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Advice on how to prepare for life after government.
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Life Changes and Benefits Changes

Federal employees and retirees typically consider making changes to their benefits during an open season or when a new benefit is introduced. However, there are times when changes need to be made for more personal reasons, such as a life-changing event. During such times, it can be confusing to navigate the process of making changes, since no one else is doing it at the same time as you are.

What do you do when it’s time to add or change your benefits because of a life event such as a marriage, divorce, birth or adoption of a child, or the death of a family member?

If you’re a current employee, you can contact your human resources office or access the employee page of your agency’s website. If you’re retired, generally you’ll need to contact the Office of Personnel Management, the Thrift Savings Plan or the Social Security Administration. Most changes to benefits can be made online, and the instructions are generally easy to follow.

For example, to change the allocation of your TSP investments, visit the Interfund Transfers page of the TSP website. Here you will find a three-minute YouTube video along with written online...

Leave Calculations

On the most basic level, the difference between sick leave and annual leave for federal employees is simple: Sick leave is for illness and annual leave is for vacations. In practice, it’s a little more complicated.

Federal workers are able to accumulate 104 hours of sick leave every year of federal service. Over a 20-year career, that’s 2,080 hours, or about a year’s worth of accumulated sick leave. Both the Civil Service Retirement System and the Federal Employees Retirement System credit unused sick leave balances toward the calculation of retirement benefits.

So should you save your sick leave for retirement or a future illness and use your annual leave when you’re sick or have a doctor’s appointment? Some employees do this in order to maintain a large balance of unused sick leave in the event of a future major medical need.

When it comes to annual leave, generally employees can carry over 240 hours from one year to the next. But they begin to earn eight hours per leave period after 15 years of federal service. That’s 208 hours a year, or more than five weeks of paid vacation. When you add in...

Should You Take a Buyout?

Earlier this week, Eric Katz of Government Executive reported that the Environmental Protection Agency will begin offering employees buyouts and early retirement incentives this year. News like this puts employees at all federal agencies on high alert. I got several emails this week from readers as a result of this announcement. For example, Susan wrote, “Would you consider posting an article giving your thoughts about the pros and cons of taking these buyouts?”

In retirement planning, it’s important to be ready for a range of possibilities. It’s like planning a vacation. I’m usually the one to plan our family getaways because I don’t like surprises and I want to be sure we don’t miss out on something because we didn’t think ahead. As Col. John “Hannibal” Smith used to say on the TV show The A Team, “I love it when a plan comes together.

So should accepting an early out offer, potentially with a buyout, be part of your plan? To answer that question, it’s first important to understand two terms: Voluntary Early Retirement Authority and Voluntary Separation Incentive Payment. The VERA and VSIP programs are key tools to help agencies meet...

Will Social Security Last?

Nancy A. Berryhill, acting commissioner of Social Security, recently announced that April is National Social Security Month. During this month, the Social Security Administration is highlighting five steps to financial security:

  • Get to know your Social Security
  • Verify your lifetime earnings with a My Social Security account
  • Estimate your future Social Security benefits at My Social Security
  • Apply online for retirement, disability, or Medicare benefits
  • Manage your Social Security benefits

Now might be a good time to gain a better understanding of how Social Security fits into your retirement plan, whether you are covered under the Civil Service Retirement System or the Federal Employees Retirement System.

The long-term future of Social Security has been a matter of political debate for years. Recently, Rep. John Larson, D-Conn., re-introduced the Social Security 2100 Act, which aims to provide increased benefits to low- and mid-wage workers while extending the solvency of the program by making the wealthy pay more into the system.

Specifically, the bill would make eight significant changes to Social Security:

  • Change the Social Security benefit formula to slightly increase all benefits payable for months of eligibility in January 2018 and later.
  • Use the Consumer Price Index for the Elderly (CPI-E...

Timely Tax Tips

April is already upon us, and I hope most of you are either finished or in the last stages of preparing your 2016 tax returns. If you have recently retired, you may be learning that their are some benefits to leaving the workforce when it comes to income taxes. For those of you in the planning stages, it might be a good time to think through the tax implications of preparing for your separation from federal service.

FIrst, for some good news: Some states don’t tax your retirement income, and others don’t have a state income tax at all. The National Active and Retired Federal Employees Association provides a state by state tax guide for federal retirees. If your state does tax federal retirement benefits, the Office of Personnel Management will not withhold state income taxes unless you choose to have such withholding after your retirement is processed. You may use OPM Services Online to make this selection. Some retirees choose to make estimated tax payments directly to their state tax office.

When it comes to federal income taxes, most, if not all, of your retirement income is taxable. You won’t pay Social Security or Medicare wage...