FERs Retirees, anyone?

[Maricar19]

More erroneous info:
Q. Does the lump-sum payment for annual leave count against maximum earnings to be eligible for the special retirement supplement? Also, if I choose a retirement date and the application begins processing, can I back out before that date?

A. Yes, the lump-sum payment counts toward the maximum earnings limit. As a rule, you can change your mind about retiring unless your position is being eliminated or, alternatively, that someone has already been selected to fill your position.

ME: Lump-sum payment for annual leave does not count towards the earnings limit of the special retirement supplement income.

 

[Maricar19]

I am a FERS letter carrier and my mantra has always been "use it, or lose it" especially with SL. I have never carried over 440 hours of AL let alone 40 hours. I'm going to try my hardest in the next four years to reach the goal of 160 hours. Pfft! Who am I kidding. :laugh:

My spouse is also a letter carrier (ex USN, ret. USNR) and shares your logic, too -actually sometimes Uses AL before even earning it. But not SL -save it for a rainy day. You never know with your line of work...last year, mate suffered stress fracture due to heavy snow season. Was out for 3 months.

 

[kave]

I am 22 months from FERS retirement eligibility. As it stands,,,,,, first day eligible is first day out!! I plan to "POSSIBLY" withdraw a minimal portion of my TSP in order to retire debt free. I plan to leave my retirement in TSP and not enroll in a TSP Annuity. I hads thought that I would project approx 5 years of salary and allocate it to the G-Fund. Allocate an additional 5 years to the F-Fund and then manage the remainder with the allotted 2 IFt's /month. Here's my question, As I project % returns on TSP dollars, is 4-5% return a reasonable objective?

Also, I would appreciate any suggestions or alternatives to this plan from those of you more knowledgable than I.


Thanks,
Kave

 

[Cactus]

4-5%? I guess that depends on your own investing history and experience. Will you be using some premium service that has historically returned that on conservative allocations? With my track record I'd be happy with half that rate in retirement. That doesn't leave me much to live on but anything is better than nothing. Capital Preservation is the name of the game in retirement.

 

[Maricar19]

Hi kave,
Google wells fargo retirement calculator. Check also the TSP website retirement calculator.
I am not sure what you meant by allocating 5 years each to G and F funds.
Why not try one of the premiums offered by TSPtalk? You have better chance of "growing" your retirement funds unless you are "in tune" with the market. This is the way I look at premium subscription - if you have more than $5000 in your TSP, paying $200 a year is well worth it.

FYI- below are the annual returns for the Different funds
xxxxxGxxxxxxxFxxxxxxxCxxxxxxxxSxxxxxxxI
2009 2.97%>5.99%> 26.68%>34.85%>30.04%
2010 2.81%> 6.71%> 15.06%> 29.06%> 7.94%
2011 2.45%> 7.89%> 2.11%> (3.38%)> (11.81%)
2012 1.47%> 4.29%> 16.07%> 18.57%> 18.62%
2013 1.89%> (1.68%)> 32.45%> 38.35%> 22.13%

As you can see, leaving your money with G fund will not bring the 4% you are aiming for.

 

[Lakebound]

Hi kave,
Google wells fargo retirement calculator. Check also the TSP website retirement calculator.
I am not sure what you meant by allocating 5 years each to G and F funds.
Why not try one of the premiums offered by TSPtalk? You have better chance of "growing" your retirement funds unless you are "in tune" with the market. This is the way I look at premium subscription - if you have more than $5000 in your TSP, paying $200 a year is well worth it.

FYI- below are the annual returns for the Different funds
xxxxxGxxxxxxxFxxxxxxxCxxxxxxxxSxxxxxxxI
2009 2.97%>5.99%> 26.68%>34.85%>30.04%
2010 2.81%> 6.71%> 15.06%> 29.06%> 7.94%
2011 2.45%> 7.89%> 2.11%> (3.38%)> (11.81%)
2012 1.47%> 4.29%> 16.07%> 18.57%> 18.62%
2013 1.89%> (1.68%)> 32.45%> 38.35%> 22.13%

As you can see, leaving your money with G fund will not bring the 4% you are aiming for.

I agree 100%. I decided to start using one of the premium services beginning this year and am extremely pleased with my personal results this far.

Frank

 

[Cactus]

Maricar19, I think Kave is talking about keeping 5 years of withdraws (living expenses) in the safety of the G Fund in retirement. I see many sites recommending that now. The idea is you invest the rest in riskier assets and in the case of a downturn you have 5 years to make that up because you are living off of the funds that didn't drop in value.

In the TSP, of course, this is more of a psychological thing because it's all one pot of money and is paid out proportionately. I guess you have to rebalance it yourself every IFT/paycheck.

 

[Maricar19]

Hi Kave, based on Cactus' explanation, I doubt your withdrawals will be able to sustain your retirement fund on the G fund. If you leave it in the G fund, the only way to preserve and earn some, is to withdraw no more than 1.5% of your funds. Simple math will tell you to withdraw less than what you earn.
The Wells Fargo calculator allows you to input more than 3 sources of income at different begin and end dates. It is good for TSP pensioners since if we retire before 62, we have the supplemental income, the FERS annuity, And TSP. You can also add SS at 62 pr whatever age you desire. This is also good if you have a military reserve component which starts at 60.

 

[kave]

Maricar19, I think Kave is talking about keeping 5 years of withdraws (living expenses) in the safety of the G Fund in retirement. I see many sites recommending that now. The idea is you invest the rest in riskier assets and in the case of a downturn you have 5 years to make that up because you are living off of the funds that didn't drop in value.

In the TSP, of course, this is more of a psychological thing because it's all one pot of money and is paid out proportionately. I guess you have to rebalance it yourself every IFT/paycheck.

Cactus, that is exactly what I am referring to. But I was thinking of rebalancing every 6 months or yearly even. Thanks!!

 

[kave]

Hi Kave, based on Cactus' explanation, I doubt your withdrawals will be able to sustain your retirement fund on the G fund. If you leave it in the G fund, the only way to preserve and earn some, is to withdraw no more than 1.5% of your funds. Simple math will tell you to withdraw less than what you earn.
The Wells Fargo calculator allows you to input more than 3 sources of income at different begin and end dates. It is good for TSP pensioners since if we retire before 62, we have the supplemental income, the FERS annuity, And TSP. You can also add SS at 62 pr whatever age you desire. This is also good if you have a military reserve component which starts at 60.

Thanks Maricar19, for your help. Also, I will check out that calculator.

 

[Cactus]

Actually, keeping 5 years of living expense safe is a method that advisors now use to encourage us to take on more risk in retirement than they have historically recommended. Look at it this way. If you plan on having 20 years of income in your TSP that translates into keeping 25% in the G Fund. That's a third of what the L Fund allocates there. The L Fund is what we are encouraged to invest in during retirement.

So, this is actually a way to increase the growth your TSP account during retirement. Yes, you won't make as much as putting everything into equities, but then you have no protection from another 2008 and in retirement you have no other income to make that up.

 

[Cactus]

Here is an article on 3 TSP surprises in retirement that I thought would be appropriate for this thread: 3 Quirks About the TSP in Retirement : FedSmith.com

 

[Stoplight]

Here is an article on 3 TSP surprises in retirement that I thought would be appropriate for this thread: 3 Quirks About the TSP in Retirement : FedSmith.com

Excellent article, Cactus...thanks for posting !!!

I factored in #1 and #2 in my retirement planning, but I was surprised to discover #3...after I retired !!! I thought we had some flexibility on which "pot" the monthly withdrawal actually came out of...


Stoplight...

 

[Maricar19]

Cactus, can you please give me some links on the subject below. I haven't come across topics about it. It is very interesting. It is contrary to most of my readings especially the one I just read (Ken Fisher). I would like to understand its logic so that I can safely "surf" during retirement...

Actually, keeping 5 years of living expense safe is a method that advisors now use to encourage us to take on more risk in retirement than they have historically recommended. Look at it this way. If you plan on having 20 years of income in your TSP that translates into keeping 25% in the G Fund. That's a third of what the L Fund allocates there. The L Fund is what we are encouraged to invest in during retirement.

So, this is actually a way to increase the growth your TSP account during retirement. Yes, you won't make as much as putting everything into equities, but then you have no protection from another 2008 and in retirement you have no other income to make that up.

 

[pmaloney]

Very good. Thanks!

 

[Maricar19]

Thanks Cactus. I have read this before more than once and for some foolish reason, i thought I know it by heart, but it never dawned on me the implications/complications of the withdrawal choices on the realities of life. I thought I had my TSP all planned out. i have an excel showing future monthly withdrawals and adjustments every 2-3 years. But I never thought of the possibility of changes midyear - emergency, unplanned super vacations, etc...I need to fine tune my tsp withdrawal plan!

And I didn't realize about the proportionate distributions. I know about the impact on Roth and regular, but for an unknown reason, i always skipped reading the part "and from each TSP fund in which you have investments."

Thanks Cactus.

Here is an article on 3 TSP surprises in retirement that I thought would be appropriate for this thread: 3 Quirks About the TSP in Retirement : FedSmith.com

 

[Lakebound]

Proportionate distributions! Ugh!

Sent from my XT907 using Tapatalk

 

[pmaloney]

One more point about Quirk #3. You have no choice on when they take out your distribution each month.

When I retired I received my first distribution around the 24th which means they take money out of my account around the 20th of every month.
When I asked if they could change the date to the end of the month they said NO.

I am not sure if it really matters but it is a weird time to withdraw. You would think it would be more efficient for them to do everyone's withdrawal at the end of the month and pay everyone at the same time.

 

[Lakebound]

One more point about Quirk #3. You have no choice on when they take out your distribution each month.

When I retired I received my first distribution around the 24th which means they take money out of my account around the 20th of every month.
When I asked if they could change the date to the end of the month they said NO.

I am not sure if it really matters but it is a weird time to withdraw. You would think it would be more efficient for them to do everyone's withdrawal at the end of the month and pay everyone at the same time.

Any strategy that you use by knowing the date of withdrawal that you can offer? I mean, is this something that affects your IFT strategies ? If so, how and what would you recommend?

Frank

 

[Maricar19]

Pmaloney, after the 1st distribution, did it remain on the same cycle or did it change? Was this a monthly withdrawal,or a partial lumpsum?

One more point about Quirk #3. You have no choice on when they take out your distribution each month.

When I retired I received my first distribution around the 24th which means they take money out of my account around the 20th of every month.
When I asked if they could change the date to the end of the month they said NO.