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Thread: Planning for Retirement

  1. #25

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    Default Re: Planning for Retirement

    Check out this article: https://www.thebalance.com/clearing-spousal-benefits-confusion-2388948

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  3. #26

    Default Re: Planning for Retirement

    I haven't talked to TSP yet but it looks like they withhold 20% for taxes on age-based withdrawals. (FRA coming up soon.) However it seems that if I roll it over to an IRA no funds are withheld. True? No? Any feedback or related links are welcome!

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  5. #27

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    Default Re: Planning for Retirement

    Responding to rakendzior:
    Yes, they are still predicting the change to the 2017 law to be implemented by Sept 2019.
    Until then, only 1. Second one has to be ‘the rest’.
    New rules under the 2017 law....unlimited number.
    Go figure.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!


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  7. #28

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    Default Re: Planning for Retirement

    Quote Originally Posted by exnavyew View Post
    I haven't talked to TSP yet but it looks like they withhold 20% for taxes on age-based withdrawals. (FRA coming up soon.) However it seems that if I roll it over to an IRA no funds are withheld. True? No? Any feedback or related links are welcome!
    IRA rollovers do not relieve you of the FRA burden. Just reduces the amount of $$ the FRA is based on.
    By the way, you do not say if Roth or not. All conversions to Roth require a tax bite.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

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  9. #29

    Default Re: Planning for Retirement

    Not sure I understand. FRA = full retirement age, in my case 66.

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  11. #30

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    Default Re: Planning for Retirement

    Mindful that I'm new to TSP details, when you say "FRA burden', do you mean required minimum distributions (RMDs)? Not sure how to help you yet.

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  13. #31

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    Default Re: Planning for Retirement

    Quote Originally Posted by exnavyew View Post
    Not sure I understand. FRA = full retirement age, in my case 66.
    FRA is the acronym for Full Retirement Age, that point in history when you qualify for full retirement benefits from the SSA system, and gain several other advantages.

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  15. #32

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    Default Re: Planning for Retirement

    Quote Originally Posted by uscfanhawaii View Post
    Responding to rakendzior:
    Yes, they are still predicting the change to the 2017 law to be implemented by Sept 2019.
    Until then, only 1. Second one has to be ‘the rest’.
    New rules under the 2017 law....unlimited number.
    Go figure.
    My friend who told me about TSP Talk gave me to believe it would be this fall but he wasn't sure and didn't know exactly how it would apply to him. Thanks.

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  17. #33

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    Default Re: Planning for Retirement

    Quote Originally Posted by uscfanhawaii View Post
    IRA rollovers do not relieve you of the FRA burden. Just reduces the amount of $$ the FRA is based on.
    By the way, you do not say if Roth or not. All conversions to Roth require a tax bite.
    Yes, any conversion of 'QUALIFIED MONEY' to a Roth means ordinary income taxes. BTW, 'qualified money' means money earned but 'qualified' by the IRS so that income taxes are deferred.

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  19. #34

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    Default Re: Planning for Retirement

    Hypothetically, you could gift an asset you already have to a charitable organization willing to take it. That would allow you to take a charitable deduction, assuming the new tax law doesn't stop that, and use the charitable deduction to offset the tax burden incurred by taking an equivalent taxable distribution from a qualified account. I am not a tax person; you must run this past a tax person first.

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  21. #35

    Default Re: Planning for Retirement

    If I rollover TSP money to a brokerage IRA (say Fidelity - which allows me to use the $$ to trade). My understanding is that:
    A: 100% of the TSP monies would rollover (I'm north of age 60).
    B: any disbursement from that IRA to say my checking account would be considered taxable income and so reported to the IRS by 'Fidelity'.

    Is that correct?

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  23. #36

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    Default Re: Planning for Retirement

    Lots of info here and a great thread. Back to the social security and spouse’s social security question which is not real easy to figure out estimates for. Everything except for the spouses own estimated benefit is based on the “workers primary insurance amount”. The primary insurance amount (PIA) is defined as “The ‘primary insurance amount’ (PIA) is the benefit (before rounding down to next lower whole dollar) a person would receive if he/she elects to begin receiving retirement benefits at his/her normal retirement age. At this age, the benefit is neither reduced for early retirement nor increased for delayed retirement”. You can figure yours out at https://www.thebalance.com/social-se...-guide-2388927. I went to ssa.gov, established a chat session, asked to speak to an expert and got mine. I didn’t know at the time to ask if this would change before I started receiving benefits. Apparently so since I have ss income in 2019 which exceeds my income 35 years ago. I also didn’t ask when this amount gets set in stone. I think when you start receiving benefits.

    According to the formula in https://www.thebalance.com/clearing-...fusion-2388948, Take the older spouse's PIA divided by 2, minus the younger spouse's PIA. $2,100/2 = $1,050 - $800 = $250. In my case 2460/2=1230 – 1513 = less than 0.
    Since the wife’s (age 63) latest ss estimate says $1225 if she applies now and $1555 if she waits until 66y 4m, I see no advantage for her to wait until I apply.

    It’s all somewhat ambiguous especially the estimated amounts. Someone correct me if I am way wrong.

    PO


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