Thread: My retirement story

I have not submited before to i hope this is were I ask the questions?
I am out on OWCP right now but I will be comeing off soon. I plan to retire ASAP. I am LEO and I meet the retirement out at 55 the year I retire so I am planing to take my TSP out since I will not have to pay the extra 10%. I will use it to buy a house so my morgage is a lot lower as it will make my retirment easyer on my income. My big question is that I am in 100% G, but should I take the risk and jump into the C & S to try to make up a little extra before I go out, or shoud I not take the risk. I could use the extra as I was to late in moving my money out of the C & S and into the G before I lost a good amount of it. I am asking for some advise on what to do. Any info will be will be a great help. So should I stay G of take the risk and jump into the C & S, and hope I can make alittle more before I go out.

You have missed the recent 30% rally so I would stay put. You lost money going to G too late, and if you re-enter now you could get caught up in another downdraft and loose even more. I do hope you have been buying C,S, and I with your biweekly contributions because all of those funds are on sale at 1/2 price!

I would think twice about pulling out all your $$$ to pay off the house. The tax implications are enormous, and you have no mortgage interest deductions. Our taxes will be going up so it would be nice if you had schedule A deductions to shelter some of your income to some extent.

Thanks for your input Elgallo, but my thought was with the reduced retirement income wouldn't it be better to have little to no mortgage so my limited income will work better for me. With what I have in TSP I will only be getting $400 to $500 extra a month. I am LEO and will be going out on retirement using my 55 rule for year you go out so at least I will not have to pay the extra 10%. I know I will still have the 20% tax withholding. I will have over 33 years Gov time. I am out on OWCP because of a bad back and kne injury and I believe my angency will not allow me to come back because I will have to many restrictions to do the job, so maybe I will be able to get SS Disability on top of my retirement with would help. So do you still think I should just leave it and wait and try to make more with the market. I am open to any thoughts on this issue i just can not make up my mind. I do not want to screw it up. i have done to much of that in the past by not taking care of my account as I should of maybe I could change my name to Ostrich.

How much do you owe on the house?

I have been renting because I didn't think I would be here so long So the new house I am thinking about buying in new but it is about 80,000 less that people paid just 6 months ago. I will pay 178,000 new but that work out to about $84 a square foot So my thought is if I pay 130,00 down with VA at 4.78% and the turn around get a pay off loan for the differance which would make be payment to between 200 to 300 a month.

One problem would be the taxes on that much. If you withdrawal 130,000 and add your salary or pension to that, you would be in a very high tax bracket. So you would need to keep back enough to pay the taxes (probably over 30%).

You should consider taking out equal payments from TSP that you could use toward the house payment so that you only have 200-300 a month to pay out of your pension. You will have a very low interest rate plus the tax write off. I say run those numbers and see what you get. If you used the equal monthly payments to get down to the $300 how long will your TSP last?

Just a thought.

Thank? You are right if I do use the TSP to pay down my monthly payment it would work and make my payment not as low but low enough to make it work. I was not think that way in the begning but maybe that is a better way to look at it. I will run the numbers. Thanks, it's nice to have other ideas because it is easy to get locked into tunnel vision idea.

I agree with Clester. Also, depending on the size of your TSP account you may be able to get by with pulling out only the earnings i.e. 3-4% annually. Should be able to earn that even investing very conservatively (mostly G and/or F). Example, 200,000 balance @ 3 % = $ 6,000 annually or $ 500 month. Tax side - earnings would be taxable and be mostly offset by mortgage interest deduction? That way, you keep your TSP account for real emergencies. Just a thought. Not an easy decision, you are wise to explore a lot of different options. Good luck!

Wow! It has been nearly a year since I walked out of the office and into the next phase of life, retirement.
It has been a wonderful, full year. Some very big highs and some very big lows. Its really exciting to be partaking of air and water and the bounty provided by our farmers.
Any body still on the fence about whether you should retire; get off that fence and start enjoying yourself and your family and friends while they are still with you.
Merry Christmas! Hope you will have a white one.

Merry Christmas 2moryrs! Mine will certainly be white. We got dumped on this weekend.

Originally Posted by 2moryrs

Wow! It has been nearly a year since I walked out of the office and into the next phase of life, retirement.
It has been a wonderful, full year. Some very big highs and some very big lows. Its really exciting to be partaking of air and water and the bounty provided by our farmers.
Any body still on the fence about whether you should retire; get off that fence and start enjoying yourself and your family and friends while they are still with you.
Merry Christmas! Hope you will have a white one.

I'm really happy that you like your retirement after a year!! I retire in 17 days, or 6 more working days, I can't wait!!! Stop around every once in a while and say hello!!