Updated: May 26
Happy New Year! Welcome to the January Retire Federal newsletter that covers the latest issues of interest for retiring and retired federal employees to include reminders to the changes for 2022 . Retire Federal exists to help prepare federal employees for retirement, provide assistance when applying for benefits, and guidance to those who need direction when navigating the maze of all the parts of your retirement benefits that fit together for financial independence.
Need to Know
Annuitants may want to review their statements to learn how the 2022 COLA increased your monthly gross income as well as to confirm the health, dental, and/or vision benefits plan you may have elected during open season were processed correctly. The statements are available online. OPM said there is a delay in the postal mailing of the Annual Notice of Annuity Adjustment. It may not be received until the end of January 2022.
Employees may want to review their pay statements later this month to learn how the January Pay Adjustment increased your salary as well as confirm the health, dental, and/or vision benefit plan as well as any Flexible Spending Account you may have elected during the open season were processed correctly.
Employees check TSP contributions: The maximum increased to $20,500 for 2022. The catch-up contributions for those turning age 50 in 2022 or older remain the same at $6,500. You must contribute at least 5% per pay period to receive the full agency matching.
To contribute the maximum for 2022, you will need to contribute $789 per pay period in order to spread the $20,500 evenly over 26 biweekly pay periods. In order to contribute $27,000 ($20,500 + $6,500) for 2022, your biweekly contribution over 26 pay periods will total $1,039. You can use this calculator if you need to make an adjustment during the year.
You can contribute the annual limitation for the year in the year you retire. For example, if you plan to retire in June you can still contribute $27,000.
Limits and Carryover of FSA: For the 2022 plan year, Health Care Flexible Spending Accounts (HCFSA) and Limited Expense Flexible Spending Accounts (LEXFSA) have a minimum enrollment amount of $100 and a maximum amount of $2,850. The carry over amount increased to $570, however, any available funds remaining from the end of 2021, will also carry over to 2022, if you re-enrolled for the 2022 plan year. The Dependent Care Flexible Spending Account (DCFSA) limit remained the same at $5,000 for 2022. The 2021 grace period is extended through December 31, 2022 for all DCFSA participants.
COLAs for CSRS and FERS retirees was effective December 1 and reflected in the January annuity payment. CSRS retirees received 5.9% and most FERS retirees 4.9%. Your first COLA is prorated based on the number of months you were retired after December 2020. Most FERS retirees will see their first COLA after they turn age 62, however special groups such as law enforcement officers and firefighters receive immediate COLAs, regardless of their age at retirement. Disability and survivor annuitants also receive annual FERS COLAs, regardless of age. The FERS supplement is not adjusted for COLA.
1099Rs and W4 should be available at the end of the month
IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits for 2021 tax preparation is now available.
The annual Earnings Test applies to most retirees who receive the FERS Annuity Supplement and individuals receiving a Social Security benefit who are under their Full Retirement Age (65 - 67, depending on your year of birth) increases to $19,560 for 2022. In the spring of 2022 the Office of Personnel Management will mail the 2021 earnings surveys to retirees who are receiving the FERS Supplement. If the survey earnings are in excess of the 2021 earnings limit of $18,960, the supplement will be reduced by $1 for every $2 over this limit or terminated beginning with the July 1, 2022. It will be reflected in the August check which pays for the month of July. For special groups such as law enforcement officers and firefighters, the earnings limit doesn't apply until after you reach the FERS Minimum Retirement Age (55 - 57, depending on your year of birth).
The Social Security Administration announces their offices will be open again. It is a work in progress as no date has been announced, yet. In the meantime, you can call 1-800-772-1213 or use their online service at www.ssa.gov. You may review your mySocialSecurity account to learn more specific information on your retirement benefit.
The Medicare Part B standard premium rate increased to $170.10 / month / person for 2022 (an increase of $21.60 / month over 2021).
Beneficiaries who file individual tax returns with modified adjusted gross income less than or equal to $91,000 will pay the standard rate.
Beneficiaries who file joint tax returns with modified adjusted gross income less than or equal to $182,000 will each pay the standard rate.
Review 2022 Medicare Income-Related Monthly Adjustment Amounts (IRMAA)
If Social Security determines that you should pay an IRMAA, they will mail you a notice called an initial determination. This notice should include information on how to request a new initial determination. You can request that Social Security revisit its decision if you have experienced a life-changing event that caused an income decrease, or if you think the income information Social Security used to determine your IRMAA was incorrect or outdated.
Medicare Annual Verification Notices may cause some questions so review Medicare's FAQs on the topic.
Contact the Social Security Administration at 1-800-772-1213 if your income has gone down. They may have you complete form SSA-44 Medicare IRMAA Life Changing Event.
Plan your Federal Retirement Podcasts with Tammy Flanagan and Micah Shilanski, CFP partner provide fun and informative retirement planning guidance.
Retirement Planning Tammy's weekly column appearing on www.govexec.com covers what you need to know for a successful transition to retirement. Get the latest stories and updates sent to your inbox every Friday.
TSP offers free webinars for federal employees and uniform members.
Tammy's team provides one-on-one consultations on all your important retirement decisions as well as navigating FEHB and Medicare. They can also review your retirement forms to ensure they are complete. Contact the team here.
NARFE Federal Benefits Institute's upcoming webinars (must be a NARFE member to register). Join NARFE today!
Tammy Flanagan recently presented a webinar for Special Category Employees (Federal law enforcement officers (LEOs), firefighters (FFs), and air traffic controller (ATCs)) to help maximize your federal benefits when planning a "special" retirement from federal employment From Employee to Annuitant: Special Retirement Considerations for Special Category Employees.
Mark Keen, CFP® to discover Post-Retirement Tax Planning for Federal Employees on Wednesday, February 16 at 2 p.m. ET
Tammy will enlighten all on the decision points of when to retire in It's Not Magic: Target Your Best Retirement Date on Tuesday, March 15 at 2 p.m. ET
Tammy will provide important tips on the application in Preparing Retirement Forms: Costly Errors and How to Avoid Them on Wednesday, April 6 at 2 p.m.