History Class XII Ch. 3 Kinship, Caste and Class (1).pptx
Fers and csrs 90mins 2016(1)
1. FERS and CSRSFERS and CSRS
Retirement BenefitsRetirement Benefits
What’s New for 2016
Webinar Instructors:
Ron Newsham
Dion Zumo
2. CSRS Eligibility to retireCSRS Eligibility to retire
AgeAge Years (creditable service)Years (creditable service)
5555 withwith 3030
60 with60 with 2020
6262 withwith 55
2% year reduction for each year under 552% year reduction for each year under 55
4. FERS Eligibility to retireFERS Eligibility to retire
AgeAge Years (creditable service)Years (creditable service)
MRA with 30MRA with 30
60 with60 with 2020
6262 withwith 55
*Employee may keep FEHB in retirement using any of these*Employee may keep FEHB in retirement using any of these
(assuming 5 years previous FEHB enrollment)(assuming 5 years previous FEHB enrollment)
5. FERS Early RetirementFERS Early Retirement
MRAMRA** with 10 or more years annuity will bewith 10 or more years annuity will be
reduced by:reduced by:
5%5% per year for each year under 62 orper year for each year under 62 or
5%5% per year for each year under 60per year for each year under 60
(if employee has 20 or more years)(if employee has 20 or more years)
*Employee may keep FEHB in retirement using any of these*Employee may keep FEHB in retirement using any of these
(assuming 5 years previous FEHB enrollment)(assuming 5 years previous FEHB enrollment)
6. FERS MRA with 10 yearsFERS MRA with 10 years
FERS - MRA with 10 or more years may also retireFERS - MRA with 10 or more years may also retire
early, postpone the annuity and begin at:early, postpone the annuity and begin at:
Age 62 with at least 10 years orAge 62 with at least 10 years or (no reduction)(no reduction)
Age 60 with at least 20 yearsAge 60 with at least 20 years (no reduction)(no reduction)
*may begin the annuity with no-reduction at that time and re-enroll in*may begin the annuity with no-reduction at that time and re-enroll in
FEHB assuming they were enrolled in FEHB for at least 5 years whenFEHB assuming they were enrolled in FEHB for at least 5 years when
they leftthey left
7. FERSFERS Special Provisions eligibilitySpecial Provisions eligibility
to retire LEO,FF,CBPO,ATCto retire LEO,FF,CBPO,ATC
AgeAge Years of ServiceYears of Service
5050 with 20with 20
AnyAny ageage withwith 2525
Mandatory retirement at age 57 (56 for ATC)Mandatory retirement at age 57 (56 for ATC)
*Employee may keep FEHB in retirement using any of these*Employee may keep FEHB in retirement using any of these
(assuming 5 years previous FEHB enrollment)(assuming 5 years previous FEHB enrollment)
8. FERS Early-OutFERS Early-Out
FERS may retire with no-reduction to theirFERS may retire with no-reduction to their
annuity if they are:annuity if they are:
Age 50 with 20 years service orAge 50 with 20 years service or
Any age with 25 years serviceAny age with 25 years service
*Employee may keep FEHB in retirement using any of these*Employee may keep FEHB in retirement using any of these
(assuming 5 years previous FEHB enrollment)(assuming 5 years previous FEHB enrollment)
9. CSRS/FERS creditable service includesCSRS/FERS creditable service includes
Federal covered service in which theFederal covered service in which the individual's payindividual's pay
is subject to retirement deductionsis subject to retirement deductions..
Other creditable service considerations:Other creditable service considerations:
Temporary time (where deductions were not withheld)Temporary time (where deductions were not withheld)
Refunded time (employee left and took contributions)Refunded time (employee left and took contributions)
Military timeMilitary time
Part timePart time
Leave without payLeave without pay
Workers compensation timeWorkers compensation time
WAE timeWAE time
Sick leave hoursSick leave hours
11. CSRS and FERSCSRS and FERS
““High 3” Average PayHigh 3” Average Pay
CSRS and FERS retirement annuity:CSRS and FERS retirement annuity:
High 3 average payHigh 3 average pay (including locality)(including locality)
Years and months of creditable service at separation.Years and months of creditable service at separation.
CSRS 100% of sick leave creditCSRS 100% of sick leave credit
FERS 100% of sick leave credit on/or after 1/1/2014.FERS 100% of sick leave credit on/or after 1/1/2014.
Your “high-3” average pay is the highest average basic pay you earnedYour “high-3” average pay is the highest average basic pay you earned
during any 3 consecutive years of service.during any 3 consecutive years of service.
15. Who gets the Special Supplement?Who gets the Special Supplement?
MRA with 30 yearsMRA with 30 years
60 with 20 years60 with 20 years
LEO/FF/CBPO/ATC (under 62)LEO/FF/CBPO/ATC (under 62)
Early out (supplement begins after MRA)Early out (supplement begins after MRA)
FERS Special SupplementFERS Special Supplement
16. CSRS & FERS considerationsCSRS & FERS considerations
CSRS may retire first 3 days of the month orCSRS may retire first 3 days of the month or
last day, for the annuity accrual to begin the nextlast day, for the annuity accrual to begin the next
day. Any other day it will begin 1day. Any other day it will begin 1stst
of the followingof the following
month.month.
FERS annuity accrual always begins the 1FERS annuity accrual always begins the 1stst
ofof
the month following retirement. Hence, maximumthe month following retirement. Hence, maximum
annuity collected would be if retiring the last day ofannuity collected would be if retiring the last day of
the month.the month.
17. CSRS & FERS considerationsCSRS & FERS considerations
CSRS and FERS unused annual leave will beCSRS and FERS unused annual leave will be
refunded to you usually within 30 days ofrefunded to you usually within 30 days of
retirementretirement..
Interim Annuity: Upon retirement you willInterim Annuity: Upon retirement you will
receive an “estimate” annuity check betweenreceive an “estimate” annuity check between
60% - 80% of your actual expected annuity60% - 80% of your actual expected annuity
amount. This may continue for 4 to 9 monthsamount. This may continue for 4 to 9 months
depending on your agency and OPM.depending on your agency and OPM.
$$$$$ (Critical to plan for this “GAP”) $$$$$$$$$$ (Critical to plan for this “GAP”) $$$$$
19. CSRS/FERS Survivor BenefitsCSRS/FERS Survivor Benefits
Who may receive a survivor benefit?Who may receive a survivor benefit?
a spouse;a spouse;
a blood or adopted relative closer than first cousins;a blood or adopted relative closer than first cousins;
an ex-spouse;an ex-spouse;
a person to whom you are engaged to be married; ora person to whom you are engaged to be married; or
a person with whom you are living in a relationship that woulda person with whom you are living in a relationship that would
constitute a common-law marriage in a jurisdiction that recognizesconstitute a common-law marriage in a jurisdiction that recognizes
common-law marriagescommon-law marriages
insurable interestinsurable interest
**children covered automatically (eligibility rules apply)children covered automatically (eligibility rules apply)
20. CSRS/FERS SurvivorCSRS/FERS Survivor
Annuity OptionsAnnuity Options
The Application for Immediate RetirementThe Application for Immediate Retirement
This form is used to leave a portion of the retiree’s retirementThis form is used to leave a portion of the retiree’s retirement
annuity to a survivor, in the event the annuitant passesannuity to a survivor, in the event the annuitant passes
away before the survivor. Your choices:away before the survivor. Your choices:
No survivor annuity at deathNo survivor annuity at death
Survivor annuity for spouse upon deathSurvivor annuity for spouse upon death
Survivor annuity for former spouse (with court order)Survivor annuity for former spouse (with court order)
Survivor annuity for spouse and former spouse upon deathSurvivor annuity for spouse and former spouse upon death
Survivor annuity for Insurable interestSurvivor annuity for Insurable interest
24. TSP or Roth TSPTSP or Roth TSP
Contribution limits for 2015:Contribution limits for 2015:
$ 18,000 / year$ 18,000 / year
$ 6,000 (catch-up)$ 6,000 (catch-up)**
Payroll deduction onlyPayroll deduction only
*may participate in the calendar year of your*may participate in the calendar year of your
50th birthday or older50th birthday or older
25. TSP Investment FundsTSP Investment Funds
G Fund
(U.S. Treasury Securities)
F Fund
(Bonds: Govt., Asset-backed, Corporate and non-Corporate)
C Fund
(Common Stock: matches the S&P 500 Index)
S Fund
(Small Capitalization Stock Fund: Index of stocks of U.S.
companies not included in the S&P 500)
I Fund
(International Stock Index: Europe, Australia, Japan, New Zealand,
Singapore, Hong Kong, Israel)
27. Your TSP in retirementYour TSP in retirement
Withdrawal options you may use:Withdrawal options you may use:
Leave the money in the account.Leave the money in the account. **(see IRS rule)(see IRS rule)
In-Service Age Based withdrawal (59 ½ or older)In-Service Age Based withdrawal (59 ½ or older)
Partial withdrawal after retirementPartial withdrawal after retirement (one time only)(one time only)
Full withdrawal after retirement (4 options)Full withdrawal after retirement (4 options)
Single PaymentSingle Payment
Life AnnuityLife Annuity
Monthly PaymentsMonthly Payments
Mixed WithdrawalMixed Withdrawal
*(must begin Required Minimum Distributions by April 1, after turning 70 ½ or subject to forfeit of*(must begin Required Minimum Distributions by April 1, after turning 70 ½ or subject to forfeit of
balance and/or 50% penalty, unless still employed)balance and/or 50% penalty, unless still employed)
28. TSP In-Service Age Based withdrawal (59 ½)TSP In-Service Age Based withdrawal (59 ½)
31. TSP Life AnnuityTSP Life Annuity
TSP life annuity is converting all or a portion of your TSPTSP life annuity is converting all or a portion of your TSP
balance to an immediate, permanent , series of monthlybalance to an immediate, permanent , series of monthly
payments to last until your death.payments to last until your death. **
The payment is determined by:The payment is determined by:
Amount of TSP money transferred to annuityAmount of TSP money transferred to annuity
Age of participant at time of transferAge of participant at time of transfer
Current “annuity interest rate index”Current “annuity interest rate index”
Beneficiary designationsBeneficiary designations
* Payments will not change* Payments will not change
33. TSP monthly paymentsTSP monthly payments
May begin penalty free (not tax free) monthlyMay begin penalty free (not tax free) monthly
payments if you:payments if you:
““retire or separate in the year in which you areretire or separate in the year in which you are
turning 55 or older”turning 55 or older”
May continue to choose your TSP portfolioMay continue to choose your TSP portfolio
May choose the sizeMay choose the size** of monthly paymentsof monthly payments
May change the size of the monthly payments once perMay change the size of the monthly payments once per
year between Oct and Decyear between Oct and Dec
**(if younger than “turning 55” must use compute my payments)(if younger than “turning 55” must use compute my payments)
34. Retirement ConcernsRetirement Concerns
1. Will my FERS or CSRS annuity be large enough to cover1. Will my FERS or CSRS annuity be large enough to cover
my expenses in retirement?my expenses in retirement?
2. If there is a “GAP” how will I cover it?2. If there is a “GAP” how will I cover it?
FERS supplement, TSP, IRA, ??FERS supplement, TSP, IRA, ??
3. How much FERS or CSRS Survivor Annuity should I3. How much FERS or CSRS Survivor Annuity should I
choose?choose?
4. Do I need additional Life Insurance?4. Do I need additional Life Insurance?
5. How should I use my TSP in retirement?5. How should I use my TSP in retirement?
6. Should I consider using an IRA?6. Should I consider using an IRA?
7. When should I take my SS benefit? 62, 65-67, or 70?7. When should I take my SS benefit? 62, 65-67, or 70?
8. Should I get Medicare Part A and Part B?8. Should I get Medicare Part A and Part B?
37. Social SecuritySocial Security
If you have earned your 40 credits needed to qualify forIf you have earned your 40 credits needed to qualify for
Social Security benefits you may start to collect as early as:Social Security benefits you may start to collect as early as:
Age 62Age 62** (70%-80% benefit)(70%-80% benefit)
Age 65 - 67 (100% benefit)Age 65 - 67 (100% benefit)
Age 70 (up to 130% benefit)Age 70 (up to 130% benefit)
** Subject to Social Security earnings test!Subject to Social Security earnings test!
39. Under full retirement ageUnder full retirement age $15,720$15,720
(lose $1 for every $2 you earn over)(lose $1 for every $2 you earn over)
The year of full retirement ageThe year of full retirement age** $41,880$41,880
(lose $1 for every $3 you earn over)(lose $1 for every $3 you earn over)
Past your full retirement age NO TESTPast your full retirement age NO TEST
* prior to the month* prior to the month
Social SecuritySocial Security
(earnings test)(earnings test)
40. Strategy #1:Strategy #1: File-and-Suspend RuleFile-and-Suspend Rule is Ending - The file-and-suspend rule, which was written into Social Security rules inis Ending - The file-and-suspend rule, which was written into Social Security rules in
2000, provides couples the opportunity to coordinate and maximize their Social Security benefits – thereby increasing the2000, provides couples the opportunity to coordinate and maximize their Social Security benefits – thereby increasing the
total amount of money they receive from the program. Here’s how it worked – when a spouse reaches full retirement agetotal amount of money they receive from the program. Here’s how it worked – when a spouse reaches full retirement age
(presently 66), that individual can file for Social Security (creating a filing date) and quickly suspend their benefits (to be(presently 66), that individual can file for Social Security (creating a filing date) and quickly suspend their benefits (to be
deferred until the a date of their choosing up to age 70 in order to earn an additional 8% per year in benefits).By filing fordeferred until the a date of their choosing up to age 70 in order to earn an additional 8% per year in benefits).By filing for
Social Security at FRA, this worker’s spouse can then file a spousal benefits claim with Social Security and receive 50% ofSocial Security at FRA, this worker’s spouse can then file a spousal benefits claim with Social Security and receive 50% of
the dollar value of the working spouse’s benefits, once they reach FRA as well. You see, one spouse must have anthe dollar value of the working spouse’s benefits, once they reach FRA as well. You see, one spouse must have an
established filing date in order for the other spouse to be eligible to receive spousal benefits.established filing date in order for the other spouse to be eligible to receive spousal benefits.
Strategy #2:Strategy #2: Retroactive Lump Sum Payments EndingRetroactive Lump Sum Payments Ending. This is actually an additional benefit to the file-and-suspension. This is actually an additional benefit to the file-and-suspension
rule that’s also coming to an end. When you ‘suspend’ your benefits under the current file-and-suspend rule, you mayrule that’s also coming to an end. When you ‘suspend’ your benefits under the current file-and-suspend rule, you may
choose to request payments that will retroactively provide an accrued lump sum payment based on what you’ve deferredchoose to request payments that will retroactively provide an accrued lump sum payment based on what you’ve deferred
since you initially filed for benefits. For example, if Jim filed and suspended his benefits at age 66, then his benefits wouldsince you initially filed for benefits. For example, if Jim filed and suspended his benefits at age 66, then his benefits would
grow 8% a year until age 70. But let’s say he could no longer work and decided to take his benefits at age 68.Jim could un-grow 8% a year until age 70. But let’s say he could no longer work and decided to take his benefits at age 68.Jim could un-
suspended his benefits and retroactively generate a lump sum payment for the money he would have been paid for the lastsuspended his benefits and retroactively generate a lump sum payment for the money he would have been paid for the last
two years. Going forward, he would just be paid monthly payments that would amount to what he would have been paidtwo years. Going forward, he would just be paid monthly payments that would amount to what he would have been paid
monthly if he had started taking his benefits at age 66.This strategy has allowed people to hedge their bets. If they aremonthly if he had started taking his benefits at age 66.This strategy has allowed people to hedge their bets. If they are
healthy and are able to work until age 70, great; if not, they can pull this retroactive lump sum trigger. However, the newhealthy and are able to work until age 70, great; if not, they can pull this retroactive lump sum trigger. However, the new
rules close the door to retroactively un-suspending benefits.rules close the door to retroactively un-suspending benefits.
Strategy #3:Strategy #3: Restricted Application Ending.Restricted Application Ending. This rule allows a beneficiary who’s between their full retirement age and 70This rule allows a beneficiary who’s between their full retirement age and 70
to file a restricted application to claim spousal benefits and defer their own benefits until age 70. Note that this is different,to file a restricted application to claim spousal benefits and defer their own benefits until age 70. Note that this is different,
though similar, to the file-and-suspend rule. That means that they can start collecting a check when they hit FRA and switchthough similar, to the file-and-suspend rule. That means that they can start collecting a check when they hit FRA and switch
it out for their own, deferred, bigger check when they hit age 70. Sweet deals, right? Yes they were and they’re coming to ait out for their own, deferred, bigger check when they hit age 70. Sweet deals, right? Yes they were and they’re coming to a
swift end. The “deemed filing” rule is being extended to age 70, which means that a spouse may only collect the larger ofswift end. The “deemed filing” rule is being extended to age 70, which means that a spouse may only collect the larger of
their own, or their spouse’s benefits check. So you can’t defer your own benefits until age 70 and switch from your spouse’stheir own, or their spouse’s benefits check. So you can’t defer your own benefits until age 70 and switch from your spouse’s
check to your own, bigger check.check to your own, bigger check.
Social SecuritySocial Security
(New for 2016)(New for 2016)
41. Social SecuritySocial Security
(New for 2016)(New for 2016)
No cost-of-living adjustment (payment increase)No cost-of-living adjustment (payment increase) - Since it’s been determined by the Bureau of Labor Statistics that there was- Since it’s been determined by the Bureau of Labor Statistics that there was
no increase in inflation, which is measured by the Consumer Price Index (CPI-W), there won’t be a 2016 cost-of-living adjustmentno increase in inflation, which is measured by the Consumer Price Index (CPI-W), there won’t be a 2016 cost-of-living adjustment
in Social Security benefits. However, starting with the 3rd quarter of 2014 to the 3rd quarter of 2015, there was no increase inin Social Security benefits. However, starting with the 3rd quarter of 2014 to the 3rd quarter of 2015, there was no increase in
inflation, so the law dictates that there can be no COLA in 2016.inflation, so the law dictates that there can be no COLA in 2016.
Medicare Premium ChangesMedicare Premium Changes Roughly 70% of Social Security beneficiaries are protected from Medicare Part B premiumRoughly 70% of Social Security beneficiaries are protected from Medicare Part B premium
increases in 2016 thanks to the “hold harmless” rule, which helps beneficiaries avoid lowering their net Social Security benefits.increases in 2016 thanks to the “hold harmless” rule, which helps beneficiaries avoid lowering their net Social Security benefits.
However, people newly entitled to Part B and higher income beneficiaries may see an increase in premiums.However, people newly entitled to Part B and higher income beneficiaries may see an increase in premiums.
Tax Rate Maximum Remains the Same. JTax Rate Maximum Remains the Same. Just as there won’t be a cost-of-living adjustment for 2016, there will also be noust as there won’t be a cost-of-living adjustment for 2016, there will also be no
changes made to the Social Security tax cap, so earnings below $118,500 will be subject to the Social Security portion of thechanges made to the Social Security tax cap, so earnings below $118,500 will be subject to the Social Security portion of the
payroll tax, but not earnings above that amount in 2016.For employees, this tax rate totaled 7.65% in 2015 and will remain thepayroll tax, but not earnings above that amount in 2016.For employees, this tax rate totaled 7.65% in 2015 and will remain the
same in 2016 – 6.20% for Social Security and 1.45% for Medicare. For the self employed, this tax rate totaled 15.30% in 2015same in 2016 – 6.20% for Social Security and 1.45% for Medicare. For the self employed, this tax rate totaled 15.30% in 2015
and will remain the same in 2016.and will remain the same in 2016.
Social Security Maximum Benefits FallSocial Security Maximum Benefits Fall. Workers who claim their Social Security payments at full retirement age will make $24. Workers who claim their Social Security payments at full retirement age will make $24
less in 2016 than they made in 2015 – adjusting to $2,639 in 2016, down from $2,663 in 2015.This is due to the unique mix of noless in 2016 than they made in 2015 – adjusting to $2,639 in 2016, down from $2,663 in 2015.This is due to the unique mix of no
COLA (cost-of-living adjustment) and an increase in the national average wage index last year.COLA (cost-of-living adjustment) and an increase in the national average wage index last year.
Earnings Limitation Remains the SameEarnings Limitation Remains the Same. The earnings limit for Social Security beneficiaries who work and claim Social Security. The earnings limit for Social Security beneficiaries who work and claim Social Security
payments will remain unchanged in 2016 at $15,720 for beneficiaries younger than full retirement age. If you earn more than thispayments will remain unchanged in 2016 at $15,720 for beneficiaries younger than full retirement age. If you earn more than this
amount and have not reached full retirement age, you will have $1 withheld for every $2 you earn above that cap. If you hit fullamount and have not reached full retirement age, you will have $1 withheld for every $2 you earn above that cap. If you hit full
retirement age in 2016, you can make up to $41,880, and $1 for every $3 above this cap will be withheld. However, once youretirement age in 2016, you can make up to $41,880, and $1 for every $3 above this cap will be withheld. However, once you
reach full retirement age, no withholdings on income apply and your benefit payments will be re-calculated to account forreach full retirement age, no withholdings on income apply and your benefit payments will be re-calculated to account for
payments that were withheld and current earnings.payments that were withheld and current earnings.
43. FEGLI:FEGLI:
BasicBasic
Extra BenefitExtra Benefit
Option AOption A
Option BOption B
Option COption C
Federal Employee'sFederal Employee's
Group Life InsuranceGroup Life Insurance
44. Basic is annual salary rounded up to nearestBasic is annual salary rounded up to nearest
$1000, then add $2000.$1000, then add $2000.
Cost is flat rate:Cost is flat rate:
15.0 cents / $1000 per pay period while employed15.0 cents / $1000 per pay period while employed
32.5 cents / $1000 per month in retirement32.5 cents / $1000 per month in retirement**
** only if elect 75% reduction at 65only if elect 75% reduction at 65
FEGLI BasicFEGLI Basic
46. FEGLI Option AFEGLI Option A
Flat $10,000Flat $10,000 (must have basic ins)(must have basic ins)
Pre-retirement cost is $ .30 and $ 6.0 per pay periodPre-retirement cost is $ .30 and $ 6.0 per pay period
Increases every 5 yearsIncreases every 5 years
After RetirementAfter Retirement
May continue if Basic Coverage is continued, and payMay continue if Basic Coverage is continued, and pay
Premiums until age 65Premiums until age 65
No cost after age 65No cost after age 65
Reduces by 2% per month until $2,500 remainsReduces by 2% per month until $2,500 remains
47. Option BOption B
Annual salary, rounded to the nearest $1,000Annual salary, rounded to the nearest $1,000
then x 1,2,3,4, or 5then x 1,2,3,4, or 5..
Cost increases every 5 yearsCost increases every 5 years
(employed or retired)(employed or retired)
May choose to cancelMay choose to cancel** or continue in retirementor continue in retirement
* Caution: if you cancel you may not be able to re-enroll!!* Caution: if you cancel you may not be able to re-enroll!!
FEGLI Option BFEGLI Option B
56. Retirement ConcernsRetirement Concerns
1. Will my FERS or CSRS annuity be large enough to cover1. Will my FERS or CSRS annuity be large enough to cover
my expenses in retirement?my expenses in retirement?
2. If there is a “GAP” how will I cover it?2. If there is a “GAP” how will I cover it?
FERS supplement, TSP, IRA, ??FERS supplement, TSP, IRA, ??
3. How much FERS or CSRS Survivor Annuity should I3. How much FERS or CSRS Survivor Annuity should I
choose?choose?
4. Do I need additional Life Insurance?4. Do I need additional Life Insurance?
5. How should I use my TSP in retirement?5. How should I use my TSP in retirement?
6. Should I consider using an IRA?6. Should I consider using an IRA?
7. When should I take my SS benefit? 62, 65-67, or 70?7. When should I take my SS benefit? 62, 65-67, or 70?
8. Should I get Medicare Part A and Part B?8. Should I get Medicare Part A and Part B?
58. Free Retirement ReportFree Retirement Report
What does it Cover ? Ø Your Pension
Ø Eligibility for Creditable Service
Ø When you can RETIRE?
Ø What age you can Retire?
Ø What Income you will Receive?
Ø Spousal Benefit – Cost – Income!
Ø FEHB – Cost and Coverage!
Ø Social Security – What you will receive?
Ø TSP – Allocations from past through present -
returns
Ø What will be my GAP needed in Retirement?
And much more – yours to keep!
59. Free Retirement ReportFree Retirement Report
Case Studies - I am working on! # 1
Individual was CSRS FOR 30+ Years - Retired 2 years ago, checks are coming in
normal until 3 months ago - OPM froze the pension statinga $24,000 over
payment - reason - Individual transitioned from CSRS to FERS.
Problems:
1. Not able to pay monthly Living expenses
2. Reduced Social Security Amount because of CSRS
3. If FERS Social Security was not paid - if not paid who pays Individual or Fed.
4. If FERS no matching 1% + ever applied
5. HR department unable to Help
6. Backlog on OPM unable to process faster solutions or resolutions.
7. Past records need to be attained - time consuming against no paycheck.
8. No money for legal defense.
9. The List goes even deeper of issues at hand here.
Solution: - Just remember record keeping, it is so Important.
60. Free Retirement ReportFree Retirement Report
Case Studies - I am working on! # 2
Individual was paying into FEGLI - After sitting down with them here is what we
uncovered: Individual looked at LES ( Leave and Earnings Statement ) only
looked at left side deductions.
Problems:
1. Individual was paying only $19.40 bi - weekly
2. Individual actually after showing the left side was paying an additional $233.00
bi - weekly.
3. Total client was paying = $19.40+$233.00 = $252.40 ( bi-weekly).
4. Individual has heart attack - just kidding - but almost.
5. Individual did not know - and wanted it to stop immediately.
6. Individual was going to work 4 more years until retirement.
7. Individual saves the following - $233 x 26 x 4 = $24,232
Solution: Look at LES - Very Important.
61. Free Retirement ReportFree Retirement Report
Case Studies - I am working on! # 3
Individual was paying into FEGLI - After sitting down with them here is what we
uncovered: Individual was paying into the Family participation side --covering
family members.
Problems:
1. They were not Married.
2. Their children were grown.
3. In fact the children should have not been covered for over 15 years
4. So Premiums had been paid for over 15 years.
5. Will they receive a refund for over payment?
6. HR is now working to resolve - before they retire.
7. Will they get credit, premiums returned, interest on amount? Who knows yet.
Solution: Look at LES - Very Important.
62. Free Retirement ReportFree Retirement Report
Case Studies - I am working on! # 4
Individual retired in March 2015 - I have been working with Individual for 3 years,
they called me up to retire - I got the paperwork ready for them, all in order,
submitted to HR all in order - submitted to OPM - they were released from agency
- per Individuals request - they wanted due to age and service a LUMP SUM - all
paperwork in order.
Problems:
1. OPM stated they have no SF3106 for refund. It was with all retirment
paperwork.
2. After three additional submissions since March - OPM states they have never
recveived the forms - to please fill out and submit.
3. After 2 more submissions and letters - OPM has still not received paperwork.
4. This Lump sum was for starting his Business - which is on partial hold.
Solution: Very Important - to do followup at and after retirement in checking your
pension amount - deducations - beneficiaries - etc.
Minimum Retirement Age is based on year of birth.
If born before 1948, MRA is age 55.
(Read the dates and age from the slide or just read some examples)
A transferee from CSRS to FERS, this chart becomes their new rules for age to retire.
Under any of the government’s retirement systems, there are choices to be made regarding FEGLI at retirement (3 choices: use form called Election of Retirement Basic Life Coverage)
The options on the basic are:
Choose to let basic reduce 75%, until there’s 25% left for the rest of their life.
- This is a 2% reduction per month after retirement or age 65 whichever is later.
- There is no cost for this option after age 65.
2. Choose to let basic reduce only 50%, leaving 50% for the rest of their life.
- This is a 1% reduction per month and there is a cost of $.59/$1,000 per month after age 65.
Choose to not to allow basic to reduce at all. Keep 100%.
- This cost is $2.04/$1,000 per month after age 65.
Rules:
Immediate annuity
Insured at time of retirement and for past 5 years
We think the rules about carrying your FEHB into retirement are so important that I have listed them for you in writing here:
For you to continue this program into retirement you must:
1. Be insured on the date of your retirement.
2. Retire on an immediate annuity.
3. Been enrolled as a primary or dependent, for 5 years immediately preceding your retirement or the first opportunity you had to enroll if less than 5 years.
4. You must provide a survivor benefit at the tie of retirement, in order for your spouse to keep the FEHB in retirement if you die.
If all of the above is met, the premium is the same as for non-retirees.
You’re allowed to pay your FEHB premiums with pre-tax dollars. Unless you signed a “waiver,” you are already in this “Premium Conversion Program”
Also allowed to have medical out-of-pocket costs within a calendar year paid with pre-tax funds
Up to $4,000 a year
Also allowed to pay Day Care or Elder Care costs out of pocket with pre-tax dollars up to $5,000 at year
However:
This is a “use-or-lose” program -- must use all in your Flexible Spending Account by the end of each calendar year, or you lose it.
Health program under Social Security -- both CSRS and CSRS Offset are eligible for this at age 65.
If you look on your LES, you will note 1.45% is deducted pay every pay period. This goes toward Part A of Medicare. Part A covers expenses while in the hospital.
Part B is the Dr and other medical costs. Whether you should sign up for Part B is based on your present FEHB plan with the government.
Some of these plans do not require you to sign up for Part B of Medicare. Some FEHBs will pay for expenses under Part B.
Some FEHBs will not pay unless Part B pays. You need to get a copy of your FEHB booklet as you get closer to Medicare eligibility and read whether they require you to sign up for Part B or not.
However, Part B has penalties for late enrollment. If you are retired at age 65, you have three months before your 65 birthday, the month you are 65 and three months after your age to sign up for Part B with no penalty.
