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Your Social Security Retirement Benefit: What Income Determines It?

By: Bob Braunstein, Federal Benefits Specialist

Published: September 2023

When you file for your Social Security benefit, the amount you receive is generally based on your work earnings – income that you earned while working subject to the Social Security payroll tax. Your benefit could otherwise be based on the work history of a spouse or former spouse, or as a survivor of either if it is higher than your work-based amount.

When married and claiming a Social Security entitlement benefit, you are deemed to be filing for a spousal benefit if: 1) your spouse is receiving Social Security benefits, and 2) your spouse’s Primary Insurance Amount (PIA) is more than twice the size of your work-based entitlement. PIA is the amount claimed at one’s Full Retirement Age or FRA (generally between ages 66 and 67 based on year of birth).

Financial FAQs

By: Brian Kurrus, CFP®

Published: August 2023

Financial planning brings many questions on the path to retirement but some questions seem to come up more often than others. Here are some of the most common frequently asked questions and key strategies to keep in mind.

Should I pay off debt or invest?

Debt can come via credit cards, student loans, car loans, home equity loans, and our mortgage among other places. Should we pay the minimum balance and maximize investments into TSP and other savings or prioritize paying down the debt first? First, what is the interest rate and how does it compare to the expected rate of return? If your savings account is earning 2% per year and your credit card is costing you 15%, that’s an easy one. Take what you can from savings and immediately pay down the debt as it is costing you more than you are earning. You also want to factor in any tax implications. Is the liability creating a tax deduction and what are the tax implications for the investments?

Medicare and FEHB – What You Need To Know

By: Herb Casey, Federal Benefits Specialist

Published: July 2023

As a Federal employee or Federal retiree, you probably have had questions about how Medicare and Federal Employees Health Benefits (FEHB) work together. This article will help you understand the four most common Medicare Parts (A, B, C and D) available once you are eligible for Medicare and how they work with FEHB.

Generally, you are eligible for Medicare if you are age 65 or older and are retired from Federal service. Medicare becomes the primary insurance payer and your FEHB plan is the secondary payer. If you are still employed at age 65, your FEHB plan is still primary. You are not required to sign up for Medicare while you are still working and for up to eight months after retiring.

All FEHB plans will adjust benefits payable so that they supplement rather than duplicate Medicare benefits. If Medicare is the primary payer, it generally will pay its allowable benefits in full and your FEHB plan will pay a reduced benefit as the secondary payer.

Federal Benefits FAQs

Published: June 2023

We asked our Federal Benefits Presenters to share questions that are most frequently asked during their presentations.

Question: My spouse and I are both Federal employees and want to know whether we should leave survivor benefits to each other.

Answer: There are important reasons you may want to leave a survivor benefit:

If one of you will have a much higher retirement benefit, the higher earner may want to provide this additional income for the spouse.
The benefit could outlast the amount of a life insurance policy.
The survivor benefit lasts for the life of the surviving spouse unless the spouse remarries before age 55.
The survivor benefit is payable in addition to the surviving spouse’s own retirement annuity.
The survivor benefit starts right away, unlike the Social Security widow(er) benefit where the survivor must be a certain age before it begins, in most cases.
The survivor annuity receives cost-of-living adjustments for life.
Last, the amount by which the retirement benefit is reduced to provide the survivor annuity is not taxed.

Tips to Building a Powerful Resume

By George Marchant, Technical Recruiter

Published: May 2023

A resume is a document that represents one’s experience in their professional career. It is a glimpse in to one’s ability and track record that may or may not translate to future success in a job in the eyes of an employer. Resumes allow someone responsible for hiring to quickly understand an applicant’s abilities for a given role within a company. The individual reviewing the resume will be faced with making a determination if they feel this person is worthy of an interview for the position for which they are being considered. Typically, the resume is the golden ticket to getting an interview or next step of consideration for a role which makes it such a critical component for job seekers to have success.

Financial Literacy

By: Karen P. Schaeffer, CFP®

Published: April 2023

Happy Financial Literacy Month! We may have started the month with April Fool’s Day but there’s nothing foolish about having the skills to make smart money decisions. Sadly, according to various surveys and studies, it appears that most Americans do not possess a strong level of financial literacy. FINRA Investor Education Foundation found that only 34% of Americans could correctly answer at least four out of five basic financial literacy questions.

Similarly, a survey by the National Foundation for Credit Counseling found that 41% of adults in the United States gave themselves a grade of C, D or F when it came to their knowledge of personal finance. This is bad news for all of us.

Understanding Service Computation Dates – Not So Simple

By: Bob Braunstein, Federal Benefits Specialist

Published: March 2023

Is your Retirement Service Computation Date the same date as your Leave Service Computation Date?

While this is likely, there are several reasons why they could be different. The rules and procedures for setting, constructing, or changing Service Computation Dates, also known as SCDs can be confusing even to the most seasoned HR professional. SCDs are essentially the starting dates for periods of service that, once fulfilled, qualify employees for specific Federal benefits. The more common SCDs are for retirement eligibility, leave accrual, and Thrift Savings, but there are many others. Some are obvious, such as the Leave SCD that appears on Leave and Earning Statements and SF 50s (Notifications of Personnel Action). Others are more elusive as they are not called SCDs but still measure qualification periods for benefits, such as waiting periods for within-grade increases, or the requisite 5-year periods for maintaining health and life insurance coverage when retiring from Federal service.

Social Security and Medicare: Key Reminders for 2023

By: Vanessa Craddock, Federal Benefit Specialist

Published: February, 2023

A good way to start the New Year is to prepare yourself for several changes to old rules. Here are three reminders that may pay off if you are Medicare or Social Security eligible.

Social Security Restricted Applications for Spousal Benefits

The Social Security (SS) restricted application has been a popular strategy for married couples. This strategy lets an individual at Full Retirement Age (FRA) file for the SS benefits they are due as a spouse while delaying their own earned SS benefit for an increase of up to 8% a year from FRA to 70. Sadly it’s on its way out.

If you reached age 66 (FRA) in 2019, and filed a restricted application to collect your spousal benefit, by age 70, your earned benefit will have increased 32%! That increase is for the rest of your life. The law that provided this rule, however, was changed in 2015 to allow filing the restricted application for spousal benefits only to those born before January 2, 1954.

Financial Checklist for the New Year

By: Kaitlin Schaeffer Yardley, CFP®

Published: January, 2023

The start of a new year is the perfect time to set your intentions and goals for the next twelve months – personally, professionally and financially!

In order to make sure your finances on the right track for 2023, sit down and check off the following from your to-do list.

Tax Changes for 2023

By: Tom O’Rourke, Counsel

Published: December 2022

The IRS has announced a number of changes to the tax laws that will take effect as of January 1, 2023. Some of these changes resulted from the passage of the Inflation Reduction Act of 2022 (the Act) and other changes are inflation adjustments that are part of the tax code and occur annually.

The Act included a number of provisions to encourage the use of clean energy and in energy saving devices. The residential energy credit provides credits of up to $5,000 for investment in energy efficient property such a solar electric, solar hot water, fuel cell and wind energy devises installed in a home. The Act also extends and increases certain credits for the purchase of a clean vehicle (primarily electric vehicles). The amount of the credit can be as much as $4,000, but eligibility for the credit is phased out for married couples with adjusted gross income of more than $150,000 and single individuals with adjusted gross income of more than $75,000.

Tricare Plus FEHB – A Possible Health Benefits “Ace in the Hole” Arrangement When You Retire

By: Bob Braunstein, Federal Benefits Specialist

Published: November, 2022

Are you military retired? Are you planning to retire from civilian service at the end of this year? Then this article is for you. During the next Open Season consider enrolling in an FEHB plan to gain your Ace in the Hole. Follow the instructions in this article and you will have additional health insurance in reserve for the rest of your life. You will only need to pay for it when needed.

Military retirees who retire from the Federal civilian service have a little-known health insurance option that may be too good to pass up. For a very low cost, they have the ability to expand their health insurance networks beyond Tricare to include an FEHB program. And when the FEHB coverage is no longer needed, they can suspend paying for it. To have this option, one would need to be under active FEHB coverage upon retiring from civilian service. FEHB coverage in retirement for non-military retirees typically requires having the coverage for at least 5 continuous years immediately prior to separating/retiring. But, if one has Tricare, this coverage is included in the 5 years provided they are also covered by an active FEHB plan when they retire.

It’s Never Too Late to Make Smart Money Decisions

By: Karen Schaeffer, CFP®

Published: October, 2022

Late in Your Career

“Wish I started sooner” is the classic lament for people finding themselves on the far side of midcareer and still looking for the on-ramp to financial confidence. Rather than stress about what could have been, take comfort in knowing with a little focus, there is a path to a comfortable retirement even for the late bloomers. Sorry, no magic wand here, but a combination of making more, spending less, and modifying the goals can get most to a pretty good place.

Transitioning to Retirement – Your Path

By: Herb Casey, Federal Retirement Specialist

Published: September 2022

In the same way that you developed your career, to have a purposeful and rewarding retirement, you must think about what steps you can take now to prepare for that next chapter. You may have something you put on the back burner during your career that you want to focus on. Transitioning to retirement can be difficult because your whole routine will change in that you will not be going into the office, and you will no longer be who you were.

What path will you take in retirement? To begin the process of finding your next path, determine who you are. You must look inward during this process. You will need to determine your purpose, values, and strengths.

Looking to Change Careers? How Technology Can Help.

By: George Marchant, Technical Recruiter

Published: August 2022

So, you are looking to change careers and you are wondering how to best position yourself to make this possible. Finding the perfect job is not an easy task but modern technology can help you overcome this challenge. Using technology can not only help streamline your ability to connect yourself with jobs you are interested in. It can also help connect prospective companies and recruiters to you with the opportunities they have available. Here are a few simple actions that can enable technology to work in your favor:

Pre-Retirement Checklist: What To Do Within 6 Months

By: Mercedes Johnson, Federal Benefits Specialist

Published: July, 2022

I know you are excited! You are retiring in a few months and can’t wait to begin the second phase of your life called Retirement. It is very important that you review your retirement plan and benefits in between your upcoming retirement festivities. How, you ask? Well, below you will find an easy retirement checklist to follow within 6 months of retirement so that you are well prepared and ready for retirement:

5 Tips to Increase Your Social Security Benefits

By: Vanessa Craddock, Federal Benefits Specialist

Published: June, 2022

Worried about claiming your Social Security (SS) benefits at the wrong time? There are no hard and fast rules about the proper age to draw SS. It often comes down to your individual circumstances at the time you are eligible. However, there are a few tips that may increase the monthly amount you will receive. Let’s look at a few.

College Savings

By: Kaitlin Schaeffer Yardley, CFP®

Published: May, 2022

They say, “don’t blink.” Before you know it, that cute Kindergartener carrying an oversized backpack filled with art projects, will be heading off to college – complete with a hefty tuition bill plus room, board, and book fees. Psychologists have many strategies for coping with that process emotionally, but for now, let’s focus on how to handle the financial cost.

Protect Your Retirement: Avoiding Frauds and Scams

By: Ray Kirk, Ph.D., Federal Benefits Specialist

Published: April, 2022

Following the legendary Willie Sutton principle, fraudsters tend to go “where the money is”—and that means targeting older Americans who are nearing or already in retirement. Federal employees and retirees with large Thrift Savings Accounts are tempting targets. Knowing how to protect your savings is an important part of financial literacy.

Every two years the Society of Actuaries Research Institute conducts a retirement risk survey to evaluate Americans’ retirement concerns and preparedness, their income and spending in retirement, how they plan for change in retirement, the impact of shocks and unexpected events, and their views on health and caregiving.

One Last Look: The OPF and Retirement

By: Vanessa Craddock

Published: March, 2022

Question: I’m about to retire at the end of the year and was told I should check my OPF before leaving. What should I look for?

Answer: The easy answer is to make sure your personnel records are in order: accurate and complete. This will help expedite the retirement process. Your Official Personnel Folder (eOPF) contains important documents used to determine retirement eligibility and your benefit calculation. While the “Certified Summary of Federal Service” is a form you may request from HR which provides a record of your creditable Federal service, it is your responsibility to confirm its content.

The Federal Employee Health Benefits (FEHB) / Medicare Wrap-Around Arrangement – Is It For You?

By: Bob Braunstein, Federal Benefits Specialist

Published: February, 2022

If you are a retired Federal employee with FEHB coverage, when you turn 65 you are not required to enroll in Medicare – but enrollment for most will be cost effective and worth it. When you enroll in Medicare Part A and Part B (Part B has an extra individual premium), Medicare becomes your primary payer for hospital and outpatient services. When FEHB is then the secondary payer, the deductibles, copays, and coinsurance you have been paying will disappear. Additionally, many of the newer FEHB plans reimburse for a good portion of your Part B premiums – in essence, you will have an “FEHB/Medicare Wrap-Around” arrangement with regular recurring premiums. Your monthly total premiums for FEHB and Medicare will often be equivalent to or less than what you are paying for FEHB coverage alone, but with no further out-of-pocket costs for your care.

What To Do First When a Loved One Dies

By: Marc S. Levine, Esq.

Published: December, 2021

What are some of the practical considerations when a loved one dies? A lot of estate planning is about planning for low-probability / high-impact events – such as an early or unexpected death, as well as planning for the reality that all of us will pass at some point. This is one of the most important aspects of what we do – helping people navigate what can be a very complicated and often upsetting maze of what has to be done after someone dies.

Part Time Proration – What It Means in Determining Your Federal Annuity

By: Bob Braunstein, Federal Benefits Specialist

Published: November, 2021

Believe it or not, there was a time when the calculation of Federal retirement annuities made no distinction between part-time work and full-time work. Under the old Civil Service Retirement System (CSRS), you could retire after the same time as one with the same number of years who had worked full-time. And, even though you had worked fewer hours, your annuity would have been the same as it would have been had you always worked full-time. This inherent inequity – paying the same annuity to those who work fewer hours due to part-time work schedules – led to the Office of Personnel Management’s (OPM) changing its annuity calculation rules. The change became effective on April 7, 1986, and created “part-time proration,” which reduces retirement annuities.

Social Security Spousal Benefits: Top 5 Questions (and Answers)

By: Vanessa Craddock, Federal Benefits Specialist

Published: October 2021

Once you are eligible to collect your Social Security (SS) retirement benefit, you may also entitle your spouse to a monthly benefit if he or she meets certain qualifications. This is true even if your spouse has never worked under Social Security. Generally, a current spouse benefit is payable if your spouse has been married to you for one year, is at least age 62, and is not qualified for a higher benefit based on his/her own earnings record. The most important fact about the spousal benefit is the timing when the benefit is claimed. Below are 5 common questions employees ask about the spousal benefit:

Finance for Singles

By: Kaitlin Yardley, CFP®

Published: September, 2021

Have you ever thought of handling your personal finances like any other household chore? It’s always best to follow a schedule before the tasks get out of control. The laundry pile is a little less daunting if you attend to it every week and the bathroom is certainly more pleasing if you can get to the scum before it grows. While it is helpful to divvy up household chores – someone cooks and the other clean up – if you are single, all of the chores fall in your lap. Delegating the cleaning duties to an outside service, when possible, can be a great solution. However, when it comes to finances, this is your job. You, and only you, will reap the reward of a job well done or pay the price of missteps. Here are some tips for staying on top of your personal finances, even when you can’t share the job.

Making the Decision About WHEN to Retire

By: Michael Townshend

Published: August 2021

Many of our readers in the Federal workforce, have shared with us their concerns about retiring, even though they may have confidence in their financial preparations. So, what is it that they fear about the prospect of retirement? For many, it is the simple question, “What in the world will I DO with myself and my newly found free time?”

Postponed or Deferred Retirement: What’s the Difference and What Are My Options?

By: Bob Braunstein, Federal Benefits Specialist

Published: June 2021

When the Federal Employees Retirement System (FERS) was introduced as the alternative to the original Civil Service Retirement System (CSRS) in the mid-1980s, it was touted as a more flexible and portable program – which, in fact, it is. Instead of a pension-only retirement plan that required staying in Federal service for almost 42 years to gain the maximum entitlement, FERS offers the following flexibilities:

A pension with a personal early retirement option; CSRS early retirements require special circumstances,
Social Security (SS) coverage for the same years of service; CSRS is not covered by SS, and
Thrift Savings Plan with agency matching; CSRS employees do not get agency matching on their TSP contributions.

Thinking About Medicare?

Published: May 2021

By: Maureen Wilkin, Federal Benefits Specialist

If you are or soon will be age 65, it is time to consider enrolling in Medicare. Enrollment is voluntary. Your opportunities to enroll are limited. You should plan on spending about as much time to make this decision as you would to choose a cable provider or streaming service. Well, maybe not that much time!

Enrollment may be done online. You can find complete information regarding Parts A, B, C, and D and also enroll at: https://www.ssa.gov/benefits/medicare/.

You have three opportunities to enroll:

Initial opportunity = 7 month window around 65th birthday
Special opportunity = 8 month period that starts when health insurance coverage becomes retirement based AND you are 65
General enrollment = January – March each year; becomes effective in July (when payment begins) Possible late penalty for delaying Part B enrollment – a permanent penalty.

Top 5 Money Concepts to Master

By: Karen Schaeffer, CFP®

Published: April 2021

In honor of Financial Literacy Month, here are the top five money concepts financial planners think everyone can and should master:

1. Managing and analyzing cash flow. How much money is coming in and where the heck is it going? Now is a great time to compile the numbers from 2020 and calculate a couple data points: What percentage of your income went to taxes? How much did you save or invest? And, since the rest got spent, determine how much went to your fixed expenses and how much of your spending was discretionary. Happy with your choices? Congratulations. Not so much? Make a list of small positive changes that you can implement in 2021. Spend less on one particular item, bring in a little more income from a side gig, round up what goes into TSP each pay period by $50; you get the idea.

Use Your Federal Benefits to Reduce Your Tax Bill

By: Tom O’Rourke

Published: March 2021

Paying the least amount of taxes possible and staying out of trouble with the IRS are common goals. The Federal benefits package helps Federal employees achieve both of these goals.

Federal employees are eligible to participate in the Thrift Savings Plan, the Federal Flexible Spending Account (FSA), and the Dependent Care Assistance Plan (DCFSA). They may also pay any health insurance premiums on a pre-tax basis and, if they are enrolled in a high deductible health insurance program, to set aside funds on a pre-tax basis in a Health Savings Account (HSA).

Financial Planning at Every Stage of Your Career

By: Brian Kurrus, CFP®

Published: February 2021

Whether you are just starting out or getting ready to retire, it’s never too early or late for financial planning. Many wish they started planning earlier and those that did sometime wish they had made better adjustments along the way. Here are the most important steps at every career stage.

Understanding Social Security Disability Insurance (SSDI)

Published: November 2020

By: Bob Braunstein, Federal Benefits Specialist

The Relationship Between OPM Disability Retirement and SSDI

Most Federal employees are able retire from Federal service around 56 or 57 years of age after completing 30 or more years of creditable service. These retirements are immediate and include important benefits such as health insurance, life insurance, dental and vision coverage, and other benefits for the rest of their lives. Similar retirement and benefit options could be available earlier to employees who become disabled for their work and qualify for the Office of Personnel Management’s Disability Retirement benefit. Disability retirement is available to any Federal employee who has completed at least 18 months of creditable civilian service with a medical condition that renders them incapable of performing the duties of their current position (or those of any job at the same grade and pay in their organization and general commuting area). Disability retirements come with the similar pensions and insurance benefits and continue as long as the retiree remains disabled. Those approved for Disability Retirement must also apply for Social Security Disability Insurance (SSDI) when they separate.