Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

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...

Women, Men and Financial Planning

You may not be aware, but next week is National Retirement Planning Week. The National Retirement Planning Coalition, a group of education, consumer advocacy and financial services organizations led by the Insured Retirement Institute, will coordinate a series of activities throughout the week aimed at promoting the importance of comprehensive retirement planning.

Last week I had the opportunity to speak with IRI president and CEO Cathy Weatherford. She was the first woman to serve as Oklahoma’s insurance commissioner and is the author of Women and Wealth: Inspiring Stories from Real Women on the Path to Financial Success. She will be a featured presenter at a Capitol Hill lunch panel next week on women and retirement.

Weatherford often focuses attention on women and retirement planning because women typically have different issues and challenges than men. Here are some things she said women should consider during the planning process:

  • Often, women’s ability to accumulate retirement savings and benefits is limited by leaving the workforce to assume caregiving roles for their children as well as dependent parents and partners.
  • Women who are financially dependent on their husbands can have retirement preparations thwarted by death or divorce.
  • There is still wage inequality...

5 Retirement Questions Only You Can Answer

There are some relatively simple things that everyone should know about their basic benefits under either the Federal Employees Retirement System or Civil Service Retirement System. This week, I want to present five straightforward questions covering the key items that allow you to transition from employee to annuitant. The answer to these questions vary according to work experience and other factors, so only you can answer them.

How old you must be and how much service you will need in order to be eligible for an immediate, voluntary CSRS or FERS retirement benefit?

Here’s some basic information to guide you:

If you’ve worked other than a full-time work schedule, it is important to factor in the impact of intermittent or when-actually-employed time, part-time work, and leave without pay periods during your federal career. (Bonus question: Can you explain the difference between an immediate and a deferred retirement?)

Remember, the age at which you are eligible to retire is not necessarily the age at which you can afford to retire. It’s just the date on which you will be able...

The Saving of the Green

When my husband and I lived in Northern Virginia, he always wanted to to see green grass by March 17. That might be because our last name is Flanagan, or just that he takes great pride in maintaining our yard — probably a little of both. (It’s a good thing we’ve moved to Florida, where things are green year-round, because right now Northern Virginia’s grass is snow-covered.)

Green isn’t just the color of a lush lawn or St. Patrick’s Day attire. It’s also a popular color when thinking about your retirement needs. After all, it’s the color of money.

In the movie Wall Street, Carl Fox (played by Martin Sheen) says, “Money’s only something you need in case you don’t die tomorrow.” That’s retirement planning in a nutshell: You’ll need a lot more to finance a retirement that is going to last 30 or 40 years than you would if you were only going to be retired for five to 10 years.

In fiscal 2014, the average age of a new federal retiree was 61.4. According to data compiled by the Social Security Administration:

  • A man reaching 65 today...