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When it comes to managing your retirement, a small mistake can cause a major loss of capital. That is why it's important to speak with a financial advisor who is familiar with your Company's benefits. Schedule a call today..  
 
 
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New College Cost Data for 2021-2022 Academic Year

Dec 6, 2021 1:20:26 PM
written by The Retirement Group

Every year, the College Board releases new college cost data and trends in its annual report. Although costs can vary significantly depending on region and college, the College Board publishes average cost figures, which are based on a survey of approximately 4,000 colleges across the country.


Over the past decade, average tuition, fee, room, and board costs have increased 11% at public colleges and 14% at private colleges over and above increases in the Consumer Price Index. Here are cost highlights for the 2021-2022 year.1


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posted in College, Cost, Academic

Market Month: November 2021

Dec 3, 2021 10:27:23 AM
written by The Retirement Group

The Markets (as of market close November 30, 2021)

Before reviewing yourcompany 401(k) plan, check out how the market can affect your retirement. Stocks ended November generally lower, with only the Nasdaq able to eke out a gain. The Global Dow and the Russell 2000 each lost more than 4.25%. The Dow fell 3.7% and the S&P 500 dropped 0.8%. The Nasdaq gained 0.3%.


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posted in Market, 2021, November

Supply-Chain Chaos: Holiday Edition

Dec 2, 2021 10:38:45 AM
written by The Retirement Group

The supply chain is the network by which products flow from the factories of suppliers to the inventories of retailers so they can ultimately be purchased by consumers. Corporate supply chains have been under pressure since the pandemic began, but the stress intensified in the latter months of 2021, with demand for goods surging and the holiday season fast approaching.1


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posted in Chain, Supply

Chevron Rates Rising, Driving Lump Sums Lower

Dec 2, 2021 9:53:16 AM
written by The Retirement Group

It is crucial for Chevron employees, particularly those who reside in Texas, to understand how interest rates can impact your lump-sum.

Chevron interest rates increased by 0.08% in the most influential segment for those who commence their benefit in January 2022. With both short-term and long-term rates rising over the last month, the higher average rate will result in lower lump-sums for those retiring in January. When Chevron employees elect the month they would like to begin their pension, Chevron looks back to the third, fourth, and fifth month's rates to calculate the rates used for the pension disbursement. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship. Through the pandemic, interest rates dropped dramatically which has greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since December, rates have increased, causing a reduction in pension lump-sums.


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posted in Pension, Interest rates, Chevron

RMD Roundup: A Few Key Updates About Required Minimum Distributions

Dec 1, 2021 4:10:02 PM
written by The Retirement Group

As we approach the end of 2021, now might be a good time to take a closer look at a few developments surrounding required minimum distributions (RMDs) for corporate employees in California.

What Are RMDs?
Once you reach age 72, you are required to take minimum distributions from your traditional IRAs and most employer-sponsored retirement plans. (RMDs are not required from an employer plan if you are still working at the company sponsoring the plan and you do not own more than 5% of the company.) You can always take more than the required amount if you choose.

The portion of an RMD representing earnings and tax-deductible contributions is taxed as ordinary income, unless the RMD is a qualified distribution from a Roth account. Failing to take the full amount of an RMD could result in a penalty tax of 50% of the difference.

Generally, RMDs must be taken by December 31 each year. You can delay your first RMD until April 1 following the year in which you reach RMD age; however, you will then need to take two RMDs in one year — the first by April 1 and the second by December 31. (If you reached age 72 in the first half of 2021, different rules apply; see below.)

You may want to weigh the decision to delay your first RMD carefully. Taking two distributions in one year might bump you into a higher income tax bracket for that year.

New RMD Age and a 2020 Waiver Add Complexity
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 raised the minimum RMD age to 72 from 70½ beginning in 2020. That means if you reached age 70½ before 2020, you are currently required to take minimum distributions.

However, there was a pandemic-related rule change in 2020 that might have affected some retirement savers who reached age 70½ in 2019. To help individuals manage financial challenges brought on by the pandemic, RMDs were waived in 2020, including any postponed from 2019. In other words, some taxpayers could have benefitted from waiving both their 2019 and 2020 RMDs.

Anyone who took advantage of the 2020 waiver should note that RMDs have resumed in 2021 and need to be taken by December 31. The option to delay to April 1, 2022, applies only to first RMDs for those who have reached or will reach age 72 on or after July 1, 2021.

New Life Expectancy Tables
The IRS publishes tables in Publication 590-B that are used to help calculate RMDs. To determine the amount of a required distribution, you would divide your account balance as of December 31 of the previous year by the appropriate age-related factor in one of three available tables.

Recognizing that life expectancies have increased, the IRS has issued new tables designed to help investors stretch their retirement savings over a longer period of time. These new tables will take effect for RMDs beginning in 2022. Investors may be pleased to learn that calculations will typically result in lower annual RMD amounts and potentially lower income tax obligations as a result. The old tables still apply to 2021 distributions, even if they're postponed until 2022.

For more information on RMDs, consider speaking with your financial and tax professionals.


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posted in RMDs

Up-To-Date Market Week

Nov 29, 2021 2:22:51 PM
written by The Retirement Group

The Markets (as of market close November 12, 2021)

Before reviewing your company 401(k) plan, check out how the market can affect your retirement.Thanksgiving week proved to be a tumultuous one for investors. Each of the benchmark indexes listed here ended the week in the red following news of a new COVID variant in South Africa. In response, several countries, including the United States, initiated travel bans and tightened border controls. Crude oil prices fell 13.5% in the week as the new coronavirus strain sparked fears that lockdowns would hurt global demand. The yield on 10-year Treasuries fell 10 basis points to close below 1.55% for the first time in several sessions.
 

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posted in Financial Planning, Lump Sum, Pension

The Budget and the Debt Ceiling: Round 2

Nov 22, 2021 3:00:00 PM
written by The Retirement Group

On September 30, 2021, Congress averted a potential federal government shutdown by passing a last-minute bill to fund government operations through December 3, 2021.1 Two weeks later, another measure raised the debt ceiling by just enough to sustain federal borrowing until about the same date.2 Although these bills provided temporary relief, they did not resolve the fundamental issues, and Congress will have to act again by December 3.

Spending vs. Borrowing
The budget and the debt ceiling are often considered together by Congress, but they are separate fiscal issues. The budget authorizes future spending, while the debt ceiling is a statutory limit on federal borrowing necessary to fund already authorized spending. Thus, increasing the debt ceiling does not increase government spending. But it does allow borrowing to meet increased spending authorized by Congress.

The underlying fact in this relationship between the budget and the debt ceiling is that the U.S. government runs on a deficit, and has done so every year since 2002.3 The U.S. Treasury funds the deficit by borrowing through securities such as Treasury notes, bills, and bonds. When the debt ceiling is reached, the Treasury can no longer issue securities that would put the government above the limit.


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posted in budget

Q&A Session for AT&T Employees

Nov 1, 2021 3:23:00 PM
written by The Retirement Group

Over the last few weeks, our AT&T-focused advisors here at The Retirement Group have been getting asked a particular question during our webinars. We feel it is important that everyone who is currently working, retired, or on the verge of retiring know the answer to this:


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posted in AT&T

Employer Open Enrollment: Make Benefit Choices That Work for You

Oct 27, 2021 11:25:00 AM
written by The Retirement Group

This article is pertinent to all age groups, however those entering their Retirement Years will find the information particularly important. Open enrollment is the window of time when employers introduce changes to their benefit offerings for the upcoming plan year. If you're employed, this is your once-a-year chance to make important decisions that will affect your health-care choices and your finances.

Even if you are satisfied with your current health plan, it may no longer be the most cost-effective option. Before you make any benefit elections, take plenty of time to review the information provided by your employer. You should also consider how your life has changed over the last year and any plans or potential developments for 2022.
Get-a-Retirement-Analysis
Decipher Your Health Plan Options
The details matter when it comes to selecting a suitable health plan. One of your options could be a better fit for you (or your family) and might even help reduce your overall health-care costs. But you will have to look beyond the monthly premiums. Policies with lower premiums tend to have more restrictions or higher out-of-pocket costs (such as copays, coinsurance, and deductibles) when you do seek care for a health issue.

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To help you weigh the tradeoffs, here is a comparison of the five main types of health plans. It should also help demystify some of the terminology and acronyms used so often across the health insurance landscape.

Health maintenance organization (HMO). Coverage is limited to care from physicians, other medical providers, and facilities within the HMO network (except in an emergency). You choose a primary-care physician (PCP) who will decide whether to approve or deny any request for a referral to a specialist.

Point of service (POS) plan. Out-of-network care is available, but you will pay more than you would for in-network services. As with an HMO, you must have a referral from a PCP to see a specialist. POS premiums tend to be a little bit higher than HMO premiums.

Exclusive provider organization (EPO). Services are covered only if you use medical providers and facilities in the plan's network, but you do not need a referral to see a specialist. Premiums are typically higher than an HMO, but lower than a PPO.

Preferred provider organization (PPO). You have the freedom to see any health providers you choose without a referral, but there are financial incentives to seek care from PPO physicians and hospitals (a larger percentage of the cost will be covered by the plan). A PPO usually has a higher premium than an HMO, EPO, or POS plan and often has a deductible.

A deductible is the amount you must pay before insurance payments kick in. Preventive care (such as annual visits and recommended screenings) is typically covered free of charge, regardless of whether the deductible has been met.

High-deductible health plan (HDHP). In return for significantly lower premiums, you'll pay more out-of-pocket for medical services until you reach the annual deductible. HDHP deductibles start at $1,400 for an individual and $2,800 for family coverage in 2022, and can be much higher. Care will be less expensive if you use providers in the plan's network, and your upfront cost could be reduced through the insurer's negotiated rate.

An HDHP is designed to be paired with a health savings account (HSA), to which your employer may contribute funds toward the deductible. You can also elect to contribute to your HSA through pre-tax payroll deductions or make tax-deductible contributions directly to the HSA provider, up to the annual limit ($3,650 for an individual or $7,300 for family coverage in 2022, plus $1,000 for those 55+).

HSA funds, including any earnings if the account has an investment option, can be withdrawn free of federal income tax and penalties if the money is spent on qualified health-care expenses. (Some states do not follow federal tax rules on HSAs.) Unspent balances can be retained in the account indefinitely and used to pay future medical expenses, whether you are enrolled in an HDHP or not. If you change employers or retire, the funds can be rolled over to a new HSA.

Three Steps to a Sound Decision
Start by adding up your total expenses (premiums, copays, coinsurance, deductibles) under each plan offered by your employer, based on last year's usage. Your employer's benefit materials may include an online calculator to help you compare plans by taking factors such as your chronic health conditions and regular medications into account.

If you are married, you may need to coordinate two sets of workplace benefits. Many companies apply a surcharge to encourage a worker's spouse to use other available coverage, so look at the costs and benefits of having both of you on the same plan versus individual coverage from each employer. If you have children, compare what it would cost to cover them under each spouse's plan.

Before enrolling in a plan, check to see if your preferred health-care providers are included in the network.

Tame Taxes with a Flexible Spending Account
If you elect to open an employer-provided health and/or dependent-care flexible spending account (FSA), the money you contribute via payroll deduction is not subject to federal income and Social Security taxes (nor generally to state and local income taxes). Using these tax-free dollars to pay for health-care costs not covered by insurance or for dependent-care expenses could save you about 30% or more, depending on your tax bracket.

The federal limit for contributions to a health FSA was $2,750 in 2021 and should be similar for 2022. Some employers set lower limits. (The official limit has not been announced by the IRS). You can use the funds for a broad range of qualified medical, dental, and vision expenses.

With a dependent-care FSA, you can set aside up to $5,000 a year (per household) to cover eligible child-care costs for qualifying children age 12 or younger. The tax savings could help offset some of the costs paid for a nanny, babysitter, day care, preschool, or day camp, but only if the services are used so you (or a spouse) can work.

One drawback of health and dependent-care FSAs is that they are typically subject to the use-it-or-lose-it rule, which requires you to spend everything in your account by the end of the calendar year or risk losing the money. Some employers allow certain amounts (up to $550) to be carried over to the following plan year or offer a grace period up to 2½ months. Still, you must estimate your expenses in advance, and your predictions could turn out to be way off base.

Legislation passed during the pandemic allows workers to carry over any unused FSA funds from 2021 into 2022, as long as the employer opts in to this temporary change. If you have leftover money in an FSA, you should consider your account balance and your employer's carryover policies when deciding on your contribution election for 2022.

Take Advantage of Valuable Perks
A change in the tax code enacted at the end of 2020 made it possible for employers to offer student debt assistance as a tax-free employee benefit through 2025, spurring more companies to add it to their menu of benefit options. A 2021 survey found that 17% of employers now offer student debt assistance, and 31% are planning to do so in the future. Many employers target a student debt assistance benefit of $100 per month, which doesn't sound like much, but it adds up.1 For example, an employee with $31,000 in student loans who is paying them off over 10 years at a 6% interest rate would save about $3,000 in interest and get out of debt 2½ years faster.


Many employers provide access to voluntary benefits such as dental coverage, vision coverage, disability insurance, life insurance, and long-term care insurance. Even if your employer doesn't contribute toward the premium cost, you may be able to pay premiums conveniently through payroll deduction. Your employer may also offer discounts on health-related products and services, such as fitness equipment or gym memberships, and other wellness incentives, like a monetary reward for completing a health assessment.


1) CNBC, September 28, 2021


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posted in Benefits, Employer

ConocoPhillips Interest Rates Continue to Fall, Increasing Lump Sums

Oct 26, 2021 3:00:00 PM
written by The Retirement Group

Understanding how interest rates can impact your lump-sum is crucial for ConocoPhillips employees, especially those who reside in Texas.

Interest rates are back to trending in the right direction for ConocoPhillips employees, considering the lump sum option on their pension payment, moving into Q1 2022. Interest rates have dropped for individuals who wish to commence their benefits in Q4 2021 and again for Q1 2022. Over the course of 2020, interest rates dropped dramatically, which greatly increased many lump sum payments. However, interest rates spiked modestly from Q1 2021 to Q3 2021. While the overall trajectory of interest rates has been higher, the slight drop in the last two quarters should have the affect of increasing lump sum amounts momentarily.

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posted in Pension, Interest rates, ConocoPhillips

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