Moving in Retirement? Make Sure Your Benefits Move with You

If you move in retirement, as many retirees do, you’ll want to make sure your federal employment-based benefits move with you.

To report a change in address after retirement, write to Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045, call (888) 767-6738, online www.servicesonline.opm.gov. Use the same points of contact to arrange to have your annuity sent to a different financial institution, if you are changing accounts because of the move.

To change your address under the Federal Employees Health Benefits program, contact your carrier directly and follow its procedures. If you are enrolled in a plan that serves a limited geographic area, such as a health maintenance organization, you will be covered for emergency care. But unless your HMO has a “reciprocity” agreement with a plan in your new area that allows you to get routine care, you must travel back to the HMO’s coverage area for such care, or change plans. To change plans, contact your retirement system. OPM’s Web page at www.opm.gov/insure/index.html contains a list of plans from which you can choose and find out how to get brochures for those plans.

Moving out of a regional plan’s service area also qualifies for changing plans under the Federal Dental and Vision Insurance Program. To change your address and/or plan, contact www.benefeds.com, phone (877) 888-3337.

Since the Federal Long Term Care Insurance Program has just one national carrier, moving does not affect enrollment. Notify the carrier of your new address by calling (800) 582-3337 or writing to Long Term Care Partners, P.O. Box 797, Greenland, NH 03840-9803.

Similarly, since the Federal Employees’ Group Life Insurance program has just one national carrier, moving does not affect FEGLI enrollment. Notify the carrier of your new address at OFEGLI, P.O. Box 6512, Utica, N.Y., 13504-6512, phone (800) 633-4542, fax (315) 792-6603.

To let the Thrift Savings Plan know a new address, use the My Account feature at www.tsp.gov.

If you have state income tax withheld and you move to a different state, you must contact the state you move away from to stop the tax withholding. If the state into which you move participates in the OPM tax withholding plan, contact its tax office to arrange for new withholding. OPM cannot make any change without notice from your state tax office.

Citation: Published: -FedWeek

 

 

Thrift Savings Plan Withdrawal Options – Part I

Over the last five years, there have been numerous changes to the Thrift Savings Plan (TSP) including TSP participant withdrawal options.

This is the first of four columns discussing the various withdrawal options for separated TSP participants.

Separated TSP participants include a civilian federal employee or a member of the uniformed services who has retired or left federal service or the uniformed services. Also included in the category of separated participants is a “beneficiary” participant who is a spousal beneficiary of a deceased federal employee/retiree or a deceased uniformed service participant who established a TSP account in his or her name.

These columns will present information about the TSP withdrawal process, the rules that govern withdrawals, and the tax implications of each withdrawal option.

With currently many federal employees and uniformed service members retiring in their late 50’s and early 60’s, the importance of having a good TSP withdrawal strategy cannot be overemphasized.

It is not unreasonable to assume that many of these individuals could live into their 80’s and 90’s, needing the income from their TSP account withdrawals to help pay their retirement expenses. With inflation expected to return to its normal average annual rate of 4 to 6 percent, separated and beneficiary TSP participants are advised to make sure that they do everything possible to maintain their TSP account throughout their retirement, a period that may last for as long as 30 to 40 years.

Questions to Ask Before Making TSP Withdrawals

To accomplish this goal of maintaining their TSP accounts, TSP participants should ask themselves the following questions before they decide to take distributions from their TSP accounts:

  1. When to start withdrawing from the TSP account?
  2. How much does the participant expect things will really cost them during retirement?
  3. Will the participant have enough retirement income to pay for all of his or her expenses during retirement?
  4. Will the participant need to provide income for any dependents/heirs from their federal retirement income?
  5. Will the participant be moving to an area in which expenses will be significantly higher or lower compared to where he or she lived before retiring?

Leaving Money in the TSP

Unless a TSP separated participant or a beneficiary participant is subject to required minimum distributions (RMDs) or has an account balance of less than $2,000, there are no requirements for a separated or beneficiary TSP participant to do anything with their TSP account. No distributions, rollovers, transfers or inter-fund transfers have to be paid. The TSP account will continue to accrue earnings. Click HERE to read more.

 

Maximum Telework Designation to End May 15, OPM Says

OPM has said that the “maximum telework” government-wide operating status designation, put in place more than three years ago in response to the Coronavirus pandemic, will end May 15 since “COVID-19 is not driving decisions regarding how federal agencies work and serve the public as it was at the outset of the pandemic.”

That follows recent issuance of an OMB memo calling on agencies to return more employees to their regular worksites and for more often, although still leaving them with discretion in the name of “organizational health and organizational performance.” The OMB memo came in the wake of criticisms about continued high levels of telework by federal employees even as the threat of the virus ebbed and President Biden had declared the pandemic to be over.

“For the last several years, executive departments and agencies have taken steps for the effective, orderly, and safe increased return to the workplace, and many federal employees have completed reentry. We have maintained the COVID-19 governmentwide operating status until now to preserve maximum flexibility for agencies to learn from work environment innovations and to allow for agencies to adjust their reentry plans in the most appropriate way considering the needs of each agency,” says the OPM memo, on chcoc.gov.

“As a practical matter, we do not expect this operating status change to have significant impact on agency and workforce readiness. Agencies have been executing their reentry plans and policies over the past year . . . Supervisors and employees should continue to follow their internal agency plans and standard operating procedures,” it adds.

OPM characterized the OMB memo as standing for “an expectation to increase meaningful in-person work while still using flexible operational policies. Agencies should continue to strategically use telework and remote work policies in support of their workforce plans moving forward while capitalizing on the benefits of meaningful in-person work,” it says.

Citation: Fedweek, Published: 

 

 

The Demise of the US Dollar

U.S. Government’s Investment Options Are Good but Could Be Great

The U.S. Federal Thrift Savings Plan’s Lifecycle Funds’ unique status as part of a huge government entity is a blessing and a curse.

As the workplace retirement savings vehicle for U.S. federal civilian workers and uniformed services members, the Federal Retirement Thrift Savings Plan stands as the largest defined-contribution plan in not only the United States but also the world. Its more than 6.7 million participants include most employees of the U.S. government, such as postal workers, military personnel, agency employees, and members of Congress.

Like most U.S. retirement savings plans, target-date strategies are important and growing components of TSP. They are known as the Lifecycle or L Funds, and more than half of TSP’s 6.7 million participants have directed at least a portion of their assets to these target-date funds; of those, 2.3 million workers invest solely in the L Funds. To offer a measure of independent analysis to L Fund investors and the advisors who serve them, Morningstar reviewed the L Funds through a lens similar to the one used to examine target-date investment strategies available to the general public, examining the funds’ Process, People, Price, Parent, and Performance.

Here, we explore the main advantages and disadvantages of TSP L Funds. Let us know if there are any other TSP-related questions that you’d like us to pursue in the future.

Thrift Savings Plan L Fund Advantages:

  • Rigorous annual testing of asset-allocation glide path.
  • Access to G Fund that provides U.S. government-guaranteed yields with no bond-market risk
  • Underlying funds rely on well-regarded managers via BlackRock and State Street Global Advisors.
  • Access to G Fund that provides U.S.-government-guaranteed yields with no bond market risk.
  • Among the lowest expense ratios available to investors.
  • Unmatched level of transparency via board meetings and various reports available to public.
  • Returns have soundly matched expectations by protecting in down markets.
  • Long-term results consistently ahead of peers. Click HERE to read more.