Federal Employees’ Group Life Insurance (FEGLI) is a federal government-sponsored group team life insurance policy available to federal employees who are either full-time or part-time permanent employees. The program is also known as FEGLI, and it was started by the federal government in 1954.
Federal workers, federal retirees – provided they satisfy the criteria to keep their insurance coverage in retirement – and their family members can take use of the benefits offered by FEGLI.
Employees of the federal government can get term life insurance at group rates through payroll deductions accessible through their agency.
Who is eligible for being part of the FEGLI program?
It is quite likely that you will be qualified for the FEGLI program if you work for the federal government. Law and regulation, on the other hand, make exceptions to this general rule. If you’re eligible, it will be determined by your government agency.
Types of coverage under FEGLI
The FEGLI program offers two levels of insurance: Basic and Optional. Each form of insurance is completely voluntary, and it can be terminated at any moment. It’s crucial to understand that FEGLI doesn’t create cash or loan value. Its purpose is to provide instant financial protection in the case of death.
Basic life insurance
Because most federal employees are qualified for the FEGLI program, they are immediately enrolled in the Basic Life Insurance program. For as long as coverage remains in effect, payroll deductions for premiums will continue.
Basic Insurance offers coverage equivalent to your yearly basic salary, rounded up to the closest $1,000, plus an extra $2,000.
You, as a federal employee, and the federal government split the cost of Basic Insurance coverage. It costs you 2/3 of the whole premium cost, while the government pays 1/3. It does not matter how old you are when it comes to paying your Basic premium because new rates are set on a regular basis.
For Federal employees under the age of 35, Extra Benefit coverage is included at no additional expense. Up to the age of 35, the Basic insurance policy’s coverage is doubled by the Extra Benefit.
Extra Benefit coverage begins to drop by 10% yearly beginning on your 36th birthday and continues until you reach the age of 45, at which point it is completely terminated, leaving only your Basic Insurance amount.
Optional life insurance
Optional life insurance is the second type of coverage offered by the FEGLI program. Basic life insurance is required before you may select any of the other three forms of insurance. To enroll in optional life insurance, you must take action, unlike with basic enrollment. Within 31 days of becoming eligible, you can decide on the types of optional insurance you want to carry. The cost of any optional insurance is entirely borne by you; the government makes no contribution to these costs.
Optional life insurance comes in three varieties:
- Option A, or Standard Optional Insurance, adds $10,000 to your policy. The price is determined by the age groups. The cost is 0.30 cents if you are under the age of 35. When you approach a new age bracket, the price rises. The age groups are 35, 40, 45, 50, 55, 60, 65, and 70. During the pay period in which your birthday falls, you are regarded to have reached the next age band. The amount withheld from your salary must be prorated and adjusted to the closest cent if you are paid on a schedule other than biweekly.
- Option B, or Additional Optional Insurance – this coverage is available in multiples of your yearly base rate of pay of 1, 2, 3, 4, or 5. It excludes the additional $2,000 for Basic Insurance. The price is also determined by the age groups. Option B coverage follows the same age groups as Option A coverage. The fee is 0.03 cents for $1,000 of coverage monthly if you are under the age of 35. If you are paid on a different schedule than biweekly, the amount deducted from your salary must be prorated and adjusted to the nearest tenth of a cent.
- Option C, also known as Family Optional Insurance, covers your spouse and qualified dependent children. All eligible family members are immediately insured if you choose Option C. You can choose from 1, 2, 3, 4, or 5 coverage multiples. For a spouse, each multiple equals $5,000, and for each qualifying dependent child, each multiple equals $2,500.
Accidental Death and Dismemberment Benefits
As a part of Basic and Option A Insurance, you’ll get accidental death and dismemberment coverage. If a participant is injured in an accident and dies or loses a limb or their sight within 90 days of the incident, benefits are payable. The amount of the accidental dismemberment payout is determined by the participant’s insurance coverage at the time of the accident and the degree of the dismemberment that was lost.
Waiver/Cancellation of insurance:
Unless they submit a waiver, employees are automatically insured under Basic Insurance. Insurance coverage, both basic and optional, can be discontinued at any moment. Optional coverage is waived or canceled when Basic insurance is waived or canceled. Optional coverage, on the other hand, can be discontinued without affecting Basic coverage. Employees can terminate or reduce coverage at any time by filling out the SF 2817 form.
Summary
Life insurance is a no-brainer throughout our lifetimes, making FEGLI an excellent insurance choice for a large number of federal employees. We’ve gone over the basics of the FEGLI program, but there are some other factors to consider when deciding which of the two forms of insurance you should use as a federal employee. Check out FEGLI’s booklets for additional information.
Employees of the federal government receive some of the highest perks in the business world. To mention just a few, the options range from a Thrift Savings Plan to life and health insurance to a full retirement savings and pension plan.
Even if you have worked for the federal government for a long time, it’s a good idea to take a few minutes to read the overview of federal employee benefits.
Let’s have a look at the perks alphabetically, shall we?
Annual leave
Annual leave is accumulated pay-period-by-pay-period and can be utilized for vacation, leisure, relaxation, and personal affairs. The accrual rate is determined by the number of years you have worked as a federal employee and whether you work full-time or part-time.
This means that full-time federal employees with less than 3 years of service earn 4 hours for every 20 hours worked, i.e., 13 days per year, those with 3 to 15 years of service earn 6 hours for every 20 hours worked, i.e., 20 days per year, and finally, those with more than 15 years of service earn 8 hours for every 20 hours worked, i.e., 26 days per year.
Part-time federal employees, on the other hand, have fewer annual leave days. Those with less than 3 years of service earn 1 hour for every 20 hours worked, those with 3 to 15 years of service earn 1 hour for every 13 hours worked, and those with 15 years of service or more earn 1 hour for every 10 hours worked.
Federal Employee Dental and Vision Insurance Program
The Federal Employee Dental and Vision Insurance Program, or FEDVIP, offers enrollee-pay-all dental and vision care to federal employees and their dependent family members. Your partner and unmarried dependent children under the age of 22 are eligible family members. Employees can sign up for a dental and/or vision plan. The amount of the premium is deducted from the employee’s salary before taxes are applied.
Federal Employee Group Life Insurance
FEGLI provides group life insurance for you, your spouse, and your dependent children under the age of 22 through this program. When a new federal employee qualifies for FEGLI, they are immediately enrolled in basic life insurance, with the option to acquire extra coverage.
Federal Employees Health Benefit Program
There are 200 different plans available to federal employees and retirees via the Federal Employees Health Benefits Program (FEHBP), making it easy for everyone to select something that works for them and their families. In order to join in any government health plan, there are no waiting periods or medical examinations, and there are no limits based on age or physical condition. In addition, the federal program offers a guarantee of coverage, making it impossible for health insurers to discontinue it. The majority of health care expenditures are paid for by the federal government, which typically covers 70% to 75% of the costs.
Federal Holidays
Every year, federal employees are given 11 paid holiday days: New Year’s Day, Martin Luther King’s Birthday, Washington’s Birthday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
Federal Long-Term Care Insurance Plan
With this sort of coverage, long-term care insurance can help cover the costs of daily living support or care if you have significant cognitive impairment. Employees of the federal government and their qualifying family members may apply for this position. The simplified underwriting method allows newly recruited employees and their partners 60 days to apply.
Flexible Spending Accounts (FSA)
In order to save money for unexpected expenses, federal employees can use flexible spending accounts to set aside a percentage of their pre-tax salaries. Employees in the federal government can save up to $2,850 a year through the Health Care Flexible Spending Account. For expenditures not covered by FEHBP, like over-the-counter medication or health insurance premiums, these funds can be used.
Retirement
As part of the Federal Employees Retirement System, or FERS, the government offers employees with a retirement benefits package that consists of three separate contributions: the Basic Benefit Plan, the Thrift Savings Plan, and the Social Security benefit.
Employees contribute a little amount each pay period, and their employer contributes 1% of their yearly salary to the Basic Benefit Plan. In addition, partners and children can get long-term disability and survivor payments under this strategy. Employees must have worked in the government for at least five years in order to qualify for the Basic Benefit Plan’s retirement benefits.
The Thrift Savings Plan, or TSP, is comparable to a standard 401(k) plan in terms of benefits. Employees who do not contribute 1 percent of their wages are nevertheless covered by the contributions of the agencies. Additionally, companies will match up to five percent of employee contributions each pay period.
Social Security assists those who are retired, jobless, or disabled, as well as those who are unable to work and those who are unable to provide for their families. Employees of the federal government are required to pay Social Security taxes and accrue benefits in their Social Security accounts as a result of this.
Sick leave
Personal medical requirements, family care, or bereavement, care for a family member with a significant health condition, or adoption-related causes can all be utilized for accrued sick leave. There is a four-hour-per-pay period accrual rate, regardless of how long you’ve worked for the institution. Accumulation of sick leave is unrestricted and does not rise at a higher rate.
Student loan repayment
Loan repayment assistance is available from the federal government in the form of two different programs: the Federal Student Loan Repayment Program and the Public Service Loan Forgiveness Program.
Federal Student Loan Repayment Program participants can receive $10,000 each year, up to a maximum of $60,000, in student loan repayments. Those who accept the offer must commit to a minimum of three years of service.
After completing a minimum of 10 years in a public service position, the government will forgive the remaining balance of qualified student loans under the Public Service Loan Forgiveness Program.
Transportation benefits
Using the Transportation Benefit, you may reduce the expense of getting to and from work each day. The Bicycle Benefits Program provides financial assistance to commuters who use bicycles to get to work. To qualify for the perk, employees must ride a bicycle for a significant amount of their commute every day or almost every day. Using the Pre-Tax Parking Benefit Program, employees are able to reduce their payroll taxes by the amount of eligible monthly parking costs they claim.
Conclusion
Federal employees have a wide range of perks, all of which are equally significant. There are so many acronyms that imply so much more than just a collection of letters, so it’s critical that you grasp the significance of each of the above benefits. Also, if you’re just starting out in the federal workforce, be sure to familiarize yourself with all of the current policies and procedures.
What could be worse than retiring without a penny in your pocket? This is everybody’s worst nightmare. You certainly do not want this to happen to you. Do you think what you have today will be enough for your future retirement? Think about it for a second. Planning your retirement early is the best thing you can do for yourself. One of the mistakes people make is that they procrastinate about it. Retirement is a major life stage, and some people do not adequately prepare for it. Unfortunately, many people are unable to retire at the time they desire because of their financial situation. However, planning your financial retirement can be very simple if you know what plans to implement.
Here are some tips to help you prepare for retirement early:
Plan way ahead of your retirement
When you start planning early, it allows you to decide when and how you will retire. It does not matter if your retirement is decades away; you can start planning from the moment you get your first job. This way, you eliminate the predicament of not retiring at the time you want.
Negotiate Your Retirement Benefits and Health Insurance
Some employers provide health and other benefits, so if you find yourself in such an organization, you can try to negotiate, and you may get a better deal. For example, depending on your employer’s policies, you can negotiate the amount you will pay for health insurance, what it covers, and whether it will include a dental or vision plan.
Know exactly how your retirement income is taxed
Many people neglect this important aspect and ignore it. Some people do not know that different sources of retirement income are usually taxed. So, while planning, put in mind that you will be taxed and prepare for any tax impact.
Check if you have a pension plan
There are some critical questions to answer while planning your retirement and one of which is, will you have a pension?
In retirement, the government may provide you with a state pension or other benefits, depending on where you live and your career path. Usually, the US government offers pensioners about $1,500 a month.
Track your expenditure
The amount of money you spend in retirement will vary as you move through different stages. You are most likely to have less money to live on during retirement, so having an idea and tracking what you are spending your money on will help you plan for the longer term.
Open an IRA account
This is a great idea, and almost every American can open this account if they have earned an income. An IRA can be Roth 401(k)s and individual retirement accounts. You can visit your bank for information on how to open an IRA. Once it is opened, start contributing the maximum amount every year.
Project how much you need to save
You can use online calculators to determine how much you should save for retirement. This will help you know how to set your savings goal and be helpful if you are not very good with working with numbers. A logical personal retirement savings plan will consider your current expenses and return on retirement investments. For example, assume your current expenses for utility bills, groceries, gas, clothing, vacation, entertainment, and insurance add up to $45,000 yearly. Then you are supposed to downsize this before you retire, so you expect these expenses to reduce to $30,000 annually. Next, consider what this amount will be worth when you retire based on inflation. Inflation has been near 3% annually for some time now.
After determining your savings goals, ensure that your retirement contributions and investment portfolio growth can accommodate and help you achieve your goals.
Seek professional help and guidance
when making any financial decision or planning, it is best to seek the professional counsel of experts as it helps you make informed decisions every step of the way. Finance can be a complex subject, and one wrong decision may have a crippling ripple effect on your entire finances.
Proper retirement planning is a serious matter and should be given the most attention. But, first, start taking inventory of all your assets: your investments, retirement savings, insurance, and business.
These tips are not a guarantee that you will be ready for retirement. However, it is better than leaving things to chance and will help you start thinking about the subject and how to make retirement seamless. Early planning and preparation enable you to take control of your life.
Even if you’ve never worked for the government, you’ll quickly learn about FERS (the Federal Employees Retirement System) if you do or want to work in the public sector.
All US public employees are covered by the Federal Employees Retirement System (FERS). The Federal Employee Retirement System (FERS), which succeeded the Civil Service Retirement Plan in 1987, is a defined-benefit plan. The federal government’s legislative, executive, and judicial branches are all included in the program. However, the military and state and municipal government employees are not covered by FERS.
Three sources of retirement benefits are available to employees: the Basic Benefit Plan, Social Security, and the Thrift Savings Plan, or TSP. The Basic Benefit and Social Security contributions must be paid by employees each pay period; however the Social Security and Thrift Savings Plan (TSP) contributions can be transferred with you when you leave government service. With the Basic Benefit Plan, payments are accessible through these four benefit categories: Immediate, Early, Deferred, and Disability. Moreover, the age of the worker and the number of years he or she has worked determines whether or not he or she is eligible for benefits.
Let’s take a closer look at the three foundations of the Federal Employees Retirement System.
Basic Benefit Plan
The Basic Benefit Plan is a pension in which the employee receives a set amount, regardless of the amount they have contributed. The amount depends on the length of service and the “high-3” average. “High-3” refers to the highest three consecutive years of service. Often, those are the last three years you worked, but if you held a higher-paying position earlier in your career, your high three could be during that time.
This calculation only considers your basic salary. It does not include overtime, bonuses, or other extra payments. Your years of credible service are reported on the SF-50 form you receive at least once per year. Then, the agency you work for adds a 1% multiplier to your high-3. However, employees who are 62 or older with at least 20 years of service will receive a multiplier of 1.1%.
Benefit Categories
1. Immediate
The Immediate benefit is effective 30 days after you stop working. If you are 62 years old and have five years of service, or 60 years old and have 20 years of service, you can retire immediately. If you wait until you reach your minimum retirement age and have between 10 and 30 years of service, your pension will decrease by 5% each year until you reach the age of 62. Those who have served for 20 years only have to wait until they are 60 to receive the full benefit.
2. Early
This option is accessible in some involuntary separation instances as well as situations of voluntary separations that occur during a large reorganization or reduction in the number of people employed.
3. Deferred
The number of years of service you’ve accrued determines whether or not you’re eligible for this choice. If you are over the age of 62, you must have completed 5 years of service. If you reach the minimum age of retirement but are not yet 62, your pension will be decreased by 5%. If you’re 60 and have 20 years of service, you can only postpone payments at the maximum benefit amount.
4. Disability
This benefit option plan compensates employees who have become disabled while working in a FERS-eligible position as a result of a sickness or injury for their useful and efficient service. This disability must endure for at least a year. The hiring agency must certify that it is unable to accommodate your condition and that you have been considered for other internal positions that are similar to yours.
Social Security
Unlike other governmental pension schemes, FERS employees pay the same amount into the Social Security fund as private employees. Anyone contributing to Social Security will contribute 6.2 percent of their salary, with the administration matching it.
Thrift Savings Plan
The TSP was established by Congress in 1986 and provides the same tax benefits and savings as a 401(k). Your employer contributes 1% of your base pay to your TSP each pay cycle. Furthermore, you have the option of contributing up to 5% of your earnings in extra contributions, which your employer will match.
The Federal Retirement Thrift Investment Board manages these additional contributions, which are tax deferred. You have the same options as with a 401(k) when it comes to investing these funds. You’ll be given a selection of fund options when you set up your TSP. However, the TSP has a cap, much as the 401k retirement plan.
Conclusion
Employees of the federal government, like those of any other big organization, are eligible to contribute to retirement savings plans under a scheme known as the Federal Employee Retirement System. Those who wish to participate in the Federal Employee Retirement System must only have served for a total of five years before being eligible for benefits. If they cease working for the government, they will be eligible to receive benefits from the program, even if they have not yet reached the age of retirement.
Living in the shadow of financial instability can be an unpleasant experience. Money is constantly on our minds as we attempt to plan for the future. Do you want to purchase a home to reside in one day, or is there an emergency, or does your youngster just want a new bike? Do you want to get out of student loan debt? Is it time to put a stop to your credit card addiction? It doesn’t really matter how large or small these matters are when it comes to your money, since they all have an impact.
It’s been a two-year financial education for everyone on the planet to live in the midst of a pandemic. Especially in the face of a crisis that appears to go on forever, no one is ever really prepared. It is important to make financial objectives for the foreseeable future in order to improve your financial situation.
What are financial goals?
Savings, investing, and spending objectives are all examples of financial goals. Having a strategy for your money is what we mean when we say “financial aim.” They help you understand why you’re putting your hard-earned money into a savings account. To achieve our financial objectives, we must first learn to prioritize our responsibilities and make better use of our financial resources. Regardless of how long it takes, your objectives should serve as a source of motivation and accountability, no matter how long it takes to achieve them.
You may create short-term, mid-term, and long-term financial objectives based on where you are in your life cycle. A short-term aim might be saving money for your forthcoming summer vacation, while a long-term goal would be saving money for your children’s college education.
Now let’s look at how you may create realistic and attainable financial objectives.
Write down your goals
The first step to reaching your financial objectives is to write them down. It is much more effective to begin the process in this manner than to only think for your financial objectives. It is essential that each objective be measurable, action-oriented, practical, and has a time frame. Make a list of all the ways you can save money, decrease costs, earn more money, or uncover more resources to help you achieve your objective.
Create categories
All of your financial objectives must be classified according to the time frame in which they must be achieved. Make a list of your short-term, medium-term, and long-term goals. There are three types of objectives: short-term goals that can be accomplished in a year or less, mid-term goals that can be accomplished in one to 10 years, and long-term goals that can be accomplished in more than 10 years.
Prioritize
Prioritizing your financial goals is an important step after making a list of your goals and deciding on a timeline for reaching them. When setting financial goals, prioritizing is critical. Making a priority list can help you stay focused on your long-term objectives and the timeline you’ve set for them. Use the terms Want, Need and Critical to describe what you want. When it comes to improving your financial situation, these three words have a huge impact. Think at it this way: you’ve been wanting a new pair of shoes for a while, but the ones you want cost a little more. This would fall into the Want category since it is simple to get, but you may always postpone the purchase if anything unexpected occurs.
Set a deadline
If your objectives are not time-sensitive, will you ever fulfill them? Avoid making empty promises about starting a savings account down the road. Take immediate action, and set deadlines that are both acceptable and demanding, but not impossible. It’s satisfying to cross off each goal-related checkpoint along the way, and deadlines are no exception. And if you need to move the date, that’s okay; unexpected things happen to everyone.
Create a budget and set up an emergency fund
Make a budget plan if you don’t already have one in place. Keep your other goals on track by minimizing excessive spending and under-saving by using this method of budgeting. Take the 50/30/20 budgeting technique, as recommended by our team of experts. To put it another way, you should put 50% of your income toward necessities, 30% toward desires, and 20% for emergency funds and debt reduction.
Unexpected costs may be paid for using an emergency fund, which is a defined amount of money put aside only for that purpose. $500 to $1,000 is a reasonable starting point. When you reach that goal, you’ll want to extend it so that your emergency fund can handle more serious financial issues, such as job loss. If you didn’t have an emergency fund before the COVID-19 outbreak, you probably wish you had one now. If you did have one, you may have used it and need to renew it.
Setting financial objectives may not always go according to plan, and that’s perfectly fine. Make rapid modifications to your goals in the event of an emergency, and don’t beat yourself up. You’ll be on track in no time if you stick to your savings plan. At this point in the article, you have all the information you need to begin planning for your financial future. Do your best!
Your retirement planning should begin as soon as possible, whether you’re just beginning your career or are towards the ending. One thing to keep in mind while contemplating retirement is that the sooner you begin, and the better off you will be in the long run. Plus, you are not alone in this situation. There are many individuals who have begun saving for retirement later in their career because of some suggestions on how to optimize retirement savings. The advice in the following article is sure to come in handy as you work toward your retirement goals.
The earlier you start, the better
The most important piece of retirement investing advice is to get started right now!! Compounding returns work best when your money has time to grow. Even if you don’t have a lot of money to invest right now, you may still enjoy the benefits of compound interest. Any start, no matter how small, will have an impact over time. If you’re just starting out, start with a little amount and gradually raise it over time. Smart, isn’t it?
Grab the 401(k) or 403(b) company match
It’s a good idea to contribute up to the amount your company matches if you have a retirement plan at work. It will be simpler for you to save a larger amount over time because of the 401(k) and 403(b) plans.
For-profit corporations provide 401(k) plans to qualifying workers who make pre- or post-tax contributions via payroll deductions, while non-profit and government employees have access to 403(b) plans. However, 403(b) plans are excluded from testing for non-discrimination.
Consider opening an Individual Retirement Account (IRA)
Having an Individual Retirement Account (IRA) can help you develop a pension pot. There are two kinds of individual retirement accounts (IRAs): traditional IRAs and Roth IRAs. An Individual Retirement Account (IRA) may provide you with a wider range of low-cost investments.
Depending on your income and whether or not you or your partner are qualified to participate in a company retirement plan, a Traditional IRA may be a better option for you. Withdrawals in retirement may be tax-deferred, and payments to a Traditional Individual Retirement Account (IRA) may be deductible.
To qualify for a Roth Individual Retirement Account, you must meet the phased-out modified adjusted gross income (MAGI) limits depending on your federal tax filing status. Depending on the holding period rules, payouts may be tax-free in both the state and federal levels.
Go double with your plan retirement contributions
Due to specific catch-up rules, some teachers, healthcare workers, public sector, and non-profit employees can contribute twice as much to retirement plans. The requirements of this section apply to certain participants in plans covered by Sections 457(b) and 403(b). Additional information is available on the Internal Revenue Service (IRS) website.
Retire in the right state
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are among the nine states in the United States without state income taxes, making them attractive retirement destinations. However, dividends and interest are taxed in New Hampshire.
Be consistent with saving
Consistency is crucial in retirement saving as it is in any other field. In your early career years, you are in a strong position since you have a long time ahead of you in terms of earning potential. Many future paychecks and many contributions to retirement are on the table as a result of this. Thinking ahead will benefit you in the future. Also, don’t just waste your money if you have extra. The best method to boost your retirement savings is to enhance the percentage of your salary that you contribute every time you get a raise.
Automate your savings
If you’re like most people, you’ve heard the expression “pay yourself first.” Choosing to automate your monthly contributions is a wise decision, as this will make it easier to grow your pension fund without having to worry about it too much.
Set a goal
Recognizing the amount of money that you could be saving might not only assist you in better understanding why you are saving, but it can also make the process more pleasurable. Setting goals and achieving them along the way will help you feel more satisfied as you work toward your retirement savings goal.
If you want to get the most of your retirement funds, you need to start planning for it as early as possible. Long-term financial success is more likely when you begin early and keep up a consistent planning schedule. It’s a typical aim for many people to retire at some point in life. In the end, your retirement savings will determine how comfortable you can live and if your money will outlast you. Be strategic in your planning!
You should begin planning several years before the date you have set for retirement so that you will know what is required to continue certain benefits into retirement. There are many factors related to retirement planning, and it is literally never too early to begin.
Becoming eligible to retire is great on paper. The main question that needs to be considered is will you be able to retire financially, enjoying the retirement you worked so hard in federal service to have. Many do not take into consideration certain aspects that are out of their control like rising taxes, inflation, healthcare costs among other things.