Everyone loves tax free money, but sometimes it’s hard to pay more today for a future benefit. Roth conversions definitely fall in the camp of delayed gratification - but could be a useful planning technique for many federal employees.
Most people are aware that they will be required to take money out of their qualified accounts when they get older. But as with anything in life, the timing is what matters. Do you just start blindly taking withdrawals when you hit 70 ½?
The FERS annuity is the foundation of the federal employee retirement plan. While some federal employees may know how to calculate their FERS annuity, I have found that there are four elements of FERS that people fail to grasp.
If you knew how to potentially save a couple thousand dollars a year, would you do it? If yes, then I would recommend looking in to bunching your expenses. The concept of bunching your expenses has been around for a long time, but I believe has become more applicable with the new tax law.
Dave makes two big assumptions that I believe can be devastating to an individual’s retirement
Many studies about retirement fears show that retirees’ biggest fear is running out of money. Running out of money as a valid fear for retirees, but should it be a valid fear for federal retirees?
Paying for college can easily be one of the biggest expenses that parents will incur during their lifetimes. Although it is likely to cost a significant amount of money, it isn’t much different from other major purchases that
The main purpose for a survivor annuity is for married FERS employees to have the option to leave an income stream to their surviving spouse. In other words, you can leave a benefit at your death (sound familiar?). The reason for the SA is quite simple – many spouses can’t afford to lose an income of $2,000 a month
I receive questions weekly asking what I do and how I help federal employees, so I have finally decided to put together some case studies to demonstrate how federal employees can benefit from advice.
Money is just money, right? Well, not exactly when it comes to retirement income. It’s not as straightforward as you would think. There are a number of things different about retirement income compared to your regular paycheck. Many of the changes will benefit federal employees, but not all. For example, taxes are just one of the things that will be different in retirement.
Ask a high income earner who works in the medical field and they’ll likely say that taxes are one of their biggest financial concerns. Accounts like a Traditional IRA, 401k, 403b, deferred comp and Roth IRAs (aka “tax shelters”) give investors tax benefits for investing in them. Does that mean that a regular taxable account is bad for medical professionals?
Searching for the right college for your children is a very overwhelming task. There are many things to consider and address when looking for the right college for your kids, but there is one major mistake that can set up children and their families for an overwhelming financial struggle.
I have had a number of questions recently from federal employees and middle-class families wondering how they will be affected by the new tax law. There are a few changes that are going to affect federal employees and the middle class, and the end result will likely be a reduction in the amount of taxes paid.
This is a question that takes a little analysis. The traditional TSP gives participants an immediate benefit by lowering their adjusted gross income (AGI), which means less taxes are paid today. The tax benefit for Roth TSP comes when a participant takes distributions and receives tax free income.
A common question for federal employees to ask me is, "so what's this annuity option in my Thrift Savings Plan (TSP)?" There is a lot of misunderstanding around what annuity options are available through TSP, as well as confusing the TSP annuity options with your FERS annuity.
