Double Feds, sick leave and V.A. meds on today’s Fenobabble.
Welcom to today’s is Fenobabble, where we take your questions and we talk about the federal employee benefits and how they work in retirement and make them understandable for humans in less than 20 minutes.
Yep. And we take your questions from the Fednobabble.com website or from the workshops that I do. And we answer them here to try to clear up all the confusion, because I cannot believe how much confusion there is of federal employees about their benefits. It’s it’s amazing sometimes Cassie no joke, OK? Obviously this hasn’t happened because lately we’ve been doing webinars because we can’t get together in real life. But there have been plenty of times where after the workshop is over, I have people come up and give me a big hug and say thank you so much.
I mean, it is it’s a big love fest after that, because they said, I have no idea that. Wow, they’re amazed at it anyways. All right. Let’s jump into the first question. Question number one. Oh, I did it again. Look at that question number one.
All right. What if I if I retire from the federal government and I get another federal job and still get my retirement? So how many times like. Yeah, it sounds like they want to retire and unretire and still get the pension. Yeah, so that’s just not possible and a paycheck, right, like LEO, that works, but so you can’t collect, and there are a number of different ways of like leaving one federal job or position how that transition can happen.
Right. It depends on the length of time. Or did you submit your retirement paperwork and then are you going to get to another agency or just, you know, like right away? Like, how does that work? What is the thinking behind this? Right. Right. Because. Are you are you are you separating from service, retiring and then moving somewhere else and hoping to get another federal job?
Right, so essentially, though, they’re not going to be able to collect both either way, but you don’t submit your retirement paperwork and then just transition into another federal job, because that’s not it’s just going to create a lot of stuff there that’s unnecessary.
You know, I’ve heard of people leaving and then they get a call six months later saying, we’ve got to have you come back at least part time. Can you do that? And they’re like, OK, I’m getting bored. I got to do something. I might as well go help and do what I know and get paid for it. Is that possible, do you think?
It’s definitely possible. Right, but they’re not going to receive their pension, right? Not at the same time. OK. No, they the government will will realize that they’re now working again and they will essentially suspend the pension. I mean, there’s different factors here that can come into play, too. But essentially, they’re their pension gets suspended and then they just receive their paycheck. Mm hmm. Yeah, OK. And you really got it.
But if you’re going to be employee, too. Yeah. Because of wanting to be employed, then your whole pension gets recalculate. It’s just this big, big mess. It’s a reemployed annuitants. There’s a lot of different factors and information and and different situations and exceptions that happen all the time. Right. So we really have to make sure that you’re talking with somebody who understands federal benefits and how that’s going to affect your specific situation, good. A good place to do that is the financial adviser who understands federal benefits.
Right. So that way they can tell you whether it’s even financially worth it. Yeah, right. That’s right.
Because if someone goes if someone goes to H.R. and says, oh, should I do that or can I do this, they may give factual information that yes, you can should you do it is a completely different question. Whether it’s financially better, whether it’s mentally better, psychologically better. You know, for your family, is it even better?
I mean, basically, if you’re going to work with a financial adviser, financial planner, they’re going to tell you on the they’re actually a lot of times what I’ve seen, as they say, financially. Can you do it? Yes. Is it you know, they may say it’s about the same. It doesn’t matter whether you do or don’t. But then they start asking you questions like. How does your family feel about this? You know, they obviously can’t give advice on the family front, but then they’ve done this so often that they can ask questions that they know that they have seen other clients go through before where they had really tough times.
Have you ever thought of this? Have you ever. Were you ever thinking about me? But I remember you said you were thinking about moving somewhere. Is that even possible? And bring up all these things that they may not have thought of in the first place. Exactly. I actually had a friend do this, it wasn’t directly with the federal government, though, so he retired from government service and then he went back and worked with the contractors for a little while.
Gotcha. Yeah. That he only did it for year.
Then the whole point of retirement is to do things that you can’t do otherwise. Right. And to spend time and everything else. And his house was on the phone.
I no, that’s not what I had planned for Friday, right?
Yep, I remember. So I remember one guy I so we I said, what do you want to do in retirement. And it was a it was a guy and he brought his wife, his nonfederal wife with them, said, what do you want to do in retirement. And he said, Oh, I want to do this and this and this. And she looks at me and said, And when were you going to tell me that in front of the whole class it was great.
And we played off the whole time. It was great. Hey, yeah.
We don’t really have to sit down. Not only, you know, make sure that it makes financial sense to even get back into federal service, but you might want to talk to your spouse. It’s probably the best advice we could give.
Maybe. OK, question number two, the sick leave have any bearing on retirement.
Now, I put this question in because. We know that the answer is yes, it does, but I this is this is really interesting, I would say about a third of the time. In my workshops, I will talk about how sick leave gets, you know, is factored into your retirement, and then I get to the end of talking about pensions and then the question comes up and says, so what is sick leave have to do with this?
And every time I think I just said it just but it must be in a way that just goes right over the heads or something. I don’t know what it is, but you got to say, you talk about that you’re trying to do. All right, simply automatically adds to your years and months of service in your pension calculation. Right, right. So they use the two thousand eighty seven sick leave chart.
You can Google that if you really want to and find out exactly how much sick leave can add to your years and months of service. But essentially, you get two thousand eighty seven hours. You can add a whole year.
To that pension calculation right now, that may just be if you work 30 years. That’s just one thirtieth more. So May some people may say, well, that’s not worth the money. Right. But they have to remember that that’s money, extra money for for the rest of their lives, compounded on top with COLA again and again and again. That’s right. Not only that, but I don’t think people realize that it can, you know, if you’re like, oh, well, I’ve only got twenty nine years of service or what have you and and it doesn’t stop at two thousand eighty seven either.
Right. Right. Let me back up. It doesn’t stop at that. That’s not some magic number that oh I’ve got a year and that’s all the sick leave I can earn. Right. OK, this is something that you can continually unlimited. Build up and add to that pension amount. So I want to do one one word of caution, though,
for FERs employees. If you’ve reached age 62 with 20 years of service, that they get that 10 percent bump.
Mm hmm. Right. Yeah, that actually they get that one point one percent and TRICARE rather than the one point zero. So if you have 19 years of service and you’ll be sixty two and you have twenty one hundred hours of sick leave, your twenty one hundred hours can not bump you into that twenty year mark. To get that extra 10 percent, you have to have actually 20 years in service.
Right. It will obviously increase the amount that you can add to your pension later. So you might have to wait till sixty three to retire to, to get that 20 years of service. But then you obviously will have more. Twenty one years and plus with that sick leave added. So that, that could be a big difference because then not only are you making sure that you get that extra 10 percent in your pension, but it’s an extra year with that 10 percent in your pension to plus your High-3 is increased.
And so there’s a lot of different factors that we need to think about here as well. But.
It would save, save, save, save, because that can really help in your retirement, right, unless you’re mentally you just can’t handle it any more and you’ve got to you can’t retire until such and such day, but you need to take as many days as you can away because it’s just not working for you.
OK, you know, there’s there’s always the financial and mental aspect of this.
Yes, but not all agencies will allow you to use that much sick leave either. Right, right. Oh, be careful. Yeah, it’s a this time it and try to use that sick leave there. But, you know, again, go to the Google to chart or talk to one of our trusted advisers, or if you have a financial adviser who is first and the federal benefits and obviously talk to them and and find out how much of a difference it makes your pension and if it’s worth it for you to continue excuse me, continue saving or use it before you go.
So it’s good to look at two sets of numbers if you use it. How much do you get if you don’t use it, how much do you get? And what does that what is the difference 20 years from now, 20 years from retirement? What does that look like? It’s always good to kind of project out as well.
And then you look at that and say, oh, maybe I ought to reconsider. Happens all the time, right, and I report that when people submit their information and we’re providing that report to them. We’re not just giving them that snapshot of what’s going to happen now. We’re projecting out what does it look like in the future. So so that way they can be really great. All right.
Question number three, if the VA covers one hundred percent of my medical, do I still have to enroll and pay into Medicare? I get this question all the time. What do you think, Cassie? Well, I was going to ask you how you answer that one.
So this is what I’ve seen.
This is a difficult one to answer, because if the VA covers one hundred percent of my medical that so I see that I here’s here’s what I hear from federal employees. My mom and my dad was they were in the service and they didn’t get everything taken care of by the VA. They had one hundred percent medical coverage because they were 70 percent service disabled. So every, you know, everything was taken care of for them.
But we lived in in an area where the VA didn’t cover it very well. And so they didn’t get the care that they wanted. Or I mean, and or we tried to get in, we tried to get service and we couldn’t get service for them.
The VA was backed up six months and we needed it now. So I always I I don’t know a great answer to this question, except for it’s possible to live in a place that doesn’t take V.A. very well. I mean, I know if
you’re so far away from a VA facility that they will pay for your regular care. But I have even heard that that kind of gets sketchy sometimes.
And and sometimes it takes a long time to get care.
And so I would just see where you live, figure out what kind of care you think you might need and what are the probabilities of getting the care when you need it. Because if you don’t, then maybe getting into Medicare and keeping obviously your TRICARE and keeping Medicare Part B, you have to do Medicare Part B, period. If you do TRICARE and maybe putting FEHB on suspend, doing all those things can make sure that you’re going to get covered no matter what happens.
And I hate that that happens to our veterans who have sacrificed so much. And and now we the government doesn’t take care of them like they say they would sometimes. And that’s not VA’s. And this is kind of funny as well. I get people coming into our class saying, well, are you kidding? Well, the government will just shaft you every turn. You go. Right. And I think you are the government.
Yeah, but but I get it. You’re not the ones who make the policies and the decisions. You’re the ones who just carry it out. And we’re so thankful for people like you who carry it out. And it’s it’s a much bigger of a deal when it comes to policy. It’s just not people. It’s the politics and everything behind that. So not a great answer, unfortunately. Yeah, you know. So there’s a lot I think that essentially this boils down to the health planning aspect.
Of your retirement benefits, right? What is he actually covering for you? Is that going to be enough coverage? What other coverage do you have besides the VA? Do you have FEHB? Do you have TRICARE? Right. I mean, this you know, if you have TRICARE, then you have to enroll in Medicare Parts A & B. And if you’re an FEHB, then you should enroll in Medicare. It’s Medicare Parts A and B, and there’s certain FEHB plans that can help with the Medicare costs or at least reimburse you for those you know.
And so there’s two different factors here that you really need to think about when it comes to that coverage. OK, and that’s why it’s strongly important to talk with somebody who’s going to help you plan for that, because you also don’t want to be stuck with some outrageous medical bill that maybe VA only covers a portion of. What about hospital coverage? Are they covering that? Is that something that’s important to you?
What about care? Exactly. Exactly. And so there’s all these different factors that need to be addressed. And this is a very uncomfortable conversation. And I think it’s one of the most difficult conversations to have with federal employees because they automatically think I have this coverage, I have that coverage and I’m solid and that’s good. And they don’t really think that there are different strategies to make sure that they’re not paying for more coverage that they need, but they’re also in the right programs that they need to have to make sure that all of the coverage that they need because they don’t want to be under covered either when it comes to medical coverage.
And so and of course, who doesn’t want to pay the least amount that they can for the coverage that they need because health care costs are on the rise significantly. I mean, it’s average four and a half percent over 10 years. Right now, you’ve got to financially plan for that increase on top of any catastrophic situations that can happen. Right. So I really just want to talk with your financial adviser. If you don’t have a personal let us get you in touch with a financial adviser who understands federal benefits, because this is simply an uncomfortable conversation that they’re used to having, because this is one piece of the puzzle that is so huge that a lot of people miss.
If your financial adviser isn’t talking with you about that, get a new one. Yeah, OK, important. And not that I’m trying to tell them what to do, but simply I want people to have the awareness that they need to do the due diligence to make sure that they’re solid, their retirement plan is solid, that they’re set up for financial success. And the biggest I would say two of the biggest things that people don’t take into
consideration when we’re doing retirement planning is health care and taxes.
Things get so often and they just simply there isn’t enough awareness and enough information out there for people to do their own planning and for them to really understand how it all works together.
You know, you mentioned a number of plans. You mentioned a financial plan. You mentioned a health care plan. You mentioned a tax plan.
You mentioned there was another plan. Oh, there’s a mental plan. Right. A plan to make sure that everything goes well with your spouse plan. I mean, there are so many things to be thinking of rather than what’s the government give me.
The questions should go far, far beyond that. So if you would like to talk to one of the advisors in our trusted network, go to Fed Pilot, Fednobabble.com, and we will make sure that you will get a report that Cassie will create right there, smiling Cassie.
She will create it and it will show you your financial options there and everything that you should be looking at. So important to get that. So again, Fednobabble.com, you can sign up for their free. No cost, no obligation, nothing like that. We just want federal employees to understand about.
What was that? That’s right, that’s right. No sales pitch for financial advisors either. They simply want to have you understand exactly what you have now so they can help you if you need it to plan for that future. And at least if they’re not going to help you plan for the future, at least give you the the different pitfalls that you that you could that could happen. Right. Here’s what we’re not planning for. So what you have some thinking, some thinking to do and can create that plan.
So either way, super helpful to have that information because it really lays out what your future looks like, because you’ve got you’ve got to do something. So let’s set you up for financial success also, please. Like subscribe. Sure. Get the get the information out so that we people can can also, you know, give us feedback and let us know how we’re doing.
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So great. Thanks for coming. Thanks. Take care.