Monthly e-News

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.

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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:
 

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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. 

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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?”

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Bob Braunstein

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.

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Medicare

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.

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Cash

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. 

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Tom ORourke

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).

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Checklist Concept

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.

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Disability Form

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.    

 

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