Norton Speaks with Thrift Savings Plan Executive Director About Ongoing Problems with New Online System

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Congresswoman Eleanor Holmes Norton (D-DC) today spoke with the Executive Director of the Federal Retirement Thrift Investment Board (FRTIB), which manages the Thrift Savings Plan (TSP), to discuss the many ongoing problems with the new TSP online system. In the meeting, FRTIB Executive Director Ravindra Deo committed to sending weekly updates on the system to Norton.

“I appreciate the timely response by Executive Director Ravindra Deo to my request for a meeting to discuss the problems my constituents are having with the new TSP system,” Norton said. “I am pleased Director Deo accepted my request to be sent weekly updates. My constituents and federal employees and retirees across the country continue to face many problems with the new system, including taxes being erroneously taken from accounts, incorrect beneficiary information, and inability to access their retirement savings.

“I will be watching to see whether my constituents see any improvement with the system, looking closely at the weekly updates from the FRTIB, and continuing to insist on fixes and accountability. I indicated the possibility of seeking a House hearing if improvements are not made more quickly.”

Norton sent a letter to FRTIB on June 13, 2022, raising the initial concerns she heard from constituents about the system. FRTIB responded on June 17, 2022. Norton requested today’s call after hearing from constituents about additional problems they are having with the system.

Should You Retire Right Now?

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Some money experts have said that 2022 is a dangerous year to retire, but what if you need to? Here are five things to consider.

SAINT LOUIS, Mo. — With inflation, rising rates, and a financial crisis, some people are worried about retiring right now.

In fact, even as more Americans receive pay raises, the rate of inflation makes increases feel more like a pay cut. According to Moody’s Analytics, the average American is spending around $460 more a month than the amount paid for the same thing last year.

A University of Michigan study predicts real disposable income per American may fall to the lowest since the Great Depression.

It’s something that a lot of potential retirees consider since their money is not only down in their retirement accounts, it’s likely those dollars aren’t going to go as far. So, many people wonder, is it worth retiring?

We asked Jeff Sachs from Sachs Financial for advice.

1. It’s not necessarily about what you have or what you make. It’s about what you save. “The first question that I ask anybody is, ‘what does it cost to be you?'” said Sachs. “‘What does it cost to maintain your lifestyle? And where does that money come from?'”

Sachs said American workers don’t have the pensions they used to have, social security doesn’t go as far, and inflation is making things more challenging. Planning ahead can make a difference.

2. A good rule of thumb is to make 80% of your current income during retirement through savings plans and social security. “You need about 80% of that because you aren’t driving to work every day,” said Sachs. “You’re not driving to work, you aren’t buying lunches, you aren’t contributing to your 401(k) and your social security and all of that. So, you need a little bit less income.” Please follow link to read more: https://bit.ly/3ujYduB

ELIGIBILITY FOR FERS RETIREMENT

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Last week I went over the retirement eligibility rules for CSRS employees. This time I’ll focus on the ones for FERS employees. Not only do they include more retirement options than those available to CSRS employees, but they also have features that are unique to FERS.

Immediate unreduced annuity
As a FERS employee, you can retire on an immediate, unreduced annuity with the following combinations of age and service:

• 62 with 5
• 60 with 20
• at your minimum retirement age (MRA) with 30
Note: MRAs range between 55 and 57, depending on your year of birth.

You can also retire at your MRA with at least 10 years of service under the MRA+10 provision. If you do that, your annuity will be reduced by 5 percent for every year (5/12 of 1 percent per month) you are under age 62 (60, if you have at least 20 years of service).
If your agency is offering early retirement under the Voluntary Early Retirement Authority (VERA), you can retire with the following combinations of age and service:

• 50 with 20
• at any age with 25

Special retirement supplement
FERS is a retirement system with three parts to it: an annuity, Social Security, and the Thrift Savings Plan. If you retire at age 60 with 20 years of service or at your MRA with 30, you’ll be entitled to a special retirement supplement. The SRS approximates the amount of Social Security benefit you earned while a FERS employee. The same is true if you retire under a VERA, but only when you reach your MRA. The SRS will continue to age 62, when you first become eligible for a Social Security benefit. We’ll look at this in more detail next week.

Cost-of-living adjustments
Unlike CSRS, your FERS annuity won’t be increased by COLAs until you reach age 62 unless you retired under disability or subject to mandatory retirement as a “special category employee,” such as a law enforcement officer or firefighter. The SRS won’t be increased at all.

Postponed and deferred annuities
If you retire under the MRA+10 provision, you can postpone the receipt of your annuity to a later date to reduce or eliminate the age penalty. If your annuity begins before age 62, you’ll be entitled to the SRS.

If you don’t meet the age and service requirements to retire when you leave but have at least 5 years of service and don’t ask for a refund of your retirement contributions, you can apply for a deferred annuity when you meet one of the following age and service combinations:

• 62 with 5
• 60 with 20
• at your MRA with 30
• at your MRA with 10, but with the same age penalty described above
Note: Deferred retirees are never entitled to the SRS.

Follow link to read more: https://bit.ly/3uhjuFg