Transcription
[Music] [Music] [Music] All right. So, welcome to the very unscheduled live stream because I want to give you a quick update on the latest tax bill, also known as the One Big Beautiful Bill Act. And I was going to make a video about this, uh, separately, but, uh, I decided against it to just give you a quick live stream. This isn't going to take more than 15 minutes, probably more like 10 minutes to give you an update.
Uh, and this video is specifically on the federal employee pension plan. And I'll give you an update on the HSA, TSP, and 401k in a separate video. So be sure to subscribe if you haven't done that already. Uh, those videos are already scheduled for, I believe, Friday and next week as well.
So anyway, right off the bat, the House Budget Committee has passed the, uh, One Big Beautiful Bill, uh, which is the committee, right? And that happened on Sunday morning around 2:00 a.m. But they didn't get all the yes votes they wanted, and they passed it by 17 to 16, but four Republicans just marked present instead of voting yes on the bill. And they're not happy with the deficit this bill creates. And it's supposed to create like about $3 trillion in deficit over the next 10 years. And Speaker Mike Johnson cannot afford to lose three votes when the entire floor, uh, votes on this final bill. And Mike Johnson wants to get this passed through the House, um, through the House by Memorial Day, which is, uh, less than a week from today.
So what I'm about to show you is not finalized, and I want to make sure that you're aware of the changes that they just made. So, uh, the as far as the Memorial Day weekend goes, um, I just want to make sure that you're aware of the calendar here. Um, here we go. So, uh, right now, obviously, today is May 20th. So, I'm giving you this update on May 20th. Depending on when you're watching this video, there may be more changes. So, I want to make sure that you're aware, uh, aware of that. But May 20th today, and they're looking to vote on this on the 26th, actually, on Memorial Day. And once it passes, uh, there it's going to go to the Senate. And then the Senate is going to have their own version, too. So, I want to make sure that you're aware of that as well. And once the Senate has its own tweaks, I'm going to make sure I give you guys the updates on that.
Uh, because there are other topics like the HSA, uh, TSP, and, uh, some of the 401k rules that are going to take effect in 2026 that I do want to cover. Uh, but for this video, again, today, it's just going to be the federal employee retirement system. And, uh, once it gets to the Senate, what they're really trying to do is get this, um, signed by President Trump no later than July 4th over here. I don't know if you guys can see my mouse. Probably not. Uh, yep, now you can. All right. So, that's what they're trying to do.
All right. So, uh, without any delay, I am going to go straight to All right. So, man, that's not it. There we go. Sorry about the delay here. I'm going to go in. There we go. Now I got my notes. Okay. Share this tab. All right. So, this is what we got going on. And I took a lot of notes on this.
All right. So, the original document showed a first pension increase of 4.4%. Right. So, this new bill that came out from the House Budget Committee, it just got struck down. So that section 90001, they completely eliminated the increase for the first pension to 4.4%. So that's not even in the bill anymore. It was originally for people at 0.8% going to 4.4% by 2027 and people, uh, who were higher in 2014 to go to 4.4% by 2027 as well. That is gone.
All right. So, uh, could they bring that back eventually? Maybe because, again, it still, it still needs to go to the floor, right? And it still needs to, needs to go to the Senate, and then they're going to finalize, they're going to vote on it. So these changes are pretty constant, but this is something that I do want you to be aware of. The one thing that everyone is asking about is the elimination of the first annuity supplement. So big change coming up here. So everyone knows that there, there will be possibly no COLA increases. So which means that no cost of living adjustments for federal employees, but there is a proposal to increase that COLA, uh, for military only, military members, uh, in, uh, in 2026.
Right? So right here, uh, this is talking about the special retirement supplement, uh, paid until age 62. So what they added was that if you, if you're retired regardless of MRA, this is how I interpret it, and let me know in the live chat if you interpret it in a different way, but the way I read this bill and it is very, very confusing because I had to read this 10 times, but if you're if you retire under VERA or DRIP, right, in 2025 and you reach your MRA, to me regardless of the year, you're still going to receive the special retirement supplement or the social security supplement, right? Some people are interpreting this as if you retire under VERA in 2025 and but you don't reach your MRA, which is the minimum retirement age by December 31st, 2027, then you do not receive SRS. But that's not how I read it from, uh, if you read section 8412 of Title 5, and I'm going to show you that in a second. But right now, some people are interpreting this as if you reach minimum retirement age or MRA after 2028 or January 1st, 2028, then you're not going to get the SRS. I don't think that's the case because, uh, right now, dur, uh, for the current statute, the, uh, for the current federal employee retirement system, if you retire before January 1st, 2028, you should be entitled to the current pension system. Right? That's how I read it. I would love to hear other people's comments on this, but, uh, I would think that they're going to have to add a few more amendments to this bill to clarify that part.
But if I go into section 8412, and I'm going to switch that real quick here. Okay, so section 8412. And if you need to like just kind of read the text, you can pinch on your, uh, your phone or your iPad to zoom in on it or, uh, I put this link in the description below so you can read this on your own. So 8412 is immediate retirement, right? So an employee or member who is separated from the service after attaining the applicable minimum retirement age, the MRA that I mentioned under subsection H and completing 30 years of service is entitled to an annuity. Okay? So you do 30 years straight, right? You get your pension, right? and an employee separated from the service after becoming 60 years of age and completing 20 years of service is entitled to an annuity. So if you do 20 years of service in the federal government, then you can start collecting your first pension at at the age of 60 and then, uh, if you separate, uh, from the service after becoming 62 years of age and completing five years of service is also entitled to an, uh, to an annuity. Not a whole lot of pension, uh, because if you only did five years and you don't get your, you know, you're not going to get your pension until you're 62, and it's not even going to be adjusted, uh, for inflation. So, you're going to get a very, very minimal, uh, first pension on that. And you can always get that first, um, pension refund. And I did a video on that. You can check it out on my website, uh, if you're doing this for way less than five years. The, um, so LEOS, um, Capitol Police, Supreme Court Police, firefighters, nuclear material, couriers, you know, and air traffic controllers, they have a mandatory retirement age of 56. Per the language of the bill right now, it says that LEOs, air traffic controllers, firefighters are still entitled to the, uh, SRS or social, uh, social security annuity retirement.
Okay. So, that's how it, it's read right now. Um, could that change? I don't think that's going to change for the LEOs. I don't think that's going to change for the people who have that mandatory retirement age, uh, of 56, 57, whatever that age is, uh, because the FBI, uh, association actually wrote to Congress and said, "Hey, we got all these people who could retire this year, and we could lose like about a third of the agency if this bill passes." So, I think they had a pretty big impact on this, uh, uh, changing of this bill here. So, um, I don't know if I have that link to the letter. I think I do. Let me see. I got like 50 windows pulled up right now, but you can read this. Uh, oh, yep, I found it. Okay, so it's this one here. So, this is the FBI agent association, which I didn't even know existed, but, uh, they had a letter on potential reconciliation action on first. So, I'm going to put this, uh, in the live chat that you, you guys can read it.
Uh, I think, um, you know, what the capital, uh, I don't is capital police. No, well the FBI, you know those guys, they're federal employees. You know, people who work for Congress, the congressional staff, they're federal employees as well. So you know, people who were, uh, who have been doing this for, for the last, let's say, 10, 15, 20 years, they were going to see an increase in pension contribution from 0.8% to 4.4%. 4%, and they weren't going to get if they didn't get any COLA adjustment, they're going to see a very significant decrease in take-home income. So, you know, just by taking out that section 9001 in this one, uh, I think it would, you know, it's good news for a lot of people, right? And you know, let me just pause for a second, and I know there will be people who criticize, and I have seen the comments, um, in my comment section criticizing federal employees, you know, um, you know, calling people names, all that stuff, you know, it, it's just the way it is, right? Um, people are just going to talk crap. No, you know, even, you know, me being a veteran for the last 20 years, um, you know, in the Air Force, people would always say, "Well, we don't need that big of a budget in the DoD." All right. Well, you know, that has, you know, what does that have to do with the people, right? So, you're like, "Oh, well, we support the military, but we don't really support the DoD budget." Okay? You know, just these are the things that these are the fights that you're not going to win. If you want to just write up paragraphs in my comment section and you want to argue with other people, complete strangers, go for it. I'm not going to stop you. I'm not, you know, I never delete comments. I think YouTube does. I just realized some of the, the filters that YouTube has, um, that I didn't realize. And people are like, well, why is Sai deleting all these, all these comments? I'm like, I am not deleting any comments. I read them. I, I do not engage with them, but I certainly do not delete them. And, um, what I, I think YouTube is the one actually deleting the comments. So that's actually really, really interesting.
So but anyway, um, back to this, um, and make sure that, uh, let me make sure that I got that link in there. Yep, I do. So this one is section 8412. If you're just tuning in, I want to make sure of this, right? And I want, you know, I want Congress to kind of clean up the language a little bit more. And same thing with the HSA that I've been reading on it. Um, they need to clean up the language, um, and say, "Hey, you know, regardless of the MRA, uh, you're entitled to the SRS kind of thing." You know, something like that because I know it doesn't say it on there, but to me, the way I read this is that under this statute, you should, uh, if you retire before January 1st, 2028, then you should be entitled to the SRS.
Okay. So, that's something that we, uh, you guys should pay attention to. And the other thing I know you guys are, uh, asking a lot of questions about, hey, uh, you know, your specific financial situation, right? And we have consultation. We help you figure out if you're ready to retire. You know, we've had a lot of brand new clients in the past month and a half, two months, especially more, um, just, you know, ever since this news came out, our, you know, my business is to help veterans, um, and to help nonveterans too to figure out what their financial independence number is, but if you give me that in the comment section and say, hey, I got this situation, you know, I'm going to retire under VERA in December 2025, but my MRA is not till 2028, what does that mean for me? I don't know because I don't know your financial situation. If other people want to engage with you and say, hey, maybe this is the situation they, you know, they can answer that question, but I, I highly recommend that you do not take somebody else's comments in the live chat or in the comment section and make a major life decision based on that. So you know, the people that you should be reaching out to is your HR. You should know what your, uh, retirement calculation is going to be. You should know how much first, uh, pension income is going to be coming in if you retire in 2026 versus 2027, right? You know what your, your GS pay scale is, what your step number is. Um, and those are the things that you should figure out. What we can help you with, and you can go to firesetcher.com/consultation to schedule a 60-minute consultation, is you pull up your TSP, you pull up your expenses, I look at all of your income, and I look at all of your, you know, what your first pension is going to be for the next five years, neu, uh, the next 10 years, and look at all your liabilities, like your debt. Then we can discuss and say, "All right, maybe you need to improve in this area and that area before you retire." That kind of thing, right? And speaking of, uh, calculating your pension, the other, uh, section that got changed was the high-five salary. Uh, originally it had January 1st, 2027, and now it's saying January 1st, 2028. So if you retire after that, they're going to calculate your last five years of your salary and average that out. But if you retire before that, then it's going to be the high-three salary, which is the last three years.
Okay? So that should be pretty, uh, clear on that. And as far as everything else, it'll remain the same. Um, the FEB, that's still the same. The, um, election for at-will employment, uh, and lower fees contributions, that's also still the same. That language did not change. I did a comparison between the, the original tax bill or the, the one before and then the current one, and, uh, I didn't see any differences between those. Okay. Um, I did not see. Um, let me see. Uh, that's what I'm talking about right now is the first annuity supplement. If you rewind in this live, live stream, you can always go back. When did I start? About 15 minutes ago. And then, uh, you're going to see that I went over the, um, the first pension. And the other, uh, pro tip is when you're watching YouTube and you want to speed things up, you can go to the speed and go to 1.25 or 1.5x, okay? to get to the information a lot faster if you want to.
All right, so the first annuity pension, again, they are adding separated from service under section 8425 and entitled to an annuity under subsection section 8412 which I went over already. And so the question and we need clarification on this too, what, uh, from Congress and hopefully they change the languages. What if you retire in 2025 or 2026, 2027, but you're not MRA? You don't re, you're not reaching your MRA until after 2028. Does that mean you still get your SRS? Again, in my interpretation of this bill, it means yes, you still get it as long as you retire before January 1st, 2028. I could be wrong, and I want to make sure that I'm very, very clear on this. I could be wrong, and these updates will come out almost on a daily basis, but I wanted to make a video about this today because these are some significant changes to, uh, from the previous one.
So, with that said, uh, I want to make sure that, uh, you guys stay up to date. I'm going to make, uh, separate videos about the HSA, which is in the bill. Uh, that's going to be very, very significant if you're a, um, HSA investor. But if you're just tuning in, just make sure you rewind by 15 minutes and then you can do a speed up by 1.25 or 1.5x and then just kind of, uh, see what the changes are. And I have all those tax documents or tax bill documents linked in the description below. So you can, uh, go to, uh, on YouTube, just scroll down a little bit, and it should say something like, let me see, latest tax bill. Yep. So I got the House, uh, website and I got the Title 5 section 8412 linked in the description below. If you want to ask me questions about whether you can retire or if you're ready to retire, you need to schedule a consultation with me because I cannot answer your questions in the comment section or in the live chat and say, "Oh, yeah, you're ready to retire, my man." You know, that's just, that's not fair to you, right? Uh, then I'm not doing my job and just tell you, "Yeah, you're good to go," kind of thing. So, but anyway, the, uh, um, just, uh, you know, stay tuned. Uh, law enforcement, the, you know, they did a letter, wrote to h, wrote to the House, and you know, uh, it seems like they're, they made a pretty significant impact. So anyway, all right.
Um, got some TSP videos coming out on Friday. Uh, there's a new rule coming out in 2026 with the TSP, so stay tuned for that. And, uh, a couple changes to the HSAs. And then there's a MAGA, mega, uh, savings account that's coming out, uh, supposedly that's also in the bill, and I'm trying to go through every single one of them, and it's very difficult to interpret, interpret a lot of things in the, in the bill, and I, you know, I maybe they're doing this on purpose, but it's more like a legal language, right? A lot of if you're a lawyer, you're probably like, oh yeah, this is easy to read, maybe, I don't know, but anyway, appreciate you guys being here and, uh, until next [Music]