63 rd Edition of the Federal Employees Almanac

Transcription

1 63 rd Edition of the Federal Employees Almanac

2 The Analogy of a Physician

3 HOW MANY PEOPLE DO NOT WANT TO RETIRE?

4 HOW LONG DO YOU EXPECT TO LIVE ONCE YOU RETIRE?

5 IRS Life Expectancy Table Example(s): Current Age 65: Life Expectancy + 21 years = 86 years old Current Age 70: Life Expectancy + 17 years = 87 years old Reference:

6 Retirement Highlights Civil Service (CSRS) Hired before 1984 No TSP Matching No SSI Benefits 50% - 60% Loss of Income Federal Employee (FERS) Hired after 1984 TSP Matching up to 5% SSI Benefits 70% - 80% Loss of Income Employee Contribution-.8%

7 New Provisions to FERS Pensions FERS- RAE- Revised Annuity Employees Employees hired on or after Jan. 1, 2013 Employee contribution is 3.1% FERS- FRAE- Further Revised Annuity Employees Employees hired on or after Jan. 1, 2014 Employee contribution is 4.4%

8 Questions to Ask Yourself.??? WHEN AM I ELIGIBLE TO RETIRE? HOW MUCH AM I GOING TO RECEIVE AT RETIREMENT? HOW LONG AFTER RETIREMENT WILL IT TAKE TO RECEIVE MY FIRST FULL CHECK?

9 Federal Employee Group Life Insurance (FEGLI) FEGLI is a group life insurance policy. Coverage is available to most federal employees, including part-time employees. FEGLI is administered by Metropolitan Life Insurance Company (MetLife) under a contract with the Office of Personnel Management (OPM).

10 Options of Coverage- FEGLI Basic Life- amount depends on your annual basic pay. Option B- you may choose one, two, three, four, or five times the basic pay, rounded to the next thousand. Option A- fixed amount of $10,000 of coverage. Option C- family optional insurance coverage. This allows you to cover eligible family members in multiples up to five times per unit coverage. One unit is $5,000- spouse and $2,500- each child.

11 Extra Benefits of FEGLI Basic Life Insurance- Extra Benefit The increase of coverage is graduated according to the employee s age. For employees age 35 or under, their basic insurance coverage is multiplied by 2.0. Beginning at age 36 the multiplication factor for the amount of basic insurance declines by 0.1 each year, until it reaches 1.0 (that is, no additional coverage) for employees age 45 and over. There is no additional cost for this coverage. Accidental Death and Dismemberment (AD&D) Accidental death benefits are equal to your Basic Life. Accidental dismemberment- one hand, foot, or eye are equal to ½ of your Basic Life. Accidental dismemberment- both hands, feet, or eyes are equal to your full amount of Basic Life There is no additional cost for this coverage.

12 Federal Employee Group Life Insurance (FEGLI) Age Group Bi-Weekly Amount per $1,000 Age Bracket 5 Year Total Under 35 $0.02 ($6.60 PPP) $ $0.03 ($9.90 PPP) $1, $0.04 ($13.20 PPP) $1, $0.07 ($23.10 PPP) $3, $0.11 ($36.30 PPP) $4, $0.20 ($66.00 PPP) $8, $0.44 ($ PPP) $18, $0.54 ($ PPP) $23, $0.96 ($ PPP) $41, Total: $103,389 Data based on $66,000 Salary w/ 5x Basic Life ($330,000)

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15 20 Years 8,750 1,667-7, TSP - $100,000 = $500/month SSI -??

16 YOU WILL PAY TAXES IN RETIRMENT? You ll have to pay taxes on your current salary? $66,000 25% tax bracket = $49,500 Loss of $16,500 per year You ll have to pay taxes on your retirement salary? $14,520 15% tax bracket = $12,342 Loss of $2,178 per year You ll have to pay taxes on your Social Security? Social Security - $1,246/month = $14,952 + $14,520 = $29,472 $29,472 15% tax bracket = $25,051 = $2,087/month You ll have to pay taxes on your TSP? $100,000 in TSP funds = Estimate you take $500/month = $6,000/year $14,952 (Social Security) + $14,520 (Pension) + $6,000 (TSP) = $35,472 $35,472 15% tax bracket = $30,151 = $2,512/month

17 Disability Retirement Eligibility CSRS: FERS: Five (5) years of credible service Eighteen (18) months of credible service Disability expected to last at least one (1) year Disability expected to last at least one (1) year Agency must certify they are unable to accommodate your condition Disability happens while employed under CSRS position Agency must certify they are unable to accommodate your condition Disability happens while employed under FERS position Must apply for Social Security benefit

18 Thrift Savings Plan (TSP) The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees. Congress established the TSP in the Federal Employees Retirement System Act of The purpose of the TSP is to provide retirement income. The TSP offers Federal employees the same type of savings and tax benefits that many private corporations offer their employees under 401(k) plans.

19 Thrift Savings Plan (TSP) cont The Federal Retirement Thrift Investment Board is an independent government agency. The Board consists of five members who serve in a part-time capacity. Money in the TSP cannot be used for any other purpose other than providing benefits to participants and paying TSP administrative expenses. The TSP expenses are based upon the size of your account balance. Your earnings are reduced by $0.29 per $1,000 for the administrative expenses. *(NOTE: It was just announced this fee will increase to offset TSP funding loss.)

20 Thrift Savings Plan (TSP) cont FERS/CSRS Participants: You can elect to contribute to the TSP at any time. You may elect to contribute any dollar or percentage amount (1 to 100) of your basic pay. The total may not exceed the Internal Revenue Code limit, which is $18,000 for 2016 (or the catch-up contribution limit of $6,000 for those over 50). The TSP, same with your FEGLI, is administered by Metropolitan Life Insurance Company. (MetLife) Employer Matches 1% - 3% of basic pay is matched (FERS 100%) 4% - 5% of basic pay is matched (FERS 50%) 6%+ is no employer match FERS 1% Automatic Agency Contribution

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22 Did you know? Did you know that when you take your retirement, as a single life annuity, in the event of your death MetLife and the government get the remaining portion of your money? Did you know, if you are married and your spouse dies before you, that you don t receive the money that was taken out on behalf of your spouse? (TSP & Pension) Did you know that all agency contributions are only credited into the non-roth account?

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