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Do You Know These Facts About Federal Retirement?

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You go through several facts in your daily life. Some of them are interesting but don’t make any difference in your life whether or not you know them. After all, when it comes to federal retirement, federal employees should know these facts about federal retirement. These facts may be a subject of discussion for many on weekends. 

Moreover, below we have included some fun facts about federal retirement you will want to know. If you are worried about federal government retirement benefits and pension plans, these facts may be beneficial for you. 

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The federal retirement system is about 100 years old

Do you know the federal retirement system is almost 100 years old? The single mandatory retirement age of 70 was created in 1920 under an act. In the beginning, retirement was not permitted except for disability. But in 1922, a retroactive provision came into force enabling discontinued service retirement at age 55 with 15 years of service. If we talk about the basic annuity, it was 60% of the final 10-year average salary. Moreover, if you are not clear about civil service retirement benefits for federal employeesyou can consult professionals in your area. 

Withdraws from conventional TSP accounts are taxed as ordinary income.

Conventional TSP withdrawals are a part of your other income that is taxed with ordinary federal rates. In addition to it, you need to keep yourself aware of the 10% tax penalty if you make any early withdrawals due to resigning or taking an early retirement before age 55. After all, to know more about federal government retirement benefits and pension plans, you can consult a professional federal retirement planner in your area. 

People are working longer.

As of 2014, the total workforce, including men and women, was 23% and 15%, respectively. The age of male and female individuals was 65 and older. The total workforce is supposed to increase in the upcoming years. If we talk about the study of the Census Bureau, the nation’s 90 and older population has almost tripled over the previous four decades. After all, federal employees should keep themselves aware of the advantages of lifetime pensions and health insurance. To know more about civil service retirement benefits for federal employeesyou can call a professional federal retirement planner in your area. That’s all. These are some facts about federal retirement you need to know. 

Federal Employee Retirement Planning Checklist

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If you want to retire at the time you have always planned to, and with a sufficient pension amount so that you can live the rest of your retirement life comfortably, the last five to ten years of your service are crucial. You can also take a financial advisor’s help to calculate the FERS benefits, understand how to boost up the perks, and what would be the perfect age for your retirement. 

When you contact a FERS advisor, they will use the federal government pension plan calculator to calculate the benefits that you may receive. Meanwhile, they will also offer you a federal employee retirement planning checklist that will assist you in planning a comfortable retirement. The checklist contains numerous factors.   

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The accuracy of SF 50 form

It is one of the important factors of the federal employee retirement planning checklistYou should ensure that all the details in your form are correct, especially box 30 and box 31 for retirement plan and service computation date, respectively. Box 30 is for the retirement plan you are covered under, and box 31 determines annual leave for full-time employees. 

 

Federal Employee Health Benefit (FEHB) coverage

Suppose you are enrolled under FEHB insurance through yourself or through a spouse who is also a federal employee and if you want to retain the benefit of FEHB through your retirement years. In that case, you must ensure that you have the FEHB coverage for at least five years on the day of your retirement. 

Thrift Saving Plan Contributions 

Use a federal government pension plan calculator to calculate how much you must contribute to the thrift saving plan. If you want to have a good amount in your thrift saving, you must also contribute the maximum amount to TSP. Unless you want to withdraw the amount as soon as you retire, you should allow for its long-term growth. 

Examine social security benefits

It is another factor of the federal employee retirement planning checklistThe social security benefit would be paid to the individual in the case of death, disability, or retirement. You must ensure that your earning history is mentioned correctly. 

These are some of the important checklists of the federal employee retirement plan. However, one of the mistakes an employee can make is not updating his estate plan. The important estate plan includes beneficiaries’ details, a living will, and establishing a trust to cover inheritance taxes. 

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Federal Special Retirement – Know about Best Medicare Supplements Plan

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Federal special retirement supplement has many things to cover. Most importantly, medicare supplement plans formulated to give exclusive benefits to the FERS employees who are very close to the retirement age. Every senior citizen needs special medicare benefits. Federal employees have exclusive rights to avail the benefits while signing off from the services after completing stipulated years of a required job as per FERS special retirement supplement criteria.

Know-How Medicare is Associated with FERS Supplement Plan

Medicare is associated with FERS special retirement supplement. FYI, Medicare is the natural health insurance for which federal employees are eligible once they reach 65. There are various parts of federal medical supplement plans as Part A makes patients eligible for treatment in hospital, skilled nursing facility as well as domicile health and hospice care, Part B pays doctor fees and medical bills, Outpatient hospital care as well as for various other medical facilities availed that are not covered under part A. Other than this, the program involving other medical care choices is Part C.

Federal employees enrolled in FERS special retirement supplement pay some portion of the amount from their salary and become eligible for federal medicare supplement plans that are called Medigap

 Know About the Medicare Eligibility

If you’ve enrolled in FERS special retirement, then the only thing that matters is whether you are eligible to avail of any federal medicare supplement plans. There’s no question of eligibility if you or your spouse are federal employees and have worked for at least ten years in Medicare-covered employment. Other than this, it would help if you were 65 years old and a permanent resident of the United States. In case you’re younger and have any disability or kidney disease, then you’re the exception to the rule and found eligible to avail any of the federal medicare supplements plans.

 How to Avail Part A without Paying Premium at 65 Years Age

Being a federal employee, you can avail part A of federal medicare supplement plans being enrolled for FERS special retirement supplement

  • Already subscribed for receiving retirement benefits from social security or railroad retirement board
  • Already received railroad retirement benefits but have not filed for them
  • Either you or your spouse is covered under any of the federal medicare supplement plans

Even if you’re under 65 years of age,  there’s no hassle in availing federal medicare supplement plan if:

  • You are eligible to receive social security benefits or railroad retirement board disability benefits for 24 months
  • You are a kidney transplant patient or in dialysis

Though you are eligible for a federal medicare supplement plan without paying any premium for part A, you need to pay for part B as its monthly premium is $148.50 for most enrollees. The high-income retires need to pay the surcharge, which is phased as per pay level. No matter you’re in FERS special retirement program, it’s essential you need to pay for part B in case of getting an exception in part A due to one or the other reason