Category: Medicare

While continuing payments to survivors upon the death of a retiree receive the majority of attention, survivorship benefits are also available if a current employee passes away. However, there are several additional eligibility requirements.

Your spouse would be eligible for a survivor annuity if you were an employee who was married at the time of your death and had at least 18 months of creditable civilian service. That annuity will be paid to you based on a portion of the annuity you were eligible for on the day of your death. This is 55% for CSRS survivors and 50% for Federal Employee Retirement System (FERS).

Note: A FERS employee’s eligible surviving spouse is entitled to a basic death benefit and 50% of the employee’s final salary (or high-3 if that amount is higher). That death benefit is around $37,000 in 2022.

The beneficiary(s) on your enrollment could continue your coverage if you were enrolled in the self plus one or self and family choices of the Federal Employees Health Benefits program at the time of your death. Any eligible survivors would be out of luck if you weren’t enrolled in the program (or if you were, but solely in the self-only option).

Benefits for FERS Survivors

A pension is given out upon retirement as part of the FERS defined benefit. This annuity, based on your age and the number of years you’ve worked for the federal government, offers a yearly payment equal to a set proportion of your most recent wage.

Your FERS account offers three types of survivor benefits, each with distinct rules.

Fundamental Death Benefit: When a FERS employee passes away, the surviving spouse is entitled to a lump-sum death benefit equivalent to $34,991 plus 50% of the deceased’s final income. (Note that while this is the approved sum for 2021, inflation is considered yearly.)

To be eligible, your surviving spouse must have been married to you for at least nine months or be the parent of a child born during your marriage.

Insurer Annuity: The surviving spouse is also qualified for an annual payout based on the deceased’s pension schedule if they match the qualifying criteria listed above and the deceased federal employee had ten years of creditable service. This benefit would equal 50% of their annual pension, with no age-related reductions if the federal employee passed away before retirement. Each year, this sum is adjusted for inflation.

Premiums

The benefits and government portion of the contributions are the same for an FEHB eligible survivor as they are for a current or retired employee participating in the same plan. The premiums would typically be subtracted from your survivor’s annuity payment, and they can also pay the premiums directly to OPM if the annuity is insufficient to cover them.

Any FEGLI benefits will be given to the person or people you designated on the Standard Form 2823, Designation of Beneficiary, if you enrolled in the Federal Employees’ Group Life Insurance program and have one on file. If you don’t, the money will be dispersed following the usual hierarchy of importance:

• First to a living spouse;

• Second, if there is no spouse, to your children, with the share of any deceased child being split among that child’s descendants, if any;

• Third, if none of the aforementioned apply, to your parents equally or in full to the lone survivor;

• Fourth, if none of the aforementioned, to your estate’s executor or administrator; and

• Sixth, if none of the aforementioned apply to your relatives as decided by the state’s legal system where you resided.

When you pass away, the Federal Long-Term Care Insurance Program will continue to cover your spouse or any other qualified family members as long as the premiums are paid. However, a family member who is receiving a survivor annuity is the only one who can sign up for the FLTCIP program for the first time.

• Any member of your family who previously had coverage via your Federal Dental and Vision Insurance Program enrollment is eligible to keep it. Similarly, anyone receiving a survivor annuity is also eligible to enroll.

• Any money in your TSP account at the time of your death will be distributed according to the above-mentioned standard order of priority unless you submitted a valid TSP-3, Beneficiary Election form.

• The beneficiary, if it’s your surviving spouse, can maintain the account and enjoy the same administration and withdrawal privileges as you did. Any other beneficiaries, however, are required to close the account.

• They can do that by either taking a withdrawal or transferring the funds to an IRA or another type of eligible retirement savings vehicle.

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]

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:

• The Federal Employees Retirement System (FERS), a retirement system for federal employees (FERS)
• Retirement System for Civil Servants (CSRS)
• Members of the armed forces (active duty or Ready Reserve)
• Civilians in other kinds of service

What Is a TSP?

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:

1. Government Securities Investment (G) Fund: This fund invests in US Treasury securities.
2. Fixed-Income Investment (F) Fund: Follows a specific index fund that invests in government bonds in the United States.
3. Common-Stock Index Investment (C) Fund: This fund mimics the S&P 500 index.
4. Small-Cap Stock Index Investment (S) Fund: Follows a Dow Jones index of small- and mid-cap companies.
5. International Stock Investment (I) Fund: Stock in non-US corporations is held in this fund.
6. Lifecycle funds: These funds comprise a mix of each of the five other funds, balanced to a suitable level of risk depending on how near you are to retirement. They are available in five-year increments that indicate your estimated retirement date.

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.

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]

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:

1. The start and end dates of each service term.
2. Retirement coverage – CSRS, FICA, or no coverage at all.
3. Appointment type: temporary, intermittent, part-time, WAE (When Actually Employed), career, or career-conditional.

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.

1. Determination of Beneficiary for Unpaid Compensation and Unused Annual Leave of a Deceased Federal Employee, Form SF 1152.
2. Federal Employees Group Life Insurance Beneficiary Designation Form SF 2823
3. Beneficiary Designation Form TSP 3: Thrift Savings Plan (TSP)
4. Form SF 2808, Designation of Beneficiary of CSRS Contributions for CSRS and CSRS-Offset Employees, or Form SF 3102, Designation of Beneficiary of FERS Contributions for FERS Employees.

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.

• Medicare Part A: covers inpatient hospitalization, hospice care, skilled nursing facility care, and home health care. For the most part, this Medicare category is free.
• Part B Medicare: covers outpatient services like doctor visits, X-rays, and lab tests. Part B coverage is paid for monthly.
• Medicare Part C (Medicare Advantage): this allows you to combine your Medicare coverage into a single plan. Hospital and doctor care and prescription drug coverage may be included in these plans. You normally pay a monthly premium for Part C coverage, plus a deductible or copayment if applicable.
• Part D: Prescription drug coverage is provided under Part D of Medicare. This coverage is available as a stand-alone plan or as part of a Part C plan that includes prescription coverage. For Part D coverage, you must pay a monthly premium and a deductible or copayment.

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]