Burning sick leave, still there? And Army reserve 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 as they answer questions from the Fed Pilot workshops and webinars or from questions submitted by you at Fednobabble.com.
Hi everyone. I am Kevin Jones and I’m Cassie Knight and we’re going to answer some questions on today’s Fenobabble. So the first question is, if I burn my sick leave on an hourly basis, how many hours am I looking at? Forty eight or fifty four? I don’t want to go over and risk losing a full month by missing the mark.
OK, well, if that wasn’t confusing enough, let’s let’s break this down just a little bit. I think what this person is trying to get at is the 30 days that you so you can use your look, leave whatever that is sick, leave sick leave in your calculation for your pension. So let’s say let’s say you have again forty five days of sick leave and you have you can use 30 of that in and use it into the calculations of the 14 days or you lose.
So when this person says, what am I looking at. Forty eight or fifty four.
I don’t know because that’s you personally and we don’t know what your situation is, but whatever it is, you know, take 30 of that and move it over into the months column really. And and use the extra left over. Now what people don’t want to do is accidentally take too many hours and have it take off a whole month because that’s what it will do.
Right. So now there is the sick leave chart and it’s based on two thousand eighty seven hours per year. Right. Excuse me.
And that equals one whole year that will be added to somebody is a pension, essentially, if they have that many sick leave hours built up. So if you burn your sick leave on an hourly basis, how many hours are you looking at for what are you looking at? That’s how many hours you burn or that’s how many hours you need to have to to qualify for a full month. Like, I don’t know how many hours this person is starting with, so I don’t know how many hours they need to burn.
Right. Um, you know, a risk losing a full month by missing the mark. If you’re concerned about that, then make sure you have an extra day or two of sick leave to where you know that you’re going to be solid even if you don’t or. Yeah, even if you don’t. Even if you retire. Excuse me. And you know, you’d rather lose out on a day or two that a full month. You want to make sure it sounds like this person is really concerned not having that full month.
They don’t want to lose twenty eight days or twenty nine days. We want to make sure that that full 30 days goes over into the pension amount. And so if that’s the case, be over by a day or two. But I can’t really do the math on what you’re looking to burn forty or fifty for it because I don’t know what your how much you’re starting out with. So I don’t know how much you need to burn. Yep.
And that’s something that when you when any federal employee meets with one of our advisors in a trusted network, they could just figure that out. And that’s another one. Let me just figure this out for you. OK, done. Here you go. Kind of.
Yeah, because they’re submitting all of that information to me to where I know what they’re sick leave is how many, you know, what their retirement service computationally is. So that way we can know exactly how many hours or how many days sorry that they’re going to have with that retirement and then how many sick leave hours they need to have on top of that to make that thirty day mark happen.
So if you you know, if you’re coming or getting in touch really with one of our trusted advisers, then we’re going to be able to help you figure that out. But unfortunately, I can’t do that right now.
Yeah, and what you don’t want to do is, is if you do it by yourself, there’s always the chance of saying, oh, I accidentally went in the next month, which takes off money from your pension for the rest of your life. And it has a compounding effect. So obviously you don’t want to do that. OK, next one is the gap. You meant if I retire before 62, still in place, so in Cassie in the last the last episode of the episode before that, we talked about all the different names for Survivor benefit.
I’m not Survivor Benefits Special Retirement Supplement.
You’re putting up with a new word. I know. Yes, I am. I just like making up names right now. So there’s a gap payment. There’s gap insurance, there’s Social Security supplemental, Social Security offset. This is really special.
Yes, that is the correct name. Special retirement supplement. It is from the federal government. It is not a Social Security benefit in a strictly a first employee’s benefit from the federal government. If you retire prior to 62, they will give you a certain amount based on your estimated benefit at 62 with Social Security and how many years, full years of service that you’ve had. And they’ll divide that up and find out what that amount will be for your special retirement supplement, OK?
And I can understand why people get this confused, because in the formula, it pulls over Social Security, the Social Security amount that you get at sixty two. So it makes sense to people.
And it’s also subject to the earnings test. Right.
That’s very similar to Social Security. Right. Right. The government has kind of adopted that earnings test from Social Security and they use it for this benefit. So it’s a very confusing benefit, especially when people don’t realize that Social Security supplement, which is what I hear most commonly, is something that is actually a Social Security benefit for disabled people and things like that. There is a supplement income for folks. And so they don’t realize that, though, when they’re talking about the special retirement supplement.
And it’s a very, very confusing in this name, it’s thrown around with so many different variations and people gap payment, right? I mean, it could be viewed as a gap payment because it’s for employees who are under 62 and it only lasts until you’re age 62 when you are eligible for Social Security. Even if you don’t begin drawing Social Security, it only lasts until you’re 60 to it. So it fills that gap of time before Social Security is is eligible to be drawn.
And so I can understand how people come up with the name. But the real name is Special Retirement Supplement.
What do you even know?
It’s still in place if you’re on it before age sixty two and you retire, however, only on an immediate full pension. Right.
And I’ll go out on a MRA+10 basis. You’re not going to receive the special retirement supplement. I want to make sure we’re really clear on that. It does depend on the type of retirement you have on whether or not you’re going to be eligible for this benefit.
So is it still in place overall? The answer is yes. But again, remember, it depends on how you retire. But it also can depend maybe possibly in some future point if Congress decides to take it away and they’re always looking at trying to figure out should we take it away or should we leave it? So that’s one thing that I hear a lot in the workshops is that people are worried, OK, is it still going to be there?
And the answer is it’s there. Now, until it’s not so mean, we don’t we don’t know.
It’s kind of like the high three to high five. Right. People are concerned about that being an issue as well. Exactly. That is seems to be constantly on the House floor for them to discuss it. Really, when it gets passed, we will let you know.
OK, we’ll make note of that for now. We’re dealing with what is current and in place as of today, because that’s the best information we have. So many of these benefits are constantly on the House floor and being discussed about being changed or withdrawn or what have you. And until that actually happens, so we have nothing to go on. We can’t tell you when that will be or what that’s going to look like. And so until then, we’re going to go with what we know and what’s in place today.
And the funny thing about this, and we get to discussions like this all the time about in the workshops, is that, well, if it’s not going to be there, I would plan differently. Well, that’s true. But you can’t let us stop you from planning. You still have to plan, assuming that it’s going to be there and then maybe make, you know, an alternative. If it’s not, then what do we do? And those are the concessions we have to make as we’re planning all those.
OK, what if situations OK, what if it’s not there? Well, then we’ll do this. What if FEHB changes or what if Medicare changes, or what of the TSP changes, or are all these the high three, like you mentioned? Because the high five? We have to be careful with that.
Yeah. What if Social Security is not there by the time all of these all of these are very valid concerns. And that’s why our advisors that we have in our trusted network are experienced in answering those questions. They make sure that, you know, whatever scenario plays out or whatever what if scenario plays out is accounted for when they do that financial plan with you, whether it’s to make sure that you have more tax free income or whatever your goal or situation is, they’re going to help you make sure that you’re covered with all of these different buckets and all of these different benefits and make sure that they’re working together as a well oiled machine and to get you to where you need where you need to be.
And if something happens, if something breaks somewhere, how are we going to fix that situation? And they really distill that down. So all of these are very great questions and very valid concerns and just know that an adviser should be able to answer them for you if they’re not helping you plan. Right. Let us know. We’ll get you in touch with somebody who is versed in the federal benefits and understands exactly how to coordinate them with outside planning.
And also mention that along with that Cassie that things will go wrong. Things things will go not as planned. It’s going to happen. And so we may if we’re trying to do this ourselves, I may be focusing on, well, what if Social Security goes away and trying to plan for that when it’s possible that it work, when it’s probably most likely Social Security won’t go away? Now, I’m not saying that that will or won’t or possibilities on that, but there are certain things that we may think are big.
Well, for example, one I remember one lady was really worried about high three to high five, and she said, I’ve got to retire before they make it high five. And I said, wait a minute. Do you for most federal employees, if they change from high through to high five, there’s going to be such a small difference that you’re not going to notice the difference, number one. And number two, the chance of it happening are very small.
So I wouldn’t I wouldn’t be your whole when you’re going to retire off of that, it’s easy for us to place undue burden or emphasis on one situation or one benefit when we should really kind of back off and have a more balanced approach. And that’s what an adviser does help us, helps us balance that much more than we would our own, because we have those emotions that that get in the way. Absolutely.
So say they don’t take Social Security away. What happens if they increase taxes instead? Because. Right, right. There’s all of these different. What do you think about.
Oh, yeah, yeah, yeah, yeah.
I mean, we help people or not we but our advisors help people with those situations and know exactly how to counteract those what if scenarios and make sure that you’re set up. So no matter what happens, you’re still set to meet your goals. Yep.
Perfect. OK, last question. How does the Army Reserve pension play into all this?
I’m going to let you take this away Cassie you go for it with the question that you don’t get very often in your workshops about active duty service.
We don’t I don’t think because a lot of people understand how that works and the bonus that they get. I very few people that I have talked to, when I bring it, if I bring it up, most people like what I’m in reserve or I wasn’t reserves. And I don’t know about this and I’m kind of surprised by that. Yeah.
OK, so let me take a deep breath here.
I love it because there is a lot going on with reserve folks, OK? And they have a huge benefit that they don’t even know about. I would say most of them don’t realize what a benefit they have just being a reservist as opposed to active duty. OK, when it comes into relation to their federal pension, I should say, I don’t know what their other benefits are. Not benefits could be of reserve active duty. But when it plays into your pension on the federal side, it can really be beneficial to be a reservist.
And here’s why. You can if you have retired from the Army Reserves or Navy Reserve, if you have retired from the Reserves Service, then you can quote unquote, double dip your pension. On the federal side, because you can collect your reserve pension and you can make a deposit for your reserve service and collect on that reserve time for both pensions.
What? That’s craziness. Let me just clarify this a little bit. Excuse me, but somebody with active duty military service, if they have bought back their service on the federal side, they waive their military pension so they will no longer receive them in a military pension. When they begin their federal pension, they reserve they receive that federal pension and military pension combined in one federal pension. But as a reservist, you still collect your fat, your reserve pension, and you can also collect that federal pension with that reserve time included and make that federal pension more robust on that side as well.
And so you have you still that’s why they call it double dipping, because you can collect your reserve pension and your federal pension and get credit for that reserve time in both pensions. That’s the bottom line.
And and how does the government allow that?
I mean, so it’s not all reserve service. And let me just make sure that we’re we’re clear on this service time that can be included for the federal side. And that’s the two weeks of the summer. And any training our deployed service. OK, so the time that cannot count is the one week in a month drill time for reservists. They cannot buy back that service, but they’ll get time for all the rest of it. OK, so pretty decent there if you know about and if you play it right.
And here’s another great example. If you know about this, if you play it right, you can score with this. And those are again, something in the in the report that you would you would catch if no one else caught it, you would catch it. Oh, look at this. You can double dip here. You bet.
We are making this note constantly back to our advisers and say, hey, look, this person’s a reservist. They haven’t made a deposit. Let you know they need to follow this process to make sure that they get credit for that service because they can double dip here. Now, I want to be clear. There is an exception. Like all rules, there are always exceptions, of course, and that’s for military reserve technicians.
If you are a military reserve technician and you are having to have that military status because of your civilian job, then that is where you will only collect the reserve pension and the federal pension because you’re already getting credit on both sides of pay. So you don’t receive the quote unquote double dipping factor, like if you were a reserve and had your federal service separate.
So you do realize that you just took a number of people on an emotional roller coaster saying, oh, I’m so excited that I dropped them flat. Well done, Cassie.
I just want to make sure that everybody understands exactly how things work. I get it. No, I, I think that’s good because it always depends. There are always exceptions to things. I don’t care what it is, there’s always an exception to different things. So to make sure that you understand what they are and what the future things are, make sure you like, subscribe, follow, get notifications, all that good stuff on on Fenobabble. Share this with your friends.
Please help them understand the benefits that you get.
Everybody let them know. Yep.
Everyone. And then Cassie, what do you do in the end.
Go to Fednobabble.com and request the report, take action, take action on your benefits and make sure that you are in control of what that financial picture looks like for you. You got it.
Great. Thanks for joining us.
And we will see you next time.
To get Cassie’s comprehensive report on your federal retirement benefits. At no cost, no obligation and no sales pitch. Go to Fednobabble.com while you’re there. Submit a question for them to answer on the show.