Retirement Decision Points and Benefits Overview
Explore key decision points and eligibility criteria for retirement benefits at the Administrative Office of the U.S. Courts. Learn about retirement age requirements, annuity effective dates, and considerations for a successful retirement transition. Discover resources to help plan for life after retirement.
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DECISION POINTS at Retirement Benefits Division Administrative Office of the U. S. Courts
Agenda When Can I Retire? N.O.W.That You re Eligible Your Benefits Additional Information Resources 2
Retirement Eligibility CSRS FERS Age 55 with 30 years of service Minimum Retirement Age (MRA) with 30 years of service Voluntary Optional Retirement YES YES Age 60 with 20 years of service YES YES Age 62 with 5 years of service NO YES MRA with at least 10 years of service Early Optional (Voluntary) ** YES YES Age 50 with 20 years of service - YES YES Any age with 25 years of service - ** Court unit must have approved plan. 4
Annuity Effective Date FERS employees generally, the first day of the following month after the retirement date CSRS employees either: First day of the month after the employee s retirement date; or, Day after the retirement date (if retirement occurs in first three days of a month) For example: the first annuity payment is received the month after the annuity effective date April 30th: Employee s retirement date May 1st: Annuity effective date June 1st: First annuity check is paid 5
N.O.W. THAT YOURE ELIGIBLE http://www.publicpower.org/files/images/PPMagMay2010page28.jpg 6
The Future Is N.O.W. NETWORKING - how you stay connected with life, with the world, with people. OVERALLHEALTH - not just medical care and your physical health, but also your satisfaction with your situation, your mental outlook, your ambitions and goals. WEALTH - how you pay for the way you live (or want to live). 7
Some Considerations for N.O.W. What will be your post-retirement income? Is that enough to sustain your quality of life? (W) What would you like to do with the time you now spend with the Judiciary? (O) Are you eligible to carry your health and/or life insurance into retirement? (O) (W) Where is your support network? (N) How would your retirement decision affect other people in your life? (N) (O) (W) How ready are you to retire QUICKLY if the actions of others (i.e., court s offer of early retirement or buyout, spouse s sudden illness, etc.) force your decision? (N) (O) (W) 8
Do you need more credits to qualify for SS or Medicare? (W) Are there any periods of service not represented in your records? In your service computation date? (W) What s the environment, climate, and cost of living like in the area where you now live? In an area where you d like to live? (N) (O) (W) How much, and what types, of health insurance will you need or want? (O) (W) If you ever need help with just living (i.e., eating, bathing, dressing, using the bathroom, moving around), where can you get it? How will you pay for it? (N) (O) (W) What about taxes? Is the tax burden affecting where you d choose to live? (W) 9
For More Information WL4U As you plan for your retirement, this year s Work Life For You (WL4U) series of webinars from the BeneFit for Life Hour provide more details and food for thought about these important N.O.W. areas: Healthy Aging (2/7/17) Planning Your Financial Future (5/23/17) Caregiver --- Legal and Financial Issues (6/13/17) The Sandwich Generation (6/27/17) Navigating Life s Transitions (7/18/17) Locate and view a live or recorded session at http://jnet.ao.dcn/human-resources/benefits/benefit-life-hour 10
YOUR Benefits http://www.solresults.com/wp-content/uploads/2015/11/blog-1.jpg 11
CSRS/FERS Annuity What do you want a survivor benefit to do? How close are you to age 62? This could affect: FERS Annuity Supplement COLA Computation formula Do you want to re-enter the Federal workforce? As a re-employed annuitant? As a contractor? Would it benefit both you and your court to work half-time during your final year (with full insurance coverage) while preparing others to take over for you? What other retirement income are you expecting, and how often will you receive it? Do you have any additional service for which you have not made a deposit or redeposit? 12
Survivor Election Options CSRS FERS Annuity Amount Full Survivor Annuity 55% of the retirees annual annuity 50% of retiree s annual annuity 55% of the amount of annuity selected as base Partial Survivor Annuity 25% of retiree s annual annuity Cost Annuity reduced by 2.5% on the first $3,600 Plus 10% remainder 10% reduction of retiree s annuity Full Survivor Annuity Annuity reduced by 2.5% on the first $3,600 Plus 10% remainder 5% reduction of retiree s annuity Partial Survivor Annuity Payable to former spouse after death if survivor benefit provided by court order Former Spouse 13
Continued Federal Service As RE-EMPLOYED ANNUITANT Annuity paid during reemployment, but salary proportionally reduced Can again have pre-tax FEHB, Flex, additional FEGLI, TSP, leave accrual Can get supplemental (1 yr) or re-determined (5 yrs) annuities As CONTRACTOR Not appointed into Federal service, so salary and benefits are up to your employing company Annuity and insurance continues Full salary paid by employer, with SS and employer s benefits As a PHASED RETIREE Management tool not an employee entitlement; approval needed Partial annuity paid while receiving half salary 50% of full-time schedule; regular FEHB premium and FEGLI amount At least 20% of schedule must be spent on mentoring activities 14
Thrift Savings Plan REGULAR SOURCEOF INCOME, would you: Purchase an annuity Take monthly payments from your account ONE-TIME PAYMENT, would you take a: Partial withdrawal at retirement, with full withdrawal rights later on Lump sum withdrawal of your entire balance KEEP GROWING YOUR ASSETS, would you: Leave money in current TSP account Roll over into IRA or other tax-deferred account Taxes pay now or pay later? Exceptions to the penalty for withdrawing benefits before reaching age 59 : Purchase an annuity, regardless of age Retire due to disability, even if it s not a disability retirement Take monthly payments based on your life expectancy Retire during, or after, the calendar year you reach age 55 (or retire under a LEO pension after reaching age 50) The TSP web site has several useful calculators to help in your planning. You can find them at https://www.tsp.gov/PlanningTools/index.html 15
Insurance Coverage Do you need the highest option on your FEHB plan? If you re married to another Federal employee or retiree, should you combine FEHB and/or FEDVIP coverage into one plan or have self-only coverage for each of you? Self Plus One coverage available for FEHB and FEDVIP Do you still need FEGLI Option B coverage? What benefits can you change (or newly elect) after retiring? FEDVIP (at any Open Season) FLTCIP Long Term Care (upon underwriting approval) FEHB (at any Open Season or upon qualifying life event) Are you interested in taking a break from premiums without permanently giving up your right to be covered? 16
Insurance and Flexible Benefits Carry Into Retirement? Eligibility YES Covered the last five years before retirement Federal Employees Health Benefits YES Covered the last five years before retirement Federal Employees Group Life Insurance YES No five-year rule to carry into retirement Can newly enroll during each Open Season after retirement Federal Employee Dental and Vision Insurance Program Long Term Care - YES Must have enrolled by 2/1/16 to carry into retirement Judiciary Long Term Care - CNA - YES Open to all Federal employees and retirees New enrollees must pass underwriting to begin coverage Federal Long Term Care Insurance Program - NO Can submit claims for expenses that are incurred prior to retirement date (HCRA) or by end of retirement year (DCRA) Flexible Benefit Program 17
Social Security Do you know the difference between quarters and credits ? CSRS employees --- how would your Social Security benefits be affected by: the Windfall Elimination Provision? the Government Pension Offset? Will your spouse receive Social Security benefits? Do you want to receive Social Security even while you re giving some of it back to the Government? Earnings Test FICA tax on salaries Which is the better deal for you? Start SS at age 62 and get 75% of your regular benefit? Start SS at full retirement age and get 100% of your regular benefit? Start SS at age 70 and get 135% of your regular benefit? 18
Medicare How will Medicare work together with your FEHB plan? What will Medicare pay for, and what will be covered by a supplement? Which parts of Medicare will you need, or want (since only the hospitalization Part A is free)? If you re eligible for Medicare, will you also need a High Option FEHB plan? For that matter, is FEHB the best Medicare supplement for you? Would Medicare Advantage really be an advantage over having separate Medicare and FEHB enrollments working together? What happens when your spouse qualifies for Medicare before you do? Or if you reach age 65 before you retire? 19
Cost Of Living Adjustments (COLAs) Effective December 1st of each year and payable January 1st each year Based on annual percentage increases in Consumer Price Index CPI Minus One for FERS retirees if CPI increases 3% or more Otherwise, direct match COLA for December 2016 was 0.3% COLA begins at age 62 for FERS retirees, and during first year after retirement for CSRS retirees First year COLAs are prorated (1/12 of COLA times the number of months in which annuity was received) Example: If you retire June 30th (and receive annuity for July- November); you will receive 5/12 of COLA for the year 21
What About Taxes? It s important for you to know: How is your retirement income taxed by the IRS? FERS/CSRS annuity --- taxed TSP benefits --- taxed, if not previously paid when TSP Roth contributions were made Social Security benefits --- taxed if total income is over $25,000, or $32,000 if married filing jointly Outside investments --- depends; consult your financial advisor Which States tax Federal retirement annuities? Some States (CA, CT, MN, ND, NE, RI, VT, WI, and others) tax the full amount of the Federal annuity Some States (AL, HI, IL, LA, MA, MS, NY, OR, PA, and others) exclude the full amount of the annuity from taxes Other States (CO, DE, DC, KY, MD, MO, NC, VA, and others) tax a portion of the annuity, but not all of it Which States do not tax any income? AK, FL, NV, NH, SD, TN, TX, WA, WY 22
Resources 23
The J-Nets Nearing Retirement Page Visit the new Nearing Retirement Resources page on the J-Net for more detailed information concerning: The various insurance programs you can take into retirement Helpful suggestions in planning for your retirement, whether it s coming shortly or if it s more than five years away Applying under your retirement program (CSRS, CSRS-Offset, or FERS) Phased retirement Frequently asked questions (by other Judiciary employees) Links to useful BeneFit for Life Hour webinars, the Benefits Overview Brochure, and a printable Benefits Matrix Once in the J-Net, go to Human Resources, then Benefits, then Nearing Retirement Resources. 24
Quick Links J-NET BENEFITS PAGE http://jnet.ao.dcn/human-resources/benefits OFFICE OF PERSONNEL MANAGEMENT https://www.opm.gov THRIFT SAVINGS PLAN https://www.tsp.gov/index.html MEDICARE https://www.medicare.gov SOCIAL SECURITY ADMINISTRATION https://www.ssa.gov LONG TERM CARE CNA https://www.ltcbenefits.com OPM https://www.ltcfeds.com WORKERS COMPENSATION http://www.dol.gov/dol/topic/workcomp 25
Have a Question? Contact the Retirement Services Team Members Phone: (202) 502-3110 Fax: (202) 502-3599 Email: Retirement Branch/DCA/AO/USCOURTS or Contact the Benefits Division Phone: (202) 502-1160 Fax: (202) 502-2877 Email: Benefits Mailbox/DCA/AO/USCOURTS 26
