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

On The Bus to Great Health

Posted on Sunday, 24th January 2010 by Chuck Jumpeter

HAPPY NEW YEAR! It seems like just yesterday that we were all concerned about the “Y2K” bug and now, here we are, a full decade later and Y2K is nothing more than an old joke. We were also challenged with another bug, swine flu, and that too, while creating some problems, did not have the severe impact we all braced for.

This last decade also brought us numerous challenges that, while we’ll never forget, we certainly won’t dwell upon them here. Suffice it to say that the first decade of the 21^st century is behind us and now we must focus on moving forward and creating the future we all want.

Concerning our wellness, as we ended 2009, I asked the question, “Did we miss the bus?” Over this past decade, it seems that the only thing that grew more than the cost of health care was the size of our waistlines. While medical science has provided us with better treatment options, heart disease and cancer still top the list of what kills us. Amazingly, the proper usage of prescription medication has now become one of the leading causes of death. Cardiovascular diseases are being diagnosed in children, type II diabetes is still on the rise and numerous other indicators tell us that in spite of technological and treatment advancements which may help us live longer, we are not getting healthier.

Starting this month, I am going to take a page out of David Letterman’s playbook. Over the next months, we’ll take a ride On the Bus to Great Health. I’ll highlight 10 stops along the way to help us all meet our wellness goals. While I’ll present them as #10 through #1, the importance and significance of each will depend upon your own individual circumstances. I’d encourage each of you to keep this list handy and incorporate these suggestions into your daily routine as much as possible. Ready? Let’s ride!

#10 – Plan Your Journey. It is virtually impossible to reach a goal that you haven’t set. During our careers we’ve all had goals and objectives that we had to meet. We developed matrices to track our progress and had specific outcomes to achieve in order to determine if we were successful. Why should we treat our health and wellness any differently?

In order to help you plan your journey, I’ve created the acronym GETFIT. Let’s see what it means.

G is for Goals. How appropriate to set goals in January – can you say New Year’s Resolution? Identify your fitness goals in specific terms. Saying “I want to lose weight” is not a goal, it’s merely a wish that will never come true. If weight loss is your goal, pick a number and a time. “I will lose 20 pounds by March 31^st” is an example of a properly stated goal. While doing this for some topics may seem tricky, you can always drop me a note with what you are trying to do and I can help you craft an appropriate goal.

E is for Evaluation. This step is critical before, during and after each activity. When dealing with your health, knowing where you stand prior to making changes is critical. Getting a physical and consulting your physician prior to starting a wellness program will identify your limitations as well as help you establish responsible goals. Your doctor can also help you track your progress. I like to set up a spreadsheet listing specific, measurable data to help me keep track of my progress.

T is for Time Frame. Unrealistic time frames are a leading cause of failure to meet a goal. E.g. if we use the weight loss example, saying you want to drop 20 pounds by the end of the week will only set you up to fail since your body simply can’t do that. Losing 2 – 4 pounds/week, depending on your current weight, is a more realistic goal. In order for a time frame to be met, it must be reasonable, responsible and measurable.

F is for Fitness. This may sound a bit counter intuitive, but you have to get fit in order to get fit. Huh? Let me describe it this way. I enjoy cycling in the summer, but I would never consider riding my bike to get into shape, rather I get into shape so I can ride my bike. We all should be getting about an hour a day of physical activity. Those 60 minutes do not necessarily have to be consecutive, but that would help. Identify where you have time during your day and get busy.

I is for Information. Remember that matrix we mentioned earlier? Well, now is the time to create it. Whether you use your computer and a spreadsheet or you like a pencil and paper, it really doesn’t matter. Like the Nike commercials say, “Just do it!” Use the information from your evaluation stage as a baseline and then track your progress. I’d recommend a weekly check. Too often may not show the results and too seldom will cause a loss of interest. E.g. tracking your weight on a daily basis could be discouraging since your weight may actually go up occasion as your body adjusts to your new eating habits while monitoring cholesterol too often is not even practical.

T is for Tenacity. Wellness goals require focus, commitment and dedication. Without a tenacious resolve, minimal success may be all you can expect. To fully realize your goals and meet your expectations, you need to remain tenacious and dedicated. The old adage says that if you stick to something for 28 consecutive days it will become a habit. Don’t give up when it gets tough. Push through it and turn your new activities into habits and you’ll be successful in your wellness endeavor.

Well now we’ve taken the first stop along our bus trip to great health. Next month we’ll explore #9 – Back to Basics. In the meantime know that we have numerous products to help you with your trip. Simply visit either of our web sites, www.shaklee.net/jumpeter and www.createyourfuture.com/jumpeter, or drop me a note and I’ll be glad to help you plan your journey along the road to good health.

Visit http://federalretirement.net often to learn more about retirement options, wellness and health issues, benefits, and estate planning guidance and I suggest signing up to receive my FREE monthly wellness newsletter.

Yours in Good Health,

Visit our other informative sites

http://federaljobs.net (Federal Career & Job Center)
http://federalretirement.net (FREE Retirement Planning Guide)
http://federalretirement.net/jobs.htm (Retiree Job Opportunities)
http://fedcareer.info (Career Development Center)
http://postofficejobs.info (Postal Career Center)
http://ehsjobs.org (Environmental Health & Safety Job Center)
http://stolenplates.com (What to do if this happens to you)
Educational Opportunities (Find educational opportunities in your area)

Posted in LIFESTYLE / TRAVEL, RETIREMENT CONCERNS, UNCATEGORIZED, WELLNESS / HEALTH

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TSP to ROTH – Is a ROTH in YOUR Future?

Posted on Saturday, 16th January 2010 by Linda Sherman

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What’s all the hoopla about the Roth retirement accounts? Traditional and Roth retirement accounts have been around for years, but recent changes in IRS tax laws, and the TSP-Roth option available in 2011 have created renewed interest in Roth investment opportunities. With these new opportunities, it is important to evaluate which option is best for you. This is just one of many financial planning issues federal employees and retirees need to consider.

The main advantages of a Roth retirement account are:

Tax planning
Retirement income planning
Inheritance planning

Tax planning: The tax implications are the most easily recognized difference between a Roth and a traditional retirement account.

Traditional IRA: This is a tax deferred account, which means the money deposited into a traditional retirement account is subtracted from your taxable income and potentially decreases your taxes payable in the year the deposit is made. In addition, the earnings on the funds also grow tax-deferred. Thus, you pay no income taxes on the deposit or the earnings until the funds are withdrawn from the account.

Roth IRA: Money is deposited in a Roth account after income taxes are paid. It will not lower your taxable income in the year of the deposit. The Roth features tax-free withdrawals on the deposit and earnings for qualified distributions. A qualified distribution is generally a distribution made after the Roth is established and funded for at least 5 years and is either:

Made on or after you turn 59½ ,
Made to a beneficiary after your death, or
Made because you are disabled.

Sounding a little like a pay me now or pay me later argument, with little difference in the Roth and traditional options? The key is predicting whether your tax rate will be lower now or in the future. Often people make less money in retirement. It would seem logical if you make less money, then your tax rate is lower too. However, income earned is only a part of the taxable equation. With fewer personal exemptions and deductions, taxable income can increase. Your effective tax rate is often lowest when you have a house full of kids, deductible education expenses and a large mortgage.

In addition, many experts forecast tax rates will increase because of the exploding federal deficit and the possible expiration of the tax cuts enacted in 2001. If you expect your effective tax rate to be higher in the future because of higher income or higher tax rates, then a Roth contribution, or a Roth conversion, may be something to consider.

Retirement Income Planning: So much attention is paid to the tax differences between the Roth and traditional retirement accounts that the other advantages are rarely mentioned. A significant advantage of a Roth retirement account is in retirement income planning. Traditional retirement accounts require you to begin Required Minimum Distributions (RMD) when you reach age 70 ½, whether you need the money or not. There are no RMDs with a Roth account. You decide when to take the money out and how much to withdraw, provided you are at least 59 ½ and the money has been in the Roth for at least five years.

RMDs are based on the average life expectancy on actuarial charts. If you are not necessarily “average” – because your grandma lived to be 102, or you plan to continue working well beyond the normal retirement dates – the Roth may give you more options for planning your income disbursements. Perhaps you anticipate needing the funds as you age for medical expenses, or you would like to provide an inheritance for your children. A Roth account allows more flexibility for financial planning options.

Inheritance Planning: Would you rather pay the taxes on your retirement account assets, or have your beneficiaries pay the taxes on the assets? Since the taxes are not due until the money is withdrawn from a traditional retirement account, the beneficiaries who inherit the funds pay the tax. To learn more about inheritance issues and to explore estate planning techniques visit http://federalretirement.net/estate.htm.

With a Roth, income tax is pre-paid on the contribution and the earnings are not taxable. Therefore, a Roth IRA is received free of income tax by the person who inherits the account, but a Roth account may be subject to estate taxes. If you have a large estate that is taxable, the size of your estate is reduced by the amount of income tax previously paid. The result is a smaller estate to be taxed, and the end value of the inheritance may be greater. RMDs are mandatory for the person who inherits either a Roth or a traditional retirement account.

2010 Roth Conversion Opportunity: Converting a traditional account to a Roth account has been limited to those individuals with a modified adjusted gross income of $100,000 or less. In 2010, however, the income exclusion has been removed and people of all incomes can convert their traditional IRA to a Roth IRA. The tax, retirement income and inheritance planning advantages also apply to Roth conversions. Keep in mind, when you convert money from a traditional to a Roth account, taxes are due on all funds transferred. For funds converted in 2010, you can elect to include the entire amount converted as income in 2010, or have the income amount split between the 2011 and 2012 tax year.

Both the Roth and traditional retirement accounts are fantastic methods to save for retirement. Consider funding both a Roth and a traditional retirement account for maximum benefits and retirement planning options. If you are considering contributing or converting to a Roth account, plan to do so in years when your effective tax rate is the lowest for the greatest tax benefit.

If you have questions or concerns about your retirement plan, or want to discuss your personal situation with a financial advisor, please contact me toll-free at 1-877-346-3434.

Visit http://federalretirement.net/tsproth.htm for updates, clarifications, and questions and answers concerning Roth IRAs.

Need more information to evaluate your options, try the calculators available at: http://www.dinkytown.net/java/RothvsTraditional401k.html.

TSP – Roth option: http://www.tsp.gov/forms/oc06-5.pdf

For tax information about converting to a Roth IRA: http://www.irs.gov/pub/irs-pdf/p590.pdf

While the publisher and author have used their best efforts in providing retirement and benefits information, they make no representations or warranties with respect to the accuracy or completeness of the content of this article and they specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. The advice and strategies contained herein may not be suitable for your situation. You should consult with a financial professional where appropriate.

Visit http://federalretirement.net often to learn more about retirement options, benefits, and estate planning issues and I suggest signing up to receive my FREE monthly benefits newsletter.

Linda Duncan

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

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A Life Insurance Check-up: Evaluating Your Insurance Needs – Part 2

Posted on Saturday, 9th January 2010 by Linda Sherman

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This article, updated 2/17/2023, will help you evaluate your total insurance needs and costs.

Inevitably during a new employee orientation, someone would ask, “How much life insurance do I need?” And another classmate would shout back, “As much as you can get.” Or, “Five to ten times your income.” As an HR Specialist, I could not advise employees on the amount of insurance they may need – offering benefit advice is specifically prohibited. However, as a financial planner, I have an opinion, not just for the new employee, but for anyone throughout their career. Retiring employees often have not evaluated their insurance needs since they began their employment. Insurance coverage and costs need to be evaluated periodically, especially when there are significant changes such as marriage, divorce or you have a child.

Purpose of the Life Insurance

In determining how much life insurance you need, first ask yourself, “What is the purpose of the insurance?” Do you need to pay off debts, provide monthly income for a surviving spouse, provide for your child’s care and education, or perhaps pay estate taxes after you die? Would you like to provide a donation to a charity or fund a scholarship to your alma mater? Since it is uncomfortable to discuss what you want to happen when you die, this discussion often never occurs; and family members are frequently left without the money needed to maintain their current life style.

Amount of the Life Insurance

After determining what you want the insurance to provide, it’s time to examine how much insurance is required to provide for these needs. Although a percentage of your income is a general guide to determine insurance needs, it is usually too simplistic for most individuals. Insurance determined by a percentage of income does not consider variations in family size, ages of dependant family members, income, expenses, debts, existing assets, and personal goals. When considering how much life insurance you need, you should evaluate your family’s immediate needs, future needs and income for dependants when you are gone.

You can use one of the many capital needs assessment calculators available on the internet, or consult with a trusted financial planner or insurance adviser who has access to a reliable assessment calculator. The comprehensive calculators will include anticipated inflation rates and anticipated rates of return to help pinpoint the amount of insurance you need. Below are some of the basic categories to consider in determining the amount of life insurance needed.

Debts and Expenses:

Final expenses (funeral, medical, taxes, legal) $___________

Debts and liabilities (Credit cards, auto, mortgage) $___________

Emergency fund (6-12 months of expenses) $___________

Future expenses (Child care/support, education) $___________

Providing an inheritance or gift $___________

TOTAL DEBTS AND EXPENSES (Add all entries above) $___________

……………………..

Income Replacement for Spouse and Children:

Annual income needed $____________

Subtract other income sources – $____________

(Spouse’s income, monthly rental income, FERS/CSRS annuity)

Adjusted Income replacement = $____________

Number of years to provide income x _______ years =

TOTAL INCOME REPLACEMENT: $______________

…………………

TOTAL NEED (add debts, expenses and income replacement)$______________

TOTAL LUMP SUM ASSETS available (subtract from total need)(Bank accounts, IRAs, TSP, property, current insurance, survivor benefits not included above) $ ______________

TOTAL INSURANCE NEED = $_______________

Type of Life Insurance

Equally important to selecting the amount of life insurance is determining if you should have temporary insurance or permanent insurance. Temporary insurance provides coverage for a limited period of time, such as 5, 10 or 20 years. The advantage of temporary insurance is the cost. Temporary insurance is typically less expensive than a permanent insurance policy.

Permanent insurance on the other hand, provides a lifetime of coverage as long as you continue to pay the premiums, but it is more costly. Another feature of permanent insurance is that it accumulates a cash value on a tax-deferred basis. The cash value is the amount accumulated in the policy that would be available to you if you surrendered the policy. Often the cash value does not accumulate until you have retained the permanent insurance policy for several years.

In reviewing the needs you identified in the worksheet above, are they permanent needs that you will always need at death? Or are they temporary needs such as funding a college education and providing support for young children? It is likely that you will have some permanent and some temporary needs. For permanent needs you should consider permanent insurance such as whole, variable, or universal life insurance. For a temporary need you would select a term policy.

You may have heard the old adage, “Buy term insurance and invest the difference.” This advice recommends determining the difference between the cost of a term and a permanent insurance policy. Then purchase a term policy, and invest the difference between the cost of the term and permanent insurance in stocks or mutual funds. This approach can meet many people’s needs, unless you have a permanent need for the insurance, such as providing monthly income to a spouse or a disabled child.

One of the drawbacks with many term policies is you have to re-qualify for the insurance periodically, and if you are in poor health you may not be able to obtain the required insurance. The FEGLI policies automatically renew without requring a new physical. However, like all term policies, the insurance rates may increase to such an exorbitant rate that you cannot afford the insurance coverage needed to protect your family.

Some term insurance contracts have a convertibility provision which allows “conversion” to a permanent policy without submitting additional medical evidence of insurability. This guarantees that you can obtain the permanent insurance without regard to health issues that may have developed since purchasing the original term policy. This could result in a cost savings if your health has deteriorated since the original exam. This is a beneficial option to have in case circumstances in your life change, such as an adverse medical diagnosis or the insurance coverage is needed for a longer period of time than originally anticipated.

Linda Duncan

Helpful Retirement Planning Tools

Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.

The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Tags: FEGLI, Insurance, Insurance Evaluation
Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SURVIVOR INFORMATION

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A Life Insurance Check-Up: Understanding FEGLI Coverage – Part 1

Posted on Wednesday, 16th December 2009 by Linda Sherman

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Life insurance is often the last thing a federal employee thinks about when deciding to retire. After all, you are looking for a great escape not your last hoorah. Yet, making uninformed FEGLI decisions prior to retiring can make it very difficult for your loved ones.

What you should know about your Federal Employees Group Life Insurance (FEGLI) coverage:

FEGLI is a term insurance policy, but it is unusual because it never has to be renewed, and you never have to provide health information to continue your current coverage. It is a term policy because the costs increase periodically and there is no accumulation of cash value.
The FEGLI basic insurance costs do not increase with age and this basic insurance is subsidized by the government.
As part of the basic insurance, additional coverage is provided at no extra cost for those under age 45. This additional coverage decrease incrementally between the ages of 35 through 45.
Accidental death and dismemberment insurance is provided at no additional costs as part of the basic insurance coverage.
The cost of the FEGLI optional insurance (A, B, C) increases significantly in your 40’s. The optional insurance amounts are group rates that are not subsidized by the government. Therefore, you may be able to find better rates elsewhere.
The cost and the amount of coverage both increase when your salary increases.
FEGLI coverage is provided by Met Life.

Not sure how much FEGLI coverage you have? In block 27 of your SF-50 Notification of Personnel Action, or on your Leave and Earning Statement, it will list the coverage options you selected. Then go to the FEGLI calculator available at http://www.opm.gov/calculator/worksheet.asp to determine the dollar value of the insurance.

Print a copy of the insurance amount every year to keep with your will and use the document to see if this insurance is still cost effective and meets your needs.

When was the last time you looked at the amount of your FEGLI coverage, or other life insurance coverage, to determine how much life insurance you need? Compared the costs of the insurance to other insurance options available.

Everyone should re-evaluate their life insurance needs periodically and have someone they trust to review their insurance needs and options. If you decide to purchase insurance from an insurance provider other than FEGLI, be sure it is a reputable company with a great financial rating. Review our FEGLI online guidance and Survivor Concerns pages that discuss insurance options and links to insurance company rating services.

Part two of this series titled “Evaluating Your Life Insurance Needs” will help you assess your needs and review your existing coverage to see where you stand.

Request a FREE Retirement Benefits Summary & Analysis from a local adviser. A sample analysis is available for your review. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. This service is not affiliated with www.federalretirement.net.

The information provided may not cover unique or special circumstances and federal regulations are subject to change. To ensure the accuracy of this information, contact your HR specialist or benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center.

Visit http://federalretirement.net often to learn more about retirement options, benefits, and estate planning issues and I suggest signing up to receive my FREE monthly benefits newsletter.

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, RETIREMENT CONCERNS

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FERS Sick Leave & Hearing is Believing Too!

Posted on Wednesday, 2nd December 2009 by Dennis Damp

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Yes Virginia, there is a Santa Clause. The signed National Defense Authorization Act permits FERS employees to apply their accrued sick leave towards retirement. However, the credit is phased in with a 50 percent credit for those who retire now and full conversion after January 1, 2014. OPM is developing final regulations on this subject that should be published soon.

FERS employees can use the new sick leave conversion calculator available at www.fedbens.us to calculate their annuity increase. Just type in your estimated average high three salary and number of sick leave hours accrued and the result will be your monthly annuity increase.

Up until now FRES employees had little incentive to save their sick leave. FERS retirees will receive an additional 1% of their high three average salary for every 2087 hours of sick leave they have on the books when they retire.

Hearing is Believing TOO!

I mentioned in my September article that my hearing was failing and that I needed hearing aids. This didn’t surprise me since I worked on jet aircraft in the military and on and around airports my entire career in one capacity or another. My wife didn’t need convincing either after battled for years over the TV volume control.

With my new hearing aids I can hear rain on the roof, leaves rustling in the wind, my hands rubbing together, and the keys on the key board click like a runaway train. At first it’s startling and when I initially put them on I was mesmerized by the sounds around me. I now hear conversations and the TV at normal volume and when I take my hearing aids off it feels like I just turned off the radio or at least turned it down significantly. If you are frequently asking others to repeat themselves and are battling your significant other over the TV volume you may want to go in for a hearing test.

Fortunately there are many helpful organizations like the American Speech Language Hearing Association and the Mayo Clinic. The average cost for a pair of hearing aids is around $3,000 to $5,000 depending on the severity of your hearing loss and you can buy less expensive ones if you are inactive and don’t need all of the bells and whistles that the high end units offer today. Most units today are digital and can be programmed for your specific hearing loss and they have compensation circuits that eliminate the annoying feedback that was a problem with older aids.

Blue Cross and Blue Shield’s Basic plan covered a good portion of the cost. They pay up to $1,000 an ear once every three years. I paid the difference of about $1,000 for two Starkey Series S-9 units. Starkey is one of the largest hearing aid manufactures and their new S Series Sweep models are easy to use, comfortable, and are performing well for me. One doctor advised me that if you are on Medicare the amount covered is reduced and there are other restrictions.

Most reputable providers offer a trail period of between 30 to 60 days. Sewickley Hearing Aids, in Sewickley, PA offers a 60 day trial period and I’ve been working with Doctor of Audiology, Sharon Hall Russo. They offered the best prices and exceptional service. I also like the fact that the hearing aid office is part of a larger nose, throat, and ear doctor’s office that can treat other ear problems and remove wax buildup if necessary. They offer a 15% discount on all hearing aids from Thanksgiving through Christmas each year. I couldn’t find better prices anywhere and I looked online, visited with two other hearing aid companies and called several more and Sewickley Hearing Aids beat them all hands down. If you are in the Pittsburgh or surrounding area you can call them at 412-741-5670, ask for Dr. Sharon Russo. Look around in your area for the best prices, ask for discounts, and compare vendor services.

The first unit I tried was a Starkey S-9 behind the ear open ear model that has a small plastic transmitter tube that goes in the ear canal. The volume adjusts with cell phone commands and the first day I had them I was walking in the mail and a security alarm went off. I couldn’t adjust the volume and had to take them off. This model’s transmitter unit was difficult to clean and I turned them in for the new Sweep series one week later.

The Starkey S Sweep series uses touch control for volume and changing modes. They are somewhat larger but the advantages are huge. The transmitter in this model is in the unit behind the ear, not in the end of the plastic tube that goes into your ear and they are easier to clean and adjust. The volume adjusts by gently touching the unit and then sliding your finger up or down to raise or lower the volume. To change between one of four modes just touch it once to wake it up and then touch it again to change to the next mode. You hear a voice prompt confirmation for each adjustment. This unit has a battery life of two weeks compared to one week for other models. Another advantage with the Sweep series is that you can get replacement ear tubes at no cost. Extra tubes with the transmitter in the ear cost $75.

Veterans with hearing loss should check with the VA first. They offer coverage if you earn under a certain amount and Vietnam Veterans regardless of income may be eligible for full coverage. Call or visit your local Veterans office to find out if you qualify.

The information provided may not cover all aspect of unique or special circumstances and federal regulations are 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 reply is not intended nor should it be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for our response may change.”

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, LIFESTYLE / TRAVEL

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Don’t Miss the Bus

Posted on Tuesday, 1st December 2009 by Chuck Jumpeter

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Well, I don’t know about you folks but this is been one incredible summer and fall for me. On a personal note I finally got my man cave finished and I have been working diligently over the last several months helping my daughter and her husband move into their new home on Long Island. I think I’ve finally completed my list of “dad things.” With all the travel back and forth to Long Island it is only in the last couple of weeks that I actually had the time to find the top of my desk again and get busy writing The Forum.

Professionally I have, as I’m sure you have, been monitoring the debates over health care reform. The intensity and negativity of the rhetoric on this issue has been nothing shy of overwhelming. This will clearly be one of the most significant domestic challenges that we will face in our immediate future. Just recently, Government executive.com announced that the federal health insurance premiums will rise by another 8.8% for calendar year 2010. Especially for those of us living on a fixed income, like CSRS, who will not get a COLA this year, that’s a significant bite. Hopefully, our elected officials will stop their partisan bickering and resolve this challenge in a way that addresses the interests of all parties adequately. One thing is certain; this will be an interesting debate.

There’s an old story about a man, let’s call him John Smith, who was going to take a bus trip to visit his family in South Carolina. He went into the bus station and purchased his ticket. While waiting for the bus John was walking around the station and noticed a scale that promised to tell him not only his weight, but also identify other personal information. Curious, he stepped onto the scale, and dropped in his quarter. After several moments of whirring and clanging, the scale produced a printout, which stated, “Your name is John Smith. You are 206 lbs., which is 26 lbs overweight. You are waiting for the bus to South Carolina to visit your family. Have a nice day.”

John was dumbfounded by the accuracy of the scale and couldn’t believe it possible. After several minutes he figured it had to be some kind of trick and decided to give it another try. So, back onto the scale he went and in went another quarter. Once again, more clanging and whirring and out came another printout which said, “Your name is still John Smith. You are still 206 lbs., which is still 26 lbs overweight. You are still waiting for the bus to South Carolina to visit your family. Have a nice day.”

Now John was beside himself and just couldn’t believe the scale could know these things. As he wondered how the scale knew these details of his life, John noticed a novelty shop across the street from the bus station. He visited the novelty shop and purchased a wig, a stick-on mustache, a pair of toy horn-rimmed glasses and a cap. Armed with his new “identity” and determined to fool the all-knowing scale, he once again entered the bus station and stepped onto the scale. He deposited his quarter and after the whirring and clanging stopped, the scale once again produced a printout which said, “Your name is STILL John Smith. You are STILL 206 lbs., which is STILL 26 lbs overweight. You are STILL planning to visit your family. However, while you were wasting your time in the novelty shop, you missed your bus to South Carolina. Have a nice day.”

While the point of this little story may seem to have much to do with health and wellness, it’s also not as subtle as you may think. Consider the following:

The US spends more than any other industrialized nation on health care, yet we only rank 38^th in the quality of our overall health.
Annually we spend $147 BILLION on the health cares costs related to obesity – double that of 10 years ago.
By 2018, our projected spending for obesity costs will rise to a whopping $344 BILLION. That number will represent a full 25% of our total health services spending. It is projected that 50% of our population will be at least 30 pounds overweight by that time.
The Long Island Press for October 1 – October 7, 2009 reported, in an article titled “A Growing Problem,” that …,since 1980 the number of American children who are obese more than doubled for ages 2 to 5, almost tripled for ages 6 – 11, and more than tripled for ages 12 – 19. Today, about one out of three children and teenagers in the U.S. is overweight or obese.”
Dr. Joanna Dolgoff, a pediatrician specializing in treating childhood obesity, stated, “Doctors have been finding cases of what used to be ‘adult’ diseases [such as heart disease, type 2 diabetes, and conditions including high blood pressure and elevated cholesterol] in overweight teenagers and children as young as age 6”
Eric Finkelstein, Ph.D., at the National Conference on Childhood Obesity in June stated, “The average U.S. taxpayer pays $175 per year to finance obesity.” Can you say Super Size that?
In addition to heart disease and cancer, the correct usage of properly prescribed prescription medications has now become one of the top ten causes of death in the U.S.
Dr. Bruce Miller from Texas says, “One of the primary activities of physicians today is to keep track of the ways people have found to kill themselves.”

Clearly, these data indicate that when it comes to wellness we, as a society, have missed the bus.

It may seem that these statistics focus on our growing waistlines; however, obesity is directly related to and exacerbates numerous other serious problems such as cancer, heart disease, stroke and related cardio-vascular conditions, diabetes, renal failure, etc. Our trips to that novelty store provide us with disguises like, “I’m not obese, I’m simply a ‘plus’ size,” or “I like myself this way,” etc. However, when we put in our quarter and wait for the whirring and clanging to stop, our note will continue to read, “You are STILL XXX pounds overweight.”

In the coming months I will provide you with numerous suggestions on how to maintain, or regain, control of your own personal wellness starting with some simple advice for shrinking your waistline. In the meantime, here are a few simple techniques to help you and your families stay healthy for the holiday season:

Eat 5 fruits and vegetables per day
Get one hour of physical activity per day (does not need to be consecutive)
Limit consumption of sugar-sweetened beverages
Eat breakfast daily (Shaklee’s Cinch is a great choice!)
Switch to low-fat dairy products
Regularly eat family meals together
Limit fast food, take out, and eating out
Prepare foods at home, as a family
Eat a high fiber diet
Be sure to take your supplementation to support your immune health. Your favorite version of Vitalizer along with NutriFeronâ provides a solid foundation for immune function. For children ages 12 and younger choose Incredivitesä; and for infants and toddlers age 6 months to 4 years, use ShakleeBabyä Multivitamin & Multimineral Powder.

Until next time, “ALL ABOARD!”

Yours in Good Health,

Posted in RETIREMENT CONCERNS, SURVIVOR INFORMATION, UNCATEGORIZED, WELLNESS / HEALTH

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The Advantages of Making A Military Deposit

Posted on Sunday, 15th November 2009 by Linda Sherman

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(Reviewed and Updated 2/17/2023) If you are a current federal employee with prior military service, you should consider making a deposit for your military service. There are two reasons why making a military deposit may be beneficial:

You could retire sooner, or
Your can increase your retirement annuity.

By making this deposit, your years of military service are included in your civilian retirement computation, just as if you performed that service under your current retirement system. Unless you are receiving a military retirement, making a military deposit is usually a great deal, often paying for itself within a year or two of retirement.

Retire Sooner

A military deposit may allow you to retire from your civilian position earlier than with your civilian service alone. If you reach your Minimum Retirement Age (MRA) before you attain the required years of service, this may be your ticket to retire earlier than anticipated. For example, if you began your federal civilian career at age 28 as a FERS employee and, you were born in 1955, your MRA is 56, but you will not attain 30 years of federal civilian service until you reach age 58.

If you made a deposit for your four years of active-duty military service, you could retire at the MRA of 56 – two years earlier than if you did not make the deposit. (Note: If you are covered under the Special Retirement provisions for Law Enforcement Officers, Firefighters, Air Traffic Controllers, and Military Reserve Technicians the military service cannot be credited towards the 20 years of special retirement coverage for retirement eligibility but will be used in computing your annuity.)

Increased Annuity

Making a military deposit will increase your federal retirement annuity. By making the deposit, you are purchasing a guaranteed monthly annuity payable when you retire. The annuity is paid directly to you in the form of monthly payments for the rest of your life (and your spouse’s life if you elect a spousal annuity). The military deposit is fully refundable if you change your mind and want a refund of the deposit.

To determine if this deposit is advantageous to you, simply compare the total military deposit amount to the increase in retirement income. Then determine how long before the increase in your retirement annuity will pay for the military deposit amount.

For example, let’s say you have four years of military service and five years of federal service as a FERS employee.

High-three Salary: You don’t know what your high-three salary will be when you retire, but you decide to use your current salary of $60,000 as your high-three salary.
Military Deposit Amount: Your payroll or HR office determines your military deposit amount will be $2,600 for four years of military service.
Computation: If you are a FERS employee, your retirement annuity is increased 1% for each additional year of service. So the computation is:

4 years of additional service x 1% per year x $60,000 = $2400 yearly increase in retirement income attributable directly to the one-time military deposit. That is a $200 per month increase in your annuity payable for your entire life.

Conclusion: In this example, it took just one year and one month of retirement income attributable to the military service to equal the entire military deposit amount. This is the break even point. The higher annuity income continues for as long as you live, and will be also used to compute a spousal annuity if applicable. If you plan to spend more than 13 months receiving this annuity, the deposit is beneficial.

If you are a CSRS employee the military deposit amount is higher, but the return is also higher:

X years of military service x 2% per year x high 3 salary = annual annuity increase.

This calculation does not include the time value of money considerations. For those analytical types, TVM calculations would be appropriate, for everyone else, let’s keep it simple since this is normally such a short period of time.

Retired Military

Making the military deposit is not for everyone. If you are retired military and are receiving full military retirement pay, it is usually not advantageous to make a military deposit, because you must waive your military retired pay for the service period to be included in the civilian retirement annuity. Usually the full military retirement is of greater value than the civilian retirement annuity. Use the computation method above to determine if making the deposit would be beneficial or consult with your HR/Benefit Specialist.

Military Disability Retirement & Reserve Retirement

You must waive your military retired pay in order to receive credit for military service in a civilian annuity, unless your military retirement is based on:

A service-connected disability incurred in combat with an enemy of the US;

On account of a service-connected disability caused by an instrumentality of war and incurred in the line of duty during a period of war; or

Under provisions of 10 U.S.C. 12731-12739 (retired members of the reserves).

A deposit is still required for the active duty military service to be credited in your civilian retirement annuity.

Creditable Military Service: As a general rule, military service in the Armed Forces of the United States is creditable for retirement purposes if it was active service terminated under honorable conditions, and performed prior to your separation from civilian service for retirement. If you are in the FERS retirement system or your civilian service began after October 1, 1982 a deposit is required to receive credit for the service.

But what would a federal regulation be without an exception? Here is information about additional rules and regulations that may be applicable to you and your service:

What else you need to know:

The deposit must be paid in full while you are a federal employee and cannot be paid after you separate from federal service. Otherwise it will not be creditable for retirement purposes.
Retirement Eligibility for CSRS and FERS requires that you must have at least five years of creditable 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 four years of military service to equal five years for retirement eligibility. You must have at least five years of civilian service for civilian retirement eligibility.
Your Service Computation Date (SCD) can be confusing. There are at least four different SCD dates used by HR. The SCD that appears on your Notification of Personnel Action, SF-52 is your Leave SCD. You do not have to make a deposit for your military service to be included for leave accrual purposes. This date is different than your Retirement SCD, which only includes the military service if there is proof the deposit was paid in full.
Plan ahead because making the deposit requires several steps that take time. The steps include requesting information from your military payroll office and your civilian payroll office. Start the process well before your anticipated retirement date. For more information review How to make a military deposit.
The amount of the deposit is determined by the amount of your military base pay, your civilian retirement system, and how long you have been a federal employee. The military income amount does not include housing allowances, combat pay or similar extra pay. The deposit amount is 3% of military base pay for FERS employees and 7% of military base pay for CSRS employees. You may make the deposit at any time you are a federal employee. The deposit can be made in one single payment, multiple payments, or through payroll deductions, normally for as little as $25-$50.
The interest rate is variable computed and added to your deposit amount on a calendar basis. There is a two-year interest free period that begins on your date of hire. However, since the interest is added on an annual basis, if the deposit amount is paid in full prior to three years of your hire date the deposit is interest free. This calculator should help you in computing the interest due: Computing your military deposit amount.
Keep all information about the military deposit until retirement. When the deposit is complete, you should receive a letter from your payroll office indicating the deposit is made in full. Payroll does not normally provide this document to your HR office. You should give a copy of the letter to your HR office to be included in your Official Personnel Folder and keep a copy for yourself to provide with your retirement documents when you retire.