Happy Spring! Welcome to the March issue of the Retire Federal newsletter that covers the latest topics of interest for retiring and retired federal employees. 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
TSP changes coming soon: Later this spring TSP is planning to introduce new features thanks to a new record keeping system:
Virtual Assistance 24/7
Mobile App to check your balance, track fund performance, make transaction requests, etc.
Connect with a TSP Representative during business hours using a live-agent chat function
Redesigned My Account interface
Complete more transactions online
Simplified process with specialized support to roll money from an IRA or other retirement plan into the TSP
Process transactions using electronic signatures
Additional investment options
and more
Note: Be prepared as the TSP will need to suspend some transactions and services temporarily in May, 2022. During this time your money will remain invested in the TSP funds. The TSP will continue to send correspondence with more details as the new record keeping system is rolled out.
Employees check TSP contributions: The maximum increased slightly to $20,500 for 2022. The catch-up contribution for those turning age 50 in 2022 or older remains the same at $6,500. 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, here's how:
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.
An example for retiring this year: Say you plan to retire in September, you can still contribute $27,000 by subtracting what you have already contributed for 2022 and divide the remainder by the number of pay periods you have left to work until retirement. Then you can adjust your payroll deduction.
Note: You cannot contribute to the TSP from your lump sum annual leave payment!
To learn more about all of the benefits of the TSP, you can register to attend a free webinar.
Tax Time is here and you may want these resources:
IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits for 2021 tax preparation.
You will find your 1099Rs on OPM Services Online, My Social Security, and TSP - My Account.
Employees should find their W4 on agency online systems, such as Employee Express, LiteBlue, EPP, myPay.
OPM announced an additional security layer is coming. This will impact the OPM Services Online system which provides access to retirement accounts. OPM will add an authentication service called Login.gov. Retirees use OPM Services Online to access their CSRS or FERS annuity account with OPM. It allows retirees to change their tax withholdings, bank account information, set up allocations, review their annuity statements, etc. For new retirees, remember that OPM will receive your application package from your agency payroll office following your retirement. You will be notified by mail and you will receive access to OPM Services Online along with your Civil Service Active (CSA) number that will identify you as a federal annuitant. Stay tuned for more details as they become available.
Are you looking for a trusted professional who is knowledgeable about federal retirement benefits? If you need a financial planner or an estate planning attorney, Retire Federal has a trusted provider list available.
FERS Annuity Supplement surveys are on their way. The annual Earnings Test applies to most retirees who receive the FERS Annuity Supplement . Later this spring, the Office of Personnel Management will mail the 2021 earnings survey to those retirees. If your earned income (not including retirement income) is 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 your July annuity payment that you will receive on August 1st. 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 earnings limit increased to $19,560 for 2022.
The Medicare Part B standard premium rate increased to $170.10/month/person for 2022.
Medicare looks at your Modified Adjusted Gross Income (MAGI) two years prior to the current year. The 2022 rates are based on your 2020 MAGI.
Beneficiaries who file individual tax returns with modified adjusted gross income (MAGI) less than or equal to $91,000 will pay the standard rate.
Beneficiaries who file joint tax returns with MAGI 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.
Learning Opportunities
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.
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