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Thread: FERs Retirees, anyone?

  1. #145

    Default Re: FERs Retirees, anyone?

    Thanks for your research and input, Skorcher. It does sound reasonable in hindsight.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2025
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  3. #146

    Default Re: FERs Retirees, anyone?

    Types of Retirement

    Changes in the Amount of the Supplement


    Like social security benefits, the FERS annuity supplement is subject to an earnings test. It is reduced if you earn more than the social security exempt amount of earnings in the immediately preceding year. The supplement is reduced by $1.00 for every $2.00 of earnings over the minimum level. It is possible that the supplement could reduce to $0. However, the FERS basic benefit will not be reduced. If you are receiving a supplement, you must report your earnings to OPM. You will receive instructions on how to report your earnings, once you begin receiving the annuity supplement.

    Minimum Level of Earnings

    The amount you may earn without affecting your FERS annuity supplement is determined by the Social Security Administration each year. It increases with the annual increases in average wages for the national workforce.

    Definition of Earnings

    The FERS basic benefit is not considered earnings when determining your earnings for the earnings test. Earnings for the year consist of the sum of wages for service performed in the year, plus all net earnings from self-employment for the year, minus any net loss from self-employment for the year.
    "Our Constitution was made only for a Moral and Religious people. It is wholly inadequate to the goverment of any other." John Adams 10/11/1798

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  5. #147

    Default Re: FERs Retirees, anyone?

    Quote Originally Posted by Valkyrie View Post
    Types of Retirement

    Changes in the Amount of the Supplement


    Like social security benefits, the FERS annuity supplement is subject to an earnings test. It is reduced if you earn more than the social security exempt amount of earnings in the immediately preceding year. The supplement is reduced by $1.00 for every $2.00 of earnings over the minimum level. It is possible that the supplement could reduce to $0. However, the FERS basic benefit will not be reduced. If you are receiving a supplement, you must report your earnings to OPM. You will receive instructions on how to report your earnings, once you begin receiving the annuity supplement.

    Minimum Level of Earnings

    The amount you may earn without affecting your FERS annuity supplement is determined by the Social Security Administration each year. It increases with the annual increases in average wages for the national workforce.

    Definition of Earnings

    The FERS basic benefit is not considered earnings when determining your earnings for the earnings test. Earnings for the year consist of the sum of wages for service performed in the year, plus all net earnings from self-employment for the year, minus any net loss from self-employment for the year.
    This is an important point. It doesn't take effect though until you reach 55 or 56 I think. Anyway, not gonna try and work in retirement because of this.
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  7. #148

    Default Re: FERs Retirees, anyone?

    Planning and Applying for Retirement FERS Chapter 40 has guidelines to assist future retirees in planning their retirement:

    Section 40A2.1-2 Five-Year Period Before Retirement

    Section 40A2.1-3 One-Year Period Before Retirement

    Section 40A2.1-4 Six-Month Period Before Retirement
    A. ClearupIndebtednesstoAgency
    B. FileWaiverofMilitaryRetiredPay
    C. MaximumAnnuity: 80PercentLimitation
    D. DocumentMedicareEligibilityandFilingforMedicare

    Section 40A2.1-5 Two-Month Period Before Retirement
    A. General
    B. Choose Exact Date

    Note: This is only an excerpt and is incomplete.
    Emotions should never play a role in one's investing strategy!
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  9. #149

    Default FERs Retirees, anyone?

    Military Service

    Credit for Military Service
    As a general rule, military service in the Armed Forces of the United States is creditable for retirement purposes if it was active service terminated under honorable conditions, and performed prior to your separation from civilian service for retirement.

    • Service Performed Before 1957 creditable without deposit
    • Service Performed on or after January 1, 1957 -a deposit must be paid to credit the service to establish title to an annuity or to compute your annuity

    Exception for individuals with a portion of their FERS annuity computed under CSRS rules
    If your military service was performed before the effective date of your FERS coverage, the military service will be credited under CSRS rules.

    Sidenote by Maricar19- Military Buyback makes a difference in the computation of your annuity$$. If you work for the USPS, you can pay pay it in installment by submitting a PS 3239.
    Postal employees- if you need help, I can help you since I have done this process personally at least 3 times over the course of my career.
    Last edited by Maricar19; 04-05-2015 at 09:01 AM.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  11. #150

    Default Re: FERs Retirees, anyone?

    Civilian Service

    Under FERS, you can make a payment for the following types of service, in order to credit it toward your retirement:

    • Any period of creditable civilian service performed before 1989 during which no retirement deductions were withheld from your pay.
    • Any period of civilian service during which retirement deductions were withheld from your pay and refunded to you.
    • Any period of Peace Corps or VISTA volunteer service (excluding training time) regardless of when the service was performed.

    Payment cannot be made for

    • Any other service which is not creditable under FERS.
    • Periods of leave without pay.
    • Time covered by a lump sum leave payment.


    Sidenote by Maricar19-
    Most postal employees were hired initially as casual appointments.
    You can buyback this time(prior to 1989) and have it added to your service time.
    Buyback makes a difference in the computation of your annuity$$. If you work for the USPS, you can pay pay it in installment by submitting a PS 3239.
    Postal employees-if you need help, I can help you since I have done this process numerous times helping co-workers.
    Last edited by Maricar19; 04-05-2015 at 09:02 AM.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

  12.  
  13. #151

    Default Re: FERs Retirees, anyone?

    Note: FERS annuity pension is different from Annuity Supplement and each is calculated differently

    Am I understanding the excerpt below that if I retire December 31 (which is the recommended date for FERS), what I earned for the year will not be included in the computation of my annuity supplement?
    Advantages of retiring last day of the month/ year:
    • you can cash in all your maximum annual leave plus what you earned for the year
    • Annuity pension starts the following month, January

    However, if I choose early January, example PP 26, I still can cash accrued and earned leave, but when does my pension start? Will it start February or March? Will my retirement supplement be computed including the earnings of the year immediately preceding my retirement? Or will PP 26 still be considered part of last year's earnings?

    i guess, I have to figure out how much effect 1 year of earnings has on my annuity supplement and effect of a month's delay of FERS pension and not being able to maximize cashing of annual leave,

    Retiree Annuity Supplement FERS Chapter 51, page 10
    Section 51A2.1-1 Constructing Earnings History (Cont.)
    E. Earnings in Year of Separation
    1. General Rule
    Earnings during the year in which an employee separates for an
    immediate retirement are not included in the earnings history. 2. Exception
    If the annuitant retired before the calendar year in which he or she reached the MRA under circumstances in which the annuity supplement does not begin until he or she reaches the MRA (see section 51A1.1-3, paragraph B), earnings in the calendar year of retirement are the retiree's annual basic pay for that year (even though he or she only worked part of the year). Earnings in calendar years after the year of separation, and before the MRA is reached, are deemed to be zero.
    Last edited by Maricar19; 04-05-2015 at 09:49 AM.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  15. #152

    Default Re: FERs Retirees, anyone?

    Quote Originally Posted by Maricar19 View Post
    Military Service

    Credit for Military Service
    As a general rule, military service in the Armed Forces of the United States is creditable for retirement purposes if it was active service terminated under honorable conditions, and performed prior to your separation from civilian service for retirement.

    • Service Performed Before 1957 creditable without deposit
    • Service Performed on or after January 1, 1957 -a deposit must be paid to credit the service to establish title to an annuity or to compute your annuity

    Exception for individuals with a portion of their FERS annuity computed under CSRS rules
    If your military service was performed before the effective date of your FERS coverage, the military service will be credited under CSRS rules.

    Sidenote by Maricar19- Military Buyback makes a difference in the computation of your annuity$$. If you work for the USPS, you can pay pay it in installment by submitting a PS 3239.
    Postal employees- if you need help, I can help you since I have done this process personally at least 3 times over the course of my career.
    Above is only an excerpt. Please read Chapter 22 -for more details.http://www.opm.gov/retirement-servic...dbook/c022.pdf
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  17. #153

    Default Re: FERs Retirees, anyone?

    Is it correct to say that if you chose "Life Expectancy"(LE) for your TSP distribution, you never have to worry about RMD?
    i am asking this because I used the TSP Retirement Income Calculator and it showed a life expectancy and fixed dollar amount comparison. Unless I choose a pretty big amount for my fixed dollar amount, i always get a warning for RMD every year after I turn 70, but the LE never showed any warnings.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1


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  19. #154

    Default Re: FERs Retirees, anyone?

    I have always been afraid that if I die, my beneficiaries will not know what to do with my TSP account and that because of this - they will get penalized or taxed unnecessarily by the IRS.

    Here are the applicable publications. So far, I have read only Publication 32.
    https://www.tsp.gov/PDF/formspubs/tspbk31.pdf
    https://www.tsp.gov/PDF/formspubs/tsp-583.pdf
    https://www.tsp.gov/PDF/formspubs/tspbk32.pdf
    https://www.tsp.gov/PDF/formspubs/tspbk33.pdf

    These are some excerpts from TSPBK32 (3/2014)
    (Pertaining to initial investment of deceased’s TSP account)
    A TSP account will be established if the TSP benefits will be more than $200.00 and will be invested initially in G Fund.
    p. 0 -Consider making an interfund transfer to move your account balance into the investment funds of your choice. (Beneficiary participant accounts are initially invested 100% in the Government Securities Investment (G) Fund.)
    p.12 - When your beneficiary participant account is first established, the entire balance is invested in the Government Securities Investment (G) Fund, a stable investment that has no risk of loss. Your money will remain in the G Fund until you make a different investment choice
    (Pertaining to existence of beneficiary’s TSP account)
    p. 2 - If you have an existing civilian or uniformed services TSP account, you can move the money from your beneficiary participant account into that existing account. (Treated as employee contribution not subject to IRS limitations)
    p. 11 - If you have an existing TSP account from your own employment with the Federal Government or the uniformed services, you can move your beneficiary participant account into your existing TSP account.2 The money that you move will be treated as an employee contribution, but it will not be subject to the Internal Revenue Code (IRC) annual elective deferral limit.
    (Pertaining to withdrawal options and roll overs) And this is where I am confused – they are allowed to roll over only if they choose any of the withdrawal options?
    p. 5 - Death benefit payments from a beneficiary participant account must be distributed as cash payments. They cannot be transferred or rolled over into a traditional IRA, an eligible employer plan, a Roth IRA, or an inherited IRA. See pages 17-18 which allows you to roll over on certain conditions (withdrawal options)
    p. 17-19 – Talks about Withdrawal options and RMD (they are basically the same if I/you were alive) and this is the only time you can do rollovers (?), I think.
    TSPBK 33 https://www.tsp.gov/PDF/formspubs/tspbk33.pdf
    Pros and Cons of combining your TSP and the beneficiary’s TSP:
    p. 3 - There is no early withdrawal penalty tax associated with withdrawals from the beneficiary participant account established for you after your spouse’s death. There is, however, an early withdrawal penalty tax associated with regular civilian or uniformed services accounts. Therefore, if you have your own TSP account and you want to move your beneficiary participant account into that account, the early withdrawal penalty rules will continue to apply to all of the money in your existing account.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  21. #155

    Default Re: FERs Retirees, anyone?

    Wrong attachment..sorry.
    Emotions should never play a role in one's investing strategy!
    No to Greed...No to Fear!
    http://share.robinhood.com/mariloc1

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  23. #156

    Default Re: FERs Retirees, anyone?

    Thanks!

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