If you’re a federal employee, you have financial benefits available to you that are different from other retirement plans. If you directed your annuity benefits to your children, you have specific distribution details to consider. Here are answers to questions about managing annuity benefits for children:

When do the benefits pay out?

Your annuity as a federal employee pays out once you retire, and you officially start receiving the money after one full calendar month from your first date of retirement.
Your children start receiving Federal Employee Retirement Systems (FERS) annuity payments after the employed or retired annuity holder dies. Until what age can children receive benefits?
Your child will not receive your annuity payouts for an indefinite amount of time. Typically, the child is only eligible until 18 years old with two exceptions:[3]

1. Full-time student: Children enrolled full time at school can receive benefits until they are 22 years old.
2. Child with pre-existing disability: Children who have been living with a disability since before they were 18 years old and are unable to continue self-care for themselves can receive the payouts indefinitely.

Do the same distribution rules govern the annuity when payouts go to a child?

No. The payment amounts do change for children. They receive reduced payments that depend on the amount of the deceased annuitant’s payable Social Security benefits.
When do children start receiving benefits? Your qualified children can receive payments starting the day after the annuitant’s death and up until they turn 18 years old, with the age exceptions mentioned above. If children who live with disabilities are over 18 years old but become able to provide their own care, then they will no longer receive the annuity payments.[5]
Many other benefits are available to you as a federal employee, so be sure you understand how these details may apply to you. Ultimately, your unique financial situation
and distribution strategies will further guide who receives your annuity benefits and when.
To learn more about distribution strategies or any other annuity details, feel free to contact us at any time.

Recipe Of The Week

Jump-Start Smoothies

Serves 2

Ingredients:

* 1 cup frozen strawberries
* ½ cup fresh blueberries
* ½ cup fresh orange juice
* 2 teaspoons chopped and peeled fresh ginger
* ¼ cup plain low-fat (1 percent) yogurt
* 2 ice cubes
Directions:

1. Put strawberries, blueberries, orange juice, ginger, yogurt, and ice cubes in
a blender.
2. Blend until smooth. Occasionally, scrape down sides of the blender.
3. Serve.

Tax Tips

What Are Your Rights as a Taxpayer?*

It might come as a surprise to some, but you do have rights as a taxpayer. In fact, the IRS spells out those rights in its Taxpayers Bill of Rights.

1. The first is the right to be informed. Taxpayers have the right to know what to do to comply with tax law.
2. Taxpayers have the right to quality service. The agency is required to be prompt, courteous, and professional in providing assistance.
3. Taxpayers are not required to pay more than the tax legally due.
4. Taxpayers have the right to challenge, object, and provide documentation in response to IRS actions.
5. Taxpayers have the right to appeal IRS decisions in independent forums.
6. Taxpayers have the right to know the maximum amount of time to challenge IRS positions. They also have the right to know the amount of time the agency has to audit a tax year, collect a tax debt, and conclude an audit.
7. Taxpayers have the right to privacy and to know their inquiries, examinations, or other actions comply with the law.
8. Taxpayers have the right to confidentiality. They have the right to expect the information they provide to the IRS will not be disclosed to others unless authorized by the taxpayer.
9. Taxpayers have the right to choose authorized representation in dealing with the agency. They have the right to request help from a Low Income Taxpayer Clinic if they’re unable to afford representation.
10. Taxpayers have the right to expect a fair and just tax system. They have the right to expect the IRS to consider the facts that might affect their liabilities, their ability to pay, or their ability to provide information in a timely manner.

Other details may apply, and you can find more information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov

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Frank Baker
F. Baker Advisors
134 University Drive
Suite 203A
Rochester Hills,MI48304
248-334-2380