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Thread: Retirement looming, questions

  1. #13

    Join Date
    Apr 2013
    Location
    Central Texas
    Posts
    3,520

    Default Re: Retirement looming, questions

    Hi, I recently attended World Investor Week 2018 put on by SEC and TSP. The attached pdf is the presentation given that describes TSP retirement withdrawal options and the options that will be available beginning in Fall 2019 as a result of legislation signed by Pres. Trump in Fall of 2017. This pdf has very good information on the new multiple withdrawal options that will be available. My understanding is that even those who have retired will also have these new options. They did get rid of the single lump sum and now can do many multiple things.

    ..sorry... must be too big.. will look for a link

    ok here is link so you can see the Webinar presentation.... but quite honestly the PDF is better!

    https://www.sec.gov/news/upcoming-ev...p-account-2018

    PDF LINK: (This link to PDF is also embedded in the Webinar meeting URL above).
    https://www.sec.gov/investor/your-ts...018-slides.pdf

    HERE ARE MY PERSONAL NOTES (so you would want to confirm accuracy). I took them pretty quickly while listening to the Webinar presentation. I think it is BEST to read the pdf first and then if you want watch the webinar.

    3 Forms will be consolidated to TSP-99 by late next year.
    Under new rules, allows more Withdrawal (WD) options. Let’s you change your monthly payment options each year and will also allow quarterly and yearly WDs. Can do more than just one lump sum withdrawal.

    11/17/2017 - NEW law enacted and must be implemented by TSP within 2-years—so that is Nov 2019. Provides more flexibility in withdrawing (WD) your funds.
    Includes multiple age-based WDs for those 59-1/2 while in-service (i.e. still working). This will not stop you from being able to take a partial WD after you retire as is now the case, plus you get up to 4 Age-based WDs per year while in service (still working). All or any portion can be transferred to an IRA or eligible employer plan, if eligible and can continue to make contributions to the TSP.

    Once retired, will be able to take one partial lump sum every 30 days, no lifetime limit, and can do this while receiving installment payments. All or a portion can be transferred to an IRA or eligible employer plan, if eligible.

    New ability to select payments on quarterly and yearly basis (plus the monthly as is currently the case). Option to get a combination of (1) partial lump sum payout, (2) purchase an annuity and/or (3) get full lump sum while receiving installment payments – but not required to take everything out. New: option to start, stop or change installment payments at any time. Also, for Lump sum or Life Annuity, can use all or a portion of the account balance. So, can do all 3: do a lump sum (partial or full) and if you do a partial lump sum, you can also set up an annuity if you want plus some payout as installments that can be changed at any time.

    FULL WD at retirement will NO LONGER BE REQUIRED. Currently, you must divide it up between single payment (full or partial lump sum), life annuity or monthly payments (of fixed amount or life expectancy). But under new law, you are no longer required to fully withdraw your TSP. You can elect installments and lump sum (full/partial) and Life annuity if you want, in basically any combination.

    WD tax treatment. You will be able to select to WD from Roth balance only, traditional balance only, or mix. Under current law, the tax charge is pro-rata against your TSP balance traditional and Roth. Under new law, will be able to apply tax to traditional only, or Roth only or pro-rata from both.
    New law gets rid of full WD requirement at age 70.5 when person is separated from gov. IRS Required Minimum Distribution (RMD) requirement at age 70.5 is going away. They will send you the RMD amount automatically. The RMD rules apply to each separate account and they use uniform lifetime table as long as there is money in the account. When you turn 70.5 must satisfy by April of year 2. May begin at 27.4 or 26.5%.

    Early WD penalties – Exceptions to IRS Early Penalty - must be age 59.5, or 55 and retired, or 50 public safety employee.
    TSP 775 AND 536 to help with payments from your account and RMD rules as far as taxes.
    Go to TSP.gov - Many tools. Use calculators. Can now find your beneficiary information on line now.
    Last edited by DreamboatAnnie; 10-10-2018 at 09:39 AM.
    CURRENT: 7-18-19 G25%-F75%S PRIOR: 7-8-2019=70G, 30S / 6-28-19 =30S,20I,30F,20G / 6-6-19 = G100% / Chart Permalinks at Page 215, #2575 & 2576

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  3. #14

    Default Re: Retirement looming, questions

    Thank you so much for all the great advice. I had to go out of town for a few days, butnow that Iím back, Iím going to reply and get more info.
    Itís great to get advice from all of you who have beenthrough this process, Iím a sponge, so please donít think you are wasting yourtime helping!
    In reply to the info provide. So much great advice, and somany questions, so Iím going to break this into several replies.
    It seems a consensus that leaving the money in the TSP vsother (vanguard) companies is the way to go. Done.I was really leaningtowards a lifetime annuity, but the responses seem so negative. Curious, whyyou are so against the idea.It seemsthat an uncertain economy as the years go by makes The market a little scary. Iívedone some computations and the TSP would run out pretty quick if I made monthlywithdrawals.
    Iíve read that as you approach retirement you should shiftmore and more to G. My current situationis 188k in TSP and breakdown of 65 G, and 10 in 3 L funds (L30/40/50). Mycontributions are 50 in the L30 and 50 in the L40.So the consensus is better 50 in G and 50 inC, with contributions the same?
    Iím currently contributing 14,300 a year to TSP. Getting to 24k seems impossible.But I do have a couple of tweaks I couldmake.
    I owe 12k on my truck with a payment of 550.00 a month. Theinterest rate is 2.5. Iíve been paying 1k a month with the intention of payingit off by October of 2019. I could lowerthis some, and put the extra in TSP (I really donít want a car payment inretirement). This would free up 250.00 or so (just a ballpark guess).Should I?Not sure the math that would allow paying it off by June of 2020(retirement).
    Iíve got 260.00 a month going into a savings account thatmakes 1.8 interest. I could stop thisand put that money into TSP. Should I?

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  5. #15

    Default Re: Retirement looming, questions

    duplicate
    Last edited by dave123; 10-12-2018 at 03:53 PM. Reason: duplicate

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  7. #16

    Default Re: Retirement looming, questions

    Further reply and questions: Thanx for advice to start reading.I see one link to the retirement thread, will check it out.Any other links you may come across are appreciated and will be pursued.
    The more I look at things, I don’t think I will be able tosell the house until I retire. I wasconsidering buying one, selling mine, but the bridge loan is just too expensive.So unless someone changes mymind, that is out.
    Cactus, you just sent shivers down my spine. ¬ďTry living on your retirement income¬Ē. Wow, that puts it in a totally new light. I can¬ít! Now I¬ím even more worried. By the way, I¬íve got my computations:
    After taking out my health insurance and taxes, I will get only 29k a year. I have a good chance of 5% more (currently trying to buy back my military), but that will necessitate almost 4k paid out to buy it back. I¬ím still waiting on the final numbers. Add to this, let¬ís say 17k with a low paying job and I would have 46k a year ¬Ė doable, but much less than I¬ím used to having.
    I’m young, and thank the Lord, in great health. A job will be part of the picture for sure. Nobody gave an opinion on gettinga job that pays more than my FERS supplement limit (17k). Any job I get that pays more than 17k would have to pay enough to make it worth throwing away the 12K supplement. I’m going to start looking for non lawenforcement government work.This is a big wild card.
    Someone mentioned marital status. Yes I’m married.The numbers above reflect the partial survivor annuity, but I promised a life insurance policy (more money out the door).
    Thanks Dreamboat ¬Ė gonna check that PDF and video out!

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  9. #17

    Default Re: Retirement looming, questions

    duplicate
    Last edited by dave123; 10-12-2018 at 03:50 PM. Reason: duplicate

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  11. #18

    Default Re: Retirement looming, questions

    Another thing if I may. I will terminate my govt. life insurance upon retirement. Opinions on good companies and term vs whole?


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  13. #19

    Join Date
    Jul 2016
    Location
    Texas
    Posts
    1,992

    Default Re: Retirement looming, questions

    TSP has some very good tools you can use: https://www.tsp.gov/PlanningTools/index.html. TSP Retirement Income Calculator is helpful in estimating your Retirement Income from TSP based on your age, estimated RoR, etc. Suggest you request a retirement estimate from your agency to get a good idea of what your retirement will be. If you are subject to mandatory retirement as a LEO you get more in your supplement than the rest of us. Dan Jamison’s FERS Guide https://fersguide.com costs $15 for 1 year subscription and has a separate guide for LEOs. He covers everything about FERS in great detail and will answer questions you have as a subscriber--worth the price.

    You may want to consider keeping the FEGLI basic life insurance with reducing value to 25%. It pays your current salary plus a couple of $1,000 until age 65 (I think) when it reduces by 2% per month until it reaches 25% the value and you stop paying premiums at age 65. At age 50 I dropped any multiple as the rates increase by over 50% per $1,000 of insurance. You should be able to get better rates outside. Based on your situation, you need to take a good look at how much additional insurance you really need.

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  15. #20

    Default Re: Retirement looming, questions

    Quote Originally Posted by dave123 View Post
    Another thing if I may. I will terminate my govt. life insurance upon retirement. Opinions on good companies and term vs whole?
    I retired at 51 from BOP. I looked at it as a way to improve my life and get relief from the hell hole I was in for 28 years. I recommend subscribing to the premium services on here. I'm paying for TSP Talk and Intrepid. At your age and balances, I believe you need to stay aggressive and grow your account. They have helped me grow my balance over $70K in the last 3 years. Money well spent in my opinion. Get a job, stay active, do something fun. I worked for Costco for a year, no stress, good people, loved my coworkers and environment. Things that sound simple, but as a corrections worker, we were deprived of. Now I work part time at a local Metroparks and love it, outside fresh air, no stress, beautiful nature. I plan on working until 59 1/2. I have Roth IRA's with TrowePrice that I still contribute to. I travel a lot, so I need income for that because your pensions will pay the bills, but you will need spending money to have fun.

    I'm not a fan of Life Insurance. I had it when the kids were young and we had debt. I pay for only the basic from OPM, $25K for burial expenses. It's around $10/month. I recommend paying off debt before you leave agency. My kids are grown and independent now. The wife has a career and her own 401K. I told her, if I pass she will get my TSP deposit and that's it. At your age life insurance policies will break your wallet.

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  17. #21

    Default Re: Retirement looming, questions

    Forgot, Good Luck. Enjoy life and your early retirement, you earned it. My friends who mocked me for taking a job in Corrections are now all envious of our benefits. It was a long hard road, but you will deprogram over time and blend in. Everyday is a Friday for me now.

    "May the force be with you"

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