PHOENIX, Ariz. - Capital Choice Arizona is a veteran-owned firm in Phoenix. It has published a free resource for federal employees and military families. The page is for anyone with a Thrift Savings Plan account or a FERS pension. The firm works with households across the Valley. Many of them live near Luke Air Force Base.
Bill Haight founded the firm. He is a U.S. Navy veteran. Chris Walsh, who works with many of the firm's federal and military clients, also served in the Navy.
Setting the record straight on the FERS supplement
Many federal workers believe the FERS annuity supplement has been cut. It has not. The House version of H.R. 1 would have ended it for new retirees. The Senate took that provision out before the final vote. The law as signed does not change the supplement. NARFE, Government Executive, and Federal News Network all reported the removal.
Pages calling the cut settled law are still out there. That is the problem. The wrong version still ranks above the fix.
The supplement does carry rules people miss. It stops at age 62. It gets no cost of living raise at all. It is also subject to an earnings test. This year, earnings above $24,480 cut the supplement by $1 for every $2 over that line.
Arizona treats pensions three different ways
State rules matter more here than in most places. Arizona lets taxpayers subtract 100 percent of military retired or retainer pay. That is under A.R.S. 43-1022, starting with tax year 2021. An older $3,500 cap no longer applies. Survivor Benefit Plan income counts too. If both spouses get military retirement pay, each one may subtract their own.
A FERS civilian pension is treated differently. Pensions from the U.S. government get a subtraction of up to $2,500. Anything above that is taxed at Arizona's flat 2.5 percent rate. So is every dollar withdrawn from a traditional Thrift Savings Plan account. Social Security is exempt.
That gap shows up constantly near Luke Air Force Base. One household may hold military retired pay, a federal civilian pension, and a TSP balance at the same time. Three income streams. Three different Arizona outcomes.
The numbers federal households should know
This year's cost of living raise split the federal community. Military retired pay, CSRS annuities, and Social Security rose 2.8 percent. FERS annuities rose 2.0 percent. FERS raises are capped when inflation runs between 2 and 3 percent.
Health premiums moved the other way. The Office of Personnel Management set the average enrollee share of FEHB premiums 12.3 percent higher. That is the second year in a row of double digit increases. Open Season for the next plan year runs in November and December.
Contribution limits went up as well. Participants can put $24,500 into the TSP this year. Add $8,000 at age 50 and older, or $11,250 for ages 60 through 63.
TSP help without moving the money
The resource also answers the question the firm hears most. Does a TSP balance have to move when federal service ends? It does not. Capital Choice Arizona can manage a TSP account while the money stays in the plan. No rollover is required.
Federal and military households near Luke Air Force Base and across Phoenix can read the guidance at https://capitalchoiceaz.com/retirement-planning-phoenix/tsp-fers-retirement-planning-phoenix/. They can also call (602) 396-2741 to set up a review of a FERS pension, TSP allocation, and Social Security timing.
About Capital Choice Arizona
Capital Choice Arizona is a veteran-owned advisory practice serving Phoenix households from an office at 11022 N 28th Dr, Suite 170, Phoenix, AZ 85029. The firm works with federal employees, military families, educators, and public sector staff across the Valley, including households near Luke Air Force Base. Advisors on the team hold Series 65 registrations and take part in the Dave Ramsey SmartVestor program. Meetings are available in person at the Phoenix office, by phone, or by video. Phone: (602) 396-2741. Web: capitalchoiceaz.com
Disclosures
Securities offered through CoreCap Investments, LLC, Member FINRA/SIPC. Advisory services offered through CoreCap Advisors, LLC, a registered investment advisor. Capital Choice is a separate entity and is not affiliated with CoreCap Investments, LLC or CoreCap Advisors, LLC.
This release is for educational purposes only. It is not individualized investment, tax, or legal advice, and it is not an offer to buy or sell any security. Contribution limits, tax rates, premium figures, and plan rules are current as of the date of publication and are subject to change. Consult a qualified tax professional about an individual situation.
Securities products are limited to residents of the states in which the representative is registered. Capital Choice and Ramsey Solutions are separate entities and are not affiliated with CoreCap Investments, LLC or CoreCap Advisors, LLC. Participation in the SmartVestor program does not assure investment success.
Email: cwalsh@capitalchoice.com
Media Contact
Name
Capital Choice Arizona
Contact name
Chris Walsh
Contact phone
(602) 396-2741
Contact address
11022 N 28th Dr Ste 170
City
Phoenix
State
AZ
Zip
85029
Country
United States
Url
https://capitalchoiceaz.com/
