Re: Using the TSP as a supplement to military pension
Here is another thought... make contingent plans that allow for a variety of possibilities. Taxes and death are sure things, the rest is up for grabs! Collecting TSP on top of early SS until full retirement age will do a couple of things; it will increase your adjusted gross income (agi, therefore tax liability) and reduce your SS benefits (due to early participation). Also, if means testing and other restrictions come into play, your total income may be reduced significantly. While there will likely be some changes to SS, one may wish to position themselves to take the best advantage of the changes by using TSP money (or rollover into another instrument) to cover the stretch between age 62 and full retirement or even delay to age 70. Early participation in SS limits future flexibility in this regard. If one looks at SS as a pension, it may be more easily understood why one might consider waiting for a maximum benefit, expecially considering spousal benefits.
This is even more significat if one is going to work after gov't retirement as SS will deduct $1 for $2 after 15k in income. Then you are paying SS (FICA, increasing your AGI (tax liability) and receiving a permantly reduced SS benefit.
A good start to research these options below : )
http://www.forbes.com/forbes/2007/1112/092.html
Official Retirement Date: 06-31-2014!
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