News for Federal Retirees

TSP Fund Still Invested in Dubious Chinese Communist Affiliated Companies

2020-04-16T14:58:00.000-04:00

"...Controversial decision for federal government Thrift Savings Plan’s International Fund to invest in an index including Chinese state-owned companies yet to be derailed by COVID-19-mired Congress..."

How CARES Act RMD Payment Waiver Affects Federal Retirees

2020-04-11T17:05:00.002-04:00

"...On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the CARES Act provides a number of benefits for those individuals affected by the coronavirus, one is the suspension of required minimum distributions (RMDs) for defined contribution plans including the Thrift Savings Plan (TSP) and traditional IRAs during calendar year 2020.

This column discusses how the waiver of RMDs during calendar year 2020 affects federal employees and annuitants...."

Read more at My Federal Retirement

Retiree COLAs vs Federal Workers Pay Raise

2020-01-03T22:06:00.001-05:00

"...Federal workers this month are getting a 3.1% total pay and federal-postal retirees are getting a 1.6% cost of living adjustment. Both the raise and the COLA are the largest in years, yet why the difference?

Short answer: Different yardsticks — fed pay raises are a political/financial decision made each year by Congress and the White House. COLAs are based on the rate of inflation as measured by the Consumer Price Index-W. While it’s been that way for decades, many people, many of them retirees, think it’s the wrong measurement...."

The FERS Special Retirement Supplement

2019-06-26T14:22:00.001-04:00

"...The Special Retirement Supplement is a bridge given to FERS employees who retire before the age of 62 when they become eligible for Social Security. This money is provided by the federal government automatically at retirement and is used as supplemental monthly income.

To qualify you must have completed at least 30 years of service with your Minimum Retirement Age or with at least 20 years of service at age 60. Minimum Retirement Age is based on the year that you were born ..."

Legislation Introduced to Protect Federal Retirees from Benefits Fraud

2019-05-30T14:45:00.000-04:00

"...Senators James Lankford (R-OK), Gary Peters (D-MI), and Kyrsten Sinema (D-AZ) introduced this month the Representative Payee Fraud Prevention Act (S 1430), a bill that would crack down on federal retirement benefit fraud and misuse.

“Most Americans work toward their retirement and count on their retirement funds. We should ensure federal employee’s retirement funds are secure by protecting them from the embezzlement of their benefits,” said Lankford. “Currently, the misuse of funds by a representative payee is punishable if the Social Security Administration or Veterans Affairs issues the payments, but not if those payments are issued by the Office of Personnel Management. This is a straightforward, commonsense bill that closes this loophole.”

If passed, the legislation would give US Attorneys the statutory authority to prosecute retiree representatives who misuse funds from the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS)...."
Read more at My Federal Retirement

Should Federal Retirees Enroll in Medicare?

2019-01-19T13:04:00.000-05:00

"...Federal employees have numerous questions as they plan for their retirement from federal service. One of the most often-asked questions is whether a federal retiree, a CSRS or a FERS annuitant, should enroll in Medicare when he or she becomes first eligible...

This column will attempt to answer this question and will also answer other frequently asked questions, namely:

When should federal retirees enroll in Medicare and in which parts of Medicare?

Is there a late enrollment penalty for Medicare and when does the penalty apply?

Which is “primary” coverage – FEHB or Medicare?..."

Read more at My Federal Retirement

Under Proposed Bill Federal Employees Could Withdraw from Retirement Funds During Shutdown

2019-01-18T13:49:00.001-05:00

"...Representatives Pete Olson (R-TX), Don Beyer (D-VA) and Ed Perlmutter (D-CO) Tuesday introduced legislation that would allow federal employees and contractors to withdraw funds from their retirement accounts without being penalized.

The Financial Relief for Feds Act (HR 545) would let furloughed federal employees — “essential” federal employees working without pay — and contractors whose sole source of earned income is their federal contract to make a withdrawal from their retirement savings accounts without the 10 percent penalty that normally applies...."

Read more at My Federal Retirement

OPM Issues Fact Sheet on Shutdown

2019-01-15T19:15:00.001-05:00

"...The Office of Personnel Management (OPM) released Friday a new fact sheet for federal employees in non-pay status due to the partial government shutdown.

It includes important updated information on what happens to pay and benefits...."

Read full text at My Federal Retirement

or find OPM's Printable Fact Sheet here:

Pay and Benefits Information for Employees Affected by the Lapse in Appropriations

Longevity and Retirement Planning

2019-01-04T13:49:00.001-05:00

"...Longevity risk–the chance you will outlive your savings–may be the greatest risk federal retirees face today. Developing a sound financial plan is essential to ensure your “savings well” does not run dry too soon. The federal retirement system is both unique and complex for its 2.8 million current employees. This system includes the U.S. Postal Service, a quasi-governmental agency that employs the largest percentage of the civilian federal workforce.1 For optimal results, employees should begin planning for their retirement up to 10 years prior to their planned retirement date. It is imperative that federal employees understand their benefits and how each piece fits into their financial puzzle...."

Congress Urged to Support Act to Increase Retiree COLAs

2018-10-26T17:41:00.001-04:00

"...The Senior Citizens League (TSCL) — a nonpartisan seniors group — delivered letters last week to all members of Congress asking them cosponsor the bipartisan CPI-E Act (HR 1251). If passed, the bill would base the annual cost-of -living (COLA) adjustment for benefits under the Civil Service Retirement System (CSRS), the Federal Employees Retirement System (FERS), and Social Security on increases in the Consumer Price Index for the elderly (also known as CPI-E).

“The inflation index that is currently used – the Consumer Price Index for Urban Wage Earners (CPI-W) – fails to capture the inflation seniors experience because items like gasoline and electronics are given more weight than medical costs, prescription drugs, and housing expenses. The fastest growing cost for seniors – Medicare Part B premiums – is not accounted for at all in the CPI-W since young workers are not enrolled in Medicare,” wrote TSCL Chairman Art Cooper...."

Read more at My Federal Retirement

Planning for Retirement Despite Benefit Cut Proposals

2018-07-16T17:35:00.002-04:00

"...News of various proposals to cut the retirement benefits of federal employees continues to come out of Washington.

The White House’s 2019 budget proposal contained various proposals to reduce or even eliminate some current retirement benefits. Among them are a move from a high 3 to a high 5, reduction or elimination of cost of living adjustments (COLA), and increasing federal employees’ share of contributions to retirement under FERS...."

Federal Retirees will Receive 2% COLA for 2018

2017-10-13T09:35:00.000-04:00

"...Millions of Social Security recipients and other retirees will get a 2 percent increase in benefits next year. It's the largest increase since 2012 but comes to only $25 a month for the average beneficiary.

The Social Security Administration announced the cost--of-living increase Friday.

The COLA affects benefits for more than 70 million U.S. residents, including Social Security recipients, disabled veterans and federal retirees..."

Read more at ABC News

Prepare for Your Retirement

2017-10-11T03:30:00.000-04:00

"...Taking steps to stave off retirement failures is easier and more efficient than recognizing problems late in life and trying to figure out how to resolve them...

It’s difficult to think of many areas of life that take care of themselves when ignored. Federal retirement is no exception.

Much like physical health issues, our financial health can be augmented by early diagnosis and consistent application of preventative measures, such as:..."

Read more at FedSmith

USPS Defaults on Billions in Retirees’ Pension Payments

2017-10-07T14:57:00.001-04:00

"...The U.S. Postal Service has yet again failed to make mandatory payments into accounts for its retirees’ pensions and health care, sparking a renewed call for legislative reform aimed at relieving the financial stress on the cash-strapped agency...

It is not the first time the Postal Service has missed its required payments to prefund retirees’ health benefits. From 2012 through 2016, the agency failed to deliver nearly $34 billion toward its pool for retirees’ health care.

The 2006 law requiring the prefunding scheduled the lump-sum payments to last 10 years, meaning they expired in 2017. USPS must still make its “normal costs” payments for the retiree health benefits, as well as an amortization of its future liabilities. It is now also facing amortized payments to cover its unfunded liabilities in the Civil Service Retirement System and the Federal Employees Retirement System. All told, USPS must pay out $6.9 billion by Sept. 30..."

Read more at Government Executive

6 Federal Retirement Myths

2017-09-26T19:34:00.000-04:00

"...We all know how complex the federal retirement system is...

so it makes sense that many details are not fully grasped by the average civil servant.

These misunderstandings sort of take a life of their own, evolve and develop into myths. I’ve spoken to many federal workers contemplating retirement that have stated these myths as fact to me. These myths all have an element of truth to them which possibly causes people to believe them so readily.

Let’s take a look at these 6 common myths:..."

Read more at FedSmith

5 Proposed Changes to Federal Retirement

2017-09-18T17:57:00.002-04:00

"...The Congressional Budget Office has issued a report on a range of potential changes to the federal retirement system that could give legislators a starting point when considering significant changes for federal retirees in the 2018 budget and beyond.

Both Republicans and the president have proposed their own ideas on ways to cut federal retirement benefits to achieve new cost savings.

Both are looking for aggressive savings, with the president’s 2018 budget request including four specific changes to the current federal retirement system to try to save more than $4.1 billion in 2018 and roughly $200 billion over the next 10 years.

The House Budget Committee, for its part, included similar recommendations in its 2018 request, albeit with a more modest estimate for cost savings...."

Take an Active Role in Protecting your Benefits

2017-09-18T03:30:00.000-04:00

"...The budget proposal submitted by the White House has many federal employees in a near state of panic about their retirement benefits. They are asking loads of important questions. Yet the one I hear most is “What can I do to protect my retirement?”

Historically a White House budget proposal ultimately shared little in common with the final “approved” budget. Even today, I would expect other proposals, lots of bluster, arguments, compromises and finally a budget that looks very little like this proposal...

Budget negotiations seem like a process that is out of federal employees’ control. However, this is an area where feds can have a voice and fight for their retirement security.

How?..."

Modest COLA on Track for 2018

2017-09-15T15:10:00.001-04:00

"...The August CPI is a good indication of what the cost-of-living adjustment for Federal retirees and Social Security beneficiaries would have been without the influence of Hurricanes Harvey and Irma.

Without factoring in the effects of the recent storms, Federal retirees and Social Security beneficiaries remained on track for a modest cost-of-living adjustment in January based on the August inflation data released by the U.S. Bureau of Labor Statistics.

For the July-August period, the Consumer Price Index for Urban Wage Earners and Clerical Workers All Items Index rose 1.7% compared to the July-August-September three-month average in 2016...."

Read more at FedSmith

Prognostication for 2018 COLA

2017-07-27T03:00:00.000-04:00

"...How big will the COLA be for retired federal employees and Social Security recipients in 2018? Will current federal employees receive more or less than the 2018 COLA?

As of July, the relevant figure for the 2018 COLA increase is 1.6%. That is not the final amount that will be applicable in January 2018.

The cost of living adjustment (COLA) for Social Security recipients and federal retirees has averaged about..."

Read more at FedSmith

Date Importance in Credit for Military Service

2017-07-26T14:32:00.002-04:00

"...I want to point out the dates that control the creditability of military service in determining your eligibility to retire and whether you’ll need to make a deposit to have it used in the computation of your annuity...."

Federal Retirees Nervous About COLA Plan

2017-07-14T12:13:00.000-04:00

"...Lots of federal workers, both active and retired, are really sweating the Trump administration’s plan to eliminate cost-of-living adjustments for current and future retirees under the FERS retirement plan. And they are worried for good reason.

Dropping COLAs in the future would save the government lots of money. And it would quickly eat into future benefits for all FERS retirees. Big time.

Financial planner Arthur Stein says that while all federal retirees will have lifetime income in the future, the zero COLA plan would dramatically eat into the money they have to spend in retirement. ..."

Trump Budget Trims Payouts for Federal Retirees

2017-05-24T14:16:00.000-04:00

"...President Donald Trump’s “taxpayer focused” budget for fiscal 2018 includes smaller cost-of-living adjustments for veterans benefits payouts and eliminating those adjustments for some federal civilian retirees altogether.

The controversial suggestions are likely to be met with opposition from outside advocates and some lawmakers, but White House officials insist the moves are part of a broader strategy to balance the budget without sacrificing essential government services..

Trump’s plan calls for eliminating annual cost-of-living increases Federal Employee Retirement System enrollees completely, and lowering the adjustments for Civil Service Retirement System enrollees by 0.5 percent..."

Using Military Service to Increase Your FERS Pension

2017-04-20T19:59:00.001-04:00

"...There’s a provision in FERS that allows you to make a deposit, or “buy back”, your active duty military service—and that time will count as creditable service for FERS retirement. Creditable service is important because it’s used to figure out when you can retire with a FERS pension AND how much your monthly pension will be!

Military service with a deposit counts as though you worked under FERS during that time—years, months and days are added to your creditable service. This can really add up to a tidy sum in retirement!..."

What Happens to Pay and Benefits During a Government Shutdown

2017-04-20T03:00:00.000-04:00

"...When lawmakers return to Washington next week, they will have only a few days to approve a spending measure in order to avert a government shutdown beginning April 29...

Here’s what federal workers can expect in the realm of pay and benefits if the government closes, based on guidance from the Office of Personnel Management from the last shutdown in October 2013..."

Tax Tips

2017-04-10T19:00:00.000-04:00

"...If you have recently retired, you may be learning that their are some benefits to leaving the workforce when it comes to income taxes.

For those of you in the planning stages, it might be a good time to think through the tax implications of preparing for your separation from federal service...."