Elgallo's Retirement story

[nasa1974]

I retired on 31 Dec 2011, the interim check was appx 80% of the total amount ultimately due me with no state tax witholding or witholding for medical/life Ins.. I was not aware of the gotcha regarding the interim payment and it not covering bought back military service on the short term. It's just another way to screw us just abit longer.

Retirement....I HIGHLY recommend it!!

My understanding on the health insurance is that the government pays their share and holds back yours until you start getting your full pension then it comes out lump sum when you get the percentage they have been holding back.

 

[Dutchy]

I retired on 31 Dec 2011, the intrium check was appx 80% of the total amount ultimatly due me with no state tax witholding or witholding for medical/life Ins.. I was not aware of the gotcha regarding the interium payment and it not covering bought back military service on the short term. It's just another way to screw us just abit longer.

Retirement....I HIGHLY recommend it!![/QUOTE]

Thanks for the info...... I'm retiring 2/29/12 with 22 years Bureau of Prisons service and 27 total Govt service. I'm using your info to plan my budget.

 

[Kaufmanrider]

[/QUOTE]

Thanks for the info...... I'm retiring 2/29/12 with 22 years Bureau of Prisons service and 27 total Govt service. I'm using your info to plan my budget.[/QUOTE]

I am glad for the info on military time. My retirement analysis done by the HR department looks good, but it includes my 5.5 years military. I was counting 80 percent of that. I'll need to recalculate my interim payments accordingly. And since they don't take medical during the interim it might be a wash.

Dutchy, I to am BOP. I am looking at next year with 25 years. Grand Prairie did retirement estimates for me using thee dates in 2013/2014 I provided. Very helpful.

 

[Dutchy]

Good Luck Kaufmanrider! Sure hope you've done well here on TSPTALK.COM too!!

 

[nasa1974]

Last year our HR (NSSC) group came in talked with all of us that were planning to retire within the next 12-18 months. We had to set up the meeting so they had most of our information. It was very eye opening. Also I have requested retirement dates for the last three years just to see what the numbers would be. In every one of those requests my 3.5 years of military was included (I paid back my military time a few years ago). So my retirement dollars includes my military time. I was told that I would see 60-80% of my full retirement while I was waiting for OPM to finalize everything. Sure hope it doesn't take to long. Looking to retire sometime between April and June this year.
I haven't decided if I will keep my TSP when I retire or roll it over to a 401K. What did you guys do?

 

[Dutchy]

I'm retiring 2/29/12 and will talk with a trusted financial advisor in April when I can rollover my TSP. I'm retiring at 57, mandatory retirement for Federal Law Enforcement, so there will be no penalties. I'm seriously considering rolling to an IRA, for more Market options, unlimited IFT's etc.,, The only negative may be higher fees, but I think it's worth it when weighing all factors and the potential for more flexibility and higher returns..

 

[Elgallo]

My TSP is soon to be rolled into a Fidelity IRA for the just the reasons you mention. As for fees, Fidelity waives those for retirement accounts if I understand correctly.

 

[roskopfj]

Dont invest with a "trusted financial advisor". That just means they get a cut. I invested in fidelity thru an advisor. Instead of the fidelity, they use the fidelity advisor funds. They invest the same as the same fidelity funds except they have lower returns do to fund fees. I was earning approximatly 1% less for each year, and in the years 2008 and 2009 when the market tanked, I lost 1% more. So in stead of a 10% Return I got a 9%, and instead of a 15% loss I got a 16%. I got this just for the advise of putting X amount in 3 funds, and that's it. Most fund companies are the same, I got locked into 6 years,which was up last year. The advisor got approximately 5% of the value of the 401K that I transfered by fidelity. Fidelity got their money back thru the additional 1% for 6 years. If you leave an advisor fund before year one, you owe the 6%, between 1 and 2, you owe 5%, until the 6th year you are free to take it all. its called a 12B-1 Fee. Do yourself a favor, put your money in Vanguard. They have the lowest fees of ANYONE except TSP. Their phone service is great, and you can take your money out anytime without any fees.

 

[roskopfj]

By the way, make sure you look at the prospectus, it showns the fees that the fund charges. You dont see those seperately, they just lower the earnings. If the fund fee total is 2%. They take 2% and divide it by 365 and charge that amount each day, or divide it by the trading days during a year. Even the regular fidelity funds without using an advisor has much higher fees that the same fund at Vanguard.

 

[nasa1974]

It sounds like it is almost better to leave it in the TSP.

 

[Dutchy]

Dont invest with a "trusted financial advisor". That just means they get a cut. I invested in fidelity thru an advisor. Instead of the fidelity, they use the fidelity advisor funds. They invest the same as the same fidelity funds except they have lower returns do to fund fees. I was earning approximatly 1% less for each year, and in the years 2008 and 2009 when the market tanked, I lost 1% more. So in stead of a 10% Return I got a 9%, and instead of a 15% loss I got a 16%. I got this just for the advise of putting X amount in 3 funds, and that's it. Most fund companies are the same, I got locked into 6 years,which was up last year. The advisor got approximately 5% of the value of the 401K that I transfered by fidelity. Fidelity got their money back thru the additional 1% for 6 years. If you leave an advisor fund before year one, you owe the 6%, between 1 and 2, you owe 5%, until the 6th year you are free to take it all. its called a 12B-1 Fee. Do yourself a favor, put your money in Vanguard. They have the lowest fees of ANYONE except TSP. Their phone service is great, and you can take your money out anytime without any fees.

Thanks for your insights...... food for thought!

 

[Kaufmanrider]

Dont invest with a "trusted financial advisor". That just means they get a cut. I invested in fidelity thru an advisor. Instead of the fidelity, they use the fidelity advisor funds. They invest the same as the same fidelity funds except they have lower returns do to fund fees. I was earning approximatly 1% less for each year, and in the years 2008 and 2009 when the market tanked, I lost 1% more. So in stead of a 10% Return I got a 9%, and instead of a 15% loss I got a 16%. I got this just for the advise of putting X amount in 3 funds, and that's it. Most fund companies are the same, I got locked into 6 years,which was up last year. The advisor got approximately 5% of the value of the 401K that I transfered by fidelity. Fidelity got their money back thru the additional 1% for 6 years. If you leave an advisor fund before year one, you owe the 6%, between 1 and 2, you owe 5%, until the 6th year you are free to take it all. its called a 12B-1 Fee. Do yourself a favor, put your money in Vanguard. They have the lowest fees of ANYONE except TSP. Their phone service is great, and you can take your money out anytime without any fees.

Some of the local Dallas advisers recommend Schwab and specifically Schwab funds because of their low fees. I have a couple ROTHs for my kids and they pay pennies on each transaction.

 

[roskopfj]

I agree the tsp has the best fees. If you are happy with the choices, no need to do anything.

 

[Bquat]

Last year our HR (NSSC) group came in talked with all of us that were planning to retire within the next 12-18 months. We had to set up the meeting so they had most of our information. It was very eye opening. Also I have requested retirement dates for the last three years just to see what the numbers would be. In every one of those requests my 3.5 years of military was included (I paid back my military time a few years ago). So my retirement dollars includes my military time. I was told that I would see 60-80% of my full retirement while I was waiting for OPM to finalize everything. Sure hope it doesn't take to long. Looking to retire sometime between April and June this year.
I haven't decided if I will keep my TSP when I retire or roll it over to a 401K. What did you guys do?

Yes your bought back military time does count toward your retirement. What I was saying before is that it doesn't count for your Social Security suppliment. If you retire at 30 years with your military your ratio is 30 -3 1/2 over 40 instead of 30/40. SS offset is payed between 55 and 62 years in the amount that you would get as social security at age 62 times the ratio.

 

[Bquat]

Yes your bought back military time does count toward your retirement. What I was saying before is that it doesn't count for your Social Security suppliment. If you retire at 30 years with your military your ratio is 30 -3 1/2 over 40 instead of 30/40. SS offset is payed between 55 and 62 years in the amount that you would get as social security at age 62 times the ratio.

Aiso I left my money in the TSP and didn't have to pay any penality because it was after I was 55 and I took equal monthly payments. I took 5% one time withdrawl and 95% toward equat monthly payments. I looked at a 85 year chart to see approxmately how much it would be. I then decided to take 5% of my balance divided by 12 as my monthly figure.

I didn't go for a transfer to an IRA because they only promissed a 5.5% gain with a withdrawl rate at 4.7%. I figure I may roll it over later if interest rates go up to 7%. I'm stuck to this 5% withdrawl rate until I'm 59 1/2 or 5 years which ever is longer. I have not used the TSP annual option to change my monthly amount because I don't know if it would void the 5 year rule. Any way if I still surpass the 5% with gains in my TSP, I can increase my withdrael by 2 1/2% at 62. Another reason I left it in TSP was that you could only leave the annuity to your spouse. If you spouse dies before you, you can still leave the TSP ballance to your children and she could alsoif you go first. I think they now let surviving wife manage the funds within TSP now.

 

[nasa1974]

Aiso I left my money in the TSP and didn't have to pay any penality because it was after I was 55 and I took equal monthly payments. I took 5% one time withdrawl and 95% toward equat monthly payments. I looked at a 85 year chart to see approxmately how much it would be. I then decided to take 5% of my balance divided by 12 as my monthly figure.

I didn't go for a transfer to an IRA because they only promissed a 5.5% gain with a withdrawl rate at 4.7%. I figure I may roll it over later if interest rates go up to 7%. I'm stuck to this 5% withdrawl rate until I'm 59 1/2 or 5 years which ever is longer. I have not used the TSP annual option to change my monthly amount because I don't know if it would void the 5 year rule. Any way if I still surpass the 5% with gains in my TSP, I can increase my withdrael by 2 1/2% at 62. Another reason I left it in TSP was that you could only leave the annuity to your spouse. If you spouse dies before you, you can still leave the TSP ballance to your children and she could alsoif you go first. I think they now let surviving wife manage the funds within TSP now.

Looks like I need to do a little more research before I retire. I'll be 60 when I retire and I was looking at taking a one time withdrawl but not taking a monthly $ amount for a few years. I have some reading to do. Thanks.

 

[Elgallo]

Well I received my temporary password from OPM and used it to successfully login. I was then able to change the temp PW to my personal one, and that was about it!

I origionally logged in to implement my CA state income tax witholding which I was informed I could do in the OPM literature. Well after over an hour of chasing my tail, calling OPM 4-5 times (busy everytime), I gave up.

There was a convieient link on the OPM site to change my FEDERAL witholding, but no similar link for the state! WTF

Any suggestions?

 

[nasa1974]

Well I received my temporary password from OPM and used it to successfully login. I was then able to change the temp PW to my personal one, and that was about it!

I origionally logged in to implement my CA state income tax witholding which I was informed I could do in the OPM literature. Well after over an hour of chasing my tail, calling OPM 4-5 times (busy everytime), I gave up.

There was a convieient link on the OPM site to change my FEDERAL witholding, but no similar link for the state! WTF

Any suggestions?

So it has taken about 2 months to get this far?

 

[Elgallo]

YUUUUUUUUUUP!

 

[bjean]

Bquat - have a question again about your monthly withdrawl

so..............I did speak to TSP customer service about these monthly payments and I will be 56 when I possibly retire. I am still real not clear on this, Bquat do you still have to pay 20% federal taxes on TSP monthly payments because of being counted as income?

Everyone is telling me not to touch TSP money if possible, but in my case I need the money now and not necessarily as much in my sixties as I have a daughter who is a junior in high school. Our rental properties will be paid off in a few years also which will be additional income.

It is really scary retiring, but still waiting on the FERS supplement elimination decision. I can still make a little money when I retire but there is no way in heck I will commit to having to show up to the same place everyday, I've done my time answering to the layer of supervisors, my husband who works in private industry still laughs the government still calls them supervisors..........this is the 21st for gods sake!!!!!!!!!!

bj

Aiso I left my money in the TSP and didn't have to pay any penality because it was after I was 55 and I took equal monthly payments. I took 5% one time withdrawl and 95% toward equat monthly payments. I looked at a 85 year chart to see approxmately how much it would be. I then decided to take 5% of my balance divided by 12 as my monthly figure.

I didn't go for a transfer to an IRA because they only promissed a 5.5% gain with a withdrawl rate at 4.7%. I figure I may roll it over later if interest rates go up to 7%. I'm stuck to this 5% withdrawl rate until I'm 59 1/2 or 5 years which ever is longer. I have not used the TSP annual option to change my monthly amount because I don't know if it would void the 5 year rule. Any way if I still surpass the 5% with gains in my TSP, I can increase my withdrael by 2 1/2% at 62. Another reason I left it in TSP was that you could only leave the annuity to your spouse. If you spouse dies before you, you can still leave the TSP ballance to your children and she could alsoif you go first. I think they now let surviving wife manage the funds within TSP now.