David Fei, CFP®, ChFEBC℠, AIF® - PlanWell Financial Planning

IRA Required Minimum Distribution: Start Age and Calculations

IRA Required Minimum Distribution: Start Age, Calculations, and More A Required Minimum Distribution (RMD) is the minimum amount of money you must withdraw annually from certain retirement accounts, starting at a specific age determined by IRS regulations. The purpose of RMDs is twofold: first, they ensure that you utilize your retirement savings during your lifetime rather than indefinitely deferring taxes; second, they provide the government with tax revenue from these distributions. Tax-deferred retirement accounts are subject to RMDs. Examples are

SECURE 2.0: Age 60-63 Catch-Up Contribution Provision & Limits

SECURE Act 2.0: Supercharging Retirement Savings for Those Age 60-63 The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, is a game-changer for retirement savers. One of the most significant changes is Section 109, which significantly increases the catch-up contribution limits for those between the ages of 60 and 63. This provision aims to help older workers accelerate their retirement savings in the crucial years leading up to retirement. What is

HCFSA vs HSA: How Health Savings Account Compare to Flexible Spending Account (FSA)

HCFSA vs HSA: Options on Healthcare Savings Healthcare costs can be a significant financial burden for many individuals and families. Fortunately, options are available to help manage these expenses, such as Health Care Flexible Spending Accounts (HCFSA, or FSA) and Health Savings Accounts (HSA). Both offer tax advantages and can be used to pay for qualified medical expenses, but they differ in eligibility requirements, contribution limits, and other features. This article will comprehensively compare HC FSA and HSA to help

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Complete Guide to Federal Law Enforcement Retirement (FERS LEO)

Complete Guide to the Federal Law Enforcement Retirement The following information is meant to be an exhaustive explanation of the FERS pension. The intention is to be a single resource when preparing for a federal retirement. The article is lengthy, we suggest reviewing our FERS page for a short summary. To easily reference a piece of information, use the dropdown on the table of contents. The following is covered: Pension Calculations Costs RSCD vs LSCD Eligibility and When to Retire Minimum

Capital Gains Tax on Real Estate & Home Sales

Capital Gains Tax on Real Estate and Home Sales Selling a home can be a significant financial event. However, it’s crucial to understand the potential tax implications, especially capital gains tax. When you sell your home, if sell it for more than what you paid, that is a gain and it is taxable. Make sure you understand these rules and avoid taxes when possible. How Much Is Capital Gains Tax on a Home Sale? Capital gains tax is a

Thrift Savings Plan TSP Hardship Withdrawals & TSP Loans

TSP Hardship Withdrawals: A Lifeline or a Trap? The Thrift Savings Plan (TSP) is a valuable retirement plan for federal employees and members of the uniformed services. It allows participants to set aside a portion of their income pre-tax, with the potential for agency-matching contributions. However, life can throw unexpected curveballs, leading some to consider hardship TSP withdrawals. What are TSP Hardship Withdrawals? A financial hardship withdrawal may allow for early distribution from your TSP account under specific circumstances. It

Roth TSP & Roth IRA 5-Year Rule on Withdrawals and Conversions

Roth 5-Year Rules for IRA, TSP & 401(k) Accounts Roth IRA, Roth TSP, and Roth 401(k) accounts offer unique advantages for retirement savings, primarily their tax-free growth and withdrawals in retirement. However, to reap these benefits fully, it’s crucial to understand the 5-year rules that govern withdrawals from these accounts. This article aims to shed light on the often-misunderstood 5-year rules for both Roth IRA and Roth 401(k) accounts, empowering you to make informed decisions about your retirement savings.

OPM Retirement Processing Time Backlog: June 2024

OPM Retirement Backlog: June 2024 Processing Time The Office of Personnel Management received 6,751 federal retirement claims in May 2024, down slightly from 6,901 in April. They were able to continue to process 8,793 claims and brought the backlog down to 14,035. Lowest so far in 2024 and much lower than the same time last year. What is the Current Status of the OPM Retirement Processing Delay? Monthly Average Processing Time The average retirement application processing time dramatically decreased from 68

SEP IRA vs SIMPLE IRA: Which Retirement Plan for Small Businesses Owners

Retirement Plan for Small Businesses: SIMPLE IRAs vs SEP IRAs Retirement planning is a crucial aspect of financial well-being, not only for individuals but also for small business owners and their employees. However, small businesses and self-employed individuals often face unique challenges in offering retirement benefits due to limited resources and administrative complexities. Fortunately, there are many small business retirement plans that are accessible and cost-effective options: the SIMPLE IRA and the SEP IRA. Understanding SIMPLE IRAs While a

FERS Rehired Annuitants: Rules for Reemployed Annuitants & Retirees

FERS Rehired Annuitants: Rules for Reemployed Annuitants & Retirees The allure of returning to work after retirement is strong for many. Whether it’s the desire to continue contributing expertise, the need for additional income, or simply enjoying work, many in the Federal Employees Retirement System (FERS) may decide to return to work. However, can a retired federal employee be rehired into federal service? The short answer is Yes! Employing agencies are allowed to rehire retired annuitants. However, understanding reemployment rules

Author: David Fei, CFP®, ChFEBC℠, AIF®