Category: Life Insurance

Inflation. There are no indications that it will slow down any time soon, and there is no quick fix. The timing is, therefore, terrible if you have just retired or are about to retire. Nobody has been concerned about inflation for almost 40 years. A whole generation has never even known how inflation might affect their finances. However, the current inflation rates are the highest since 1982.

Families are worst hurt by price hikes in electricity, autos, housing, and food. But it goes further than that.

Even the costs of travel (flights, lodging, and rental cars), TVs, appliances, and furniture have risen to heights that were unthinkable just a year ago. Everyone will be affected by these exorbitant rates. However, pensioners will be more affected than working families.

The “silent killer” of retirement: inflation

When you have a fixed income, spending more on groceries and gasoline means making trade-offs someplace else. And before you realize it, you can be compelled to choose between purchasing necessities like food or medicine.

Many experts are concerned that the current inflation rate may be worse than we think, while some people think a recession could be coming soon.

The 71st Secretary of the Treasury of the United States and economist Larry Summers have expressed their concern that we are already approaching a point when cutting inflation without triggering a recession will be challenging.

The effects on your nest egg are still felt even at modest inflation rates of 2% or 3%.

Marketwatch claims that a 3% inflation rate would gradually reduce your ability to buy things. For instance, if your retirement budget is $5,000 per month, your purchasing power would decrease to $3,720 a month in 10 years. Your purchasing power would be only $2,760 per month after 20 years.

Therefore, even with a mere 3% inflation rate, your purchasing power might be lost in just 20 years.

Think about what recent inflation rates might quickly do to your retirement savings. But set aside the numbers and consider inflation differently. What did your home cost twenty or thirty years ago? It was significantly less expensive than what someone would pay today, right?

What do you believe the value of your home will be in 20 or 30 years? I think it’s safe to say that it would be worth a lot more. The same is true for every purchase you make, including that brand-new La-Z-Boy recliner, groceries, and gas.

Most retirees encounter difficulties in this area. They set a savings target based on current prices rather than projected prices for the next 20 or 30 years. And this can increase the likelihood that you’ll run out of money in retirement.

But not all the news is negative. You can use a few easy tactics to prevent losing purchasing power to inflation. These techniques may help reduce risk while providing a solid hedge against inflation. The sooner you take concrete action, the better off you’ll be in either case. Nobody can afford to ignore inflation when rates are this high.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Millions of current and retired federal employees pay attention to the magnitude of the federal pay boost and the retiree inflation catchup every year. As a result, they are even more vital to the communities where they reside, vote, shop, and raise children.

Therefore, in his State of the Union address, President Joe Biden made a particular point of announcing that federal employees who are now working remotely will return to their offices “soon,” as in “soon.”

Both current employees and those who have already retired may be concerned about the importance of increases and COLAs, but they may be unaware of the specific amounts.

Especially when the sums are so vastly different, the system dictates that the methods used to arrive at such figures are primarily of scholarly interest to the two parties. You’ll receive what you’re looking for. Period!

Cost of Living Adjustment

The Bureau of Labor Statistics provides a cost of living adjustment for retirees. The inflation rate does not play a role in any base raise for active duty federal employees.

As a result, federal employees in high-paying cities like New York, Houston, and Los Angeles earn more than their counterparts in lower-paying states like Kentucky and Idaho. COLAs are frequently granted to retirees even while government salary increases are capped, as in 2011, 2012, and 2013.

Pay for government employees increased by 2.7 percent in 2013. Old-system civil service retirees received a 5.9 percent cost of living increase, while new-system federal employee retirees received a 4.9 percent adjustment.

In January 2023, then Vice President Biden proposed a 4.6 percent increase for federal employees. The September cost of living statistics must be reviewed to establish the retiree COLA. However, considering how quickly things have evolved, the COLA for 2023 might be a monster.

Raises vs. Cost-of-Living Adjustments

For most people, the debate over a pay increase versus a cost-of-living adjustment is purely academic. There is disappointment among those who receive the lowest percentage raise. And so it goes. However, “regular times” is the most important word. These, on the other hand, are not.

We’re in the thick of a European land war. Refugees, mainly women and children, have fled to six nations, including the United States, Germany, and Canada. Nearly 11 miles from Poland, the Ukraine conflict has shifted its focus to the east.

One assault on a member of NATO (the United States included) is an attack on all NATO members. Many people in the United States think that the recent election was rigged. Many people are eager to see how the elimination of controversial mask mandates will affect the economy.

Ex-President Barack Obama tested positive for COVID earlier this week. Who knows what effect the first large-scale gatherings in recent years — from Mardi Gras in Louisiana to the Florida beaches — will have when people return to their hometowns and colleges?

Increase in the Cost of Fuel

The fuel price looks to be rapidly rising from $4 a gallon to $5 a gallon. Unless, of course, you reside in California, where time moves at a breakneck pace. It’s a little bit! What’s next? It’s hard to say when this “return to the office” trend will run out of gas.

Supply chain issues might become worse before they get better at present. The “economy,” as most people refer to it, is affected by various factors, including new trade restrictions. Your biweekly income and monthly annuity are also real.

Will the massive wave of retirements be triggered if the gap between a COLA and a salary increase widens? It has been foretold for over a decade, yet nothing has happened — for the time being. More than a hundred thousand active-duty federal employees are now eligible to retire.

They need to determine whether they can afford to retire and rely solely on diet COLAs in an inflationary environment. To achieve this, they’ll need to see how their Thrift Savings Plan account is doing and whether they need to make any changes to its allocation in light of the current economic climate.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

A measure to change the retirement system for first responders who sustain injuries while on duty and must seek out new employment within the federal government was unanimously approved by the House on Tuesday.

First responder federal employees, such as law enforcement and firefighters, participate in an accelerated retirement benefits program, offering to pay more toward their defined benefit pensions with each paycheck in exchange for receiving a full annuity after 20 years of service and turning 50. They must also retire at the age of 57.

Suppose a federal first responder sustains an injury on the job that prevents them from working any longer. In that case, they are not reimbursed for the higher payments they made along the way and thus lose access to that accelerated retirement program.

The First Responder Fair RETIRE Act was proposed by Rep. Jim Langevin, D-R.I., Brian Fitzpatrick, R.-Pa., and Gerry Connolly, D-Va. This act would enable federal first responders who are compelled to seek employment elsewhere in the federal government due to a workplace injury to continue contributing to the accelerated retirement system and retire after 20 years of service and the age of 50.

The measure also allows those workers to get a refund for their prior expedited payments if they leave their federal employment before becoming eligible for an annuity.

Connolly stated on the House floor that we want to motivate our first responders to continue their commitment to this nation. He also stated that we shouldn’t hold them accountable for the harm they caused while protecting communities. And as a reward for their efforts, we ought to keep them enrolled in the retirement plan they chose when they first began their employment.

The bill was moved in July to be considered by the Senate. On August 3, 2022, the Senate Committee advanced the First Responder Fair RETIRE Act. In a letter to the committee on August 2, NARFE stated its support for the legislation.

If passed, the First Responder Fair RETIRE Act will allow federal first responders to continue their service outside their present system while still being a part of the public safety retirement system they contribute to. 

TSP Transition: Lawmaker Requests GAO Probe

The difficulties associated with transitioning the federal government’s 401(k)-style retirement savings program to a new recordkeeper will be the focus of an independent study, Eleanor Holmes Norton, D-D.C., stated last week.

Thrift Savings Plan (TSP) participants have reported difficulties accessing their accounts via the new login system, losing historical account data, and correcting beneficiary information, among other issues. This started when TSP switched to a new recordkeeper and introduced several new services like a mobile app, the capacity to access mutual funds, and sign documents electronically in June.

According to TSP officials, even though they had anticipated that the transition is expected to be “bumpy” and some participants may need to call the customer service “Thrift Line” to resolve problems with beneficiaries or request old documents related to their account, their call center vendor drastically underestimated the number of calls they would receive and was unable to meet demand, resulting in hours-long wait times.

Norton has pushed for details about what went wrong with the changeover since mid-June. She met with the TSP Executive Director Ravindra Deo on June 30, and he pledged to provide her with weekly updates on initiatives to help participants who were having difficulty.

Norton revealed last week that she would request that the Government Accountability Office (GAO) look into the changeover. The Federal Retirement Thrift Investment Board (FRTIB), which oversees the TSP, will have an inspector general, adding that she would draft legislation to that effect.

Norton said she was “profoundly concerned” about the widespread issues with the new TSP online system. She heard from constituents daily regarding the new system’s numerous problems. She said although they need to learn how this fiasco came about and establish new accountability measures at the FRTIB, she will continue to demand prompt repairs to the issues. For this reason, she would ask for a GAO study and drafting legislation to establish an inspector general at the FRTIB.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

LGBTQ spouses became eligible for the same Social Security family benefits as heterosexual spouses after the Supreme Court’s Obergefell ruling in 2015 recognized marriage equality for same-sex couples.

But those conditions remained to bar many LGBTQ partners from getting married and establishing eligibility for Social Security survivor benefits in the event of their partner’s passing because of pre-Obergefell state legislation.

That changed toward the end of last year when the Social Security Administration (SSA) passed new regulations that will make many older LGBTQ individuals eligible for survivor benefits and the financial security those payments can give in their later years.

Peter Renn, a senior counsel at the civil rights organization Lambda Legal, which brought two class-action lawsuits that resulted in the revisions, said, “It’s no exaggeration to suggest that this development is seismic in nature.” The daily lives of thousands of same-sex survivors who were unfairly denied the benefits they paid will be significantly improved.

The Nine-Month Marriage Rule

In most cases, surviving spouses who are aged 60 years or older and have been legally wed for at least nine months at the time of their spouse’s death are qualified for benefits based on the deceased spouse’s earnings. Depending on how old they are, survivors may be able to get between 71.5% and 100% of the Social Security benefits of the person who died.

Many LGBTQ survivors could not get benefits due to Obergefell’s strict interpretation of those requirements because of state marriage prohibitions that the Supreme Court had ruled illegal.

The senior vice president for litigation at the AARP Foundation, William Alvarado Rivera, says, “The Social Security Administration recently issued a categorical ruling in which it stated, ‘Sorry, you must be married for nine months; it’s too bad that doing so was against the law in your state.’”

Same-sex partners may now be eligible for survivor benefit payments under the new policy if they can demonstrate that they meet either of the following requirements:

• If state law hadn’t stopped them from getting married at the time of their partner’s passing, they would have been wedded.

• If state law hadn’t stopped them from being married earlier, they would have been wedded for a more extended time before the spouse’s death.

The SSA states that it will consider “all the available evidence” that prevented a couple from getting married or remaining married long enough to qualify for survivor benefits before one of the partners passed away when weighing such claims.

Legal Difficulties

In 2018, Lambda Legal filed two lawsuits opposing the SSA’s post-Obergefell survivor benefit rules application: one on behalf of Michael Ely. Michael’s husband and partner of 43 years passed away seven months after their state, Arizona, legalized marriage equality, and one on behalf of Helen Thornton, a resident of Washington who lost her 27-year spouse to cancer in 2006—six years before to the passing of a law allowing same-sex unions in their state.

The group contended that because discriminatory state laws prevented the plaintiffs from being married, they shouldn’t be denied survivor benefits. In judgments from 2020, many U.S. district courts concurred. The Trump administration appealed those rulings, but the SSA ended the appeals in November 2021 and developed standards for evaluating benefit applications from LGBTQ survivors.

The SSA urges anyone who believes they could be eligible to get in touch with the organization immediately. You cannot apply for the benefits online. You can do so by calling 800-772-1213.

You can also ask Social Security to reevaluate a rejected claim owing to outdated state legislation that prevented you from becoming married. In this case, you might be eligible for retroactive compensation.

According to Renn, there are probably tens of thousands of people still unaware that they can be eligible for survivor payments, especially those who were never able to marry their loved ones. He said, “Given how long marriage prejudice has existed, the number of people who stand to benefit is astounding.”

Information That Social Security Will Require for Same-Sex Survivor Benefits

Those who were prohibited from marrying same-sex partners by state laws before the Supreme Court’s Obergefell ruling may be subject to the following questions from the Social Security Administration to establish their eligibility for survivor benefits.

1. For how long were you two a couple?
2. Did you jointly own property?
3. Were you jointly responsible for looking out for one another?
4. Did you raise any children from previous relationships or have children together?
5. Would you have gotten married sooner or later if you weren’t forbidden from getting married?
6. Before same-sex marriage became legal, was there a formal recognition of the relationship through a ceremony or another means?
7. Did your partner leave you anything in a will?
8. Was the deceased’s life insurance or retirement account set up with you as the beneficiary?
9. Were same-sex unions illegal in the state where your wedding took place until fewer than nine months before the passing of your dead spouse?
10. Did you decide against getting married before your spouse passed away for any other reasons besides the state’s ban on same-sex unions?
11. If state law had allowed you to wed sooner, is there any other available proof of when you would have done so?

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].