Federal Retirement benefits are complex. Not having all of the right answers can cost you thousands of dollars a year in lost retirement income. Don’t risk going it alone. Request your complimentary benefit analysis today. Get more from your benefits.
A Thrift Savings Plan (TSP) is the equivalent of a 401(k) for government employees. In other words, it’s a government employee’s tax-advantaged retirement plan.
Participants in a TSP must be from one of the following groups:
If you qualify for a Thrift Savings Plan, your employer will usually inform you at your job orientation.
Do you intend to donate to a TSP at work? There are a few options available to you:
• Will you donate a certain proportion of your salary?
• Will you donate to a standard TSP or a Roth TSP? (The distinctions between IRAs and 401(k) plans are the same.)
• What are your plans for investing your money in your TSP?
What Is a Thrift Savings Plan? Additional Considerations
Civil servants can only contribute to their TSP from their regular income (as opposed to bonus or overtime pay). Members of the armed forces can contribute from their normal pay, bonuses, or overtime pay.
If you work for FERS, 1% of your salary is automatically deposited into a TSP, whether you contribute or not. You lose your free retirement savings if you don’t stay on the job for three years. As a result, it is a retention strategy.
TSP contributions are automatically registered for some employees. The money is usually put into a lifecycle fund. Some people are surprised by this, as they are unaware that a portion of their salary is redirected to a retirement account. If you work in the government, this is something to consider.
If you switch from the private to the public sector, you can roll your 401(k) or IRA into a TSP. If you switch from government employment to a private company, you can do the same thing in reverse.
Normally, you won’t be able to contribute to a 401(k) and a TSP simultaneously. You can, however, contribute to both a TSP and an IRA at the same time.
What Are the 2022 TSP Contribution Limits?
Contribution Limits for the Thrift Savings Plan in 2022:
Employee contributions (under 50 years old) are capped at $20,500.
Employee catch-up contributions (for those aged 50 and up) are $6,500
All sources have a contribution limit (under age 50) of $61,000; $67,500 contribution limit, all sources (age 50+)
Thrift Savings Plan contribution limitations for 2022 are nearly identical to the 401(k) contribution limits.
You can contribute up to $20,500 to your TSP plan this year if you are under 50 years old on December 31, 2022. This holds even if you split your contributions across regular and Roth TSP plans.
Those aged 50 and up are eligible for an extra $6,500 in “catch-up” payments. You can also make after-tax contributions that exceed the base contribution limitations if your employer allows it.
The IRS enables you to put up to $61,000 in additional money into your TSP in 2022, including your contributions and any money your workplace provides. (For people aged 50 and up, the figure climbs to $67,500.)
Investment Options in the Thrift Savings Plan
Within your TSP, you have only six investing possibilities. Counting the ten separate “lifecycle” funds, which are the target date fund equivalent, brings the total to 15.
Here are the options:
The government creates retirement programs with your best interests in mind, so you can hopefully support yourself in retirement. However, the IRS will eventually want a portion of your earnings, so you need to take a required minimum distribution.
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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 implementiong a sound plan for your retirement. We are commited to helping you achieve your goals. Visit us at M. Dutton and Assoiciates.COM. Tel. 212-951-7376: email: [email protected]
The article outlines the top retirement mistakes to avoid as a federal employee.
1. Failing to check personnel records before retiring from the federal government thoroughly.
Employees should also evaluate their OPF and note the following items that may affect their federal retirement eligibility and the computation of their CSRS or FERS annuities:
2. Failure to request estimates of outstanding deposits or re-deposits promptly.
Many employees are unaware that by depositing for military or temporary (“non-deduction”) time, they are resetting their SCD for retirement backward in time. As such, this increases their service time and the amount of their starting CSRS or FERS gross annuities. Another advantage of making a deposit is that they may be able to retire sooner than anticipated.
3. Failure to complete and, if necessary, revise beneficiary designations.
The following beneficiary forms should be filled out and updated as needed – for example, if the employee marries or divorces, etc.
4. Failure to understand the procedures governing the continuation of federal employees’ health benefits (FEHB) after retirement.
Many federal employees are unaware of the rules for retaining their Federal Employees Health Benefits Program health insurance benefits for retirement. Employees and annuitants each pay around 25% to 28% of total FEHB premiums, with the federal government covering the remaining 72% to 75%.
5. Failure to contribute as much as possible to a Thrift Savings Plan (TSP) early in a government employee’s career.
This is especially critical for FERS employees, whose retirement income relies heavily on TSP earnings. Employees should make every effort to contribute the maximum amount allowed, and those who will be 50 or older by December 31 should make an additional maximum contribution in “catch-up” contributions each year.
6. Failing to properly plan for retirement, including income, housing, and lifestyle changes, for themselves and their family members, particularly spouses.
Retirement should be viewed as a separate “life event” with substantial implications for the retiree’s income, housing demands, and lifestyle. It could be disastrous if you do not adequately plan for these developments.
7. Failure to plan for Social Security.
Individuals as young as age 62 can apply for monthly Social Security retirement benefits. However, due to delayed retirement credits, your payout will be bigger if you wait longer to file your claim.
Social Security increases an individual’s payments by 8% for each year they delay claiming benefits.
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 implementiong a sound plan for your retirement. We are commited to helping you achieve your goals. Visit us at M. Dutton and Assoiciates.COM. Tel. 212-951-7376: email: [email protected]
Medicare is a health insurance program for those over the age of 65 and those under age 65 who have specific disabilities. You can sign up for Medicare at least three months before your 65th birthday. If you’re new to Medicare, you might be unsure where to begin. What you need to know is summarized below.
Medicare is Divided into Four Sections
These four components operate together to offer comprehensive coverage, although each part is responsible for different services.
Parts A and B Are Available Without Charge
For the most part, Part A is free. Unless you or your spouse have never worked and paid Medicare taxes, you usually don’t have to pay a monthly payment for Part B. If you’re unsure if you’re eligible for premium-free Part A, contact your Human Resources department if you’re still employed or the Social Security Administration if you’re retired.
If you’re still working at age 65, Medicare is secondary to employment coverage. (If you get health insurance via your employer, you won’t have to do anything until you retire or your job-based coverage stops.) Parts A and B should be signed up for three months before your 65th birthday or eight weeks after you retire (whichever comes first).
Medicare Supplement Insurance Provides Additional Protection
You can get supplemental insurance, generally known as Medigap, in addition to the four categories of Medicare. Some costs not covered by Medicare, like deductibles and copayments, are covered by Medigap plans.
Medicare Advantage Plans Can Also Provide Coverage
You can acquire coverage through a Medicare Advantage plan if you don’t want to buy a Medigap policy. These plans are offered by private insurance companies that have a Medicare contract. All Original Medicare services must be covered by Medicare Advantage plans (Part A and Part B). They can, however, provide additional benefits such as prescription medication coverage, dental coverage, and vision coverage.
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 implementiong a sound plan for your retirement. We are commited to helping you achieve your goals. Visit us at M. Dutton and Assoiciates.COM. Tel. 212-951-7376: email: [email protected]
Following the publication of the 15th-anniversary issue in print, the editorial staff at PLANADVISER Magazine took some time to stop and consider the enormous changes that have transpired in the retirement plan services sector over the previous few decades. Following this time of introspection, many lessons were learned, including newfound respect for the efforts of prominent individual leaders and change-makers. They have played a significant role, if not the most influential, in defining the retirement plan industry of 2022.
The Vision Awards are planned to recognize and honor people in the industry who have pushed for good change and made significant contributions to improving retirement outcomes for United States workers. WIPN is an acronym for We Inspire, Promote, and Network.
WIPN was founded in 2009 as the Women in Pensions Network and has since grown into a well-established 501(c)6 non-profit organization comprising a network of more than 5,500 retirement industry professionals organized in local chapters throughout the United States. WIPN’s members are united in their goal of increasing the presence of women, people of color, and other underrepresented groups in the financial industry in the United States, and their efforts are bearing fruit.
The members of WIPN have included women at all career levels, from entry-level positions to senior management, who represent the many segments of the retirement industry since its inception. These include recordkeepers, third-party administrators, delegated control investment officers, broker/dealers, RIAs, ERISA attorneys, asset managers, and financial advisers. In 2021, the group changed its name to WIPN – WE Inspire, Promote and Network, to better reflect its mission. This shift saw WIPN expand its membership to include men working in the retirement industry and reaffirm its commitment to the promotion of networking opportunities, the development of mentoring programs, and the pursuit of equal employment opportunities and promotion practices in the industry.
Those in charge of WIPN say the decision was based on a vision and understanding that true representation and equality in the retirement plan services industry will only be achieved through a collective effort that includes everyone working in the industry today, regardless of their ethnicity or sexual orientation, and that this change was necessary. WIPN is the first to admit that their work is far from over, but their past, present, and future work proves the enormous influence that visionary professionals can have on the retirement plan market.
Former Assistant Secretary of Labor for Employee Benefits and current Director of the Employee Benefits Security Administration, Bradford Campbell, has been a partner at Faegre Drinker since 2007.
There is little doubt that the Pension Protection Act (PPA) of 2006 has significantly influenced defined contribution plans, elevating them from their previous status as an accessory retirement benefit to their current position as one of the primary pillars of the United States retirement system. As it is popularly known among industry professionals, the PPA was instrumental in ushering in the present age of automatic enrolment and asset-allocation funds.
Brad Campbell was a prominent figure in developing the PPA and other critical ERISA retirement and health reforms during his years in government. His regulatory and policy choices have substantially influenced the ERISA plans’ structure and administration.
The qualified default investment alternative and enrollment safe harbor framework, which was developed and issued during Campbell’s tenure as Assistant Secretary of Labor for Employee Benefits, continues to make automatic enrollment and the use of pre-diversified investments in defined contribution plans possible. He also played a crucial role in orchestrating the implementation of the Pension Protection Act’s (PPA) significant reforms to pension legislation, which resulted in the publication of approximately 30 regulations and important guidance papers. The retirement plan clients and other ERISA fiduciaries who rely on Campbell’s policy vision to administer compliant and successful retirement plans continue to benefit from his policy vision today.
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 implementiong a sound plan for your retirement. We are commited to helping you achieve your goals. Visit us at M. Dutton and Assoiciates.COM. Tel. 212-951-7376: email: [email protected]
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