LEOs, penalties, and MRA & TSP all on today’s Fenobabble
This is Fednobabble.com, where Kevin and Cassie make federal retirement benefits understandable for humans like you. These two don’t hold back because they answer questions from the Fed Pilot workshops and webinars or from questions submitted by you at Fednobabble.com.
Welcome, Cassie, good to have you here. Hello, Kevin.
Yes, let’s do some questions.
Here’s all right. I am a LEO and will turn fifty seven with twenty nine point four years, that’s very precise, very specific.
Is there any way to get to 30 years for the retirement benefit? What say you?
Oh, so OK, this is a kind of a funky one because LEO law enforcement officers part a special provision.
They have a mandatory retirement age of fifty seven and for them, well they’re trying to get to 30 years.
The first question is why are you trying to get to 30 years?
Because it really doesn’t matter, does it? I mean, as far as eligibility for retirement. It doesn’t matter, right, not if they’re a law enforcement officer, because they could be 50 with twenty five years of service or fifty five with 20 years.
OK, I was thinking that records I think actually no one was in age twenty five years any age with twenty five years, so 50 with 20 and any age with twenty five years. So he’s going to turn fifty seven. So he’s over the 50. So he could retire or she could retire at 20 years of service, which this person is way over that. So they’re unless they’re trying to get a trophy for 30 years, there’s no need.
And I’ve heard of LEOs waiting until fifty seven because then they can choose any day in that month to retire and their pension will begin accruing right away rather than having to wait till the end of the month.
So that’s been a thing. And other times LEOs though will receive waivers, but that’s if mostly if they have less than 20 years. So for instance, if somebody is hired in at the age of 40, then they might get a waiver to get to age 60 so they can qualify what the twenty five with the 20 years minimum required for LEOs service.
But typically, if somebody has over the 20 years and they’re fifty seven, I mean, the only way to get past that twenty nine year point for Mark would be with sick leave if they want to increase their pension amount.
But there’s no real benefit, no need necessarily to having that extra time.
It’s not going to add or change the percentage factor for those years past 20 so that they can increase their pension. I mean, it will increase their pension just based on the experience. But there’s no other reason.
Right, for that.
If that makes and it will only increase their their their pension at the one point level, not even the one point seven level.
So right now, this is this is something that I’ve seen excuse me, recently where someone was wanting to retire, going off of the wrong rules, not realizing that they could retire already. So I wonder if this person, which very could well be could be the case, is trying to retire, waiting, not realizing that they can retire right now.
This happens all the time.
You would be surprised the amount of lack of information for certain types of employees. Yes. People think that the regular FERS eligibility rules apply to everybody, and that’s simply not the case. There are many exceptions out there. LEOs firefighters’ air traffic controllers, they all have their own set of rules called because there’s special provision employees. And then we’ve got military reserve technicians, Customs and Border Protection, and those each have their own set of rules. There’s so many different.
And it’s not just eligibility either. It’s how their pensions, Computer-Aided and all of these things.
And so people really have to make sure that they’re using the right set of rules for their whole retirement package for what is going to be, you know, pertains to them, because there’s so much information out there and and so many different types of employees that it’s really easy to get confused, that’s for sure.
Right. And, you know, one of the things that when I do the Fed Pilot workshops and we don’t have any special provisions, so we don’t cover those rules, one of the I always hesitate because it’s a little raspy voice. I always hesitate because I say, OK, you first employees, this is how you retire and when you can retire, knowing that if they go to any of their special provision friends, if they go to any law enforcement officers and say, hey, this is what I learned, this is the way it is, that’s actually not true for them.
It’s only true for the people that were on the webinar or in the workshop at that moment.
And so I called.
Do you mean to tell me that you’re a culprit to this water cooler talk everybody talk about?
I may be LEO. I may be enabling that in a way. But but that’s right. You’re right. And I feel badly about that. And every time I hesitate but I can’t say, OK, now, it’s not that way with these because the people on the call are on the webinar in the in the class workshop.
They don’t care about that other stuff. So I have to speak to the people who I’m speaking to with their rules and not go off on all. The exceptions, so, yep, and it not only happens with LEOs, but it happens in all of the other benefits for women in a lot of different ways, I could be speaking to one person and then turn around to their coworker doing the same job and say, oh, it’s different for you because that’s not how it works.
And most people just think there’s a rule and everyone follows that rule and it’s not that way.
So it’s how the government makes them helps them to think. I can’t say it makes them think that way, but leads them on to think that this is the rule. This is how it should be. Yeah, but do not apply government or do not apply logic, I should say, to government policy, because it’s not going to work.
No it’s not. No, it’s not. OK, that’s a good question. Let’s go to the second.
I am over 65 and didn’t take Part B. Well, I pay a penalty if I try to get in or if I try to get it when I retire next year.
No. In fact, even if you continue to delay taking Medicare Part B, you may also be able to avoid the penalty.
If you have FEHB and you fill out the proper documentation with Medicare or Samms, which is the Center for Medicare Services, you can go to CMS.gov or Medicare.Gov. Either one of those websites and you’ll be able to search for the form that you need to avoid the Part B penalty because you have an employer sponsored program.
The other thing is that you can what will happen is when you retire, if you want to get into Medicare Part B, you will have an eight month special election period to be able to do that because you have separated from the service, but you’re not losing employer coverage. So that’s why I said you can continue without Medicare Part B and still avoid the penalty. But you do have you avoid it if you also decide to elect during the special election period once retired.
Yeah, that’s an easy one. The answer is no. Great. Although, well, I’ll just throw in part a part A when you turn 65, even if you’re working, you get because yeah, typically that one’s automatic and there’s no fee to it.
So that’s nice.
Yeah. Easy. OK, next one. Can I retire at age 55 and access my TSP without penalty, even if my MRI is fifty seven?
Well, if your MRI is age 57, you’re not retiring at 55 unless you’re retired special provisions employee and the correct use of service of so.
So let’s say that they they are supposed to provision then. Yes you can. But if you’re not special provision then. Yeah, like you said, you’re not retiring, if it’s not you’re not retiring, you’re going to go out on a limb. Well, you’re going to go out on a deferred pension. You’re not going out on an immediate pension, which then disqualifies, you know. And to think about that. I want to say they have to retire on a pension to be eligible to have penalty access.
I believe penalty free access.
I believe that’s TSP. I don’t get this question very often because it’s not common. Typically, if somebody made it to fifty five and they have so many years in service, they’re waiting until age fifty seven to either receive their MRA+10 retirement or to fully retire.
But yeah, I want to say they have to retire on an immediate pension.
I would have to look that one up. Yeah I believe so.
I think you’re right on that one. So yeah that’s an easy one to just roll. No you can’t.
So as you as I was watching this and listening to Cassie Knight go back and forth, you can tell that some answers are really, really simple to answer. It’s just there it is. Here’s a few things and we’re done. Other ones are, oh, my goodness, we got to get pretty involved. And it’s only going to go to specific people at specific times. And it gets really, really complicated. And that’s why it’s so important to be able to go figure out what your retirement is going to look like well before you retire so that you are setting yourself up in the right way so that when you do retire, you’re not having to make all these adjustments at the last minute trying to figure out, OK, well, how do I put myself in the best spot?
No, you’re already in the best spot because you have a plan and you’re going forward.
So as Cassie and I always say, if you want to get a comprehensive report on your benefits, just go to Fednobabble.com and let us know and we will get you in touch with one of our trusted one of the professionals that we work with and our trusted network and free no cost, no obligation. And you’ll be able to know what your next steps are no matter if you’re twenty years or two months from retirement. Yeah.
Oh, and the answer is no. I just checked my notes. They do have to retire you with an immediate pension. It can’t be a deferred retirement to get that penalty free access. So wait till your MRA until you separate from the service. If you’re looking at needing that, needing that money from TSP in order to make it financially good.
See how quick she is? See that? I love that Cassie. Good job. All right.
So we’re going to close this one next time. Yes. Thank you. Take care, everyone.