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Senate Ends Tax Penalty for Retired Federal Officers

Federal law enforcement officers and firefighters will soon be able to withdraw funds from their Thrift Savings Plan (TSP) after the age of 50 without a tax penalty. The legislation cutting the penalty was passed unanimously by the Senate June 4. The House passed a similar version of the legislation last month, but must now take up the Senate's amended version of the bill. Under current law, federal law enforcement officers are eligible to retire after 20 years of service at age 50 and must retire in many cases...

Enrolling in FERS

New Employees Most new employees hired after December 31, 1983, are automatically covered by the Federal Employees Retirement System (FERS). The exceptions are employees in appointments that are limited to 1 year or less, most intermittent employees, anyone who is not eligible for Social Security coverage, or certain persons with non-Federal service which is creditable under the Civil Service Retirement System (CSRS). Rehires and Conversions  The general rules on whether you are covered by CSRS, CSRS Offset, or FERS...

What Long-Term Care Costs

The cost of long-term care depends on where you live and the kind of care you receive. There are generally three kinds of long-term care: nursing home care, assisted living facility care, and in-home care. Nursing home care is the most intensive kind of care, and usually costs the most. Assisted living facility care is for people who do not need nursing home care, but who are unable to remain in their own homes. Home health care is the least expensive kind of care, and is generally for those who can still function...

Reader Question: How Do I Calculate My Federal Retirement Benefits?

A: Your benefits are calculated as follows... Your benefit is based on your “high-3 average pay.” This is figured by averaging your highest basic pay over any 3 consecutive years of creditable service. Generally, your benefit is calculated according to this formula: 1% of your high-3 average pay  X  years of creditable service If you retire at age 62 or later with at least 20 years of service, a factor of 1.1% is used rather than 1%. To determine your length of service for computation, add all of your...

Federal Employee Thrift Savings Plan

The Thrift Savings Plan is a retirement and savings investment plan for federal employees. Congress established the TSP in 1986 for the purpose of providing federal employees with retirement income. The TSP offers federal employees the same type of savings and tax benefits that many private corporations offer their employees under so-called “401(k)” plans. You can participate in the TSP if you are covered by the Federal Employees’ Retirement System (FERS), the Civil Service Retirement System (CSRS), or an equivalent...

Minimum Retirement Age (MRA) Plus 10 Annuity under FERS

A Minimum Retirement Age (MRA) plus ten annuity under the Federal Employees Retirement System is a provision that allows you to retire with benefits beginning immediately if you have ten years of service and have reached the Minimum Retirement Age (at least 55). However, the annuity is reduced for each month you are under age 62. The reduction equals five percent per year (or 5/12 of one percent per month). To avoid the reduction, you can postpone payment. You can later apply for the benefit by writing to OPM or filing...

Retirement Contributions Overpaid and Require Repayment

Federal employees hired in 2014 are subject to paying higher contributions into the FERS system, but many have not been paying at the higher rate because payroll processing systems could not account for the change. This means these new employees have been overpaid and will owe the excess as a debt to the government. The Defense Finance and Accounting Service, which handles payroll of some 1.2 million non-postal federal employees in agencies like the DoD, VA, HHS, Energy, EPA and several smaller agencies, has said it will...

What do you do if you come up short for retirement?

You’ve done your homework and discovered that your retirement expenses are going to exceed your retirement income. What can you do now? Quite simply, you are going to have to figure out a way to increase your income and/or reduce your expenses. Here are some ideas to get you started: 1. Postpone your retirement. While you might like to retire at a particular age, this may not be realistic given the high cost of retirement. You may need to postpone retirement and continue working a few additional years to allow...

Long-Term Care By The Veteran’s Administration

The Office of Geriatrics and Extend Care which is under the Department of Veterans Affairs (VA) health system, makes certain Long-Term care services available to veterans based on a priority ranking system, with highest priority given to those with severe service-related disabilities. VA-funded Long-Term care may be worth investigating, especially for veterans with service-related disabilities and/or low incomes and assets. Keep in mind, however, that in addition to the priority ranking system, the availability of Long-Term...

Health Benefits Coverage Procedures for Retiring Employees

Planning your retirement from the federal workforce takes quite a bit of work. It is often advised to have a plan starting 5 years from your expected retirement date. One area of concern is health coverage. But it doesn't need to be one that worries you. It's one of the easiest parts of your plan to prep. If You Want to Continue Your Health Benefits Coverage... If you meet all the requirements, you don’t need to do anything to have your same health benefits enrollment continue after your retirement. If You Want...

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