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Thread: Planning for Retirement

  1. #37

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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.
    Born in 1954 or earlier? if later it's 66y + some months.

    PO

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  3. #38

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    Default Re: Planning for Retirement

    Quote Originally Posted by rakendzior View Post
    I have a retired federal employee client who wanted to keep some of his money at TSP but remove the rest. He wanted an environment that gave him upside potential but guaranteed him against a loss if it turned out he was too exposed to sequence of returns risk. He moved some of it but TSP said "no more transfers". He thinks the rules may be changing but because he is afraid of a market crash this year, and he lost a lot of his account last fall, he has everything in the most conservative option available. That's not good if he expects to live another 25 years.
    By “no more transfers” I assume you meant no more withdrawals?

    Your client can do an “interfund transfer” to move his remaining TSP assets to the G fund. Any time the client wants. G is guaranteed not to lose money. It earns 2.75% this month. It does change monthly. Is this the most conservative option you refer to?

    We all lost a lot of our C, S or I funds last fall. Most of us paying attention moved the money around. Your client can move money back to stock funds twice a month. Not great flexibility I understand. But the client need not be concerned about losing money if they move funds to G. Only concerned about missing gains.

    I am aware about the gov suspending G fund investments to avoid the debt ceiling. They do it every time the ceiling is close. They have a hard fight and have to change laws to make that permanent. As of today my G fund investment have kept increasing in value. Yeah I know it's all paper money like all investments until you take the cash.

    I am very curious about the “environment that gave him upside potential but guaranteed him against a loss if it turned out he was too exposed to sequence of returns risk” I’d like some of that myself.

    PO

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  5. #39

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    Default Re: Planning for Retirement

    Quote Originally Posted by alfaman View Post
    in regard to social security...my wife plans to take her lower spousal benefit at 62...i will take mine at 70
    She can draw her spouse benefit at age 62 (and I will be age 72) which will be 32.5% of my increased full benefit. Upon your death, her benefits will increase to my benefit amount if she is at least age 67.

    I am 10 years older than her
    alfaman, are you sure about 32.5% of your increased benefit under the delayed retirement credit rules and not your PIA?

    If you would like to get really in to it go to https://www.ssa.gov/policy/docs/rsnotes/rsn2017-01.html.

    Every rule I find about spouse being 10 years younger applies to minimum required distribution (MRA) and not SS benefits.

    PO

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  7. #40

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    Default Re: Planning for Retirement

    Quote Originally Posted by PessOptimist View Post
    .....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.

    PO
    Yes, ‘set in stone’ when you start receiving benefits. This is because all previous years’ income is indexed based on inflation. SS.gov has all the up to date index info if you want to get down into the details.
    So what the chat advisor must have said is that your 2019 SS income is larger than the INDEXED SS income 35 years ago. Note also, I believe this 35 yr period is consecutive.
    yes?
    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. #41

    Default Re: Planning for Retirement

    Regarding A: A transfer from TSP to an IRA incurs no tax. Not sure what you mean by 100%. You can transfer any % of your TSP to an IRA. When the new rules kick in you won't be limited to two transfers.
    Correct on B. Unless you transfer that money to another IRA within 60 days.

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  11. #42

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    Default Re: Planning for Retirement

    Quote Originally Posted by PessOptimist View Post
    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
    Here is a curveball. Does WEP affect the SS payout for a spouse drawing early on your SS (only for CSRS folks)?
    May the force be with us.

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  13. #43

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    Default Re: Planning for Retirement

    PO - re your curveball. You ask if the WEP affects the SS payout for a spouse taking spousal SS benefits. At least that's what I think you're saying. I think that's an entirely different income stream. Spousal SS benefits are a function of your earned income from a source other than as a Federal employee where you didn't have FICA applied.

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  15. #44

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    Default Re: Planning for Retirement

    This is Tony Kendzior. Thanks for your questions and your replies etc. I'm still working out the best way to respond to question so that the person who asked them gets my reply in the right context and doesn't have to ask them again. I know I understand money but as yet, I don't seem to understand how to use the TSP Talk forums. But I'm working on it...

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  17. #45

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    Default Re: Planning for Retirement

    Quote Originally Posted by rakendzior View Post
    PO - re your curveball. You ask if the WEP affects the SS payout for a spouse taking spousal SS benefits. At least that's what I think you're saying. I think that's an entirely different income stream. Spousal SS benefits are a function of your earned income from a source other than as a Federal employee where you didn't have FICA applied.
    The curve ball comes from nasa1974, below a quote from one of my posts.

    PO


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  19. #46

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    Default Re: Planning for Retirement

    Quote Originally Posted by uscfanhawaii View Post
    Yes, ‘set in stone’ when you start receiving benefits. This is because all previous years’ income is indexed based on inflation. SS.gov has all the up to date index info if you want to get down into the details.
    So what the chat advisor must have said is that your 2019 SS income is larger than the INDEXED SS income 35 years ago. Note also, I believe this 35 yr period is consecutive.
    yes?
    I understand when it is set in stone now. Thanks. The chat advisor didn’t actually say anything about the 2019 income. All I asked was for the PIA and didn’t know to ask for what month that was computed. I got the gross wage amount from my last LES so am not positive that is all actually ss income. Probably. I got the indexed amount from my ss earnings record and the indexing factor based on the national average wage index for the year I turned 60 and the 35th year back. It is so close it probably makes little difference. I was an E-6 in the AF 35 years ago. The real factor will be what the COLA will be for 2019 if I don’t start receiving benefits.

    I’m not sure I will go down in to the weeds and figure out my actual AIME for any given month.

    According to the ss web site https://www.ssa.gov/oact/progdata/retirebenefit1.html “We use the highest 35 years of indexed earnings in a benefit computation.”.

    PO

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  21. #47

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    Default Re: Planning for Retirement

    uscfanhawaii, I forget to include this in the last post. There are 11 types of people in the world. Those who know binary, and those that don't, and those who don’t accept different number systems!!

    PO

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  23. #48

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    Default Re: Planning for Retirement

    Quote Originally Posted by rakendzior View Post
    This is Tony Kendzior. Thanks for your questions and your replies etc. I'm still working out the best way to respond to question so that the person who asked them gets my reply in the right context and doesn't have to ask them again. I know I understand money but as yet, I don't seem to understand how to use the TSP Talk forums. But I'm working on it...
    TSPTalk uses vBulletin software which can be difficult at times. Sometimes replies to posts will go away. This is not necessarily due to the software or the web site server, there are so many factors involved with the interwebthingie.

    Several questions may be asked in a post and replies to those post may ask more. The questions come fast and furiously.

    This has been my solution to replies that has worked well for me. Under the post you want to reply to (not a reply to the post with or without a quote) select the Reply with Quote button. This should open a Quick Reply window and show the quote. Copy the quote and paste it in to a word processor. Go back to the Quick Reply window and select cancel. Now you can answer the question(s) in the word processor in your own time, leaving to research something if needed. When you are done with the reply copy it from the word processor and go back to the thread. Make sure you are still logged in, select Reply to Thread. A Quick Reply window will open. Paste what you copied from the word processor in to the window. Now select Go Advance in the bottom right. A Reply to Thread window will open and should show your post. Select Preview Post a little way down on the right. This will show you what the post will look like. If you need to make any corrections there will be a Your Message window just below you can edit. After editing select Preview post again. When you are ready to submit the post, scroll down to the Your Message window and select Submit reply.

    Sounds complicated but it’s not really and will help preventing lost replies. Plus it gives you a chance to see your reply before it is submitted.

    Depending on your equipment and software, right clicking the mouse may not give you copy/paste options. Using the keyboard commands control c and control v seem to work better.

    PO

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