FEGLI In Retirement

FEGLI in RetirementLast month’s blog addressed the FEGLI cost structure for a federal employee while employed. This week we will take a look at the cost of FEGLI in retirement. Let’s consider the example below.

Annual FEGLI cost for an employee earning $97,752 (annually) with FEGLI Basic and Bx5. Death Benefit of $590,000.

The green line represents the rising cost of FEGLI every five years. Let’s assume that at age 60

Learn How to Use TSP-75 Age-Based Withdrawal Form

learn how to use TSP-75 formAt retirement you will be faced with some decisions that must be made. One of those decisions will be deciding what withdrawals to make from your Thrift Savings Plan (TSP).

In order to complete TSP-75, Age Based In- Service Withdrawal, you must be age 59 ½ or older and still working as a federal employee.

Age-Based Withdrawal Rules

  • Can only withdraw vested funds based on years of service. Typically the vesting period is 3 years in order to claim your TSP. However, for some positions the vesting period is 2 years.

FERS Special Retirement Supplement

FERS special retirement supplement eligibilityThe 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

When Can I Start Taking Social Security Benefits

social security benefitsDeciding when to take Social Security benefits is tricky business. So many choices to make and decisions that once made cannot be changed. To begin making sense of the myriad of choices you have before you let’s walk through some key factors.

To be eligible for Social Security benefits upon federal retirement, you must have earned forty credits. Employees can earn up to four credits per year. Generally speaking, FERS retirees will almost always have the necessary forty credits.

Should You Pull the Trigger during FEGLI Open Season?

FEGLI Open SeasonAs a federal employee, you have the option of getting life insurance through the Federal Employees Group Life Insurance (FEGLI) program. FEGLI is a group term insurance that has a basic benefit and three add-on options. It can be a great tool, but costs may spiral out of control as you get older. The basic benefit cost doesn’t increase as you age, but the options’ costs increase every five years – and dramatically so. Before we enter into the next FEGLI Open Season, let’s review the various cost structures.

Start Planning with our FERS Retirement Calculator

FERS Retirement CalculatorAre you considering FERS retirement and wondering if this is a possibility? One of the biggest concerns that federal employees face is, “Will I have enough money to sustain my current standard of living?” Retirement Benefits Institute offers a FERS Retirement Calculator to help you answer this question. Over the next few months we will address each of the elements needed to calculate your annual annuity.

Growing Your TSP

Growing Your TSPWhat often separates the success stories from the tragic failures in financial planning is, as the term implies, sound planning. This may seem obvious, but many federal employees fail to start thinking about retirement until it is just around the corner. Earlier is better, but whatever your age, career stage, or retirement goals, the time to start planning is always now. The earlier you start saving, the sooner you can begin growing your Thrift Savings Plan (TSP) and other retirement accounts. These tax-advantaged accounts have yearly contribution limits, which means the sooner you start saving, the more assets you can shelter and the longer your assets may be able to grow.

Planning a Secure Future for Special Needs Children

special needs childrenYour child’s diagnosis might come during one of your prenatal visits with the obstetrician. It might come just after birth, or it might not come until years later. It might be that your child suffers a traumatic injury as a toddler or during the school years. Whenever you first hear your child’s diagnosis, it is devastating. In that instant, your world changes.

In that first moment and into the early days or months of your child’s diagnosis, your focus is on your child’s health, finding all the right people to take care of him or her, and adapting to the changes. You likely are not thinking immediately about how your child will be taken care of 10, 20, 50, or even 5 years from now. As your life settles into its new normal, though, planning for your child is one of the most important things you can do.

Is Social Security Taxable?

Just because you stop working does not mean you get to stop paying taxes. (If only it were so!) Depending on your combined income, a portion of your Social Security income may be subject to income tax. The government has the ability to tax your Social Security (SS) benefit no matter how old you are if your provisional income exceeds the thresholds below. The table provided outlines the tax structure for Social Security benefits as of 2019.

Social Security Tax Structure

TSP Modernization Act of 2017

Many of you are aware that on November 17, 2017 the TSP Modernization Act (PL 115-84) was passed. Today’s blog will unpack the September 15, 2019 changes.

Multiple age-based in-service and post-separation partial withdrawals

Current law states that only one age-based withdrawal may be taken at age 59.5, and if you took an in-service withdrawal, you are not eligible to take a partial withdrawal.

In the coming months, the following regulations will change for federal employees.

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