flown over the Capitol Building in Washington DC and certified by the Architect of the capital for as little as $13.25. Generally flags are paid for with donations from the unit and they can also be displayed in attractive engraved flag cases available from Just Write Engraving. They also sell custom mugs with federal agency logos and dates of service. Flag folding instructions demonstrate how to fold the American Flag for proper display and to fit easily in the case.

Administrative personnel may request a letter from the White House for a civilian employee retiring with 30 years or more of Federal service (this encompasses those who have combined military and civilian service as well as those with straight civilian service.)  Both the flag and letter make excellent retiree gifts that will be cherished for a life time.

Updates

  • Suggestions Requested – We would like to hear from our site visitors and newsletter subscribers to find out what current federal employees and retirees wished they knew earlier in their careers about benefits, retirement, and the hiring process and what you wish to have more information about now.  We will use this information for future articles and to add content to our retirement planning site.  Use our online comment form to submit any input that you would like to contribute.
  • Travel – Nancy Holston’s travel article “Vacation Plans and Rising Gas Prices” was published last week. Discover how she evaluated her travel plans and modified them to reduce travel costs this year. She also provides links to cost saving airfare alerts and travel package deals that may save you money too.
  • Interesting Activity – I receive a catalog from The Great Courses that offer unique and interesting home study courses. The courses come in either CD (audio), DVD or download to your desktop computer. Subjects vary from history to fine arts and music, literature, science and mathematics, to better living, philosophy, religion, business and economics. There is a course for wine lovers titled “The Everyday Guide to Wine” by master of wine Jennifer Simonette-Bryan. History buffs will find 10 courses covering ancient Rome, the Vikings, the American Civil War and everything in between. There are 20 or more lectures and NO TESTS. They have tremendous discounts right now (up to 70% off) for many courses. For example the Wine course is typically $245.95; right now it is only $39.95. Use my catalog’s Priority code (52470) to receive the same discount prices I mention here. You can call them to receive a catalog at 1-800-832-2412.  I’ve not personally taken a course yet. However, when I get time I would like sign up for one of the history courses.
  • Retirement Planning Calculators (Options)

 

  1. OPM recently launched Version 2.0 of the “Federal Ballpark Estimator.” The Federal Ballpark Estimate is a retirement savings planning tool for annuity projections and TSP analysis. It is not an annuity estimate. This program covers (CSRS), CSRS-Offset, or (FERS) employees who plan to retire under the voluntary age and service rules. The current version does not perform estimates for retirement under the Minimum Retirement Age (MRA) + 10 rules, or those who are covered by special computation rules such as law enforcement officers and firefighters, or former Federal employees who may be entitled to a deferred retirement.
  2. Decision Support Software offers free software to estimate your annuity and benefits. Their free software includes a comprehensive set of tools for estimating and analyzing federal employee’s annuities, benefits, Thrift Savings Plan, social security, FERS & CSRS sick leave conversion, military credits and more. You can generate numerous reports to help you make informed decisions about your unique situation.
  3. Assistance is also available. You can request a FREE Annuity Review and Personal Summary of Benefit’s. This analysis, view sample analysis, uses the professional version of the free software mentioned here.
  • I completed my 25th book this spring, the 11th edition of The Book of U.S. Government Jobs, and need of a break! This edition is the first to feature the new HIRING REFORM initiatives ordered by President Obama and I take readers step-by-step through these changes, presenting an insider’s view of what it takes to go from job hunter to hired employee — and everything in between — to improve their chances of landing a government job. The book details what it takes to be rated “Best Qualified” under the new “Category Rating” system. This book took over a year to write due to the many changes in the recruitment process and it includes a comprehensive federal resume writing guide.

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 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 BENEFITS / INSURANCE, ESTATE PLANNING, RETIREMENT CONCERNS

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Vacation Plans and Rising Gas Prices

Posted on Thursday, 14th April 2011 by

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How much can you afford to spend on vacation this year?

Ouch!!! Gas prices went up 20 cents in one day where I live, one station raised the price twice within 2 hours!  I had travel planned for Cape Cod, Colorado, Seattle and Alaska this year.  I was wise, or maybe lucky, enough to get the airline ticket for Cape Cod just before the prices started going up.  Airfares to Seattle and Denver are already approximately $100 higher than late last week.  Of course that’s still far less than the increased cost of gas to drive to those cities not to mention how much time I would spend driving and the lodging along the way.  So it’s time to go back and look at just how much of my budget I can afford to spend on travel this calendar year.  If you’re like me you probably plan to do the same thing.

My family lives about 400 miles away, friends I would love to visit live 300 miles from my home and with gas increases it is going to take a larger chunk of my monthly budget.  In the past these visits to family and friends were easily planned and did not impact monthly expenses, however planning is a now a must if I don’t want to blow my monthly budget.  Not wanting any surprises that would require a withdrawal from my savings, I decided it is time to figure out how much I have for travel this year and adjust my travel plans accordingly.

Once I determined how much of my budget I can dedicate to travel this year, given rising food and gas prices for everyday activities, I estimated my travel plan costs for the year.  I estimate that airfares will increase $100 over the historical two year average if it’s west of the Mississippi, and $50 if it’s east of the Mississippi. Any driving will be estimated at $4 a gallon, dividing the distance by the manufacturer’s MPG rating multiplied by two.  Ten hours on the road is more than enough for one day.  I use that as a guideline to determine lodging for the road trips.  I normally fly if it takes more than 10 hours to get to my destination but if it’s a remote spot, flying may not be the best mode of travel.  There’s also the expense of a rental car if I decide to fly and that can be high for remote spots or less popular vacation areas.  Generally, a figure between $250 and $350 will get you a suitable vehicle for a week. There is always the option of choosing economy cars if your looking to save a little.

You shouldn’t be afraid to use public transportation if that will meet your needs.  For instance, when we go to Provincetown on Cape Cod in Massachusetts, public transportation meets all of our needs.  A bus takes us from Boston Logan airport to the ferry terminal and a ferry to Provincetown drops you in the center of town.  Most lodging is within easy walking distance.  Just don’t get carried away when packing your bags.  The ferry fare is around $80 for a round trip.  If you plan to spend all your time in Provincetown, there is no need for a rental car.

After I determined what I could fit into my budget for this year, I canceled the plans for Alaska and replaced it with another destination that is more affordable and will allow me more flexibility. I sign up for airfare alerts to the places I plan to visit, Kayak and Airfare Watch Dog are two web sites that offer money saving opportunities.  They will give me a jump on any last minute airfare sales.

Saving on local transportation at your destination takes advanced research and planning.  You will need to look at the options for the location you are visiting and determine what best fits the activities you plan to participate in.  If it’s a resort hotel you are staying at, you may not need to spend a penny on local travel.  Check with the resort hotel to see if they have shuttle service from the airport and ask if they provide transportation to the local shopping areas. Many resort hotels provide shuttle service as a benefit of staying at their hotel.  If you plan to go to a popular spot but you’re not staying at a resort, choose a hotel that is central to your planned activities and you may not need a rental at all.  But if you plan to go exploring for a day or two during your weeklong getaway, check to see if Enterprise has an office near where you are staying.  When I go to Honolulu I can walk to the Enterprise office and pick up a car for the day.  The cost for a one day rental is about $15 more than the one day parking fee at most Honolulu hotels.  That is a bargain.

If you want be adventurous and let your budget be your guide, as a retiree you can take advantage of those last minute vacation deals.  Royal Caribbean recently offered Balcony cabins for the price of an Inside cabin on the Oasis and Allure of the seas on cruises to the Caribbean in April. You might also find last minute flight specials to European destinations this Spring.  Explore the websites for all the hotel rewards programs and frequent flyer programs you are enrolled in and sign up for their emails on vacation offers.  If you have an American Express card, they also offer vacation deals.  You may find a fantastic getaway on last minute deals.  I found a vacation package to Australia, 9 days (11 including the flights to Australia) visiting Sydney, Melbourne and the Great Barrier Reef starting at $1799 for 3 star hotels that included domestic flights in Australia and round trip airfare from Los Angeles.  This deal is still available through early June.

The bottom line is to plan a vacation that will meet your desires without exceeding your budget.  Below are some websites that can help you find a great vacation getaway at a price you can afford!

Airfare Alerts:

Package Deals:

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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How to Increase Your Annuity & Updates

Posted on Tuesday, 29th March 2011 by

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Robert worked for the Federal government for 4 years under FERS. He resigned in 1995 and withdrew his FERS retirement contributions and then returned to government in 1998. He now holds a career position and was not sure if he could obtain credit for his prior service that he withdrew in 1995. We receive many questions about the redeposit process and eligibility. Significant changes to the redeposit process were enacted in 2009 under the National Defense Authorization Act (NDAA), Public Law 111-84. The provisions of section 1904 of the NDAA only apply to employees covered under FERS on or after October 28, 2009.

Prior to enactment of the NDAA, FERS employees who separated from Federal service and were refunded their retirement deductions permanently forfeited all retirement credit for the service covered by the refund.  Section 1904 of the NDAA now permits individuals who are subsequently reemployed to make a redeposit of the amount refunded, plus interest, and to have credit for the service reinstated.

OPM issued updated guidance on 2/25/2011 in their Benefits Administration Letter Number 11 – 103. The current FERS Application (SF-3108) is now being accepted to make a redeposit. Employees must indicate on the application that the period of service was refunded and send the completed application through their agency for certification.

Don’t submit a payment with the application. If a payment is sent to OPM before the service credit account is established, OPM will not be able to identify where to apply the payment. As soon as the Service Credit office processes the application, a bill and instructions for making payments will be sent to the employee.

Buying back your previously refunded federal service time will increase your annuity for life. The sooner you make the repayments the less you will have to pay in interest and for each year you buy back, your annuity will increase another 1 to 1.1% of your average high three salary in retirement. If your high three average salary was $50,000, and the calculation is 1% additional per year of service, your annuity would increase $500 a year. With 10 years restored service your annuity would increase $5,000 a year in this example!  Some only look at the annual increase and say why bother for $500 to $1000 a year when I have to pay so much back. You have to factor in the years you estimate you will collect which can be up to 30 years or more. Visit our FERS Annuity page for additional information on this subject and if you are a veteran explore your military credit options.

Updates

  • TSP – FERS employees can dramatically increase their total retirement income by contributing at least 5% to their THRIFT plan to obtain a full match from Uncle Sam. It pays to put as much into the TSP as possible to increase your potential income in retirement. The closer to retirement the more conservative you need to be with your investment mix. I personally kept most of my TSP in the G and L2010 funds the last five years of employment to preserve capital.
  • COLA for 2012! – A small 2012 COLA is expected next year, the first since 2009.  AARP reports that as much as 75 percent of the COLA increase will be used to pay for higher Medicare premiums next year.  Retirees must economize in retirement to maintain their standard of living. It is best to learn how to live on less while you are still working and I devised a plan that worked for me the last ten years I was employed. The process allowed me to pay off my mortgage while I was working so that I would have more disposable income in retirement. It is a painless process and worth reviewing now that retirees must ultimately live on less.  If your mortgage is already paid off the process will simply help you save more for retirement.
  • Correction – I received a number of messages concerning my last article where I talked about the SF-50 and military buyback time. I incorrectly stated that your military deposit is annotated on your retirement SF-50. I meant to say that your military deposit is often listed on your Leave and Earnings Statement and to keep a copy of your last Leave and earnings statement with your retirement paperwork when you retire. It can be used to verify that your deposit was made. I also stated that I received my retirement personnel action (SF-50) on my last day of employment and that you typically receive this document several weeks after submitting your retirement paperwork. Several personnel specialists reported that their agency typically sends out the retirement SF-50 after the retirement date.
  • More Job Listings – We received more new job postings in March and as before many are from federal agencies and private sector companies looking for talented federal retiree’s.   The United States Graduate School posted several new  diverse instructor positions to teach scheduled classes at their facilities around the country and in Washington.  Visit our Jobs Board often to check on new listings.
  • March Travel Article – If you ever dreamed about visiting Greece and exploring the Greek islands you will enjoy Nancy Holston’s new article titled A Greek Holiday.

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 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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Your Last Day, Retiree Jobs, and Updates

Posted on Monday, 14th March 2011 by

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Your last Day

How can you ensure that your exit doesn’t cause you or your agency problems? There are many loose ends to sew up the last few days of employment that if not done properly can delay payment of your first check or cause other problems.

I still hadn’t received my retirement Personnel Action (SF-50) on my last day of work. Typically, you receive your retirement SF-50 several weeks after you submit your retirement paperwork along with OPM contact information that you will need to follow-up on the status of your annuity and benefits.

The SF-50 lists your retirement date, salary, current benefits, and in the remarks column it states whether or not you elected to continue health benefits coverage. For those who purchased their military time back, that payment is annotated on this form as well and will serve as documentation of payback if problems should arise down the road. I suggest keeping your retirement action SF-50 with copies of your retirement paperwork after you leave.

I contacted our division office and they went down to HR to walk it through. I received a fax copy by mid afternoon.  This is just one of many reasons why you need to send in your retirement paperwork at least 3 months in advance. The more notice you give HR the more likely your retirement application will get the service and attention needed. I submitted my paperwork more than three months in advance and somehow this just slipped through the crack.

Typically, on your last day you must process out and turn in your federal ID card, computer, office keys, credit cards, cell phones and any other government property assigned to you. Obtain a statement or signed property release forms from your supervisor listing the property you turned in and keep a copy with your other paperwork. If you do not turn in assigned property and your ID your annuity checks will be held until you do so.

If you are the only person in your organization performing a function that needs to be continued after you leave, discuss this situation with your manager. They should assign someone to be trained by you so that function can continue. By the time your last day comes around, with proper planning, it should go rather smoothly until you start to walk out the door. At that point you wonder, hopefully to yourself: Did I make the right decision! Everyone thinks that no matter how badly they want to leave, so don’t be surprised. It is an emotional minute in your life and life continues on as it always does, with or without us.

More Jobs

 

Some may think it strange that we post and feature jobs on our retirement planning site’s Job Center. I would not have retired in 2005 had I not had my company, that I started part time in 1985, to fall back on. I was age 55 with 35+ years service, including 3 years military. It wasn’t that I didn’t enjoy working in the Air Traffic environment; it was more of a choice to change direction and try something new, yet not that new in my case. Part time employment can smooth the transition from full time work to eventual full retirement and pursuit of whatever pleasures you desire. It can also be a breath of fresh air after working so long within the same organization and under government’s bureaucratic restraints.  There are many opportunities for those who seek them out for whatever reason; social interaction, extra income, or simply to keep active or pursue a profitable hobby.

We received many new job postings recently and most are from federal agencies or related organizations seeking to hire federal retiree’s for their vast knowledge base.  There are many opportunities for rehired annuitants. Many private sector companies also realize the tremendous opportunity to tap into a federal retiree’s 30+ years of specialized experience.  The United States Graduate School is looking for 6 instructors to teach scheduled classes at their facilities around the country and in Washington.  U.S. Customs and Border Protection (CBP) is advertising for a Contract Specialist and the Idaho State Government needs to hire Lands Resource Specialist.  Jobs are also listed by FEMA and others needing assistance on a part time to permanent basis. Add to the mix many more jobs from contractors and private companies nationwide in a broad spectrum of occupations; from sales reps to engineers and highly trained specialists.

Money magazine’s February issue featured eight great part-time jobs for retirees. We added links to literally thousands of job vacancies across the county for the recommended occupations. You can narrow the search to your area and search for the occupation you are most interested in as well:

Updates

  • TSP – I mentioned in my last article that I transferred 100% of my TSP account back into the G Fund on January 31, 2011. Since then the markets have remained erratic and lacking any real momentum in either direction. I was asked why I would do this and potentially give up gains with the common stock funds. The short answer is that anyone in or close to retirement can’t have all of their eggs in one basket.  With the world in turmoil including the most recent massive earthquake in Japan, gas projected to be $5 a gallon this summer, the unrest in Libby and the middle east, inflation on the horizon, and the national debt exceeding 13 TRILLION dollars, it makes sense to be conservative until things settle down.  The THRIFT fund can act as ballast for your overall investment accounts and when I feel times are getting tough I head for the safety of the G-Fund. In my other accounts, during times like these, I focus on more conservative high yielding dividend paying stocks including utilities and large cap stocks such as AT&T. Many federal employees’ TSP accounts have the potential to grow substantially over time; however you must understand the markets, especially close to retirement, to safeguard your nest egg. For anyone interested in understanding investing and their TSP account, I suggest joining Better Investing.  Their Better Investing magazine and new investor training courses are worth their weight in gold. I joined in my early 30s and their focus is on individual investors and investment clubs.
  • Reporting a missing annuity payment – We have had several site visitors ask us how to report a missing payment this month.  You can call the OPM hot line at 1-888-767-6738 however; it is very difficult to get through. The best way to report the missing payment is through OPM’s online Missing Payment Report. Just enter you claim number and personal information and click on submit.

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 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, EMPLOYMENT OPTIONS, FINANCE / TIP, LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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A Greek Holiday – Exploring Greek Ports of Call

Posted on Thursday, 10th March 2011 by

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While a student in college working on a liberal arts degree, I read The Iliad and The Odyssey by Homer and was fascinated by the stories of Greek Gods and the Temples of Greece.  Seeing the Parthenon was a must for me but it took another 36 years before I planned the trip and another 18 months before actually departing on my quest to see The Parthenon.  So off to Greece I went on a cruise ship with four ports of call.

Once in Athens I boarded a tour bus for the Acropolis.  When I got off and began climbing the hill to the Acropolis, I did my best to take it all in.  I noticed the plants growing around the area and the view of the surrounding hills as I climbed the ancient steps to the Parthenon; all the while imagining what it must have looked like in its prime.  The stacked columns, some slightly offset to maintain the delicate balance for the beams overhead, were fascinating.  Then finally, I reached the point where I could see the majestic Parthenon.

There is something about standing on the Acropolis in the ruins of the Parthenon and knowing that it is a piece of ancient history that still stands in all its glory. The Acropolis is so revered by the people of Greece that restoration work continues to this day to keep their beloved history alive. It is nearly the size of a football field!  Some of the beams have carvings of horse heads and riders located at the corners. You can nearly see breath coming from their nostrils. At the back of the Parthenon, if you look at the hillside below, it looks as if someone has laid parts of buildings like pieces of a puzzle. How appropriate, given that it is exactly what the Archeologists are doing on the Acropolis; they are reconstructing buildings as well as restoring statues on the temples of the Greek Empire.

The city of Athens is huge and seems to disappear into the horizon without end. The skylines remain to this day uncluttered by skyscrapers. While there are high rises, few are above twelve stories.  Millions of people live amongst the ruins, which come to life in the stories of Homer.  While these stories were no longer fresh in my mind the knowledgeable guides brought these Gods and Goddesses back to life and helped me remember some of those wonderful stories that were the reason for my new journey.

My Greek holiday also included a stop at the port of Katakalon which is near the ruins of the original Olympic Games.  The Olympic Torch is lit on these ancient grounds and starts its journey to the host city every two years.  The stadium is believed to be the 5th stadium and is located east of the original site. It is a simple stone flat field with a start line that is also the finish line. Spectators sat on slopes around the stadium for the events.  It is believed there were a few stones seats originally just for the Olympic officials.  These ancient grounds include the Temple of Hera and the Temple of Zeus.  The Olympic museum has magnificent displays of stone works of the period including warriors, gods and mythical creatures.  If you enjoy watching the Olympics you would find this port of call very interesting.

Another reason that I choose Greece was due to Samantha Brown’s Travel Channel shows. She has a few episodes on Greece and the two in particular of the Santorini and Mykonos islands that I could watch over and over again.  She talks about the food, the quaint shops and traditional Greek Coffee.  My Greek holiday included a stop at Mykonos, a magical little island with narrow walkways, windmills, lots of white buildings, Churches with colorful domes and winding sidewalks that you climb up and down.  It’s very picturesque and if you love cats there are plenty to share a little love with as you explore the island. Of course I made sure to have a cup of Greek Coffee at a café while exploring this little island. It was different from any coffee I have had before, a little thick but very flavorful.  You do need to pay attention while exploring the city on the hillside of this island.  You can easily get lost, and that is partly why the city was structured as it is.  The story I heard was that pirates often raided these islands and they had difficulty navigating the narrow passageways and couldn’t escape easily. Another reason for the narrow paths is the strong island winds which dissipate as you walk further into the central part of the city.

A Greek Holiday is a fun and fascinating vacation that includes history and ancient lands to explore.  If you have ever thought about traveling to Greece you won’t be disappointed.

Nancy Holston

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 LIFESTYLE / TRAVEL, WELLNESS / HEALTH

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Military Credits, Health Care, Survivor Benefits, TSP, and Updates

Posted on Tuesday, 22nd February 2011 by

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Please Forward This Email to Others That Would Benefit From This Information

Military Credit Clarifications

Military credit is one of the most confusing issues for those planning their retirement. We recently expanded our Military Credit section to help federal employees evaluate their personal situation. Buying back your military time can increase your annuity; however, it isn’t always advantageous to do so. The basic retirement eligibility rule for CSRS and FERS requires that you must have at least five years of actual civilian service and be covered under the CSRS or FERS retirement system on the date of retirement.  Therefore, you cannot be a civilian employee for just one year and pay back your military service to achieve retirement eligibility. Many veterans who start working for Uncle Sam later in life must understand this basic principal.

If a veteran with 4 years military service starts working for the government at age 58 for example, he/she must work at least 5 years to age 63 to be eligible to collect an annuity – not counting military buyback time.  This individual could retire at age 63 with 9 years towards retirement (if a military deposit is made) instead of receiving an annuity calculated for just 5 years of service. The annuity would increase from 5% to 9% of their high three average salary.

Review the FERS eligibility charts located online and read Linda Sherman’s excellent article on this subject that has over 80 comments posted that you will find most helpful.

Health Care Costs

Joel, one of our site visitors commented on last month’s article titled skyrocketing health care premiums.  His health care plan costs had increased 5.9% this year plus a total of 7.13% in the two previous years.  However, he had also been paying an additional $124 a month for his daughter’s insurance coverage.  He is saving $106 per month or $1276 a year now that his daughter is covered on his FEHB policy until she reaches age 26 thanks to the new health care legislation.

He and others have suggested too that if your plan costs increase substantially evaluate other FEHB plans and change providers during open season. This is certainly an option for those who can find comparable lower cost providers. Some of the problems encountered when making changes is that you may not be able to find the same coverage for less or find coverage with the desired services, doctors and specialists, especially for those with catastrophic illnesses.

There are good and bad features for every program and benefit we receive. FEDVIP, our dental and vision care coverage providers, offer packages for self plus one instead of having to elect family coverage which is about 40% higher cost. Many retirees would like to see this changed so FEHB participants don’t have to pay higher family coverage costs when they have no children living at home.

Surviving Spouse Issues

A number of spouses have contacted us concerning their eligibility for a survivor’s annuity. A spouse is eligible for a reduced annuity, after the death of an annuitant, if the annuitant elected a spousal benefit when he/she retired. Typically, the spouse MUST sign the retirement forms concurring with a “No Spousal Annuity Election.”

If a spousal annuity is elected, when the annuitant’s death is reported to OPM, they will adjust the annuity to the reduced amount and send it to the spouse of record.  Survivors can call OPM at 1-888-767-6738 to verify their status for a survivor’s annuity if in doubt. The surviving spouse will need the annuitants SSN and/or CSA retirement account number. Call early in the morning otherwise you will more than likely get a busy signal. Printout our Master Retiree Contact list and keep this with your retirement paperwork. Also, all of the links on this document are active; keep it on your desktop to easily link to the referenced web sites. Feel free to send the contact list to others that will benefit from its use.

Another issue that we run into is whether or not the annuitant was married before he/she retired or married their current spouse after they retired. If the annuitant married after retirement he/she can elect a new survivor’s benefit for their new spouse if desired but it has to be done no later than two years after the date of marriage. Many retirees that remarry don’t make this election because it reduces their annuity by 10% to cover the spousal election.

TSP Discussion

My TSP account fully recovered to pre 2008 recession levels this past year. On January 31, 2011 I converted all of my TSP account back to the G-Fund anticipating a market pull back after the long run up we had in 2010. I was also apprehensive about the economy as a whole with food and fuel prices rising and world unrest.

The day after I made the move the DJIA rose by 100+ points and along with the S&P rose sharply until 2/22/11 when oil prices shot through the roof and Mideast tensions escalated. Many, after making an investment adjustment tend to regret the move when the market doesn’t immediately corroborate their actions. This is natural, however, when you go back and forth jumping at every turn you tend to lose considerably more than you gain and it does pay to stay the course at times.

There was so much hype about the market going to 14,000, few pundits anticipated a correction. It was actually a good thing when the THRIFT capped the number of trades you can make each month; it prevents participants from over reacting, bouncing in and out of the equity funds as the market turns.  The nice thing about the G-Fund is that it is the only fund in the universe that is guaranteed never to go down in value. You can watch for a correction to bottom out, typically about a 10% drop, and then switch back into equity funds to capture more gains. No one can time the market and you have to sometimes stay the course to protect your nest egg.

UPDATES

  • New Job Postings for Retirees – We had several new and interesting jobs posted on our employment page recently. Government Contract Solutions, Inc. (GCS) is looking for retired federal employees to fill acquisition specialist, administrative assistants, secretaries, and contract specialist positions. They posted 5 new listings on our jobs board last week and Customs and Border Protection (CBP) posted contract specialist and budget analyst jobs targeted to reemployed annuitants.
  • Duplicate 1099-R– You can download duplicate 1099-R forms from OPM’s retiree web site if you are a registered user. To become a user you have to call OPM, their contact numbers are listed on our site, go to http://federalretirement.net/faqs.htm and click on the Contact OPM link for the web address and phone number. If you call, they will also send out a hard copy of the form to you if desired.
  • Direct Deposit Change of Address – Contact OPM at 1-888-767-6738. You will need to have your CSA number handy when you call. Go to http://federalretirement.net/retireforms.htm to review the instructions on how to complete the SF-1199 direct deposit forms and other options to accomplish this.
  • Proposed Cuts – President Obama’s budget proposes extending the federal pay freeze to 5 years. Several other bills in congress propose extending these pay cuts to include any step or pay increases of any kind and a hiring freeze that only permits hiring of 1 person for every 2 that retire or leave for any reason.  Nothing has been passed as of yet and it is too soon to panic. All of the national associations and unions are lobbying congress to moderate or eliminate these proposals.
  • Projected Retirements – Many retirements are projected as each day 10,000 baby boomers turn age 65 for the next 19 years! In 2011 637,000 federal employees will become eligible for regular retirement according to OPM’s Analysis of Federal Employee Retirement Data Report. Add to this many who are eligible for early retirement and another 200,000 Postal employees that will become eligible over the next few years. Significant delays for processing retirement paperwork have been reported and if you are planning to retire be sure to submit your paperwork well in advance of your planned departure date.

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 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, EMPLOYMENT OPTIONS, ESTATE PLANNING, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION

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