REP. ANGIE CRAIG INTRODUCES LEGISLATION TO ELIMINATE FEDERAL TAXES ON SOCIAL SECURITY PAYMENTS

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U.S. Representative Angie Craig introduced the You Earned It, You Keep It Act, which would repeal federal taxes on Social Security benefits for retirees across the country. Over the past year, inflationary pressures have stretched the already limited budgets of many retired Americans. Craig’s legislation would allow seniors to keep the benefits they rightfully earned after decades of working and contributing to the American economy.

“Social Security is a promise we have made to the American people – if you work hard and play by the rules, the dignity of a secure retirement will be within your reach. But taxing the very benefits American workers have earned after decades on the job diminishes our promise and threatens to undermine the financial security of retirees already struggling with rising prices,” said Representative Craig. “Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work.”  Follow link to read more. https://bit.ly/3e5qJuI

FERS Retirement Eligibility

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Retirement eligibility under FERS is determined by a federal employee’s age and number of years of creditable service.

When retiring as a regular FERS (Federal Employee Retirement System) employee, your eligibility is based off of years of service and age. You must meet one of the three main minimum age and service requirements in order to qualify for an “immediate” unreduced pension. While there are other factors to consider when planning for retirement, such as income needs, strategies around social security and health benefits, the basic requirements are a good place to start. 

MRA (Minimum Retirement Age) with at least 30 years of service

Retiring at MRA with at least 30 years of service is the earliest a regular FERS employee can retire (other than excepting an “Early Out” option) without a penalty. Minimum retirement age is based on the year of birth of the FERS employee. Follow link to read more. https://bit.ly/3q22DDM

President Biden Announces Plan to Cancel Student Debt

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Ahead of another deadline on the restart of payments for America’s $1.7 trillion in federal student loans, President Joe Biden on Wednesday, 8/24/22 announced a plan to cancel debt for a subset of Americans and continue to keep a pandemic-era pause on the repayments — a sweeping move he has openly weighed in some form or another since his time as a candidate.

“In keeping with my campaign promise, my Administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023,” Biden wrote in a Twitter post.

Pell Grant recipients can qualify for up to $20,000 in debt forgiveness as part of Wednesday’s broader announcement on student loan forgiveness. Other student loan borrowers who don’t have Pell Grants will still have loans forgiven up to $10,000, as has been previously reported.

Both forgiveness options are for people who earn less than $125,000 per year, or $250,000 as a household. According to the White House, Biden will give remarks Wednesday at 2:15 p.m. in the Roosevelt Room.

Biden’s social media post also announced an extension of the pause on student loan payments through Dec. 31, 2022 — the final extension — a move that’s intended to give time for the transition back to repayment. Follow link to read more: Biden unveils plan to forgive student loan debt for a subset of Americans (msn.com)Follow link to read more.https://www.msn.com/en-us/news/politics/biden-unveils-plan-to-forgive-student-loan-debt-for-a-subset-of-americans/ar-AA111x5j

The Fed’s Inflation Nowcasting Tool

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Does waiting 30 days for a government report seem a bit unreasonable? After all, we live in a world of instant messages and real-time quotes. Why should we wait a whole month between updates on the Consumer Price Index to see what’s going on with inflation?

Well, you don’t. If you’re an economics geek like me, here’s a secret tool you may not know. If economics is not your thing, know that I’m keeping close tabs on this stuff.

The Cleveland Fed has a tool called Inflation Nowcasting, which provides daily updates on inflation. Much like the Atlanta Fed’s GDPNow forecasting model, it provides a real-time snapshot of gross domestic product.

For July, the Inflation Nowcasting forecasts that prices will rise 0.27% from a month earlier. That would be the smallest month-over-month gain since January 2021. For August, it’s showing an increase of 0.32%. How will the financial markets react if inflation starts to trend lower?

It’s important to point out that forecasting tools are based on assumptions and subject to revision without notice. In some instances, they may not materialize at all.

Real-time reports are nothing new, but it’s great to see that the Fed is starting to get more instant updates on the economy. And it’s information that’s available to all of us. You have to know where to look. Click HERE to learn more.

Your FERS Annuity Is Worth More Than You Think

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How much is your FERS annuity worth? More than you think it is! FERS is a defined benefit plan that is funded by mandatory contributions from both you and the government. You pay significantly less for this benefit than does Uncle Sam. Your FERS annuity is calculated by your length of service (in years and months) and your high-three annual salary. Those who retire under the age of 62 will receive an annuity based on 1% per year, while those who retire at or older than 62 and have at least 20 years of service will receive an annuity based on 1.1% per year. Those who are 62 or older but have less than 20 years get the 1% factor. Special category employees (e.g., law enforcement officers, firefighters, air traffic controllers, etc.) will receive a higher percentage.

How much would you have had to save on your own to get a benefit that is equal to what you have will receive in your FERS annuity? Quite a bit! Let’s say that you retire under the age of 62 and have a total of 30 years of federal service. Your high three salary is an even $100,000 a year. Your FERS annuity will be $30,000 per year and will (once you reach 62) have a cost of living adjustment. The COLA kicks in upon retirement for special category employees. How much would you have had to save in order to be able to generate an inflation indexed income of $30,000 per year? Click HERE to read more.