top of page
Search

Summer 2024 Newsletter

Thank you for signing up to receive the Retire Federal newsletter! This issue focuses on what you need to know, whether mid-career or starting your pre-retirement planning. The next issue's focus will be on retirees.  Retire Federal exists to help prepare federal employees for retirement, assist them when applying for benefits, and guide those who need direction when navigating the maze of all the parts of your retirement benefits that fit together for financial independence.


 


Employees Need to Know

 

  • Maximize your TSP Contributions

  • Check your TSP contributions: The maximum for 2024 is $23,000. The catch-up contribution for those turning 50 in 2024 or older is $7,500. You must contribute at least 5% per pay period to receive the full agency match.

  • If you wish to contribute the maximum for the year 2024, here's how:

  • You must contribute $885 per pay period to spread the $23,000 evenly over 26 biweekly pay periods. To contribute $30,500 ($23,000 + $7,500) for 2024, your biweekly contribution over 26 pay periods will total $1,174.

  • You can use this calculator if you need to adjust during the year. An example for retiring mid-year: Say you plan to retire in September; you can still contribute $30,500 by subtracting what you have already contributed for 2024 and dividing the balance by the number of remaining pay periods until your retirement. Now, adjust your payroll deduction. Your Year-to-Date (YTD) contributions are on your Earnings and Leave (Pay) Statement.

 

Note: When you retire or resign from federal service, you cannot contribute to the TSP from your lump sum annual leave payment! Read OPM's Fact Sheet on Lump Sum Payments for Annual Leave, where you will learn that you will receive a lump-sum payment for any unused annual leave when you resign or retire from Federal service or enter active duty in the armed forces and elect to receive a lump-sum payment. Generally, a lump-sum payment will equal the pay you would have received had you remained employed until the period covered by the annual leave expires.

 

  • Insurance Reminders:

  • Is it time to review your Federal Employees Group Life Insurance (FEGLI) coverage and/or Designation of Beneficiaries? Details on what to consider are in the Fall 2022 Newsletter.

  • Is it time to review your FEGLI coverage? Did you know you can reduce your coverage by completing a Life Insurance Election Form, SF 2817, at any time? Remember that Optional FEGLI increases every five years on your birthday (50, 55, 60, etc.).

  • Employees may increase Option B or cancel the Basic or Option A waiver at any time. However, you must submit Form SF 2822, Request for Insurance (including Part D, the statement from your physician), and SF 2817.

  • If you wish to continue insurance into retirement, you must meet these two conditions:

  • Eligible for immediate retirement (including retiring at your MRA with ten years or more creditable service).

  • For FEHB and FEGLI to continue, you must have been covered for the five years immediately preceding your retirement. This may include time covered as a family member on your spouse's FEHB coverage or coverage under TRICARE (you must be covered under FEHB on the last day of employment).

  • You can apply for Medicare Part A at age 65, whether you remain employed or have already retired. Employees over age 65 and spouses of employees over age 65 and covered by "current employment" health insurance will have a Special Enrollment Period to enroll in Medicare Part lasting up to eight months following the retirement date.

  • Planning to Retire soon?

  • To qualify for an unreduced immediate retirement, you may retire at your Minimum Retirement Age (57 if you were born in 1970 or later) with at least 30 years of creditable service; at age 60 with at least 20 years; or at age 62 with as little as five years of civilian service covered by FERS retirement contributions. An "immediate" retirement will commence within 31 days of your separation from federal employment.

  • You may apply for immediate retirement if you separate from federal employment at your MRA and have at least ten years of service but don't meet the above requirements. However, it will be reduced by five percent every year you are under age 62. To avoid this reduction, you may postpone submitting the retirement application until later.

  • NARFE (www.narfe.org) members may watch Tammy's webinar, "Understanding Deferred/Postponed Retirement Options," which explains the difference between deferred and postponed retirements. You should choose your retirement date carefully. A postponed MRA + 10 retirement must commence at least two days before age 62. If you select a date after your 62nd birthday, this will be a "deferred" retirement, and you will NOT be eligible to reinstate your insurance. Follow the instructions on Form RI 92-19, Application for Deferred or Postponed Retirement (FERS)l.

  • To learn more about the process for your application, see OPM Retirement Quick Guide and these Planning for Retirement Tips from OPM.

  • Are you seeking a trusted financial planning professional who is knowledgeable about federal retirement benefits? Retire Federal has a trusted provider list if you need a financial planner or an estate planning attorney.

  • If you would like comprehensive and personalized, one-on-one retirement benefits counseling to help you navigate the retirement process, contact one of our retirement experts at Retire Federal. We can assemble the puzzle pieces of your CSRS or FERS retirement benefit, Social Security, Thrift Savings Plan, and valuable insurance so that your retirement income will adequately replace your federal salary and help ensure a smooth transition to your life after retirement.


Upcoming Opportunities with TSP

 

  • Did you know that the TSP has online training available? Sign up to attend a presentation today!

  • Beginning January 1, 2025, participants aged 60 through 63 are eligible for a higher catch-up limit. For these participants, the IRS catch-up contribution limit increases to $10,000 (indexed to inflation) or 150% of the regular catch-up limit. 

  • Visit the TSP Website for additional Secure 2.0 changes, such as changes to Required Minimum Distributions, reduced excise tax on missed RMD payouts, and the news that Roth balances are no longer subject to RMDs before death.


Recent Question

 

Question: Are the retirement estimates our agency provides reliable and accurate?

 

Answer: Many agencies use GRB Platform or FEDHR Navigator to allow employees to calculate their retirement estimates. The software provides a good summary of your retirement benefits. However, the information and retirement estimates are only as good as the data in the system.

  • A key data point to ask your HR retirement benefits specialist is if your Service Computation Date (SCD) for "retirement" differs from your "leave" SCD. Review form SF 50 Notification of Personnel Action filed in your eOPF.

  • Block 30 indicates your retirement coverage, and block 31 indicates your "leave" SCD. Your "retirement" SCD may be different if there is federal civilian or military service that counts for leave accrual but not for retirement eligibility or computation.

  • If you have retired from the military, these two SCDs may differ.

  • If you have civilian service that was not adequately documented or covered by FERS contributions, this is also a red flag that there may be a difference between these two dates.

  • If you ever had a work schedule other than full-time (part-time, intermittent, WAE, or LWOP), ensure this has been accounted for in your leave and retirement SCDs.

  • The electronically generated retirement estimates may also not accurately show your withholdings for insurance or federal and state income tax. Be sure to do tax planning before you retire to be sure that your "net" retirement income will adequately replace your net paycheck.

  • Reductions to your retirement should also be considered, including survivor benefit elections, former spouse apportionments, an age reduction if retiring under the MRA + 10 retirement option, and the proration for a part-time work schedule.

  • These items will reduce your gross retirement. This reduces your taxable income. These are not withholdings from your monthly retirement benefit. The only withholdings from your FERS or CSRS retirement benefit are taxes and insurance.


What is New

 

Audio Show

A new audio show focuses on Federal Employees: Your Federal Life on the Federal News Network. The government employs some two million people, but no two federal employees are alike. That's why career and retirement planning can be complicated. For instance, what if you're old enough to retire but have less than 30 years of service? For insight into what's known as MRA plus 10, listen to long-time federal retirement expert Tammy Flanagan.

 

TSP Updates 

  • TSP added Biometrics to the TSP app (i.e. fingerprint and face recognition).  

  • The 30 day wait period for post separation withdrawals was eliminated effective May 15th.  The 30 day wait period will also be eliminated for the 4 time-age 59 1/2 in service withdrawals.

  • There is a new TSP Annuity Calculator Secure Act 2.0, for the year you turn 64. You will not be able to contribute the super catch up for that entire year.  Example: Employee turns age 64 on March 15, 2026, then for the 2026 year they will be limited to the regular catch up amount of $7,500 (assuming IRS catch up amount remains $7,500).  

  • Next year, the "How Much Can I Contribute" calculator will be updated to include the Secure Act, Sec 109 change.  Therefore, you will be able to use the calculator in 2025, to determine your contribution limit amounts no matter how old you will be in 2025.

 

Good-bye 

For Your Benefit on the Federal News Network had it's last episode on February 20. Click here to listen to host Bob Leins, CPA® welcome back the original program guests: Tammy Flanagan, NITP Senior Benefits Director, Karen Schaeffer, CFP®, Marc Levine, Esquire, and Tom O’Rourke, Counsel.



 


What to Save

 

  • Keep a personal copy of these critical personnel documents filed in your Electronic Official Personnel Folder (EOPF)

  • Notification of Personnel Action Statements (SF 50s) documenting beginning and ending dates, retirement coverage, change of work schedules, and highest three years of salary (including locality pay)

  • Proof of enrollment for FEHB and FEGLI at least five years immediately before retirement/separation

  • Military discharge form DD 214s

  • Certification for LEO, Firefighters, ATC, Customs & Border Protection Officers, or other employees eligible for an enhanced retirement benefit. Verify your agency has provided certification documenting service requirements in your eOPF.

Other documents to keep with your retirement papers:

  • Last Earnings and Leave Statements

  • Marriage Certificates

  • Divorce degrees/Court Orders


Mark Your Calendars

 

Valuable training opportunities are available in the coming months! Sign up at NARFE Federal Benefits Institute to learn more to help you plan for your retirement:

 

  • June 20: Retirement Processing Prep Smoothing the Transition

  • July 25: TSP:  Should I Stay or Should I Go?

  • September 26: How to Plan for Long-Term Care

  • October 17: Medicare Part B- To B or Not to B

  • October 24: Open Season Preview with FEDVIP (Dental & Vision Insurance)

  • October 31: Medicare Advantage Plans (In FEHB and Out of it)

  • November 1: Postal Service Health Benefits Program

  • November 12: Choosing the Best FEHB with Medicare

  • November 14: Choosing the Best FEHB without Medicare

  • November 21: FEHB Prescription Drug Program

  • December 12: Estate Planning

 

NARFE members enjoy a wealth of benefits that serve their information and financial needs. In addition, they have the satisfaction of having put their support behind a legislative powerhouse that is determined to defend the federal community. Benefits for federal employees and retirees are a popular target for legislators and administrations trying to find budget cuts, but those are your hard-earned benefits. NARFE helps protect those benefits and helps you manage those benefits, which can be confusing and frustrating. In fact, if you don’t do it right, you could wind up leaving money on the table.

23 views0 comments

Recent Posts

See All

コメント


bottom of page