Federal Buyout Offer Pros and Cons

[Scout333]

Any TSP'Rs who received buyout offers lately. Advice on pros and cons to consider? Really doesn't seem like enough money to make it worthwhile unless you're going anyway.

 

[nnuut]

Any TSP'Rs who received buyout offers lately. Advice on pros and cons to consider? Really doesn't seem like enough money to make it worthwhile unless you're going anyway.

It was $25,000 over 20 years ago and hasn't been adjusted for inflation, how much was your salary 20 years ago? Really not worth the trouble, it should be a years salary.

 

[nasa1974]

I don't think a 25K buyout is worth it unless you are a year or two away from retirement or you have a good job lined up after you retire.

 

[Rustynutt]

Straight time wise, April 8th 2013 for me. HR contacted management with news buyouts were available until Sept 30th of this year. I've rather loudly stated I'm in, have been told my name was submitted for consideration as I've been on detail nearly two years. My position is pretty much legacy, with customers being educated on how to set up to perform their own test, and maintenance has all been but contracted out. At this point in my career, major efforts have come to a stand still, and after three years putting off a total knee replacement went ahead with it 11 weeks ago. The buyout would payoff the toy hauler, with reduced time in the calculation not worth the effort to limit rehab. Tax wise, exiting end of the year would be ideal, however no way to know if buyouts will be offered then. With the cost of living freeze, not much to worry about there. After a couple years of remodeling the house and restoring motorcycles, will re-enter the work force at a much more comfortable schedule than what the government will allow. Our group lost three employees the past 5 years, and it weighs heavy. On to greener pastures.
IMHO

 

[uscfanhawaii]

Straight time wise, April 8th 2013 for me. HR contacted management with news buyouts were available until Sept 30th of this year. I've rather loudly stated I'm in, have been told my name was submitted for consideration as I've been on detail nearly two years. My position is pretty much legacy, with customers being educated on how to set up to perform their own test, and maintenance has all been but contracted out. At this point in my career, major efforts have come to a stand still, and after three years putting off a total knee replacement went ahead with it 11 weeks ago. The buyout would payoff the toy hauler, with reduced time in the calculation not worth the effort to limit rehab. Tax wise, exiting end of the year would be ideal, however no way to know if buyouts will be offered then. With the cost of living freeze, not much to worry about there. After a couple years of remodeling the house and restoring motorcycles, will re-enter the work force at a much more comfortable schedule than what the government will allow. Our group lost three employees the past 5 years, and it weighs heavy. On to greener pastures.
IMHO

Sounds like the buyout was tailor-made for you...go out 6 months early to get $25K?!

Something to consider....if you can swing it financially, max out on your TSP contributions thru Sept....all $22.5K if you can. That will minimize your taxes for 2012, and you will get your lump sum payment for Leave anyway.

Good Luck in retirement....and make sure to stick around here too!

 

[nasa1974]

Straight time wise, April 8th 2013 for me. HR contacted management with news buyouts were available until Sept 30th of this year. I've rather loudly stated I'm in, have been told my name was submitted for consideration as I've been on detail nearly two years. My position is pretty much legacy, with customers being educated on how to set up to perform their own test, and maintenance has all been but contracted out. At this point in my career, major efforts have come to a stand still, and after three years putting off a total knee replacement went ahead with it 11 weeks ago. The buyout would payoff the toy hauler, with reduced time in the calculation not worth the effort to limit rehab. Tax wise, exiting end of the year would be ideal, however no way to know if buyouts will be offered then. With the cost of living freeze, not much to worry about there. After a couple years of remodeling the house and restoring motorcycles, will re-enter the work force at a much more comfortable schedule than what the government will allow. Our group lost three employees the past 5 years, and it weighs heavy. On to greener pastures.
IMHO

At first blush it looks like the buy out may fit your needs. Does your HR group do retirement calculations? If they do get one for the end of September and one for your April date. Keep in mind the best dates to retire for CSRS and FERS depending on which class you fall under.

Advice on how to prepare for life aftergovernment.


BestDates to Retire 2012
· By Tammy Flanagan
· How long will the payfreeze last? Will your retirement be computed on your highest three years ofsalary, or five? Will we see a cost-of-living adjustment for retirees in thenear future? Will the formula change for computing the government'scontribution to the Federal Employees Health Benefits program? So many thingsare up in the air as Congress looks at ways to cut federal spending and reducethe deficit. And it's possible that some of the savings may come at the expenseof federal retirement benefits.
· Under thesecircumstances, now might be a good time to start considering your retirementdate, even if your departure is more than a year away. So I've prepared aspecial downloadable, printable calendar showing the best dates toretire for each month next year:
· Download BestDates to Retire 2012
· Tammy Flanagan is the senior benefits director for the National Institute of TransitionPlanning Inc., which conducts federal retirement planning workshopsand seminars. She has spent 25 years helping federal employees take charge oftheir retirement by understanding their benefits.
· For more retirementplanning help, tune in to "For Your Benefit," presented by theNational Institute of Transition Planning Inc. live on Monday mornings at 10a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washingtonmetro area.


BestDates to Retire 2013
· By Tammy Flanagan
· National Institute ofTransition Planning
Download the Calendar: Best Dates to Retire 2013
It’s that time of year again. Are you thinkingabout setting your retirement date for 2013? This column is designed to helpyou find the most advantageous date for your departure.
If you’re planning to retire sometime thisyear, you can read my Best Dates to Retire 2012 column.) Also, if you need a primeron what times of the month are generally best to retire (depending on whatretirement system you’re in), see my March 9 column, Best Date to Retire Tips.
In general, the last day of the month is goodunder both the Civil Service Retirement System and the Federal EmployeesRetirement System, and the 1st, 2nd or 3rd of the month are good under CSRS,too.
The end of a leave period also is an opportunetime. That’s because leave accrual is not pro-rated. Retiring in the middle ofa leave period means you don’t accrue any sick or annual leave for that period.In 2013, three months end at or next to the end of a leave period: May, Juneand November. Notice that for some of these months, the last day is a Fridayand in others, it’s a Saturday or Sunday. It doesn’t matter, as long as you’vecompleted your full work schedule. If you are covered under CSRS (or CSRSOffset), you might also consider May 3, Aug. 2 or Nov. 1.
If you work a flexible schedule and Friday isyour regular day off, then you might be able to retire on a Thursday aftercompleting 80 hours of work for the pay period and accrue your final leaveaccrual. For CSRS employees, Oct. 3 is a Thursday. This might be a good date ifFriday is your regular day off.
For those under FERS, sometimes there arebenefits to retiring in the middle of the month. You can earn some extra daysof salary to offset the retirement benefit you will forfeit, and gain someother advantages. For example, if you choose to retire at the end of a leaveperiod, you get an additional leave accrual and more days of service than youwould have if you retired at the end of the previous month.
For example, let’s say you’re planning toretire on April 30, 2013. If you do, your retirement benefit will be based onthe amount of service you have on April 30, and your first FERS retirementbenefit will be computed for the month of May. But suppose you have 20 years, 6months and 20 days of service and you are 61 years and 11 months of age. Andsuppose your 62nd birthday is May 6. The next leave period ends on May 18. Youwould not receive your May retirement check, which, if your high-three averagesalary is $70,000, would be in the amount of $1,195. But here is what you wouldgain by moving your retirement date to May 18:
Agency payroll offices are responsible forpaying lump sum payments for all accumulated and accrued annual leave. In somecases this comes as early as two weeks after retirement, but it could take upto eight weeks. Still, it definitely will arrive before the final processing ofyour retirement claim and might help pay the bills while you are in interimretired status and receiving partial retirement payments.
For those retiring at the end of 2013, FERSemployees will probably choose Dec. 31, 2013 or possibly Jan. 10, 2014, andCSRS employees will find that Jan. 3, 2014 would be their best date.
Are you ready to look at what specific dateswill be the best throughout next year? Click on the link below to download acalendar highlighting them, month by month.
Best Dates to Retire 2013

Correction: The second-to-lastparagraph in the original version of this column said, "CSRS employeeswill find that Jan. 3, 2013 would be their best date." The correct date isJan. 3, 2014. The column has been updated to correct the error.