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Getting the Most from Social Security

  • By Tammy Flanagan
  • October 19, 2012
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This week, the federal government announced that the cost-of-living increase for federal retirees and Social Security recipients will be 1.7 percent in 2013. That’s not a lot of money, so it may cause some retirees and those contemplating retirement to wonder about how they can get the most out of their benefits.

One thing that those retiring under the Federal Employees Retirement System can do to maximize their income is to carefully consider the best time to claim Social Security benefits. There are a lot of variables involved, so it helps to have some guidance. One user-friendly book I’ve found is A Social Security Owner’s Manual. It provides a guide to help for couples decide whether to claim Social Security at their first opportunity -- when they turn 62 -- or to wait.

If you wait past your full retirement age (65-67, depending on your year of birth), you can get a benefit as much as 76 percent bigger than the amount payable at 62, and 32 percent more than the benefit available at your full retirement age.

Spousal Scenarios

Let’s look at a hypothetical scenario involving a couple that shows how delaying Social Security can result ...

Women’s Issues

  • By Tammy Flanagan
  • October 12, 2012
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For the past 15 years, the MetLife Mature Market Institute has operated a center for studying aging and longevity. In September 2011, the institute produced a study titled “Women, Retirement and the Extra-Long Life.” In conjunction with the Scripps Gerontology Center of Miami University, they studied the challenges that women face in planning for retirement. Did you know that women are:

  • More likely than men to age alone, and thus be responsible for their own retirement
  • More likely than men to have higher health care costs throughout their lifetime
  • Less likely than men to be adequately insured and thus have greater issues with affording the rising higher cost of health care
  • More likely to be the caregiver in a long-term care situation with a family member
  • More likely to need long-term care themselves at a cost three times the average cost for men
  • Likely to have lower annual retirement income than men. The average income for men 65 and older in 2009 was $37,509; for women, it was $21,519.

Where to Start

The MetLife study showed that 39 percent of women expected to live to be 90 or older. Only 20 percent of men expected to live that ...

Who’s Getting What?

  • By Tammy Flanagan
  • October 5, 2012
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I still remember going to school and wondering how many of my classmates got an A on a test and how many got a B (like me – at least most of the time). Then, when I had children, I wondered how many other children were walking when mine were crawling and how many were saying as many words as mine were? It might not be healthy to compare ourselves (or our children) with others, but sometimes it’s hard not to.

I find the same is true in the federal workforce. People want to know how many of their colleagues have $1 million or more in their TSP accounts? (It’s less than 300). Or how many retirees get benefits packages approaching six figures? (More than 50,000 retirees receive a monthly annuity of more than $7,000, but that’s only 2.7 percent of the total number of retirees).

For those of you who crave more statistics like these, here are some numbers -- courtesy of the Office of Personnel Management -- that you might find interesting about federal retirees and their benefits.

But first, some background on the current workforce: At the beginning of fiscal 2011, more than 2 ...

Back to Basics

  • By Tammy Flanagan
  • September 28, 2012
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After presenting information about retirement to federal employees for 25 years, I can tell you that some questions seem to come up over and over again.

This week, I thought I’d address some of those common questions by providing links to previous columns I’ve written on key subjects. I’ve divided them into three categories, based on stages of planning: early career, midcareer and preretirement.

Early Career

If you’re at this stage right now, you need to get familiar with the three elements of the Federal Employees Retirement System: the basic retirement benefit, Social Security and Thrift Savings Plan investments.

Here are some past columns that will help you understand the value of your federal retirement benefits:

Midcareer

These employees need a checkup. Their typical questions include: What happens if I leave federal service before I retire? Will I be eligible ...

Nine Tax Planning Tips for Retirement

  • By Tammy Flanagan
  • September 21, 2012
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This week’s column is guest-written by Bob Leins, CPA, president of the National Institute of Transition Planning.

Let’s face it. When the topic of income taxes comes up, there are few who get excited and many who want to turn the other way. But the fact is, income tax planning is essential when preparing for retirement. And if you break it up into individual parts, it’s a manageable task.

Here are some tax tips to consider as you plan for life after your federal career:

1. Know your federal and (if applicable) state income tax brackets. This is necessary to project your cash flow in retirement to meet your living expenses. Also, you should make sure your tax withholding is appropriate.

2. Plan carefully before withdrawing funds from your Thrift Savings Plan account. Should you take funds from the TSP to pay off a mortgage, or put a downpayment on a home? Most likely the answer will be no, because withdrawals from the TSP generally are fully taxable (with the exception of the new Roth TSP option). You may be better off looking at other options -- such as refinancing.

3. Remember that Social Security benefits are very ...