Thread: PessOptimist's Retirement Story

I got an e-mail from OPM today saying my status had been updated. Logged in and found this:

I am somewhat amazed at how quickly this happened. No info on what the final amount is going to be.

PO

Originally Posted by PessOptimist

It also shows $0 under Life Insurance amounts though the 75% reduction is checked.

PO

After age 65 there is no cost for Basic Life Insurance w/75% reduction. It reduces by 2% per month until it reaches 25%

Congrats PessOptimist How are you adjusting to retirement?

PO,
Did you get an OPM deposit this week (separate from the 3/1 deposit)? My retirement has been tracking yours closely, my case was finalized on 3/4 and yesterday I got a mystery deposit of about $2400 from OPM. I'm assuming it's for the retroactive amounts owed to me for the 2/1 and 3/1 annuity and FERS Supplement amounts, mostly the latter, but there's nothing explaining it in my Services Online account. I'd thought I'd get the retroactive amounts lumped in with my 4/1 deposit, but guess I was wrong.

Originally Posted by Tsunami

PO,
Did you get an OPM deposit this week (separate from the 3/1 deposit)? My retirement has been tracking yours closely, my case was finalized on 3/4 and yesterday I got a mystery deposit of about $2400 from OPM. I'm assuming it's for the retroactive amounts owed to me for the 2/1 and 3/1 annuity and FERS Supplement amounts, mostly the latter, but there's nothing explaining it in my Services Online account. I'd thought I'd get the retroactive amounts lumped in with my 4/1 deposit, but guess I was wrong.

My case was finalized on 2/29/19. I received an interim payment and a mystery payment on 3/1/19. The mystery payment was the retroactive payments.

My personalized benefits booklet arrived a few days later and does not really explain the computation. It states the gross interim payments will be listed below and does list an amount, only “Gross benefits due from 01/01/2019 through 02/28/2019 and Gross Interim pay, FEHP and fed taxes deducted’"from the adjustment. It all seems to add up correctly so far, you just have to search for it.

On the SOL site under “Annuity Statement” it shows the interim for 3/1, $0 for 2/1 and no mention of the adjustment. I am underwhelmed about the booklet and SOL site so far, you would think there would be a page that shows what they paid and deducted on what date.

Not so, so far. “We’re from the gubmint, trust us”.

As stated by others it seems to be normal to get the retroactive payment separately.

Good luck, I’ll keep posting as things evolve.

PO

A couple of new threads about retirement strategies now which are very informative. I chose to put this in my retirement story because…

The OPM SOL site shows my 4/1 statement with the amount including taxes, FEHP and the two FEDVIP allotments. The amount is NOT what the booklet I was sent states. I remain underwhelmed by this sacred booklet.

FEDVIP has been sending me letters about having to pay premiums in the interim before OPM starts paying them. So far, I got only one bill, for the vision plan which I paid. I am sure there is a dental plan bill coming.

Now that the OPM amount has been finalized, it’s time to start planning for income after the AL lump sum runs out. That happens in July and I gotta keep that cash flow coming to keep to the plan of having take home equal what it was when employed.

As mentioned before in one of the threads, the decision is taking SS then at 67y 3m or withdrawing from TSP and waiting until 70 for SS.

Another wrinkle to the story is that an insurance agent for one on my ancient whole life policies recently was handed my policy. He has reached out to me and I have consented to talk to him about financial planning. He has brought one of the company’s financial planners in to our weekly conversations and I suspect there may be some OJT going on here. They have made some good suggestions but have yet to get to the bottom line, what are they going to try to sell me? When we discussed TSP (which as usual they know nothing about) and the G fund paying 2.75% right now there was a lot of silence followed by “we will run some scenarios and talk next week”. A hint came this week when the financial planner suggested that I could turn my TSP balance in to a million dollars by age 70. Roughly between 16 and 21% per year. Not impossible but it has to have some risk.

Based on my own thoughts and one of their suggestions, comes yet another potential plan. The SO really wants to apply for SS by August. She is a little confused about her SS amount, mainly due to a friend’s statements about her own payments, based on a deceased husband. I have determined my SO’s PIA and my spousal benefits based on that. If she draws SS in August and I apply and restrict my payment to spousal benefit, my own delayed retirement credits will continue to accrue until I reach age 70. Then I apply for my own benefits. This is based on the below from the SS web site and not to be confused with the old “apply and suspend” rule. This applies to me as I turned 62 in May 2014. FRA was May 2018. From the SS web site.
Can I restrict my application for benefits and apply only for spouse’s benefits and delay filing for my own retirement benefit in order to earn delayed retirement credits?
If you turn 62 before January 2, 2016, deemed filing rules will not apply if you file at FRA or later. This means that you may file for either your spouse’s benefit or your retirement benefit without being required or “deemed” to file for the other. In your case, you may also restrict your application to apply only for spouse’s benefits and delay filing for your own retirement in order to earn delayed retirement credits. However, if you turn age 62 on or after January 2, 2016, you are required or “deemed” to file for both your own retirement and for any benefits you are due as a spouse, no matter what age you are.

If we do this, the “full withdrawal based on monthly payments” from TSP to keep up desired cash flow will deplete my TSP at age 88. Based on keeping it in the G fund and planning on 2% return. This from a TSP.gov calculator.

At age 70 I will apply for my own SS benefit and reduce the TSP monthly payment accordingly. At 70^1/2 I must take MRD from TSP which based on the projected amount left in TSP using one of TSP.gov’s calculators will be about $1600 per month. This changes upward as I age. Changing the monthly payment to MRD at 70 projects the TSP to last well in to my 90s. The SS amount will be somewhere between $400 and $500 per month more based on the delayed retirement credits and possible SS COLAs.

I suppose the question is what will quality of life be like at 70 for me and 67 for SO?

Decisions, decisions. Decisions.

How is your retirement story going?

PO

PO,

This whole SS thing is confusing. I've decided to wait until I'm 70 because of WEP. It will give me a little more in my pocket and the break even point if I started to collect now isn't that big of a deal. My SO just turned 66 this month and we haven't totally decided what to do but I'm leaning towards starting her SS sooner than later. I think it all depends if I did the math right.

I knew we shared the same birth date I just realized we share the same birth year.

Originally Posted by nasa1974

PO,

This whole SS thing is confusing. I've decided to wait until I'm 70 because of WEP. It will give me a little more in my pocket and the break even point if I started to collect now isn't that big of a deal. My SO just turned 66 this month and we haven't totally decided what to do but I'm leaning towards starting her SS sooner than later. I think it all depends if I did the math right.

I knew we shared the same birth date I just realized we share the same birth year.

Yup, same year. Differences are you are a rocket scientist and I'm not and you are CSRS and I'm FERS.

PO

I thought I had this all figured out for my particular situation. Spouse files for SS benefits as she wishes and gets what she gets. Then I file for benefits and restrict my benefit to spousal benefit. My own delayed retirement credits continue to accrue. At 70 I apply for my own benefits.

Why? Spouse survivor benefits. When I die, she gets a percentage of my benefit based on her age. If I make it to when she turns 66, she gets 100% of what my benefit was on the day I died or started collecting. If I don’t make it that long she gets a percentage of what my benefit would have been on the day I died. Still more than she gets on her own record. If I start receiving benefits earlier, she receives a percentage of that benefit so I should wait until 70 to receive my benefits.

To make this work I need to start a full TSP withdrawal of monthly payments soon. When I turn 70 and start receiving my SS benefits I can reduce the monthly payment amount to around my MRD.

I went to the tsp.gov site and tried to download the TSP-70. No luck, you have to use the online wizard. Scary since I am not ready to pull the trigger. I didn’t need to worry since you have to print and snail mail or fax the form.

What I did find out is that unless I can get my wife to sign the form (notarized of course) that I am locked in to buying the Metlife joint annuity with 50% survivor benefit, level payments, and no cash refund. From the TSP.gov site:
“If you are married (even if separated from your spouse) and your total TSP account balance is more than $3,500, your spouse is entitled, by law, to a joint life annuity with a 50% survivor benefit, level payments, and no cash refund. If you choose any other method of withdrawing your account, the law requires your spouse's written consent.

Joint Life Annuities.
If you choose any of the joint life annuities, your monthly annuity payments will be less than if you had chosen a single life annuity. Also, keep in mind that if you choose a joint life annuity with a 50% survivor benefit, the monthly annuity payment will be cut in half when either you or your joint annuitant dies.”

Even if I choose the 100% survivor benefit I need her signature.

I always swore I would never buy the TSP annuity. I think that under my plan of monthly payments soon and reducing them in 3 years is a better deal. On the other hand do we really care if there is any TSP left over for my kids? My plan, based on G fund paying at least 2%, leaves about $150k in TSP the year she turns 91. I have no expectation of being alive at 95. The big deal to me is once you buy the annuity there is no going back.


I better start working on a business case.

PO

PO,

Regarding the TSP withdrawal initiation process, thought I’d describe how it’s working for me.

Since I wanted to show the extra income as part of qualifying for our giant VA mortgage for our retirement home purchase, I went ahead last week and submitted the form to start the monthly withdrawals. I found a blog topic on federal soup where people have been posting the timeline on how long the process takes, and saw that in recent years the TSP has been getting faster and faster at it, with the most recent person posting that it took just 4 business days from faxing in the TSP-70 form until the deposit showed up in their bank account. Being a former engineer, I’m rather anal about money matters and I’d like to get all the income early in the month (unfortunately, based on my birthdate of the 22^nd, my SS payments will come on the 3^rd Wednesday of each month…I wonder why SS continues that archaic practice when all SS payments are electronic now, not physical checks?, sigh)…so I waited until last Thursday to send in the form by fax…I did that from a UPS Store, just $4 and tax for the 2 page form, since we’re staying in a rental condo currently and don’t have the ability to fax from home….anyway, as of Saturday (and it’s the same right now on Monday morning 4/29), when I log into TSP.gov, then click on the “Withdrawals” link, there’s a red message that says “Message Alert – Pending Full Withdrawal Request”, so I know it’s being processed. I’m hoping that the deposit shows up on 5/1, but any date before the 10^th of the month works I suppose since our mortgage payments will be on the 10^th. My understanding is that whatever day it happens, it will be set in stone and you’ll get your deposits on that day forever and can’t change it (why?, sheez).

As with OPM Services Online, I really wish TSP would get with the times and update their website, and do a better job at communicating with participants. Why not send me an email confirmation when the form was logged in for example? I wouldn’t be surprised if I get a letter, probably weeks after I get the first deposit LOL. Also, they don’t let you choose how much you want taken out in federal income tax like the OPM does for your annuity. Really annoying. I just went with their standard “married and 3 allowances” option (I’m too brain dead with all the house selling, moving, house buying stuff to try to figure out how much that will be so will just let it be a surprise), and plan to adjust my annuity taxes as needed in order to come out close to break-even each year. Regarding getting the form notarized, yep, a pain, but my wife trusted me in signing off that she won’t collect the joint life annuity option (she also has a TSP account and the plan is for whoever goes first, that account will be rolled over into the other spouse’s account)…and we really lucked out in that we had a notary public come by in order to sign the closing documents on our house in New Mexico, and for just $10 she did the TSP-70 form at the same time as a side deal. One disconcerting thing to me is that the poorly crafted TSP-70 form, and the message on TSP.gov, makes it sound like I’m about to get a check for my full account balance, so I have to trust that it will indeed be monthly payments as I indicated on the form (why not have a separate form for the monthly payments option?).

I’ll post again when I get my first monthly deposit in our account, hopefully by Friday this week. In the mean time I’ll start checking that the status in my account each day to look for any indication I’m about to get that deposit.

I’m only withdrawing the equivalent of about 4% per year to start, and I figure that at the current G fund rate all I need to do is find one single 1.5% trade outside of the G fund each year in order to keep my account balance stable…and then to keep up with a 2% inflation rate that would bump up the additional amount I need to make to about 3.5%, or about 6%/year, which seems doable if I’m patient and wait for a really oversold panic day each year, they always come a least a couple times each year…then even if we have a long grinding bear market that lasts for a large part of the 2020’s I can still grow my TSP withdrawals on par with inflation…and at age 62 in a few years (I turn 59 in June) hopefully I can bump up the withdrawals a bit more to somewhat make up for not collecting SS…if that’s what I do…I might just start collecting SS at age 62 based on that excellent long article by Danial Amerman that I posted recently.

"No Cash refund"? I surmise that means that even if your initial balance lets say 300k wasn't paid out by the time you pass along, they get to keep the money left over?