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Decoding Retirement and Tax Planning for Federal Employees in 2024

Federal jobs come with many perks, and a strong retirement plan is a big one. For most federal employees hired after 1983, the Federal Employees Retirement System (FERS) offers a powerful way to save for the future. Here's how it benefits you: Tax-Deferred Growth : The cornerstone of FERS is the Thrift Savings Plan (TSP). Similar to a 401(k), your contributions are deducted from your paycheck before taxes are applied. This lowers your taxable income now and lets your money grow tax-deferred until retirement. Government Match : A big bonus! The government contributes a percentage to your TSP based on your contributions, essentially giving you free money for retirement. Catch-Up Contributions : Reaching retirement later? The IRS allows "catch-up" contributions for those aged 50 and over, letting you save more each year. Traditional or Roth : The TSP offers both traditional and Roth options. Traditional lowers your taxable income now, with taxes paid on withdrawals. Roth contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. Remember, contribution limits apply, so research the current limits to plan your savings strategy. For a secure and prosperous retirement, FERS's tax-deferred options are a valuable tool. Since there is a lot of information to review and consider before you retire, it’s recommended to consult with a retirement coach for personalized guidance. To get connected with one of Federal Retirement Experts’ retirement coaches, visit our connection page and complete the form to schedule a 30-minute consultation . Our expert coaches can answer your FERS and TSP questions, explain how federal benefits work in retirement, and calculate a projected retirement income. If you're 50 or older, you’ll also receive a complimentary pre-retirement analysis. This is a free tool to help you to better plan for retirement.

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Retirement should be a golden age filled with relaxation, travel, and spending quality time with loved ones. However, the potential need for long-term care can cast a shadow over this golden picture. The costs of long-term care can be astronomical, quickly depleting savings and jeopardizing financial security. Thankfully, federal employees have access to a valuable resource: the Federal Long Term Care Insurance Program (FLTCIP). This program offers comprehensive and affordable long-term care insurance to eligible federal employees, retirees, and their families.

When a federal worker or retiree passes away, it raises critical questions about the healthcare coverage of their surviving spouse and children. The answers to those questions depend on the type of coverage the deceased federal employee had and the decisions made before retirement. This is why pre-retirement planning is so important. To secure healthcare continuity for your loved ones, it's essential to consider a benefit review and pre-retirement analysis with a Federal Retirement Consultant (FRC), like the ones at Federal Retirement Experts. Survivor Healthcare Coverage Through Federal Employee Health Benefits (FEHB) FEHB is a critical component of healthcare coverage for federal employees and retirees. The good news is that FEHB generally allows eligible surviving family members to continue coverage after the federal employee's death. However, maintaining this coverage involves certain prerequisites and considerations: Who’s eligible? Spouses and dependent children can typically continue FEHB coverage if they were covered under the employee's plan at the time of their death. However, designated eligible family members must meet all requirements to continue enrollment. Is there a cost? Survivors are responsible for paying the full premiums, as the government no longer shares the cost. It's essential to be prepared for this financial responsibility. When is enrollment? Surviving family members should act promptly. Eligible family members usually have a limited timeframe to enroll in a new plan or convert their existing coverage. Survivor Healthcare in the Federal Retirement Systems The specifics of healthcare coverage after the death of a Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) retiree differ from FEHB, highlighting the importance of a pre-retirement analysis. Survivor Annuity: If a federal retiree chose a survivor annuity option, their surviving spouse may be eligible to receive a portion of their annuity. This annuity may include health benefits. Death Benefit: Federal retirees who elected a survivor annuity can provide their surviving spouse with a monthly annuity and continued FEHB coverage. However, the terms and conditions may vary, making pre-retirement planning crucial. The Role of a Federal Retirement Consultant (FRC) Given the complexity of federal benefits and the unique considerations for each family, consulting with an FRC is an invaluable step. An FRC specializes in understanding federal retirement systems and benefits, including healthcare coverage. Federal Retirement Experts (FRE) have FRC coaches that can understand both federal retirement systems and can help federal employees plan ahead. Here's how they can help: Benefit Review : Our FRCs can review your existing benefits and help you make informed decisions about survivor annuities, FEHB, and other healthcare-related options. This review can ensure that your loved ones receive the best possible coverage after your passing. Pre-Retirement Analysis : Our FRCs can assess your specific situation, offer personalized advice, and help you optimize your retirement plan. They can help you make choices that will not only secure your financial future but also provide for your family in case of your untimely death. Securing healthcare coverage for your surviving spouse and children after your passing as a federal employee or retiree is a complex task. It requires careful planning, understanding the intricacies of your specific benefits, and making informed decisions. To ensure that your loved ones are well-protected, a benefit review and pre-retirement analysis with one of our Federal Retirement Consultants is essential. Don't leave this critical aspect of your retirement to chance; consult with an FRC to secure a brighter future for your family. Currently, we’re offering a complimentary benefit review and pre-retirement analysis to all current federal employees and retirees over the age of 55. To get your review and analysis, request your copy today.

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