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Thread: longing to retire

  1. #13

    Default Re: longing to retire

    Quote Originally Posted by nasa1974 View Post
    If you retired under CSRS and earned SS outside the government you get hit with WEP (Windfall Elimination Provision) https://www.ssa.gov/planners/retire/wep.html. You may be better off taking SS when eligible.
    thanks..under fers but this is useful information for a friend of mine who is thinking of retiring....thinks he ma know because he is the one who suggested i start looking at this site


    i have to reread the information on life insurance....think i changed it to basic and part a last year

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  3. #14

    Join Date
    May 2007
    Location
    Washington State
    Posts
    185

    Default Re: longing to retire

    Some good issues and discussions. Thought I'd direct y'all to recent 2/11/19 post on Tsunami's Account Talk; he posted a link to a long & very good website-article that give a good, REAL picture/analysis of when to start drawing SS (Pasted excerpt below).
    " It took me a week to find the time in my busy retirement schedule to read this, but boy am I glad I did:

    Making Optimal Social Security Claiming Decisions by Daniel Amerman What an eye opener regarding social security and Medicare Part B. I'd urge anyone not already collecting SS to take the time to read that from start to finish."

    That corroborated my own simpler assessment - and I'll be claiming SS at 62 or 63 for my own situation. I'm FERS, have 35+ yrs Fed Service, have about 2.5 yrs till I'm 62. Since my wife just started working for FED Civil Service 2+ years ago, I decided not to retire now but wait till 62, so that, basically, we can retire/travel/etc together (she must work till 62 to have a FERS 5+ years retirement, she's only 9-months younger than I). Would like to go now but don't want to sit home alone waiting for her to retire; plus I'll get the extra 10% for my annuity at 62. I have just more than about half of that $1.3mil mentioned in this thread in my TSP so far... so I can build that up more too. GOOD LUCK ALL.

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  5. #15

    Default Re: longing to retire

    wow..thanks great article...have to factor in my wife, who is 10 years younger...i do know our/my minimum distribution for iras is less if your spouse is 10 years or younger...this rule does not apply with the thrift plan so that is a disadvantage of the tsp..higher minimum distribution for tsp, so money may not last for her when i am gone

    as far as social security goes, will run the numbers for amt for 40 years...she will already already be getting only half my pension when i am gone, so need to maximize social security, her ira, and remaining money in the thrift plan

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  7. #16

    Join Date
    Jul 2016
    Location
    Texas
    Posts
    2,274

    Default Re: longing to retire

    Have you run the retirement income calculator? Right now, based on what you have said $1.3M, you 62, wife 52. If you assume a very conservative 4% rate of return, if you withdrew $4K/month it would last until you & your wife were 110 & 100, respectively. Base on your TSP balance and your financial situation, I think you will probably have more money than you know what to do with when you retire & stop contributing to TSP [look at your end of year paycheck and subtract out MEDICARE, OASID, FERS RETIRE, TSP & TSP CUC from your Gross Income to get a better idea of what level of income you will need on an annual basis. You will still have to include FEHB & Income Tax in you're expenses] If you went with life expectancy payments, payments would range between $3600 and $6,300/per month until you are over 100. At age 85, under the conservative 4% return, you would still have $1M. https://www.tsp.gov/PlanningTools/Ca...ependentAge=52 Try different RoRs in the calculator based on your actual experience. When you die your wife can assume your TSP as a beneficiary TSP or roll it over to her own IRA or into an inherited IRA (different withdrawal rules to consider depending on her age at the time) see https://www.fedweek.com/issue-briefs...ry-policies-2/. Any non-spouse beneficiary should be instructed use the inherited IRA option to avoid a large tax bill and to receive it over their life expectancy.

    A lot depends on you and your wife's life expectancy but the rate of return between Full Retirement Age and age 70 for SS really cannot be beat with automatic COLA adjustments if you expect for either of you to live until your 90s & if you can afford to wait (see https://www.ssa.gov/pubs/EN-05-10147.pdf) It can also help offset the decrease in your pension for her. IRS life expectancy table end at 115, so that is what I use Note: I don't really understand how Medicare Part B limitation/correlation with SS factors in based on link FAAM posted but I know your income the year or two prior to age 65 when you will have to begin Medicare does factor into the rate you will pay (you have some control here based on your withdrawals from TSP). Higher income earners have higher rate. It's too far off for me to worry about it now.

    One thing you may want to consider before receiving payments from TSP, is doing a partial rollover into an IRA. You will still have to take RMDs at 70.5, but as you stated, the rules are slightly different; plus you can look at converting some of the traditional IRA to a Roth IRA over time. Although you have to pay the taxes, the benefit is that Roth accounts grows tax free, are not subject to RMDs and the tax brackets for surviving spouse are much lower than Married Filing Jointly.

    I recommend retiring as soon as possible

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  9. #17

    Default Re: longing to retire

    Quote Originally Posted by evilanne View Post
    Have you run the retirement income calculator? Right now, based on what you have said $1.3M, you 62, wife 52. If you assume a very conservative 4% rate of return, if you withdrew $4K/month it would last until you & your wife were 110 & 100, respectively. Base on your TSP balance and your financial situation, I think you will probably have more money than you know what to do with when you retire & stop contributing to TSP [look at your end of year paycheck and subtract out MEDICARE, OASID, FERS RETIRE, TSP & TSP CUC from your Gross Income to get a better idea of what level of income you will need on an annual basis. You will still have to include FEHB & Income Tax in you're expenses] If you went with life expectancy payments, payments would range between $3600 and $6,300/per month until you are over 100. At age 85, under the conservative 4% return, you would still have $1M.https://www.tsp.gov/PlanningTools/Ca...ependentAge=52 Try different RoRs in the calculator based on your actual experience. When you die your wife can assume your TSP as a beneficiary TSP or roll it over to her own IRA or into an inherited IRA (different withdrawal rules to consider depending on her age at the time) see https://www.fedweek.com/issue-briefs...ry-policies-2/. Any non-spouse beneficiary should be instructed use the inherited IRA option to avoid a large tax bill and to receive it over their life expectancy.

    A lot depends on you and your wife's life expectancy but the rate of return between Full Retirement Age and age 70 for SS really cannot be beat with automatic COLA adjustments if you expect for either of you to live until your 90s & if you can afford to wait (see https://www.ssa.gov/pubs/EN-05-10147.pdf) It can also help offset the decrease in your pension for her. IRS life expectancy table end at 115, so that is what I use Note: I don't really understand how Medicare Part B limitation/correlation with SS factors in based on link FAAM posted but I know your income the year or two prior to age 65 when you will have to begin Medicare does factor into the rate you will pay (you have some control here based on your withdrawals from TSP). Higher income earners have higher rate. It's too far off for me to worry about it now.

    One thing you may want to consider before receiving payments from TSP, is doing a partial rollover into an IRA. You will still have to take RMDs at 70.5, but as you stated, the rules are slightly different; plus you can look at converting some of the traditional IRA to a Roth IRA over time. Although you have to pay the taxes, the benefit is that Roth accounts grows tax free, are not subject to RMDs and the tax brackets for surviving spouse are much lower than Married Filing Jointly.

    I recommend retiring as soon as possible
    Thanks so much..feel grateful for all the input...cannot express how much you guys have helped me......... after talking to some others at work i realize that i am in a very good situation.....did all the calculations again in front of my wife, who is worried that we may come up short (one income family)....we also have been funding 2 vanguard roth iras off and on for a few years, and was surprised to see about 100,000 between the both of us in there.....have about 15,000 in roth tsp that i will transfer to vanguard one of these days, since i believe the nontsp roth iras do not have a RMD

    work wants me to go one more year....know i have two weddings in the future to fund, so i am thinking about it, but doubt i will stay

    as far as waiting to take ss until later, in order for my wife to receive a larger ss check....i thought that she can only get up to my maximum for my minimum retirement age...at about 66.5.....was not sure waiting longer would benefit her, but now i know she will get the higher benefit...thanks for the link
    Last edited by alfaman; 02-26-2019 at 08:09 PM.

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  11. #18

    Join Date
    Apr 2008
    Location
    Cleveland, Ohio
    Posts
    12,148

    Default Re: longing to retire

    Quote Originally Posted by evilanne View Post
    A lot depends on you and your wife's life expectancy but the rate of return between Full Retirement Age and age 70 for SS really cannot be beat with automatic COLA adjustments if you expect for either of you to live until your 90s & if you can afford to wait (see https://www.ssa.gov/pubs/EN-05-10147.pdf) It can also help offset the decrease in your pension for her. IRS life expectancy table end at 115, so that is what I use Note: I don't really understand how Medicare Part B limitation/correlation with SS factors in based on link FAAM posted but I know your income the year or two prior to age 65 when you will have to begin Medicare does factor into the rate you will pay (you have some control here based on your withdrawals from TSP). Higher income earners have higher rate. It's too far off for me to worry about it now.
    For Medicare Part B your monthly cost will depend on your income and your wife's income and how you file your income tax. Here is the link to a chart that explains your monthly cost for Medicare Part B.
    https://www.medicare.gov/your-medica...s/part-b-costs
    May the force be with us.


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  13. #19

    Default Re: longing to retire

    Quote Originally Posted by nasa1974 View Post
    For Medicare Part B your monthly cost will depend on your income and your wife's income and how you file your income tax. Here is the link to a chart that explains your monthly cost for Medicare Part B.
    https://www.medicare.gov/your-medica...s/part-b-costs
    Its also good to know that your Medicare Part B premiums will be automatically deducted from your monthly Social Security check unless you have not yet claimed SS which in that case you get billed quarterly.

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  15. #20

    Default Re: longing to retire

    there is so much good information on this thread....when i ran the numbers i determined that i would be in a higher tax bracket when i turn about 70...wow, never even considered that...good problem to have

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  17. #21

    Join Date
    Feb 2019
    Location
    Gainesville, Florida
    Posts
    36

    Default Re: longing to retire

    alfaman - hello - TSP Talk has recently introduced me to readers of TSP Talk by creating a new element called Retirement Talk with Tony. The idea is for me, having spent most of my adult life as a financial professional, to bring ideas and potential solutions to readers of TSP Talk. My sole focus these days is helping people retire, to help them process all that information so that a worry free and financially secure retirement is a more likely outcome. I've started a thread there and invite you to ask questions if any come to mind.

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  19. #22

    Default Re: longing to retire

    just want to give a quick update...life got in the way and was not able to retire.the good news is i was able to dodge the market drop and tsp has grown about 1.46 million...just lucky on my part....

    so i have put in for my estimate to retire either 7/31 or 12/31 of this year...but both estimates had errors in them and having a heck of a time getting them corrected (life insurance and EOD date)...just a quick question if you don't mind...who do i turn my retirement paperwork in to ....my agency says it's all online and the online people tell me it's my agency...any insight would be appreciated..thanks

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