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Thread: PessOptimist's Retirement Story

  1. #1

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    Default PessOptimist's Retirement Story

    I have been thinking about starting one of these for a long time. I even asked a couple of times what the MB thought with mixed replies.

    Since everyone’s situation is different and all the other posts in various places apply to many different situations I will start my own thread as other’s have. Nothing against all of you planning MRA+however many years or those in special pay status. Go for it!

    I am 62 years old. I have 17.67 years FERS service. I plan on retiring on 12/31/17. At that time I will have 20 years, 6 months and 23 days FERS service. I will be 65.58 years old.

    I am a Military Annuitant with 24 years, 23 days service. I did not and am not planning on making a military deposit (buy back).

    I hope to sell back 448 hours of leave when I retire.

    I hope to defer collecting my SS benefits until I am 66 years old.

    I hope to not withdraw from my TSP until I am forced to at 70.5 years old.

    How can this all happen? Looking at take home pay right now (money coming in to the house) v projected annuity/SS money coming in to the house in June 2018 the number comes close. Deductions from fed pay that will go away include FICA, OASDI, Medicare, state income tax, two TSP, union dues, state taxes and good old retire,fers. State taxes will pick up on the FERS annuity but theoretically at a reduced rate. After June 2018 fed taxes will kick in on 50% of the SS.

    I really hope my thinking is not unsound. Am I a hopeium addict?

    Comments are welcome. I am getting inputs from all over the place outside TSPTalk that my say my sig other will surely starve if we follow my plan and other people can make it all better. All I have to do is give them the keys.

    Other retirement preps all ready made: house is paid off, no outstanding credit card debt, cars paid for, major/minor infrastructure in the house done (roof, HVAC, water heater, stove, refrigerator, dish washer, water conditioner, insulation), house still needs painting, factored in before retirement. May need to replace my 2001 vehicle before retiring. Maybe not, where the hell am I going?

    PO


  2.  
  3. #2

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    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by PessOptimist View Post
    I have been thinking about starting one of these for a long time. I even asked a couple of times what the MB thought with mixed replies.

    Since everyone’s situation is different and all the other posts in various places apply to many different situations I will start my own thread as other’s have. Nothing against all of you planning MRA+however many years or those in special pay status. Go for it!

    I am 62 years old. I have 17.67 years FERS service. I plan on retiring on 12/31/17. At that time I will have 20 years, 6 months and 23 days FERS service. I will be 65.58 years old.

    I am a Military Annuitant with 24 years, 23 days service. I did not and am not planning on making a military deposit (buy back).

    I hope to sell back 448 hours of leave when I retire.

    I hope to defer collecting my SS benefits until I am 66 years old.

    I hope to not withdraw from my TSP until I am forced to at 70.5 years old.

    How can this all happen? Looking at take home pay right now (money coming in to the house) v projected annuity/SS money coming in to the house in June 2018 the number comes close. Deductions from fed pay that will go away include FICA, OASDI, Medicare, state income tax, two TSP, union dues, state taxes and good old retire,fers. State taxes will pick up on the FERS annuity but theoretically at a reduced rate. After June 2018 fed taxes will kick in on 50% of the SS.

    I really hope my thinking is not unsound. Am I a hopeium addict?

    Comments are welcome. I am getting inputs from all over the place outside TSPTalk that my say my sig other will surely starve if we follow my plan and other people can make it all better. All I have to do is give them the keys.

    Other retirement preps all ready made: house is paid off, no outstanding credit card debt, cars paid for, major/minor infrastructure in the house done (roof, HVAC, water heater, stove, refrigerator, dish washer, water conditioner, insulation), house still needs painting, factored in before retirement. May need to replace my 2001 vehicle before retiring. Maybe not, where the hell am I going?

    PO
    Hi PO, Definitely not an expert in this and trying to learn all I can. You look like your doing great!

    Is there an advantage to wait until age 66 to collect SS?

    Looks like you could retire 6 months earlier than your current target date of 12-31-2017. Some folks do that to take a partial lump sum on TSP so it hits in the next tax year to reduce taxes. But you said your not taking any TSP until 70-1/2.

    Looks like the annual leave hours sold back would give you another 3 months of service. So doesn't sound like it would buy you another year of service to increase your annuity percentage.

    I've been thinking about Partial versus full distributions and lump sum versus monthly. Plus rollovers and annuities. In recent seminar, I heard that you can buy an annuity outside the Fed Govt with distributed TSP funds and that they are not taxable; but annuity purchased with TSP funds IS taxable. I need to look into that further. Not sure I heard that right.

    Best wishes on your retirement planning!!
    NOW as of 11/21= G70-F0-C10-S15-I5 // PAST: 11/2: G20-F30-C10-S00-I40 to 11/14=G10-F10-C35-S30-I15

  4.  
  5. #3

    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by PessOptimist View Post


    Comments are welcome. I am getting inputs from all over the place outside TSPTalk that my say my sig other will surely starve if we follow my plan and other people can make it all better. All I have to do is give them the keys.



    PO
    From your past posts about your sig....is this a good thing or a bad thing to factor into your retirement?

  6.  
  7. #4

    Default Re: PessOptimist's Retirement Story

    Hello,

    something else to add to the mix of expenditures would be your sig others survival annuity, only assuming it is the same as CSRS. Not cheap, but noteworthy. Best of luck with your planning.

  8.  
  9. #5

    Default Re: PessOptimist's Retirement Story

    I guess you have it all planned out,
    January 2018 - Military pay + FERS annuity (with or without survivorship)
    Possible expenses other than everyday living: Since you are a military annuitant, do you have to switch to Medicare when you reach 65 or do you have options? Also federal taxes; life, property and car insurances; property/real estate taxes

    June 2018- military pay + FERS annuity(with or without survivorship) + SS
    All expenses mentioned above plus taxation to 50% of SS

    December 2022, 701/2 - watch out for your TSP Required Minimum Distribution or RMD. Possibility of moving to a higher tax bracket and 85% of your SS will be taxable, since your provisional income will be affected. Either start withdrawing before but no later than April 1, 2023

    Required Minimum Distribution if You Are Over 701⁄2
    If you are over age 701⁄2 and are separated from Federal service, you must either withdraw your entire TSP account or begin receiving monthly payments by April 1 of the year following the year you turned 701⁄2. In addition, this April 1 date is the deadline for the TSP to start to distribute the IRS “required minimum distribution,”a minimum amount of the money in your account that you must receive each year. For more information, see the TSP tax notice “Important Tax Information About Your TSP Withdrawal and Required Minimum Distributions.”

    Source:https://www.tsp.gov/PDF/formspubs/tsp-536.pdf
    Page 7
    Last edited by Maricar19; 02-08-2015 at 02:55 PM.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

  10.  
  11. #6

    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by PessOptimist View Post
    I have been thinking about starting one of these for a long time...

    ...where the hell am I going?

    PO
    PO,

    SWEET !!! You've contributed your observations to MY Retirement Thread, so I look forward to doing the same !!! THANKS for sharing your comments as you make your way through the maze, and decide what your direction is, long-term !!!

    Ahhhh...LOL !!! If we knew THAT, we wouldn't need stuff like TSPTalk !!!

    Best of luck !!!


    Stoplight...
    "Too old to rock and roll...too young to die"... - I. Anderson

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  13. #7

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    Default Re: PessOptimist's Retirement Story

    Thank you for all the replies so far. I am going to reply to each one so nothing gets overlooked. No promises I will always do that.

    PO

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  15. #8

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    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by DreamboatAnnie View Post
    Hi PO, Definitely not an expert in this and trying to learn all I can. You look like your doing great!

    Is there an advantage to wait until age 66 to collect SS?
    About $120 per month or $1440 per year. Based on 5/18 v 5/17. Crap shoot. I might live one day or 40 years.

    Quote Originally Posted by DreamboatAnnie View Post
    Looks like you could retire 6 months earlier than your current target date of 12-31-2017. Some folks do that to take a partial lump sum on TSP so it hits in the next tax year to reduce taxes. But you said your not taking any TSP until 70-1/2.
    I could. I decided to wait until the end of the year for the additional income and to maximize the AL sell back and to have that income in the next tax year.

    Quote Originally Posted by DreamboatAnnie View Post
    Looks like the annual leave hours sold back would give you another 3 months of service. So doesn't sound like it would buy you another year of service to increase your annuity percentage.
    The AL sell back is for cash. Only sick leave counts toward time in service computation. I am not figuring that in or counting on it. Who knows what may happen. I only have about 400 hours sick leave right now.

    Quote Originally Posted by DreamboatAnnie View Post
    I've been thinking about Partial versus full distributions and lump sum versus monthly. Plus rollovers and annuities. In recent seminar, I heard that you can buy an annuity outside the Fed Govt with distributed TSP funds and that they are not taxable; but annuity purchased with TSP funds IS taxable. I need to look into that further. Not sure I heard that right.
    I have decided that I will not buy anyone’s annuity with my TSP funds. To me that is like another crap shoot, I may win, I may lose, the company paying the annuity may disappear. I would check very carefully about a promise of an annuity purchased with tax deferred TSP funds being not taxable. I think the key word here is “distributed” which I take to mean you have paid the taxes on them. If they were not ROTH contributions to your TSP someone sometime is going to pay tax on that money.

    Quote Originally Posted by DreamboatAnnie View Post
    Best wishes on your retirement planning!!
    Thank You
    PO

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  17. #9

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    Cool Re: PessOptimist's Retirement Story

    Quote Originally Posted by PessOptimist View Post
    About $120 per month or $1440 per year. Based on 5/18 v 5/17. Crap shoot. I might live one day or 40 years.


    I could. I decided to wait until the end of the year for the additional income and to maximize the AL sell back and to have that income in the next tax year.


    The AL sell back is for cash. Only sick leave counts toward time in service computation. I am not figuring that in or counting on it. Who knows what may happen. I only have about 400 hours sick leave right now.


    I have decided that I will not buy anyone’s annuity with my TSP funds. To me that is like another crap shoot, I may win, I may lose, the company paying the annuity may disappear. I would check very carefully about a promise of an annuity purchased with tax deferred TSP funds being not taxable. I think the key word here is “distributed” which I take to mean you have paid the taxes on them. If they were not ROTH contributions to your TSP someone sometime is going to pay tax on that money.


    Thank You
    PO
    I will be watching as it seems alot of what you are doing is what I have been looking at also as my husband and I are both getting ready to go this year.


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  19. #10

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    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by konakathy View Post
    From your past posts about your sig....is this a good thing or a bad thing to factor into your retirement?
    Oh, she ain't that bad. Just worried about the future when all I want to do is hang out in the pasture when I retire. There does seem to be a lot of interest from her friends/acquaintances/property managers about "helping" us to survive. She does own some land in the farm belt but I am also leaving that out of the retirement equation. We got married later in our lives and what's hers is hers and what's mine is...well you know.

    PO

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  21. #11

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    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by Buffalo_Nickle View Post
    Hello,

    something else to add to the mix of expenditures would be your sig others survival annuity, only assuming it is the same as CSRS. Not cheap, but noteworthy. Best of luck with your planning.
    You are correct, not cheap but figured in. It is 10% for FERS and pays (I think) 50% of the annuity if I am the predecedent. Great word isn't that? Health insurance is also figured in just in case. I haven't figured all that out yet but right now I have two health care plans, Tricare Prime and BCBS.

    PO

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  23. #12

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    Default Re: PessOptimist's Retirement Story

    Quote Originally Posted by Maricar19 View Post
    I guess you have it all planned out,
    January 2018 - Military pay + FERS annuity (with or without survivorship)
    Possible expenses other than everyday living: Since you are a military annuitant, do you have to switch to Medicare when you reach 65 or do you have options? Also federal taxes; life, property and car insurances; property/real estate taxes
    Good questions! No I do not really have it all planned out but hope I have made a good start. Yes, at midnight the day before my 65th birthday I am literally thrown out of TriCare Prime. IF I have enrolled in Medicare and bought part B I get something called TriCare for Life for free which is supposedly a pretty good wrap around insurance. The unanswered questions so far are that my wife will only be 61 at that time and will NOT be medicare eligible. Do I have to continue paying for TriCare Prime for her for four years?

    If this TriCare for Life sounds like a good deal, the premiums for Medicare part B are estimated to be 113% of the TriCare Prime premiums.

    Just to be clear about this, free medical care for life for military retirees is a myth. It is cheap but not free. Plus it is pretty much like pulling teeth to get an appointment. That factor varies depending on where you are located. I am fortunately located close to a pilot training base where they have better things to do than give medical care to some former enlisted scum bag who was never issued a zipper suit or sun glasses. Consider that last sentence to be in sarcastic font.

    Quote Originally Posted by Maricar19 View Post
    June 2018- military pay + FERS annuity(with or without survivorship) + SS
    All expenses mentioned above plus taxation to 50% of SS
    As I mentioned in my IP I have looked at the numbers over and over and my annuity plus SS will come close to my take home right now. Keep in mind I am putting the max + catch up in TSP. Insurances and taxes are currently being paid out of the take home amount.

    Quote Originally Posted by Maricar19 View Post
    December 2022, 701/2 - watch out for your TSP Required Minimum Distribution or RMD. Possibility of moving to a higher tax bracket and 85% of your SS will be taxable, since your provisional income will be affected. Either start withdrawing before but no later than April 1, 2023
    Required Minimum Distribution if You Are Over 701⁄2
    If you are over age 701⁄2 and are separated from Federal service, you must either withdraw your entire TSP account or begin receiving monthly payments by April 1 of the year following the year you turned 701⁄2. In addition, this April 1 date is the deadline for the TSP to start to distribute the IRS “required minimum distribution,”a minimum amount of the money in your account that you must receive each year. For more information, see the TSP tax notice “Important Tax Information About Your TSP Withdrawal and Required Minimum Distributions.”

    Source:https://www.tsp.gov/PDF/formspubs/tsp-536.pdf
    Page 7
    Good advice. I do not want to get backed in to a corner. The “hope” I stated about not withdrawing TSP funds until 70.5 needs to be looked at too. Likely I will start withdrawing some monthly amount at some point before that age. I believe that is called “Full Withdrawal as a series of Monthly Payments” and can be changed once a year. I still am against buying the annuity.

    AND there is no way I am working until I am 70.5.

    PO

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