Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.
USA

A federal retirement three-legged stool may have a fourth leg

Federal retirement benefits tend to stand like a three-legged stool: the Federal Employees’ Retirement System (FERS) pension, savings plans, and Social Security. But the fourth leg could lead to an even tougher retirement. Good Old Savings Bonds are another way federal employees can invest in their personal savings. Tom Temin and Federal Drive We got more information from Abe Grungold, a retired federal manager and financial counselor.

Abe Grungold There is an employee of every institution who is a bond coordinator, handing out U.S. Savings Bond brochures and payroll allocation cards available at the bank and allowing you to choose the amount of bond you pay. How often would you like to receive it? So you can buy a $50 bond or a $1,000 bond. And if you do it 50 times, you’ll get 26 bonds, one for each payment period. If you issue a $1,000 bond, let’s say you issue a $100 bond, you will take it once a month instead of every 26 payment periods. So, this was a great program that the government offered its employees for tax deferred savings before the TSP existed. Then, when TSP was introduced, they continued the program. Unfortunately, technology has now ended the bond drive they would do each year. We receive them in the mail when you buy them, or when some people actually send them to the office. It was the employee’s responsibility, and the employee was unaware of it. Because the annual bond issuance was like an educated employee and gave them a chance to think about it. So I think it’s somewhat lost now. [Office of Personnel Management (OPM)] There’s that literature in there, and if you go in there and search for US Savings Bonds, you’ll be taken to where it says you have to do it directly from the Treasury. Again, it’s tax deferred savings. It was available before TSP came along. It’s an excellent investment in addition to the TSP, in addition to the first annuity, since there is a TSP. And that gives you a tax deferred profit that you can keep on it for 30 years. I now have a $10,000 savings bond purchased for 5,000 worth 16,000. And I have to pay tax when I redeem it. Not years ago when I was trying to bring it up. That’s why we still offer excellent tax deferred investments for our employees today.

Drew Freedman In that case, this could be a valuable tool for federal personnel. Can you elaborate further on how it can be combined with other aspects of retirement for federal employees?

Abe Grungold Today, federal employees have a three-legged stool when they retire. They have a FERS pension. They have a thrifty savings plan and they have Social Security. It is a so-called three-legged stool. But personal savings, such as U.S. savings bonds, provide a fourth avenue for a safer retirement. Let’s say you didn’t receive your first pension. Because you didn’t spend enough years in the federal government. Now on the stool he has only three legs. There are TSPs, Social Security, and savings bonds. It’s another important investment vehicle for you and your retirement planning. You should always think about your retirement savings. The government can ensure pensions and receive social security. If you invest and contribute appropriately, you will have a thrift plan. And savings bonds give you an emergency investment opportunity in your life and career. This is an emergency investment, valid for 30 years. The E-bond currently yields 2.1% and the I-bond currently yields 6.89%. So you can save for 30 years until maturity and cash out when you retire. And you belong to a lower tax rate, and you probably need the money very badly to pay for college for your grandchildren, or to go on a trip, buy a motorbike, whatever you want to do. will be Retirement, that money will come in handy. And I’ve purchased them for my entire federal career. Now that I am retired, there are many things that are maturing and they are coming at the right time for me to use them.

Drew Freedman Is there a right time to buy government bonds? You said you purchased them through your carrier. Is there a time that might be better than another to start this?

Abe Grungold I think it’s very important to start buying early in life. You can start by purchasing a $50 savings bond or a $100 savings bond and work your way up. And if you do it consistently, you’ll be amazed at how much this account can grow over time. We are planning to get married on the day my daughter was born. I plan to have the roof repaired on the first day I buy the house. I know these expenses may come in the future, but this is a great way to save and defer paying taxes on your income. And it really is a rainy day fund, a nest egg. And you should really get into the habit of doing it regularly. When you do, it becomes second nature to you. And I was always buying a savings account, usually at the end of the year when I knew I had extra money. I even bought it with a tax refund. I received a significant tax refund and immediately used the refund to purchase savings bonds. And if you do it alone, if you do it in conjunction with a tax refund, if you’re lucky enough to get that tax refund, you’ll be amazed at how much you’ll save and how much you’ll add up in 30 years. .

Drew Freedman As I mentioned earlier, there are of course many different types of bonds. Can you elaborate a bit more on the benefits of each different type of bond? And what we’re really talking about here is the amount that can come out on the other side?

Abe Grungold There are two main types of savings bonds. The EE bonds that are currently gaining 2.1%, and those are the I bonds. Currently, I-bonds are gaining 6.89%. These rates currently change every 6 months. You can buy unlimited E-Bonds. I-Bonds are currently only available for purchase of $10,000 worth of I-Bonds per year. I had clients when you bought them and you stuck with them and they said, basically, this is all they bought. I didn’t invest either, but I bought a savings bond. And just by purchasing a $1,000 savings bond, you saved about $700,000 in savings bonds. And those bonds actually mature during their lifetime, and a $1,000 savings bond could mature to $10 or $15,000, depending on the interest rate over the life of the bond. So they took maturing savings bonds and bought larger savings bonds over time. So it wasn’t a $1,000 savings bond. They began buying his $10,000 savings bonds. When you reach old age or retirement age, you have to think about entering a nursing home. And this is an important savings vehicle to fund the year if needed.

Drew Freedman Now, if there’s one piece of advice or key point you want federal employees to know, what is it?

Abe Grungold I want you to know that you have to think about saving. It’s not something people think about when they join a company, but they do have to think about retirement. You have to think about savings. Let me give you a perfect example. For example, you are a federal employee and as a federal employee he has served 10 years and is subject to furlough. I think she went through 30 days of furlough, but 35 days was the longest furlough. From 2018 he was 2019 I think. If you don’t have an emergency savings account, how were you going to pay the rent, food, and all those necessary bills that came in during furlough? So it will be a savior against cashing out savings bonds to pay for food. Not just retirement benefits, but emergency tax deferred savings. And this is very important. Yes, a federal employee should have savings in her TSP. it is essential. Very important. Yes, you must have money in your bank account to pay your daily bills. But what happens when unexpected expenses arise? Also, US savings bonds can provide employees with that safety net. Young federal employees, mid-year federal employees, try to start saving.



Summarize this content to 100 words Federal retirement benefits tend to stand like a three-legged stool: the Federal Employees’ Retirement System (FERS) pension, savings plans, and Social Security. But the fourth leg could lead to an even tougher retirement. Good Old Savings Bonds are another way federal employees can invest in their personal savings. Tom Temin and Federal Drive We got more information from Abe Grungold, a retired federal manager and financial counselor.Abe Grungold There is an employee of every institution who is a bond coordinator, handing out U.S. Savings Bond brochures and payroll allocation cards available at the bank and allowing you to choose the amount of bond you pay. How often would you like to receive it? So you can buy a $50 bond or a $1,000 bond. And if you do it 50 times, you’ll get 26 bonds, one for each payment period. If you issue a $1,000 bond, let’s say you issue a $100 bond, you will take it once a month instead of every 26 payment periods. So, this was a great program that the government offered its employees for tax deferred savings before the TSP existed. Then, when TSP was introduced, they continued the program. Unfortunately, technology has now ended the bond drive they would do each year. We receive them in the mail when you buy them, or when some people actually send them to the office. It was the employee’s responsibility, and the employee was unaware of it. Because the annual bond issuance was like an educated employee and gave them a chance to think about it. So I think it’s somewhat lost now. [Office of Personnel Management (OPM)] There’s that literature in there, and if you go in there and search for US Savings Bonds, you’ll be taken to where it says you have to do it directly from the Treasury. Again, it’s tax deferred savings. It was available before TSP came along. It’s an excellent investment in addition to the TSP, in addition to the first annuity, since there is a TSP. And that gives you a tax deferred profit that you can keep on it for 30 years. I now have a $10,000 savings bond purchased for 5,000 worth 16,000. And I have to pay tax when I redeem it. Not years ago when I was trying to bring it up. That’s why we still offer excellent tax deferred investments for our employees today.
Drew Freedman In that case, this could be a valuable tool for federal personnel. Can you elaborate further on how it can be combined with other aspects of retirement for federal employees?

Abe Grungold Today, federal employees have a three-legged stool when they retire. They have a FERS pension. They have a thrifty savings plan and they have Social Security. It is a so-called three-legged stool. But personal savings, such as U.S. savings bonds, provide a fourth avenue for a safer retirement. Let’s say you didn’t receive your first pension. Because you didn’t spend enough years in the federal government. Now on the stool he has only three legs. There are TSPs, Social Security, and savings bonds. It’s another important investment vehicle for you and your retirement planning. You should always think about your retirement savings. The government can ensure pensions and receive social security. If you invest and contribute appropriately, you will have a thrift plan. And savings bonds give you an emergency investment opportunity in your life and career. This is an emergency investment, valid for 30 years. The E-bond currently yields 2.1% and the I-bond currently yields 6.89%. So you can save for 30 years until maturity and cash out when you retire. And you belong to a lower tax rate, and you probably need the money very badly to pay for college for your grandchildren, or to go on a trip, buy a motorbike, whatever you want to do. will be Retirement, that money will come in handy. And I’ve purchased them for my entire federal career. Now that I am retired, there are many things that are maturing and they are coming at the right time for me to use them.
Drew Freedman Is there a right time to buy government bonds? You said you purchased them through your carrier. Is there a time that might be better than another to start this?
Abe Grungold I think it’s very important to start buying early in life. You can start by purchasing a $50 savings bond or a $100 savings bond and work your way up. And if you do it consistently, you’ll be amazed at how much this account can grow over time. We are planning to get married on the day my daughter was born. I plan to have the roof repaired on the first day I buy the house. I know these expenses may come in the future, but this is a great way to save and defer paying taxes on your income. And it really is a rainy day fund, a nest egg. And you should really get into the habit of doing it regularly. When you do, it becomes second nature to you. And I was always buying a savings account, usually at the end of the year when I knew I had extra money. I even bought it with a tax refund. I received a significant tax refund and immediately used the refund to purchase savings bonds. And if you do it alone, if you do it in conjunction with a tax refund, if you’re lucky enough to get that tax refund, you’ll be amazed at how much you’ll save and how much you’ll add up in 30 years. .
Drew Freedman As I mentioned earlier, there are of course many different types of bonds. Can you elaborate a bit more on the benefits of each different type of bond? And what we’re really talking about here is the amount that can come out on the other side?
Abe Grungold There are two main types of savings bonds. The EE bonds that are currently gaining 2.1%, and those are the I bonds. Currently, I-bonds are gaining 6.89%. These rates currently change every 6 months. You can buy unlimited E-Bonds. I-Bonds are currently only available for purchase of $10,000 worth of I-Bonds per year. I had clients when you bought them and you stuck with them and they said, basically, this is all they bought. I didn’t invest either, but I bought a savings bond. And just by purchasing a $1,000 savings bond, you saved about $700,000 in savings bonds. And those bonds actually mature during their lifetime, and a $1,000 savings bond could mature to $10 or $15,000, depending on the interest rate over the life of the bond. So they took maturing savings bonds and bought larger savings bonds over time. So it wasn’t a $1,000 savings bond. They began buying his $10,000 savings bonds. When you reach old age or retirement age, you have to think about entering a nursing home. And this is an important savings vehicle to fund the year if needed.
Drew Freedman Now, if there’s one piece of advice or key point you want federal employees to know, what is it?
Abe Grungold I want you to know that you have to think about saving. It’s not something people think about when they join a company, but they do have to think about retirement. You have to think about savings. Let me give you a perfect example. For example, you are a federal employee and as a federal employee he has served 10 years and is subject to furlough. I think she went through 30 days of furlough, but 35 days was the longest furlough. From 2018 he was 2019 I think. If you don’t have an emergency savings account, how were you going to pay the rent, food, and all those necessary bills that came in during furlough? So it will be a savior against cashing out savings bonds to pay for food. Not just retirement benefits, but emergency tax deferred savings. And this is very important. Yes, a federal employee should have savings in her TSP. it is essential. Very important. Yes, you must have money in your bank account to pay your daily bills. But what happens when unexpected expenses arise? Also, US savings bonds can provide employees with that safety net. Young federal employees, mid-year federal employees, try to start saving.

https://federalnewsnetwork.com/retirement/2023/05/the-three-legged-stool-of-federal-retirement-might-have-a-fourth-leg/ A federal retirement three-legged stool may have a fourth leg

Back to top button