Here are a series of financial tips/information for designed for quick reading, written in the style of Twitter.
- Generally poor returns for the stock funds for August 2019 in the TSP, but a good return in the bond fund: .18% for the G fund, 2.6% for the F fund, -1.59% for the C Fund, -4.19% for the S fund and -1.77% for the I Fund.
- The White House is recommending a 2.6% pay raise for 2020.
- FEHB open season will be 11/11 through 12/9 for 2019. If you do nothing, your FEHB and FEDVIP will continue as is. FSAFEDS is also open to set aside money for a Flexible Spending Account. If you do nothing, your election WILL NOT automatically renew.
- Please remember that as a FERS or CSRS retiree, you receive your payment monthly. Not the every-two-week payment you received while you were working.
- If you obtain stock or real estate through an inheritance, the cost basis is set to the value on the deceased person’s date of death. You would only be responsible to pay taxes on gains above the value on the deceased person’s date of the death.
- The IRS requires the TSP to withhold a mandatory 20% for federal income tax on all taxable portions of distributions.
- The terms “transfer” & “rollover” are often used interchangeably when referring to retirement accounts. Transferring means funds go from one institution to another. Rollover happens when funds are sent to an investor, who needs to deposit them into a qualified retirement account within a certain time.
- Generally speaking, you are required to take distributions from your TSP by April 1st following the year you turn 70 ½. Exception: if you are still working at your federal job when you are 70 ½ or older, you do not have to take these distributions.
- Your Social Security benefits are based on your top 35 years of earnings, indexed for inflation. Taking a low paying job while retired does not usually help increase your benefits. That is a myth.
- Your high-3 salary calculation for your Federal Annuity is the highest average basic pay you earned during any 3 consecutive years of Federal service. It does NOT have to be calendar based as in Jan 1 – Dec 31.
- To fully retire under FERS you need 20 years of service & be age 60, 5 years of service at age 62 or 30 years of service & meet your minimum retirement age.
- If a FERS employee has reached their minimum retirement age (MRA) & has 10 years of service (MRA +10), they are eligible for a reduced retirement right away. The reduction is a 5% penalty on their pension for each year under 62. However, they will not receive the FERS supplement.
- When a FERS employee retires, the retirement is effective the following month; the first check comes in the month after. For example, if you retire Aug 29, it takes effect Sep 1, and the first check arrives Oct 1. Best to retire at end of month to avoid a pay gap.
- Generally speaking, FERS cost of living adjustments (COLA) are not provided until age 62 on your retirement annuity. They are paid in the month of January.
The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. Carefully consider your investment objectives, risk factors before investing. Investing involves risk, including the possible loss of principal. Diversification and asset allocation may not protect against market risk. Nothing in this article is intended as legal or tax advice. Please consult with your independent legal or tax advisor to seek advice based on your particular circumstances. For a list of states in which I am registered to do business, you can visit www.adviserinfo.sec.gov and search for my name.