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June 29, 2023
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Tom Hofferber the Federal Retirement Consultant

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Tom Hofferber is an individual who has made a significant impact as a Federal Retirement Consultant. With his expertise and knowledge, he has become an excellent advisor for federal employees seeking guidance on their retirement plans. As a Chartered Federal Employee Benefits Consultant, Tom Hofferber understands the intricacies of federal retirement benefits and is dedicated to helping individuals navigate through the complex process. In this article, we will delve deeper into who Tom Hofferber is and how he has become a trusted resource for federal employees.

Understanding the Role of a Federal Retirement Consultant

Before we explore Tom Hofferber’s journey as a Federal Retirement Consultant, it is essential to understand the significance of this role. Retirement planning can be a daunting task, particularly for federal employees who have unique retirement benefits. A Federal Retirement Consultant provides guidance and assistance to these individuals, helping them make informed decisions about their retirement plans.

Tom Hofferber’s expertise as a Chartered Federal Employee Benefits Consultant allows him to offer comprehensive advice and support to federal employees. He possesses an in-depth understanding of federal retirement benefits, including the “401k” Federal Savings Plan ( “401k” Federal Savings Plan ), Federal Employees Retirement System (FERS), and Civil Service Retirement System (CSRS). Tom’s vast knowledge and experience make him an invaluable resource for federal employees looking to plan their retirement effectively.

The Journey of Tom Hofferber

Tom Hofferber’s journey as a Federal Retirement Consultant began with his passion for helping individuals secure their financial future. After completing his education in finance and becoming a Chartered Federal Employee Benefits Consultant, Tom recognized the need for specialized guidance in federal retirement planning. He witnessed the confusion and uncertainty many federal employees faced when making retirement decisions, and he was determined to make a difference.

Tom’s approach to retirement planning is rooted in his belief that every individual’s situation is unique. He takes the time to understand his clients’ goals, aspirations, and financial circumstances before providing tailored advice. His ability to connect with federal employees on a personal level sets him apart as an exceptional advisor.

The Impact of Tom Hofferber

Tom Hofferber’s impact as a Federal Retirement Consultant is evident through the success stories of the federal employees he has assisted. One such example is John, a federal employee nearing retirement. John was overwhelmed by the complexities of his retirement benefits and was unsure of the best course of action. Through personalized consultations with Tom, John gained clarity and confidence in his retirement plan. Today, John is enjoying a fulfilling retirement, thanks to Tom’s guidance.

Another example is Sarah, a federal employee who was worried about the adequacy of her retirement savings. Tom worked closely with Sarah, analyzing her financial situation and recommending strategies to maximize her savings. With Tom’s assistance, Sarah was able to make informed decisions and achieve her retirement goals.

Tom’s commitment to his clients goes beyond retirement planning. He believes in empowering federal employees with the knowledge and tools they need to make sound financial decisions throughout their lives. His dedication to his clients’ success is what makes him an exceptional advisor and a trusted resource in the federal retirement planning community.

Conclusion

In conclusion, Tom Hofferber is an excellent advisor and a highly regarded Federal Retirement Consultant. With his expertise as a Chartered Federal Employee Benefits Consultant, he has helped numerous federal employees navigate the complexities of retirement planning. Through personalized consultations and tailored advice, Tom has made a significant impact on the lives of his clients. If you are a federal employee seeking guidance on your retirement plan, Tom Hofferber is the go-to resource who can assist you in achieving your retirement goals.

June 28, 2023
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“401k” Federal Savings Plan Rollover: Taking Control and Managing Risk

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 “401k” Federal Savings Plan Rollover: Taking Control and Managing Risk

When it comes to retirement planning, there are few options as attractive as “401k” Federal Savings Plan s ( “401k” Federal Savings Plan ). These plans offer federal employees and members of the uniformed services a secure and tax-advantaged way to save for their future. However, as retirement approaches, many individuals face the challenge of what to do with their “401k” Federal Savings Plan funds. This is where “401k” Federal Savings Plan Rollovers into Indexed Annuities can provide a solution.

“401k” Federal Savings Plan Rollovers into Indexed Annuities allow individuals to take control over their “401k” Federal Savings Plan savings and manage the risk associated with market volatility. By rolling over their “401k” Federal Savings Plan funds into an indexed annuity, individuals can enjoy the safety of principal and the potential for lifetime income. In this article, we will explore the benefits of “401k” Federal Savings Plan Rollovers into Indexed Annuities and how they can help you secure your financial future.

Benefits of “401k” Federal Savings Plan Rollovers into Indexed Annuities

One of the key benefits of “401k” Federal Savings Plan Rollovers into Indexed Annuities is the safety of principal. With an indexed annuity, your initial investment is protected from market downturns. This means that even if the stock market crashes or the economy takes a hit, your principal will remain intact. This provides peace of mind and ensures that your hard-earned savings are secure.

Furthermore, “401k” Federal Savings Plan Rollovers into Indexed Annuities offer the potential for lifetime income. An indexed annuity allows you to convert your “401k” Federal Savings Plan funds into a stream of income that will last for the rest of your life. This can provide a stable and reliable source of income in retirement, ensuring that you can maintain your standard of living and enjoy the retirement you deserve.

How “401k” Federal Savings Plan Rollovers into Indexed Annuities Work

The process of rolling over your “401k” Federal Savings Plan funds into an indexed annuity is relatively straightforward. First, you need to select an indexed annuity provider that offers competitive rates and favorable terms. Once you have chosen a provider, you will need to fill out the necessary paperwork to initiate the rollover.

After the rollover is complete, your “401k” Federal Savings Plan funds will be transferred to the indexed annuity. From there, your funds will be invested in a combination of fixed and indexed accounts. The fixed accounts provide a guaranteed interest rate, while the indexed accounts offer the potential for higher returns based on the performance of a specific index, such as the S&P 500.

Managing Risk with “401k” Federal Savings Plan Rollovers into Indexed Annuities

One of the main reasons individuals choose “401k” Federal Savings Plan Rollovers into Indexed Annuities is to manage the risk associated with market volatility. By diversifying their investments and allocating a portion of their “401k” Federal Savings Plan funds to an indexed annuity, individuals can reduce their exposure to the ups and downs of the stock market.

Furthermore, indexed annuities offer a unique feature known as a participation rate. This rate determines how much of the index’s gain will be credited to your annuity. For example, if the participation rate is 80% and the index gains 10%, your annuity will be credited with an 8% gain. This feature allows individuals to participate in market gains while still protecting their principal.

Considerations for “401k” Federal Savings Plan Rollovers into Indexed Annuities

While “401k” Federal Savings Plan Rollovers into Indexed Annuities offer many benefits, it is important to consider a few key factors before making the decision to rollover your “401k” Federal Savings Plan funds. First, it is essential to evaluate the fees associated with the indexed annuity. Some annuities have high fees, which can eat into your returns over time. Therefore, it is crucial to carefully review the fee structure before committing to a rollover.

Additionally, it is important to understand that indexed annuities have a cap on the potential returns. This means that even if the underlying index performs exceptionally well, your annuity gains will be limited. While the safety of principal is a significant advantage, it is essential to weigh this against the potential for higher returns in other investment options.

Conclusion

“401k” Federal Savings Plan Rollovers into Indexed Annuities offer federal employees and members of the uniformed services a way to take control over their “401k” Federal Savings Plan savings and manage the risk associated with market volatility. By rolling over their “401k” Federal Savings Plan funds into an indexed annuity, individuals can enjoy the safety of principal and the potential for lifetime income. However, it is important to carefully consider the fees and potential limitations of indexed annuities before making a decision. Ultimately, “401k” Federal Savings Plan Rollovers into Indexed Annuities can provide a valuable option for securing your financial future in retirement. We have been helping Federal Employees for years and have moved millions into Indexed annuities, so let us help find the solution to fit your retirement needs. Contact us today.

June 28, 2023
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Federal Retirement Help – Plan To Retire Happy

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Federal Retirement Help: Planning for a Bright Future

As a federal employee, planning for your retirement may seem overwhelming. However, with the right resources and guidance, you can ensure that your golden years are comfortable and financially secure. By taking advantage of tools such as the Federal Pension, Social Security, and the “401k” Federal Savings Plan ( “401k” Federal Savings Plan ), you can create a retirement plan that works for you.

In this article, we will explore the various options available to federal employees for retirement planning and provide practical advice for maximizing your benefits. From understanding the basics of the Federal Pension system to utilizing the “401k” Federal Savings Plan Annuity and Federal Retirement Calculator, we will cover everything you need to know to plan for a bright future.

Understanding the Federal Pension System

The Federal Pension system is a retirement benefit offered to federal employees who have worked for the government for at least five years. This system provides a guaranteed stream of income for life, based on your years of service and highest salary earned. The longer you work for the government, the higher your retirement benefit will be.

One important factor to consider when planning for your federal retirement is the age at which you choose to retire. The earliest you can retire and begin receiving your pension is at the age of 62, with a minimum of five years of service. However, if you wait until the age of 67, you will receive a higher monthly benefit. It is important to weigh the pros and cons of retiring early versus waiting to maximize your pension.

Maximizing Your Benefits with Social Security

In addition to the Federal Pension, federal employees are also eligible for Social Security benefits. Social Security is a government-run program that provides retirement, disability, and survivor benefits to eligible individuals. To qualify for Social Security benefits, you must have worked and paid Social Security taxes for a minimum of 10 years.

One way to maximize your Social Security benefits is to delay your retirement age. The longer you wait to start receiving benefits, the higher your monthly benefit will be. For example, if you wait until the age of 70 to begin receiving benefits, your monthly benefit will be 32% higher than if you had started at the age of 66.

Utilizing the “401k” Federal Savings Plan Annuity

The “401k” Federal Savings Plan ( “401k” Federal Savings Plan ) is a retirement savings plan for federal employees. Similar to a 401(k) plan, the “401k” Federal Savings Plan allows you to save for retirement on a tax-deferred basis. One unique feature of the “401k” Federal Savings Plan is the option to purchase an annuity with a portion of your “401k” Federal Savings Plan balance. An annuity provides a guaranteed stream of income for life, similar to the Federal Pension system.

When considering purchasing an annuity with your “401k” Federal Savings Plan balance, it is important to weigh the pros and cons. One advantage of an annuity is the guaranteed income stream for life. However, once you purchase an annuity, you cannot access your “401k” Federal Savings Plan balance for other expenses. It is important to carefully consider your retirement needs before making a decision. We suggest you speak to one of our Federal Retirement Consultants to find which one would be best for you.

Planning with the Federal Retirement Calculator

The Federal Retirement Calculator is a useful tool for federal employees to plan for retirement. This calculator allows you to estimate your retirement benefits based on your years of service, salary, and retirement age. It also allows you to compare different retirement scenarios, such as retiring early versus waiting to maximize your pension.

When using the Federal Retirement Calculator, it is important to remember that it is only an estimate. Your actual retirement benefits may vary based on a variety of factors, such as changes in the cost of living or changes in government policy. It is important to regularly review your retirement plan and adjust as necessary.

Conclusion

Planning for retirement can be overwhelming, but by utilizing the resources available to federal employees, you can ensure a comfortable and financially secure future. Understanding the Federal Pension system, maximizing your Social Security benefits, utilizing the “401k” Federal Savings Plan Annuity, and planning with the Federal Retirement Calculator are all important steps in creating a retirement plan that works for you. By taking the time to plan now, you can enjoy your golden years without financial stress. And Remember, Don’t Worry, Retire Happy and let us help guide you there. Request your Free review today.

June 26, 2023
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Maximizing Your Retirement Benefits: Federal Retirement Planning Assistance

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Maximizing Your Retirement Benefits: Federal Retirement Planning Assistance

Planning for your retirement can be daunting, but with the help of Federal Retirement Planning Assistance, it doesn’t have to be. As a federal employee, you have access to a variety of retirement benefits, which can be overwhelming to navigate on your own. This article will guide you through the process of maximizing your retirement benefits with the help of Federal Retirement Planning Assistance.

Understanding Your Retirement Benefits

Before you can begin planning for your retirement, it’s important to understand the retirement benefits available to you as a federal employee. The Federal Employees Retirement System (FERS) is the retirement system for most federal employees, which includes three main components: a basic benefit plan, Social Security, and the “401k” Federal Savings Plan ( “401k” Federal Savings Plan ).

The basic benefit plan provides a monthly annuity payment based on your years of service and highest average salary. Social Security provides a base level of retirement income and the “401k” Federal Savings Plan is a defined contribution plan, similar to a 401(k), that allows you to save for retirement with pre-tax dollars.

With the help of Federal Retirement Planning Assistance, you can understand the specifics of each component and how they work together to provide you with retirement income. They can help you calculate your projected retirement income, estimate the cost of living in retirement, and create a retirement income plan that maximizes your benefits.

Maximizing Your Annuity Payments

The basic benefit plan is a key component of your retirement income as a federal employee. It provides a monthly annuity payment based on your years of service and highest average salary. Maximizing your annuity payments requires careful planning and consideration of several factors.

One factor to consider is your retirement date. The longer you work for the federal government, the higher your annuity payments will be. Federal Retirement Planning Assistance can help you weigh the benefits of retiring earlier versus working longer to maximize your retirement income.

Another factor to consider is your survivor annuity option. If you are married, you can choose to provide a survivor annuity for your spouse, which will reduce your monthly annuity payments. Federal Retirement Planning Assistance can help you understand the costs and benefits of this option and make an informed decision.

Optimizing Your Social Security Benefits

Social Security provides a base level of retirement income for all Americans, including federal employees. However, the amount of your Social Security benefit is based on your earnings history and the age at which you begin receiving benefits.

With the help of Federal Retirement Planning Assistance, you can determine the optimal age to begin receiving Social Security benefits based on your individual circumstances. They can also help you understand how your Social Security benefit will be affected if you continue to work in retirement.

Maximizing Your “401k” Federal Savings Plan Savings

The “401k” Federal Savings Plan ( “401k” Federal Savings Plan ) is a defined contribution plan that allows you to save for retirement with pre-tax dollars. Maximizing your “401k” Federal Savings Plan savings requires careful consideration of several factors.

One factor to consider is your contribution rate. Federal Retirement Planning Assistance can help you determine the optimal contribution rate based on your retirement goals and income. They can also help you understand the tax implications of your “401k” Federal Savings Plan contributions.

Another factor to consider is your investment strategy. Federal Retirement Planning Assistance can help you understand the different investment options available in the “401k” Federal Savings Plan and create an investment strategy that aligns with your retirement goals.

In Conclusion

Planning for your federal retirement doesn’t have to be complicated, but it does require careful consideration of several factors. With the help of Federal Retirement Planning Assistance, you can maximize your retirement benefits and create a retirement income plan that meets your individual needs.

Remember to take advantage of the retirement benefits available to you as a federal employee and seek the guidance of Federal Retirement Planning Assistance to ensure that you are making informed decisions about your retirement. For your Free Retirement Consultation, My Federal Retirement Help does Free 90 minute consultations. Contact us today to Schedule your Retirement review.

March 23, 2023
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How Your FERS, Social Security and “401k” Federal Savings Plan Payments Get Taxed

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How is your retirement income, specifically your FERS annuity, Social Security, and “401k” Federal Savings Plan withdrawals, taxed for federal income tax purposes?  The taxable portion of each of these sources of income are taxed as ordinary income; that is, they receive no special tax treatment are taxed based on the bracket in which they fall.

The vast majority of your FERS annuity will be federally taxable.  You will not be taxed on the portion of your FERS annuity that is due to your already taxed contributions but, because you recoup your contributions bit by bit over your life expectancy, most of your FERS annuity is taxed.  The form 1099-R you receive from OPM will tell you how much is taxable.

It is quite likely that 85% of your Social Security will be subject to federal income tax at your rate for ordinary income, though some retirees will find that a lesser portion is considered taxable; the higher your income the higher the percentage of your Social Security benefit that is subject to federal income tax.  You will determine how much of your Social Security is taxable when you are filling out your tax forms.

Distributions from your traditional “401k” Federal Savings Plan are fully taxable for federal income tax purposes.  Distributions from your Roth “401k” Federal Savings Plan will be tax free if the withdrawals are qualified.  For a Roth withdrawal to be considered qualified, you must have had the Roth account for at least 5 years and be at least 59 ½ years old.  If your Roth withdrawals are not qualified, you will pay taxes on the portion of your Roth distribution that is due to earnings; withdrawn contributions are never taxable, because your contributions were made out of already taxed dollars.  In the Roth “401k” Federal Savings Plan (unlike a Roth IRA) Roth withdrawals come proportionally from contributions and earnings.

The above paragraphs tell how your retirement income is taxed – not how taxes are withheld from said income.  We’ll look at withholding in the paragraphs below.

Regarding your FERS annuity, you likely filled out a W-4P with your retirement papers and now taxes are being withheld from your monthly payments.  You probably based this withholding on the last W-4 you filed while still an employee and it will most likely cover all taxes due from your annuity.

On the other hand, Social Security will not withhold one red cent from your benefits for taxes unless you ask them to!  In order to be sure enough is withheld for taxes, you can:

Ask Social Security to withhold from your monthly payments.  You can do this when you apply (if you’re applying online, you do it in the “remarks” section of the form) or you can file a form W-4V after you have applied.

Make quarterly estimated tax payments.  These payments which are due on April 15, June 15, September 15 and January 15 (or a few days later depending on the day of the week the 15th falls on) require you to remember to set aside the money for the payment and remember to actually send it in.  I don’t trust my memory (or my ability to keep my hands off money that I have set aside) so, when I filed for Social Security, I requested that they withhold a percentage of my benefit for federal income taxes.  If I don’t see it, I won’t miss it.

The “401k” Federal Savings Plan withholds taxes at different rates for different types of payments.  They have a booklet available on their website, tspbk26.pdf that contains a detailed table describing the withholding on each different type of withdrawal.  According to “401k” Federal Savings Plan statistics, the most common withdrawal is installment payments and with that type of withdrawal (if the payments are likely to continue for 10 years or more) taxes are withheld as if you were married, filing jointly, and claiming 3 exemptions.  This will almost certainly result in not enough taxes being withheld and might even cause a tax penalty.  Just because you’re not having taxes withheld doesn’t mean that you don’t owe taxes.

Most other types of payment from the “401k” Federal Savings Plan withhold at a 20% rate, which may (or may not) be sufficient to cover your federal income taxes.

Those of you who live in states that tax retirement income and/or Social Security should be aware that neither Social Security nor the “401k” Federal Savings Plan withhold state income taxes.  You will want to either make estimated payments to your state taxing authority or have more withheld from other sources of income.

If you’re just retired, or planning on retiring in 2023, plan on having enough money withheld this year to cover your taxes and avoid any penalties.  Remember, tax avoidance is OK – it’s tax evasion that’ll get you into trouble.

Finally, to get the best idea of where you stand going into retirement, we do suggest you get a Full Retirement Consultation with a Federal Retirement Consultant.  Please visit the contact us page to start the process to schedule your Free Retirement Review.

January 26, 2023
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Congressional Democrats Propose an 8.7% Pay Raise for Feds in 2024

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The annually introduced bill would provide a 4.7% across-the-board increase in basic pay and an average 4% increase to locality pay.

Democrats in both chambers of Congress on Thursday introduced legislation that would provide federal employees with an average 8.7% pay raise in 2024.

The Federal Adjustment of Income Rates Act, introduced by Rep. Gerry Connolly, D-Va., in the House and Sen. Brian Schatz, D-Hawaii, in the Senate, would increase federal workers’ basic pay by 4.7% across the board next year, and provide an average 4% increase in locality pay.

The introduction of the FAIR Act has been an annual endeavor in recent years; last year, the bill proposed a 5.1% pay increase, split between a 4.1% across-the-board basic pay raise and a 1% average increase in locality pay. Although the bill is rarely acted upon, it could serve as an important marker as lawmakers and the Biden administration debate spending levels for fiscal 2024 as House Republicans demand cuts to government spending.

Connolly described the measure as a way to restore “years of lost wage increases” over the last decade due to government shutdowns, hiring and pay freezes and sequestration-related furloughs.

“For years now, federal employees have risked their health and safety working on the frontlines of this pandemic,” Connolly said. “They were subjected to the Trump administration’s cruel personal attacks, unsafe work environments, pay freezes, government shutdowns, sequestration cuts, furloughs and mindless across-the-board hiring freezes. Still, our federal workforce serves with dedication and distinction every day. Federal employees are our government’s single greatest asset, and they deserve better.”

The bill’s introduction drew swift support from unions and other federal employee groups.

“The 8.7% increase listed in the FAIR Act is not a pay raise,” said Randy Erwin, national president of the National Federation of Federal Employees. “It is a minimum increase needed to offset the dwindling checking accounts of public servants, and it is critical to recruiting and retaining the best possible workforce.”

American Federation of Government Employees National President Everett Kelley said that a sizeable pay increase is particularly important as the government tries to recruit new workers during a tight labor market.

“The latest report of the Federal Salary Council shows that federal worker pay lags behind the private sector by over 23%—making it difficult for agencies to recruit, hire and retain top talent and hurting the quality of services Americans receive,” he said. “The 8.7% pay increase included in the FAIR Act will not only reward federal employees’ hard work and help them keep pace with inflation, but it will also help government agencies remain competitive and deliver high-quality services to the American public.”

And William Shackelford, president of the National Active and Retired Federal Employees Association, echoed that sentiment.

“The FAIR Act proposes a strong pay raise to counteract a tightening labor market and increasing private-sector pay, rising costs of living and an impending federal retirement wave,” he said. “A strong pay increase in 2023 is critical to the recruitment and retention of an effective federal workforce, and we’re thankful to have Congressman Connolly’s support for this effort.”

So how would this raise affect your High 3 average going into retirement?  Let us run a Full Benefits Analysis Retirement Review for you so you can help plan and maximize your retirement.  Contact Us today to get YOUR Review!

December 27, 2022
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No Time Like the Present: Retirement and Estate Planning in Your 20s and 30s

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When you’re young, saving for retirement may be the last thing on your mind. Yet, the financial choices you make in your 20s and 30s will dictate how well-off you are decades from now, and delaying retirement and estate planning until you’re older can be a decision you live to regret. Here’s how to start preparing so you’re ready for your golden years.

Money Management: Budgeting and Handling Debt

Living within your means is a habit best formed early in life, and it becomes even more critical when you’re earning a regular paycheck that must cover expenditures like rent, auto loans, insurance, and utility bills. To ensure you’ll meet your obligations, start by tracking your income and expenses; if the latter exceeds the former, you’ll need to either cut unnecessary spending or find a way to generate more earnings. Use your tracking to create a monthly budget, and then stick to it to avoid overspending.

If you’ve used credit wisely up to now, and you don’t carry any revolving debt, keep it that way. If not, add a line in your budget for paying down your cards so you don’t waste money on interest charges. Pay as much as you can above the minimum requirements, and remit payments on time to avoid fees and build your credit history.

Money Maximization: Saving and Investing

Once you have built a budget and are following it, you may be tempted to splurge with any extra cash. Although you shouldn’t live a life of hermetic deprivation, focusing on saving rather than spending will always have a better outcome long term. That’s because interest compounds, or builds on itself, so free money is added to what you’ve saved.

Speaking of free money, if your job offers a 401(k) plan, join it. It will make it effortless to build your savings, and if your employer provides matching contributions, then company money will be added to your plan every payday.

Buying a home is also a smart investment, as house values generally increase over time. Down the road, you can use your home’s equity as a source of liquidity when needed. When you’re ready to purchase, use a helpful online house appraisal to assess the asking price so you avoid overpaying and benefit fully from any appreciation.

Money Protection: Insurance and Estate Planning

Once you’ve committed to saving and investing for retirement, take steps to ensure you’ll hold onto that money until you or your loved ones need it. Always carry health insurance coverage, as medical debt can quickly deplete your savings. Having a life or disability insurance policy will also help preserve what you’ve accumulated if you die or become unable to work.

Although estate planning may sound silly when you’re beginning to save for the future, if you die without a will, your money may not go where you wish. By creating a complete estate plan when you’re young and then updating it when you marry, buy a home, have children or go through other life changes, you’ll rest assured that your assets won’t end up in the wrong hands.

No one ever says they wish they’d waited longer to be smart with their finances. By focusing on managing, maximizing, and protecting your money in your 20s and 30s, which may include taking advantage of your home equity or utilizing your 401(k) plan, you’ll set yourself and your loved ones up for a stronger financial future.

My Federal Retirement Help can assist you as you begin planning for your upcoming retirement. This way, you won’t have to spend your golden years worrying about your finances. Contact us today by calling 254-870-5959 Ext. 700 or texting 254-301-6571.

December 13, 2022
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OPM Will Suspend Long Term Care Insurance Applications as a Sizeable Premium Increase Looms

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The deadline to apply for the program before a two-year suspension is Dec. 19, but officials want applicants to go in with “eyes wide open” that rates will likely increase substantially.

The Office of Personnel Management plans to suspend applications for the Federal Long Term Care Insurance Program for two years beginning Dec. 19, in anticipation of a sizeable rate hike.

OPM announced the unusual measure last month in the Federal Register, and noted that federal workers who submit their applications by the deadline will still be considered for enrollment. FLTCIP was created in 2002 and assists with health care costs for participants who need help with daily personal functions, or who have a severe cognitive illness, and covers home care, nursing home or assisted living benefits.

“OPM is suspending applications for coverage in FLTCIP to allow OPM and the FLTCIP carrier to assess the benefit offerings and establish sustainable premium rates that reasonably and equitably reflect the cost of the benefits provided,” the agency wrote.

The program will continue to operate normally for current enrollees, although they will not be able to apply to increase their coverage. There are currently around 267,000 federal workers and retirees participating in the insurance plan, and OPM typically receives only a few thousand applications to enroll per year.

The decision to suspend applications for the program came after John Hancock Life and Health Insurance Co., the contractor that administers the program, informed OPM that it is likely that there will a premium increase sometime next year.

In recent years, the long term care insurance market has been plagued by large premium increases, in part because people have been living longer and in part because long term interest rates have been at historic lows since the aftermath of the 2008 financial crisis. The Federal Long Term Care Insurance Program last saw premiums increase by an average of 83% in 2016.

John Hatton, staff vice president of policy and programs for the National Active and Retired Federal Employees Association, said it is likely that OPM will examine whether there is anything they can do administratively to improve the stability of the program or propose legislation to alter the program.

“Reading the tea leaves, instituting a suspension of applications shows that there’s a lack of faith or trust that it’s designed in a way that can be sustainable,” he said. “The first premium increase was around 25%, the second was as high as 125% [in some cases], and 83% on average. These premiums were quoted with the intention of staying stable for the lifetime of the coverage, which is someone’s life. And it’s not just federal workers’. They were just not priced correctly to begin with.”

After the previous round of premium hikes, OPM instituted “FLTCIP 3.0,” which allows current enrollees to adjust their coverage downward in order to reduce the impact of rising premiums. Even with that change, Hatton said OPM likely made the right decision by suspending applications.

“If you can’t accurately quote someone what the cost will be for a product, it shouldn’t be open ended,” he said. “That said, the reason these premiums are going up is costs are very high, and people have to figure out how to plan for long term care costs, and there’s no public option aside from Medicaid, which only provides catastrophic coverage if you’re completely impoverished yourself.”

Ultimately, Hatton said he thinks that OPM will wind up having to request legislation from Congress to make the changes needed to stabilize the program.

“OPM, for their part, has done—within the structure of the program, I think—what they can do,” he said. “They hired an independent actuary to look at the assumptions and make sure that they’re right, they hired a consultant to look at various options, and we’ll see where that goes and what flexibility they have in the statute or whether they’ll need Congress to provide some flexibilities. But at the end of the day, the options that would emerge are going to be ones that are maybe tied more to affordability and certainty, but also less coverage.”

We can also show you a better alternative to Long Term Care insurance using certain riders on our Income Annuity Products.  Why pay for something you may or may not ever use?  Contact us today to learn more.

November 9, 2022
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plan your federal retirement

FAQs Related to Federal Retirement Planning

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The number of retirees receiving social security benefits has increased from 34 million to 47 million in the US. It clearly indicates how important retirement planning is. Whether you have just kick-started or are at the mid-way of your career, it is never too late to plan your retirement.

According to a study, 39% of adults start saving for their retirement in their mid-20s. Another study suggests that an average American starts saving money for their retirement at age 31. When you want to begin your retirement planning, you need to increase your awareness, especially when you are a federal employee.

What is the federal employee retirement program?

Under FERS, a federal employee is eligible to receive benefits from three sources, a basic benefit plan, social security plan, and a thrift saving plan. A basic benefit plan is the most common type of retirement plan that every employee is eligible for. A thrift saving plan is similar to a private sector 401 (k), while social security is another type of benefit that a federal employee receives based on the eligibility criteria.

What if your employment comes under fers special retirement category?

If you fall under the category of fers special retirement, your retirement age would be less than other federal employees. They may retire at age 62, but you’ll be retiring at age 57; there will be a money gap till you become eligible for receiving social security benefits. But, you are eligible for receiving special supplemental benefits. It is an extra supplemental income that bridges the money gap till you become eligible for receiving FERS benefits.

Should you calculate your retirement benefits yourself?

You can calculate your retirement benefits yourself using a federal retirement calculator. All you need to know is your high three average salaries and year of creditable service. You can put all the values in the formula to calculate your estimate. However, you can calculate your estimate much more accurately with the help of professionals. But where can you find such professionals? Find out in the next point.

Seek professional help from My Federal Retirement Help

We are federal retirement planning specialists who offer guidance so you can choose the best retirement plan to meet your and your family’s needs. We will listen to your concerns and chart out personalized plans to meet your goals. In the end, we will make sure that your checklist is covered and that you can get the most out of federal employee retirement planning.

August 5, 2022
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What You Need to Know About Social Security and Federal Retirement

By | Benefits, Federal Pay, Retirement, TSP | No Comments

What is the average monthly Social Security retirement check in 2022?

$1,657, according to this Social Security fact sheet.

Sandy and her husband, Tom, were both born in 1956. Sandy began receiving a reduced Social Security benefit of $586 a month at 62. (This is 73.3 percent of the full benefit amount of $800 she would have received at her full retirement age of 66 years and 4 months). Tom is retiring this year and will receive $2,800 a month at his full retirement age—also 66 and 4 months. How much will Sandy receive after Tom retires?

She will get $1,115. This is a bit complicated, so don’t feel bad if you couldn’t figure out the answer. At full retirement age, a spouse is eligible for 50% of the full Social Security retirement benefit of their spouse or their own benefit—whichever is higher. But the fact that Sandy began collecting her own benefit at 62 affects the calculation of her spousal benefit when her husband retires.

Social Security will use Sandy’s full benefit amount that would have been payable at her full retirement age, based on her own work record (not the amount she has been receiving since she was 62). That amount will be subtracted from 50%of her husband’s amount. Sandy’s full benefit would be $871 (it has grown from the initial amount of $800 by cost-of-living adjustments since 2018), so Social Security would subtract $871 from 50% of her husband’s full benefit amount of $2,800, or $1,400. The resulting sum of $529 would be added to her current benefit of $586, and her new benefit amount would be $1,115 per month. If Sandy had waited until her full retirement age to apply for Social Security, then she would have received the higher of her own full benefit amount or 50% of Tom’s, which would have been $1,400 a month.

How much can you earn in 2022 if you are under your full retirement age without reducing your Social Security benefit?

$19,560. If you’re under your full retirement age for the entire year, Social Security will deduct $1 from your benefit for every $2 you earn above the annual limit. Here’s more information about how work affects your Social Security benefit.

What are the conditions under which you can receive a Social Security benefit based on your former spouse’s work record?

If you were married for 10 years or more, are not currently remarried, and are not receiving a pension from work not covered by Social Security. A former spouse who meets the requirements to receive a Social Security benefit is treated basically the same as a current spouse. This entitlement does not affect the former spouse’s own Social Security benefit or his or her new family’s. If the spouse is receiving a Civil Service Retirement System retirement benefit, then he or she will be affected by the dreaded Government Pension Offset, which will reduce the spousal benefit by two-thirds of the CSRS retirement. This will eliminate the benefit entirely in many cases. Read more in this Social Security publication: What Every Woman Should Know.

Among beneficiaries 65 and older, what percentage rely on Social Security for more than 90 percent of their income?

For men the answer is 12%, and for women it’s 15%. It’s also interesting to note that 37% of men and 42% of  women rely on Social Security for 50% or more of their income.

What is the full Social Security retirement age?

The earliest you can start receiving Social Security retirement benefits is 62, but the benefit is permanently reduced for applying early. Your full retirement age is between 65 and 67, depending on your year of birth.

What can you do to increase the amount of your Social Security check?

Here are some of your options:

  • Delay receiving payment until you turn 70
  • Claim a benefit on your spouse’s work record
  • Continue working past 62

Social Security was never meant to be your only source of retirement income. Knowing this, how should you plan your retirement?

Here are some steps you could take:

  • Learn to live on less now
  • Make saving mandatory and automatic
  • Plan for being single, even if you’re not
  • Be realistic about when you can afford to retire

Always remember that the modern federal retirement has three key elements: a government retirement benefit, Social Security and personal savings, especially through the “401k” Federal Savings Plan . Learning how to balance and maximize these elements is the key to a comfortable retirement.