Don't leave money on the table when you leave your state job
Your ability to pay for health-related costs may depend on it
A little-known health benefit exists for most state employees when they retire, but many folks leave their jobs, and this benefit, on the table. You can avoid this fate by taking a few easy steps to ensure you receive the benefits you've earned.
If you’re currently working full-time in one of the following positions, you’re eligible for the Retirement Medical Benefits Account (RMBA). If you are:
- A state elected officer;
- An appointed officer who is appointed to fill State elected office vacancies;
- Certain police officers of the executive branch (eligible for medical benefits);
- An employee of the executive, legislative or judicial branch of state government; or
- A member of the Indiana General Assembly, you are eligible for the RMBA.
The RMBA is a health reimbursement program for medical, vision, dental, and long-term care insurance available to qualifying state employees who retire out of their eligible position. If you choose to quit your job and then later retire, you forfeit your eligibility in this program. Here’s what you need to know:
- If you're a qualifying employee, understand what the RMBA is and how you can receive benefits upon retirement.
- Understand that quitting your covered position will result in your forfeiture of membership in RMBA unless you are already age and service eligible for a normal retirement when you quit. If you are close to retirement eligibility, consider if retiring out of your covered position could be in your best interest.
- Plan details and frequently asked questions are available here.
Take some time today and learn about the RMBA. If you need support, please contact INPRS at 844-GO-INPRS.
9 things to know when you leave your Defined-Benefit covered position
If you recently had your last day or are considering leaving your INPRS-covered position, you should know that you have options for managing your account. The choices you make can have a significant impact on your retirement and future.
Your fund provides you with a defined benefit (DB) which includes a member contribution component. To be eligible for a defined benefit when you retire, you must meet specific age requirements and be vested based on your plan’s rules. The member contribution portion of the plan belongs to you if you are not vested. There are requirements for withdrawing this money but leaving your defined benefit retirement fund does not reduce or eliminate your balance.
Here's what you need to know if you are thinking of leaving employment or retiring:
- You can leave the money invested in your retirement fund even if you are not working in a covered position.
- You may take a distribution, or you may roll over your member contribution account into a qualified retirement account outside of INPRS. This could include an IRA or other acceptable employer retirement plan before retirement age. Early withdrawal penalties may apply if you do not meet age-eligibility requirements, per the IRS.
- You will not be able to contribute additional money to your account if you are no longer in a covered position.
- You will continue to receive an annual member statement for your account. INPRS will no longer collect contributions toward your account.
- If you are vested, your total contributions plus earned interest will remain invested with INPRS. It will fund your pension benefit.
- It is your responsibility to keep your personal information up to date. Log in to your account to update your communication preferences and beneficiary information as life changes.
- If you leave your covered employment before being vested, you can withdraw your member contributions plus earned interest at a rate set by the INPRS Board of Trustees.
- If you choose to have your contributions paid directly to you and not rolled over to an IRA or Qualified Retirement Plan, INPRS is required to withhold 20% as pre-payment of your current year’s federal income.
- Once you are vested, meet eligibility requirements, and your retirement application is submitted and approved, you will receive a retirement benefit check every month for the rest of your life. If you are not vested, you do not qualify.
To receive a distribution of your member contributions plus earned interest, log into your secure online account to initiate your request at
www.myINPRSretirement.org. If you have questions, call, and speak with our Member Advocate Team at (844) GO-INPRS or (844-464-6777). Speak with a tax or financial advisor before making a distribution choice to verify that your choice is best for you.
If you are ready to retire, remember to submit the online retirement at least 90 days before your target retirement date. You are not eligible to receive any benefit (retirement or distribution) until after your last wage-earning day with your employer. In-service withdraws and distributions are available for qualifying members. Distributions may require some information from your employer. Submit your application no later than 90 days before your retirement date.
Additional information is available on this website or you can speak with a Member Advocate Team representative at (844) GO-INPRS (844-464-6777).
Getting the most out of your advance child tax-credit payments
Beginning in July 2021, the Internal Revenue Service (IRS) began issuing advanced payments for taxpayers who qualify for 2021 child tax credit. These advanced payments provide taxpayers with a monthly payment for half of their total child tax credit amount. The second half of the credit may occur when the taxpayer files their 2021 taxes.
If the IRS has taxpayers’ direct deposit information on file, payments are by direct deposit. Taxpayers without direct deposit information in the IRS’s database will receive their payments by check. The 2021 child tax credit is only approved for this year and is different than the child tax credit that you may have been eligible to receive in prior years.
While these payments generally are intended to help qualifying taxpayers cover expenses for their children, you may be wondering what their best use may be. All situations are different but keep one thing in mind — any financial improvement you make indirectly benefits your child. Do not feel obligated to use the money for diapers unless that is the area of your greatest need. Here are some ways to use your advance child tax credit payments to better yourself and your family.
Cover child-related expenses - Daycare, diapers, clothes, and other essentials are a straightforward expense to tackle with your monthly check.
Pay down credit card balances - Your monthly obligations, especially high interest-earning credit card balances.
Put the money in savings - If you have less than three months of essential expenses saved, you may want to give it a boost with your child tax credit.
Deposit the money in your child’s 529 account - Set the money aside for your child’s qualifying education expenses. You could be eligible for a 20% tax credit on your Indiana return. Remember, money in a 529 account can only be used for qualifying education expenses (without penalty), so only consider this if you do not need to access the money.
No matter what you choose to do with your advance child tax credit, remember that it is not permanent. Resist adding it to your budget as expected income and instead treat it as an opportunity to improve you and your kids' financial situation. For more information on the advance child tax credit, read here.
Build a healthier budget using the 50/30/20 Rule
With the holidays around the corner, the end of the year is quickly approaching. That means between now and the new year, you have the urge to spend more on seasonal items and activities. From buying candy for costumed visitors to traveling for family dinners and present giving, for many people, all of this spending can add up very quickly and cause financial stress.
If seasonal overspending is an issue, start creating a budget early to help reduce stress about finances after the holidays. Stick to a realistic budget and be mindful of your spending. You will not only help your finances bounce back but keep yourself moving toward your savings and retirement goals.
Our record-keeping partners at Voya can help you build a healthier budget to assist with life and next year’s events. Learn how by applying the 50/30/20 rule. This simple budgeting approach may help you simplify your financial life while meeting all of your goals. To learn more check out this article from Voya, here.
Source: Voya Financial
Get your three weekly credit reports for FREE
Equifax, Experian, and Transunion – the three major credit bureaus – will continue to offer free weekly credit reports to all Americans through April 20, 2022.
The year extension continues the weekly reports offer that first became available at the beginning of the global pandemic. You can get your free credit reports by visiting AnnualCreditReport.com.
- Go to AnnualCreditReport.com.
- Click on “Request your free credit reports.”
- Fill out the form to request up to three free copies of your credit report.
- Select the reports you want (Equifax, Experian, and/or Transunion).
- Confirm your identity and submit your request.
- Review your report(s) and verify accuracy.
Your credit report serves as a good snapshot of how your overall financial health looks. Regular review of all three credit agency reports is a great way to check your financial profile, current and historical credit accounts, and personal information. And when you need to use credit, it is good to know where you stand before making a big purchase, securing a loan, or other financial transactions.
Source: Federal Trade Commission