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Federal Retirement & Financial Planning Report

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Fraud Targeting Older Persons a Growing Concern Almost all older persons are vulnerable to financial fraud and such swindles are a serious and growing problem, according to a survey of experts who deal with the topic. Continue ›
The Retirement Value of Unused Sick Leave The original purpose of sick leave was to allow employees to be absent from work either because of physical or mental illness that resulted in their being incapable of performing their duties or because they needed time off to receive medical, dental or optical exams or treatment. Continue ›
Protecting Yourself from Liability Many federal employees, especially those with managerial or supervisory responsibilities, carry professional liability insurance to protect themselves in case they are sued for actions arising out of their official duties and the government doesn't step in as the defendant, an unfortunately not uncommon occurrence. Continue ›
Premium Sharing Policies a Mixed Bag With annual health insurance open seasons under way both in the government and in many private companies, attention once again is turning to the sharing of premiums between the government and enrollees, a policy that long has been fixed on the government side but variable on the private sector side. Continue ›
Putting TSP Withdrawal Decisions in Context On separation for retirement or other reasons, you will have several options for dealing with your Thrift Savings Plan account. Continue ›
When Prepaying a Mortgage Makes Sense When you prepay a mortgage you're essentially investing at the mortgage rate. Continue ›
Erosion of Defined Benefit Plans Continuing Private sector companies are continuing to replace defined benefit retirement plans with defined contribution plans—at a time when the federal government offers its employees both—although the rate of change is slowing somewhat and several industries stand out in resisting the trend. Continue ›
Retirement Application Takes Careful Handling Applying for federal retirement is a process that must be handled with care. Continue ›
Many Leaving, Few Entering beyond Age 50 Recent data on the federal workforce show the impact of the much-examined growth of retirement eligibility in the federal workforce, but meanwhile highlight a less-known parallel trend, the government's low rates of hiring—both from outside and from inside, of current employees changing jobs—at older ages. Continue ›
Even CSRS Employees Might Qualify for Social Security Federal employees covered by the FERS retirement system and by the CSRS Offset system pay into Social Security and for many of them, qualifying for later benefits under that system is not an issue. Continue ›
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Report: Fourteen Retirement Planning Mistakes (updated)

Subscribe to: Retirement and Financial Planning Report

When you are thinking about retiring, planning might not be everything, but it’s head and shoulders above whatever’s in second place. This is a mistake too many federal employees make: going it on their own. Or relying on water cooler conversations or other conventional wisdom. Even on the odd chance that what you’d hear there is actually correct, the lunchroom lawyer doesn’t know everything you need to understand.

You need authoritative help because federal retirement is more complicated than it looks. So get with it. A pre‐retirement counseling seminar, in person or online, is the best way to go. Most agencies, if they don’t offer them to their retirement-eligible employees already, are willing to pay the enrollment fee for ones offered by private companies - and often let employees have time off to do it. Even if your agency doesn’t provide or pay for pre-retirement counseling seminars, it’s worth it to pay out of your own pocket (for example, you might being sucker‐punched by a little‐known rule that leaves you without health insurance). Seminars are that important. Be prepared with questions – and be ready to be surprised by all the questions and answers that had never occurred to you.

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Report: Understanding the Value of Your Benefits

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About a fourth of federal workers already are eligible to retire but are continuing to work anyway. There are a variety of reasons, including a need to rebuild finances damaged in the economic downturn and a weak job market dissuading them from following the common route of working elsewhere after retiring from the government. Within a few years, as many as 40 percent of employees will be retirement-eligible.

That has led to widespread concerns about a brain drain: a loss of expertise and continuity so important in government programs. Although they might not retire as soon as they are eligible, eventually, those employees will leave.

Many of them have been torn between staying and going. Commonly, older employees like their work, know its importance, and want to be sure it is carried on properly after they retire. They also like or need the income from working. But many would like to cut back, giving themselves more free time and lessening the everyday hassles of working full time.

However, the second issue is that the government traditionally has left only a one or the other choice: work or retire. It had no arrangement in which employees could ease into retirement by reducing their working schedules. In fact, there was a policy that actually discouraged older employees from changing to part-time work by causing a reduction in their eventual annuity. A 2009 law repealed that provision, a first step toward phased retirement.

Unlike many government personnel policies that apply to either active employees or to retirees but not to both, phased retirement is a mix of the two. Except for being able to draw a partial annuity, a phased retiree is treated like an active employee—and more specifically, as a part-time employee, although certain exceptions apply as described below.

Phased retirement has been a long time coming. Congress and OPM put real effort into deciding whether it should be available, and on what terms. Deciding whether to ask for it requires similar careful consideration (and bear in mind that granting a request is up to an agency’s discretion).

This publication is designed to illuminate the path through those issues. It includes an overview of the phased retirement policy, including eligibility rules, the special policies for calculating an annuity, and what happens during and after phased retirement. Also included is a comparison with the other career options available to someone who reaches retirement eligibility.

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