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[TSPStrategy] For Some, Retirement Just Means a Different Kind of Work

[TSPStrategy] For Some, Retirement Just Means a Different Kind of Work

For Some, Retirement Just Means a Different Kind of Work

One path to financial security is to continue earning money after your federal career ends.

What are you going to do after you retire? For some federal employees, the answer is, "I'm going to work!" If you're fortunate to be eligible to retire from federal service in your 50s, you might be able to continue working for a decade or two. And bringing home a paycheck while you're still in your "go-go" years could reinforce your financial security for your later "slow-go" and "no-go" years. 

Your earnings could allow you to delay withdrawals from your Thrift Savings Plan account so you don't run the risk of depleting your balance too early. Or you might be able to delay claiming your Social Security benefit, increasing its value. Everyone has the same eight years, from 62 to 70, to file for Social Security. But there's a 20% to 30% reduction to your benefit if you take it at 62, and a 24% to 32% boost if you wait until 70 to begin receiving it.

Retirement is a time when you can stop doing what someone else wants you to do and do what you want. So, if what you want is to keep working, but on your own terms, maybe that means starting your own consulting business or taking on a few paid assignments that can be completed in a short period of time. Or maybe you could become a coach or teach classes at the local community college. 

These things are all work, but as the saying goes, "If you love what you do, then you'll never work a day in your life." 

Earnings Limits

I've heard some people joke that when you retire from the federal government you'll receive your retirement benefit "just for waking up." Of course, you earned every dime of that benefit. And you can earn as much as you like in a post-retirement job without risk of losing your benefits under either the Federal Employees Retirement System or the Civil Service Retirement System. There is no offset because of earned income to your government pension benefit. It is paid every month regardless of whether you have stopped working or have a lucrative second career. 

There are a few exceptions, however. One applies to disability retirees. If you earn more than 80 percent of the current value of your final salary as a federal employee, you run the risk of being deemed recovered and your disability terminated. It is important to report your earned income to the Office of Personnel Management and Social Security if you have returned to work while receiving disability retirement benefits.

Another exception applies to FERS retirees who are entitled to receive the FERS Special Retirement Supplement, which  represents what they would receive from Social Security as if they were eligible to receive benefits when they retired. The supplement is subject to an earnings limit patterned after the Social Security earnings test. For 2022, the limit is $19,560. For every two dollars earned over the annual limit the FERS supplement is reduced by one dollar.

The supplement is payable until age 62, so if your supplement has been terminated because you were making too much income to continue to receive it, it's important to report to the Office of Personnel Management if you stop working while you're still entitled to this benefit. 

If you claim Social Security retirement benefits, you might also find you have to pay some or all the money back if you return to work before your full retirement age and earn more than the annual limit. Just as with the FERS supplement, the earnings limit for 2022 is $19,560.

After you've retired from federal service or when your supplement stops at age 62, it might take you awhile to decide whether you want to return to paid employment. If so, it might be best to delay filing for Social Security until you make a decision or have reached your full retirement age—when the earnings limit goes away.

If you realize within a year of filing for Social Security that your earned income will exceed the limit, you can withdraw your application and pay back the amount you received up to that point. Later, you can reapply with a clean slate.

If it's been more than a year since you applied for benefits, you can decide to suspend your benefits starting at your full retirement age. You can keep your benefits suspended until age 70, when you will be entitled to delayed retirement credits. If you work past your full retirement age, it might be worth adding delayed credits to increase your lifetime benefit.


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[TSPStrategy] It's Time to Prepare for Open Season

[TSPStrategy] It's Time to Prepare for Open Season

It's Time to Prepare for Open Season 

It's in your interest to conduct an annual insurance checkup—especially this year.

The start of the 2023 plan year open season for the Federal Employees Health Benefits program, the Federal Employees Dental and Vision Insurance Program, and flexible spending account elections under FSAFEDS is only three weeks away. Open season runs from Nov. 14  to Dec. 12. But Instead of waiting until the eleventh hour, it's a good idea to get started early.

The overall average premium increase for FEHB plans next year will be 7.2%, the highest since 2011. This figure applies to the total premium, which includes the government contribution. The average increase to the enrollee premium will be 8.7%. So this may be the year to do some comparison shopping to try to mitigate the increases. There are 271 plan choices in 2023, down slightly from the 275 this year.

Here's a to-do list to help you navigate this year's open season (and preseason):

Pre-Open Season

  • Review your 2022 health care expenses. Don't forget dental, vision and prescription costs. 
  • Check your plan website for specific information, such as providers in your plan's network, its prescription drug formulary and information about how the plan works with Medicare.
  • Check OPM's website to find available plans and check the plans' website to see if 2023 plan brochures are available.
  • Check the Office of Personnel Management's 2023 premium list and open season information for FEHB and FEDVIP plans. In early November, full FEHB and FEDVIP plan brochures will be available on the OPM website. Benefits information will be available on OPM's plan comparison tool.
  • Begin to consider your 2023 flexible spending account allotment. Remember that only actively employed feds can use FSA dollars. You can carry over up to $570 of unused funds remaining in your health care flexible spending account and limited expense (dental or vision) flexible spending account into 2023. Carryover is not available under the dependent care flexible spending account. 
  • Assess your FEDVIP needs and options. FEDVIP provides dental and vision benefits to a total of 7.5 million federal employees, uniformed service members, annuitants and their family members. For the 2023 plan year, FEDVIP carriers have made some changes to their plans, including removing waiting periods for orthodontic services.

During Open Season

If you take the time to consider all of your insurance options, you could save some money next year—and maybe even get better coverage. "Tens of thousands of enrollees are potentially leaving valuable savings on the table by not taking advantage of open eason to review their health care coverage and ensure they are receiving the most out of their benefits for themselves and their family," OPM director Kiran Ahuja said recently. "Ask yourself—how have my or my family needs changed this past year, and then utilize the open season enrollment period to conduct a wellness or financial check-up to make an informed decision that gets you the best care."

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[TSPStrategy] OPM Director Urges Enrollees Not To Leave Savings on the Table During Open Season, and More

[TSPStrategy] OPM Director Urges Enrollees Not To Leave Savings on the Table During Open Season, and More

OPM Director Urges Enrollees Not To Leave Savings on the Table During Open Season, and More

A weekly roundup of pay and benefits news.

Office of Personnel Management Director Kiran Ahuja urged federal employees to check their finances and reassess their benefits during the upcoming federal benefits Open Season, which runs Nov. 14 through Dec. 12.

"Tens of thousands of enrollees are potentially leaving valuable savings on the table by not taking advantage of Open Season to review their health care coverage and ensure they are receiving the most out of their benefits for themselves and their family," Ahuja stated in a press release. "Ask yourself – how have my or my family needs changed this past year, and then utilize the Open Season enrollment period to conduct a wellness or financial check-up to make an informed decision that gets you the best care."

Those with upcoming surgeries, children on the way, prescription medication and vision care needs are encouraged to take that into account during Open Season, and plan accordingly. It's estimated that 2.5% of enrolled workers changed health coverage in 2021's Open Season, with 0.6% of enrollees switching health insurance carriers.  

Federal employees can save money through the Federal Flexible Spending Account Program, FSAFEDS, which allows workers to set aside an annual pre-tax amount that they estimate spending on out-of-pocket health care costs. In 2022, less than 20% of employees across agencies used the FSAFEDS program, according to OPM.

The Federal Employee Health Benefits Program has over 8 million enrollees, making it the largest employee-sponsored health benefits program in the world. The overall increase in premiums for most FEHBP enrollees is 7.2% for 2023. 

The FEHBP features 271 health plans for 2023. OPM asked FEHBP carriers to focus on COVID-19, telehealth, maternal health, gender-affirming care and services, obesity, preventive services, assisted reproductive technology, and medical foods.

Feds can find FEHBP information and compare plans on OPM's website.

2022 Combined Federal Campaign National Co-Chairs 

Veterans Affairs Secretary Denis McDonough and Office of Personnel Management Director Kiran Ahuja, will serve as national honorary co-chairs of this year's Combined Federal Campaign.

The CFC allows federal workers to donate directly to thousands of charities or causes in the United States and around the world. The 2022 campaign runs Sept. 1 to Jan. 14, and each week features a different cause, such as disaster relief or mental health. Earlier this year, a special solicitation to help people affected by the war in Ukraine raised $670,000.

"Through the tremendous generosity of the federal family each year, the Combined Federal Campaign demonstrates that a commitment to service can take many forms," Ahuja said. "The impact and spirit of the Combined Federal Campaign extends far beyond the workplace and is kept alive by dedicated public servants in communities across the nation and around the world. I look forward to another successful campaign season."

Federal workers and retirees can pledge to any charity or cause by visiting the pledge portal at givecfc.org

"America's great public servants always step up when the country needs them most, whether it's through their day-to-day work or their generous giving. I know that same spirit of compassion and selflessness will shine through during this year's campaign," McDonough said.  

Last year, the CFC raised more than $80 million. Since its inception 61 years ago, federal workers and retirees have pledged more than $8.6 billion to CFC charities.

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Re: [TSPStrategy] Pay & Benefits - Big COLA Boost for Retirees

Re: [TSPStrategy] Pay & Benefits - Big COLA Boost for Retirees

Thanks for the info,

Tex
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[TSPStrategy] Pay & Benefits - Big COLA Boost for Retirees

[TSPStrategy] Pay & Benefits - Big COLA Boost for Retirees

Big COLA Boost for Retirees

High inflation at least means a boost in federal retirement benefits.

Federal retirees can breathe a sigh of relief: They will continue to be able to buy groceries, pay for health care and put gas in their cars in 2023. Most retirees will see the largest annual increase in benefits payments in more than four decades, based on the Social Security Administration's announcement this week that its annual cost of living adjustment will be 8.7%.

Civil Service Retirement System

Retirees covered under CSRS who have been receiving retirement benefits since December 2021 will see the full 8.7% increase in their benefit payable on January 1, 2023 (which is the December 2022 payment).

Those who retired after Dec. 3, 2021 will receive a prorated amount of the COLA based on the number of months they received retirement benefits before Dec. 1, 2022. The full increase also applies to CSRS survivor annuitants and children who are receiving survivor annuities. 

Federal Employees Retirement System

Under FERS, when the Consumer Price Index increase is 3% or higher, the annual COLA is 1% less than that amount. So the COLA for eligible FERS retirees will be 7.7%.

It is important to remember that those who retire under FERS and are younger than 62 on Dec. 1, 2022 will not see any of the increase in their 2023 FERS retirement benefit due to the delayed COLA that applies to most FERS retirees. Those who have reached 62 before December 2022 will receive the full 7.7% increase in their December FERS retirement benefit, payable in January 2023. There are exceptions for FERS disability annuitants, those retiring under the special provisions covering law enforcement officers, firefighters and air traffic controllers, and also spouse, former spouse, and insurable interest survivor annuitants.

Eligible FERS retirees who retired after Nov. 30, 2021 and had their retirement commence in January 2022 or later, will receive a prorated COLA based on the number of months they received retirement benefits before Dec. 1, 2022. For example, if a law enforcement officer retired on June 30, 2022, they would receive 5/12 of the 7.7% increase, or 3.2%, in their December benefit payment. There are no COLAs on the FERS special retirement supplement for any retiree.

Social Security 

This year's COLA will increase Social Security retirees' benefits by approximately 8.7%. It's a little more complicated than that, though. The actual amount is based on an individual's "primary insurance amount," which is the amount of their benefit that is payable at their normal retirement age. The NRA for those born in 1960 or later is 67. For those who retire before their normal retirement age, the benefit will be lower than the primary insurance amount. Those who retire after attaining their normal retirement age will receive a benefit higher than their PIA. 

Good News, Bad News

For those who are planning to retire on Dec. 31, 2022, and who will be eligible for a COLA, the first COLA will be granted on Dec. 1, 2023 and will be payable in their January 2024 annuity payment. That COLA will be 11/12 of the full COLA granted on Dec. 1, 2023. 

Remember that a high COLA announcement is both good news and bad news. It's more money in retirees' pockets, but that's because goods and services are much more expensive than in the pre-pandemic days. When will the economy return to normal? Time will tell, but in the meantime, most retirees will get at least some relief come January.

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[TSPStrategy] Pay & Benefits - Money May Not Be Federal Workers' Main Motive For Quitting

[TSPStrategy] Pay & Benefits - Money May Not Be Federal Workers' Main Motive For Quitting

Money May Not Be Federal Workers' Main Motive For Quitting

The reasons driving federal employees to leave government service, and other pay and benefits news.

Alack of respect in the workplace and no opportunities to advance may be bigger drivers than low pay for people choosing to leave the federal government, according to the Merit Systems Protection Board.

MPSB analyzed its own survey data after reviewing the results of a Pew Research Center survey that focused on why people quit their jobs in 2021. The main drivers, according to Pew, were lack of respect at work, no opportunities for growth, and undesirable pay. The 2021 Merit Principles Survey asked federal employees about the three issues Pew identified as well as respondents' intentions regarding quitting their jobs. 

The MPS had over 25,000 respondents, with 12.2% of those surveyed saying they had "very high" quit intentions. There were three statements used in the survey, and respondents could agree or strongly disagree to the statements: 

"My organization provides employees with opportunities for growth and development."

"I am treated with respect at work."

"My organization pays employees fairly."

According to MSPB, having an opportunity to move up in the company decreased an employee's quit intention score by nearly 50%, and strongly disagreeing on the growth option question doubled employees quit intentions to nearly 27%.

Strongly agreeing that their organization paid them fairly cut employees' high quit intention to 15%, while strongly disagreeing increased high quit intention to 25%.

The answer to the survey question "I am treated with respect at work" is telling. Employees that strongly disagreed with the question had a high quit intention of 37.9%, according to MSPB, while those that felt they were treated with respect at work had a high quit intention of 6.1%.

In the end, MPSB found that federal workers are quitting their jobs for much the same reasons that private workers are leaving their employers. 

How Next Year's Health Insurance Premium Increases Stack Up

Federal employees will spend an average of 8.7% more on their health insurance premiums in 2023 compared to this year, according to the Office of Personnel Management. This is the largest percentage increase in more than a decade. The following table shows health insurance premium increases from 2013 to now.

Federal Employees Health Benefits Program Premium Increases

(% increase from the previous year)

Year

Overall Increase

Employee Portion Increase

Government Portion Increase

2023

7.2%

8.7%

6.6%

2022

2.4%

3.8%

1.9%

2021

3.6%

4.9%

3%

2020

4%

5.6%

3.2%

2019

1.3%

1.5%

1.2%

2018

4%

6.1%

3.2%

2017

4.4%

6.2%

3.7%

2016

6.4%

7.4%

6%

2015

3.2%

3.8%

3%

2014

3.7%

4.4%

3.3%

2013

3.4%

3.7%

3.3%


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