Freshly Retired - Got Some Questions

[TSATSO]

Greetings to the Collective! I am 62 years old, and freshly retired from TSA - my last work day was May 31st. I am now in the "limbo" between my working life, and my retired life, and while I wait for my paperwork to slowly filter through the system, I have a couple questions for those who have gone before me. First one concerns payment of accrued annual leave. I had 40 days on the books when I quit. My final paycheck (PP-11) has now been posted, and did not include payment for the accrued leave. When might I expect to get the payment for the leave? Will I get any kind of paper or electronic notification of the payment, or will it just pop up in my direct deposit account without any warning? Second question concerns the TSP. I have decided to try the "monthly payments" system, where I will attempt to draw off the earnings and keep the principal more or less intact. I have read all the posts at this forum on the subject, and I think it will work for me. I am wondering about two things. First, when do they sell the shares to fund your monthly check? Does it happen the last working day of the month or what. Also, if you have your TSP money split up into several of the funds (part of it in "G", part of it in "C", etc.), how do they work selling the shares in that case. Would they sell some of the "G" shares, and some of the "C" shares? How do they decided how many shares to sell from each fund you hold? I am 100% in "G" fund at the moment, so this question is just something I'm curious about. I'm sure many more questions will pop up as I go along, and I will look to the members of this forum as a valuable source of info. Thanks in advance, Chuck Avery (TSATSO)

[squalebear]

The resistance to reading your thread was futile (star trek analogy).
The Collective (another star trek analogy) will be around soon, I'm sure,
to help you with your questions. I just wanted to welcome you aboard.
:)

[luv2read]

You will be assimilated. The collective is always adding to its knowledge base (us). Welcome!:D

[XL-entLady]

my last work day was May 31st.
Welcome to the retired world. It's a much less stressful place!
I am now in the "limbo" between my working life, and my retired life, and while I wait for my paperwork to slowly filter through the system, I have a couple questions for those who have gone before me. First one concerns payment of accrued annual leave. I had 40 days on the books when I quit. My final paycheck (PP-11) has now been posted, and did not include payment for the accrued leave. When might I expect to get the payment for the leave?
I know 3 people, including myself, who have retired recently, and it took about 2 months for each of us.
Will I get any kind of paper or electronic notification of the payment, or will it just pop up in my direct deposit account without any warning?
It's just a magic "pop." One day your direct deposit account will look much healthier than it did a day before. But you'll eventually get some paperwork on it. It's just that the paperwork will come after the fact.
Second question concerns the TSP. I have decided to try the "monthly payments" system, where I will attempt to draw off the earnings and keep the principal more or less intact.
Good choice. Me too, and so far I've made much more than I've withdrawn.
I have read all the posts at this forum on the subject, and I think it will work for me. I am wondering about two things. First, when do they sell the shares to fund your monthly check? Does it happen the last working day of the month or what.
You get a direct deposit starting one month after the TSP receives and approves your request, and it doesn't come on the first or last day of the month. It can be any time. Just figure about four weeks after the date on the letter that you get saying the TSP received your request.
Also, if you have your TSP money split up into several of the funds (part of it in "G", part of it in "C", etc.), how do they work selling the shares in that case. Would they sell some of the "G" shares, and some of the "C" shares?
They take the money right off the top and reallocate the remaining shares based on your current allocation percentage.
How do they decided how many shares to sell from each fund you hold? I am 100% in "G" fund at the moment, so this question is just something I'm curious about. I'm sure many more questions will pop up as I go along, and I will look to the members of this forum as a valuable source of info. Thanks in advance, Chuck Avery (TSATSO)

Hope that helps. Welcome! This MB is a great place to get information and to just hang with friends who become family.:)

Lady

[TSATSO]

Thanx for the replies. Good to know this group includes some Trekkies! To XL-entLady - thanks for taking the time to give details. I think I understand your answer, in regard to removing cash from multiple funds. You are saying that they take the combined total value of all of the shares you own, and subtract the amount of your monthly withdrawal. Then they take the remaining total value of your account, and divide it up among whatever funds you own, in whatever percentage you have elected. Is this correct? I think you partially answered my question about when the monthly payment is removed from your account. You said the first payment comes about 4 weeks after they get your request. But what about all the months after that? You (and everyone else who is doing this) gets a direct deposit each month. Do they process all the payments on the same day, like for instance the last day of the month? In that case everyone would get the deposit into their account about the same time. This would seem the only logical way to do it. But I could be wrong. Thanx for all your help. Chuck Avery (TSATSO)

[XL-entLady]

Thanx for the replies. Good to know this group includes some Trekkies! To XL-entLady - thanks for taking the time to give details. I think I understand your answer, in regard to removing cash from multiple funds. You are saying that they take the combined total value of all of the shares you own, and subtract the amount of your monthly withdrawal. Then they take the remaining total value of your account, and divide it up among whatever funds you own, in whatever percentage you have elected. Is this correct?
Yes, that's exactly right.
I think you partially answered my question about when the monthly payment is removed from your account. You said the first payment comes about 4 weeks after they get your request. But what about all the months after that?
Same day of the month as your 1st payment, just a month later. If you get your first payment on July 10, for example, then you'll get your next payment on August 10, and all future payments on or near the 10th of each month.
You (and everyone else who is doing this) gets a direct deposit each month. Do they process all the payments on the same day, like for instance the last day of the month?
Nope. Spread out through the month, based on approval date, as explained.
In that case everyone would get the deposit into their account about the same time. This would seem the only logical way to do it.
"Logical? Logical? The TSP don't need no stinkin' Logical!" (BTW, the recent Treasure of Sierra Madre clip was fun to watch!)


Please don't hesitate to ask additional questions or clarifications. I'm glad to help as I can.

Lady

[TSATSO]

By the way, after I posted this question, I realized it probably should have gone into the "TSP Strategies > Retirement Talk" section. Sorry about that. If I have more questions (and I will) I will post them in that area.

[luv2read]

A moderator could move this thread to that forum if you request it.:D

[Elgallo]

To avoid drawing down your total account you cannot have all your beans in the G fund. That is unless what your draw monthly percentage wise is LESS than the interest earned p/month by the G fund which currently appx. 4% per year. If your draw was 2% p/year you be OK and your principal would grow 2%.

I retire in appx 18 months and I am currently 100% in the market C,S and I. I also plan to make monthly draws of 1-4% PA depending on my needs. However I anticipate over time to realize an average return on my principal of a conservative 7-10%. If successful my principal will grow at 3-6% year over year. Conceivably I could die with as much or more money than I started with the day after I retired.

Check this site and run some Monte Carlo simulations


http://firecalc.com/

[TSATSO]

I have no heirs, so I'm not concerned with retaining a big chunk of cash to pass on. I only have to take care of myself and my wife. We have other sources of revenue besides the TSP account. I am going to try my best to draw my TSP account down to zero just before we both pass away. Of course the timing may be a little tricky, but I'll do the best I can. I have used the following calculation to arrive at the amount I will request for my initial monthly withdrawal. I used 1 penny per share per week as the average assumed rate of "interest" in the "G" fund. My final contribution has gone into my account, so my number of shares is now fixed, until I start making withdrawals. My total number of shares times $00.01 equals the number of dollars per week that my account generates. I multiplied the "weekly gain" times 4 to get the "monthly" amount generated by my account. That figure, rounded DOWN to the next even 100 dollars, will be the initial monthly amount I will remove from my account. I have run this plan on a spreadsheet, and it looks like it will keep my principal fairly well intact. Of course, I can always adjust it once a year to "tweak" the result. I will (hopefully) follow this procedure until I hit the 70.5 years-of-age mark. At that time, I will let the TSP calculate the mandatory withdrawal required to meet the IRS rules, and go with that number.