Research
VIDEO-Negative Taxable Income & Tax Planning for 3/4 Retirees
Brave Eagle Wealth Management has posted a new video to the website. FDNY & NYPD retirees should at least have a general understanding how federal taxes work. The Negative Taxable Income & 3/4 Retirees video is an educational (Case Study) video that highlights the importance of tax planning.
Video-FDNY NYPD Final Average Salary
Brave Eagle Wealth has posted a video to the website. The FDNY-NYPD final average salary video is an educational video that active members might find helpful.
The 10-Year Certain Beneficiary Option: A Misunderstood Gem for FDNY Retirees
When FDNY retirees receive their pension finalization letter, the 10-Year Certain option is listed as one of the seven beneficiary options available. Yet, surprisingly, it remains untouched. This article explores the 10-Year Certain Option, its unique features, and how it can address the needs of FDNY retirees seeking a balance between cost and security.
The Importance of Isolating Rolled Over Pension Money
At retirement, some FDNY & NYPD Tier 2 members elect to rollover pension money (excess/overage, VSF DROP, etc.) into an IRA. At Brave Eagle Wealth Management we isolate the client’s pension rollover money in its own IRA, no other retirement plan money (NYC Deferred Compensation Plan 457, 401k, etc.) is rolled into the pension money IRA.
One Billion Dollars of Hidden Losses in NYC DCP’s Stable Income Fund
The Stable Income Fund is a crowd favorite across NYC Deferred Compensation Plan account types. In aggregate, 29.5% of total plan assets were invested in the Stable Fund, or $7.7B (Billion) of $26.2B, at year end 2022. In stark contrast, the Bond Index Fund only holds about 4.4% of plan assets even though this AA rated Bond Fund was offering the highest prospective returns in over a decade.
Roth Conversions and Federal Tax Brackets
A Roth conversion is when a taxpayer decides to move (convert) pre-tax retirement funds (IRA, 457, 401k, etc.) to a Roth IRA. A Roth conversion must take place during a tax year and once it is complete it cannot be undone. The conversion results in taxes being owed, in most cases. There are no income limits to do a Roth conversion and there are no limits on the amount that can be converted.
The Superannuated – A Ladder Strategy to Protect the Pension
FDNY retirees generally can choose between two tools to protect (hedge) the value of their pensions:
1. Pension Beneficiary Option
2. Term Life Insurance
The beneficiary option is available to all retirees. The cost depends on the age of the pensioner and the age of the beneficiary. Life insurance is available to those that are healthy enough to qualify for it.
Terminal Leave Lump Sum Tax Deferral Failures
Some FD retirees receive their terminal leave lump sum check without any of the funds being tax deferred even though they requested a certain tax deferral percentage before they retired. Why does this happen?
No ITHP for Tier 3 and So What!
The ITHP has a strong fan base throughout the FDNY and with good reason. Over time participants have invested their capital and earned a strong rate of return with zero volatility.
Is This the Best Opportunity to Buy Stocks in the Last 30 Years?
The S&P 500 Index declined 19.44% in 2022, the third worst annual loss in the last thirty years. A rapid increase in interest rates, driven by inflation, contributed to the repricing of asset classes across the board.
Best Opportunity to Buy Inflation Bonds in the Last Decade
We are referring to US Treasury Inflation Protected Securities (TIPS). These securities are linked to CPI inflation and have a place in some investment portfolios as a hedge against inflation.
Does Diversification Really Work?
Investors have been indoctrinated to believe that diversification is unequivocally good, and that it lowers risk. You might ask, what risk are we lowering? And does diversification help when you need it most?
There is Always Something to Worry About
Interest rate changes have continued to support relentlessly strong US dollar moves against European currencies. Republicans and Democrats continue to debate the best way to address the nations aging infrastructure problems. A massive hurricane recently caused deaths and severe damage to parts of Florida.
Do You Really Need the NYCDCP 457 Plan After 59 1/2 Years Old?
In general, the answer is no. Although, if you over 59 ½ years old and are still working for FDNY/NYPD it may make sense to continue to contribute to the NYCDCP 457 plan.
Is Terminal Leave Deferral Worth the Wait?
The subject of terminal leave is often a common topic discussed among FD-PD pre-retirees. Terminal leave is a benefit generally given to Service or Disability retirees. The benefit is equal to 3 terminal leave days for every year completed plus 1 terminal leave day for every 4 additional months completed.
The NYC Deferred Compensation Plan is Bouncing Checks
In the past few months, we have experienced several instances of the NYC Deferred Compensation Plan bouncing rollover checks it has issued directly to participants of the plan. We will examine why this is happening and offer two potential solutions that would improve upon the Deferred Compensation Plans current process.
Stable Value Funds & Black Swan Risk
Stable Value Funds are popular choices in retirement plans in general. They are usually marketed as vehicles investing in high quality fixed income securities with a focus on safety of principal and consistent returns. Many investors are attracted to the “guaranteed returns”. However, guaranteed does not mean risk-free. The guarantee is only as good as the party providing the guarantee.
Two of The Worst Investments for FDNY & NYPD Retirees
When FDNY Firefighters and NYPD Police Offers retire their investment opportunity set is no longer limited to what is available in the NYC Def Comp Plan and the Union Annuity Plans. However, the increase in flexibility also increases the risk of stepping on an investment landmine.