Episode Transcript
[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Welcome to Reyna Retirement. Reyna Reyes has dedicated her career to helping people make small, smarter financial decisions. Raina Retirement is all about breaking down complex financial concepts into language you can actually understand.
Now here's the co founder of American Federal Benefits Consultants, Reyna Reyes.
[00:00:40] Speaker B: Now, you may know I love to reference music and songs and things like that. And there's a lot of songs that talk about being given a piece of paper, but they're not usually incredibly positive. So let's not reference those, the pieces of paper we're talking about or those addendums or those additional documents that are required in your retirement packet, your retirement application. And these are not as much of a bummer as those are.
One of them has something to do with spousal relations and spousal benefits.
But the things you want to remember are, first of all, we, my team and myself, we have the ability to help you through all of this, right? This is an online portal. Rather than things, physical pieces of paper, other than the fact that there are still some physical pieces of paper that you're going to need to then upload, that is scan and upload into the portal. So things like your DD214, if you are a military member, retired or not, veteran or retired, you know, either way. And then also if there was a court order that says you owe money to your former spouse, you're going to have to upload those.
And then there's the big three that everybody has to submit. So let's go into them. The first one is going to be related to your life insurance election. What insurance are you keeping? This is super, super, super, super important.
This chair has cushions, so you can't hear me banging on that. How about this? Important, important, important. How's that? So this is super important because after we retire, what do we start thinking about? Family planning, legacy, inheritance in our family members and everybody's, oh, I don't want to be a burden. I don't want to go down that, you know, rabbit hole. But the point is it's not about being a burden. It's about simply preparing the way for an easy transition for everyone, including yourself, with peace of mind. Peace of mind is a huge thing. Why am I even bringing this up? Life insurance creates peace of mind. Because it's a lump sum, income tax free benefit that goes to your family that you prepared often. This is the last love letter you have sent, you have written to your family and you should see it as that. In fact, your job, if you're a federal or postal employee, has provided you with this template of your last love letter. How's that? How is that? Well, if you have basic life insurance, which the majority of you do after retirement and after age 65, you've got a free burial because 25% of your salary is no cost to keep as life insurance. If you're questioning that reach out get scheduled 850-450-6500. We'll go into the deep dark depths of that life insurance option so you understand what it means. But this form is what you're declaring to them, what you're keeping and how you're keeping it. So there's basic abc and we can go into that in our meeting to decide what makes sense for you to keep and at what cost. But remember, above all, at a minimum, you want to keep basic with a 75% reduction. Because after you're 65, how much are you going to pay?
Nothing, nada, zilch, settle, nothing, big deal, no cost burial depending on your salary, but in most cases it's going to cover the cost.
So that's document number one that you actually have to upload. What, what's the next one? Well, what are the two things Benjamin Franklin said that we have guarantees in? Life, death and taxes. So yes, you got taxes coming out of your pension and you got to let them know how you want it withheld. W4P P for pension or periodic payments, whatever you want to call it. But that's what it is. W4. Just like you have taxes taken out of your paycheck right now, taxes get withheld out of your pension in the same way as a withholding. That way when it comes time for taxes the next year, you've already paid along the way and they're just shaking it out in the wash to see if you still owe them a little extra or if they owe you or if somehow you planned it perfectly and it's a break even. But this is the document that you're going to submit to tell them, yeah, keep taking withholdings out in my marital status and any specific additionals you want. If you want an extra withholding or whatever, this is the form to do it. What's the last form? You may or may not need this one. If you're not Married, you don't need it. If you're married and you're leaving a full survivor benefit, you don't need it. If you're married and you're going to leave your spouse a reduced survivor benefit 25% rather than 50 or none at all, they have to agree to it. This form has to be signed in front of a notary, which I am, but I'm a Florida notary. For those of you all not in Florida, it has to be signed in front of that notary, inked, printed, signed, stamped, and then uploaded, scanned in.
So that means they've got to give permission for you to spend less money on your pension in order for them to receive less money monthly if you were to pass away from your monthly pension. So standard, standard, what do they get? They get half. They're entitled to it. That's just the law of the land. Marital status, half, half a. For a half, half a partial half, half of it. Or they can agree to take a 25% which allows health insurance still, but cost you less and gives them less. Or they could say, no, don't do a monthly. Don't spend money on me. I already have health insurance and I already have a pension. Remember Twinkies? A lot of y' all may not want to do Survivor benefit, but that's a conversation for the meeting because some Twinkies still do Survivor benefit, depending on income and years of service and all of that.
So those are your forms, those are your documents, and it's good to get those started.
And myself and my team, we can help you make sure that they're filled out correctly and help you upload them. I've done that many times for people who just don't love tech, which I totally get it. And that's one of the reasons we have face to face meetings and zoom meetings. It's incredible what we can do with a virtual meeting with things like remote controls and screen shares and all kinds of things. So don't be scared. Go ahead and get scheduled for a meeting as soon as possible. If you're planning to retire, go ahead and get scheduled. There is no such thing as too soon, but there is such thing as too late. There really can be. We can still talk after retirement and we can even talk within weeks of retirement. I have it all the time. However, it gets more difficult to make an edit sometimes than it is to just do it right the first time. So I would say go ahead and get scheduled with me and my team so we can help you make those decisions and submit it up. That way, when you're done, you can feel it. We'll talk to you soon.
[00:07:17] Speaker A: Thanks for listening to Reyna Retirement With a strong commitment to ethical standards, Raina works hard to find the right solution for each individual or family who reaches out for advice. To contact reina directly, call 850-450-6500. That's 850-450-6500. Or to reach the team at American Federal Benefits, consult, call 1-800-872-8857. That's 1-800-872- 8857. You can also go online to americanfederal.org not affiliated with the United States Government. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. The information is intended to be educational in nature and is not do not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. American Federal Benefits Consultants is an independent organization, not a government agency or affiliated with the Federal Government or any state government. The terms CSRs, FERs, FELI, and FEHB are all registered trademarks of the U.S. office of Personnel Management. American Federal Benefits Consultants, agents, consultants, or any independent contractors do not provide tax, legal or investment advice and do not engage in the solicitation or sale of securities. Consult with your tax advisor or attorney regarding specific situations.
