FERs Retirees, anyone?

[pmaloney]

I will look back and check but I don't think I had any choice. I retired 4/30/2013 because they offered a buyout. I received my first annuity payment from TSP on 5/23/2013. Since you are so close I would talk to HR, TSP, and maybe OPM and see if you can optimize your retirement date to get payment on the 1st or 2nd of the month which would mean they would take money from your account. This was unexpected for me and I was able to compensate by adjusting payment of my credit card to the 28th so that is always paid and the OPM Retirement money always comes in on the 1st so that pays the next months bills <Grin>.

I haven't been thinking of the distribution in terms of where the money is taken from but I will from now on. I think it would be hard to come up with a consistent plan for dealing with it since every month is different but will consider the effect of the withdrawals on my future IFTs.

Retirement is a transition and requires planning. You definitely need to have at least several months of accessible savings for unexpected expenses like major car repairs, health issues, and major equipment replacement like AC & heat. However this money can be invested in stocks in a brokerage where you can withdraw it quickly.

Hope this helps. Good luck!

 

[Stoplight]

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?

PM and Mari, et al !

I don't know the precise answers to your questions/comments ! What I DO know is that my monthly withdrawal comes out at the same day every month...the 20th for me, too !!! The "check" doesn't get posted to my bank account for another 2-3 days, depending on the day of the week...kinda like the 3 day settlement rule with stock transactions !!!

I've never tried to change it with TSP...just plan my "cash flow" around those dates they started me on !!! I wonder if it differs, depending on when you submit your paperwork ??? I have no clue !!!


Stoplight...

 

[pmaloney]

I would check with TSP and see if it matters when your retirement date is. If you retire at the end of the month and they take your annuity on the 20th to get it to you by the 24th you might consider asking if that would change if you retired on the 10th or some other date. Over all it isn't a big deal I don't think but it was strange for me to make a switch from being paid twice a month around the first and mid-month to being paid on the 1st and the 24th.

I am postponing the Social Security as late as possible and might work again but luckily I don't have too.

I said this on an earlier post but another thing to account for is that the TSP only takes out Federal Tax, not State Tax so you should plan to up your State tax taken from your OPM Federal Retirement so account for the extra money you get from the TSP or you will have to pay up to the State at the end of the year.

 

[Maricar19]

Fortunately, PA doesn't tax federal pensions, but I am not so sure about TSP distributions, I have always a$$umed same treatment goes to TSP. Now that's another to do list for me. I know when I start collecting my SS benefits, 85% will be subject to Federal taxes because I will be over the threshold. Bummer! Cannot get away with these taxes even upon retirement.

I said this on an earlier post but another thing to account for is that the TSP only takes out Federal Tax, not State Tax so you should plan to up your State tax.

 

[Maricar19]

Btw, PM and SL, do you at least notice the day, your TSP shares go down? Can you do us all "would be"retirees, if not too much to ask, to go back at least several months on your TSP Balance by Fund, and see if the date (20th) is the consistent "sell" date of your TSP proportionate distribution?

Lakebound, I am not sure how much beneficial impact it would be to be on a certain fund, G, S, or otherwise, for when TSP sells your fund for the proportionate distribution.

I am not good with extrapolating data. I hope TSP talk can do this for us - by creating different scenarios based on historical fund allocations and TSP proportionate distribution dates. Or maybe it doesn't matter as long as you are on the "gain" status.

Hate it when i don't know the answer..., but I would venture a guess..if your money is on the c/s/i fund and it is on the upswing, then it would take less shares for the distribution, but you will be missing the action because you have less shares playing the game...ugh

 

[clester]

Tsp withdrawals are counted as income on federal return not capital gains so if your state doesn't have income tax you're good to go. I would think it would be retirement pay too. It's in that section on your federal taxes. I retired end of May 2010 and started getting tsp payments on June 7. Not sure if I had to postpone it until then. Tsp just needs know you're retired. I notice my dispersements or withdrawals vary from the 3 rd to the 6th and usually takes a couple of days after that to show up in my account.

 

[alevin]

I retired end of May 2010 and started getting tsp payments on June 7. Not sure if I had to postpone it until then. Tsp just needs know you're retired. I notice my dispersements or withdrawals vary from the 3 rd to the 6th and usually takes a couple of days after that to show up in my account.

So since best dates for FERS retirement are the last 3 days of the month generally speaking, then we can expect tsp withdrawals to hit our bank accounts by mid-month the following month and months thereafter. good to know for budgeting purposes when people get to that point.

 

[clester]

So since best dates for FERS retirement are the last 3 days of the month generally speaking, then we can expect tsp withdrawals to hit our bank accounts by mid-month the following month and months thereafter. good to know for budgeting purposes when people get to that point.

That's why I picked the 7 th. So that I could use it for mid month bills but the day it hits your account can vary by a few days depending on weekends, holidays, and how your bank works etc. so, give yourself some leeway.

 

[Maricar19]

Stoplight, did you retire end of month, too? PMaloney retired eom and both of you have the same distribution dates, 3rd week of the month, Clester retired on the end of the month, too, but he has different distribution date...1st week of the month.

Just trying to understand effect of retirement date with tsp proportionate distributions.. Thanks guys, this is very enlightening..
Thanks also to Kave, Cactus and Lakebound ...

PM and Mari, et al !

I don't know the precise answers to your questions/comments ! What I DO know is that my monthly withdrawal comes out at the same day every month...the 20th for me, too !!! The "check" doesn't get posted to my bank account for another 2-3 days, depending on the day of the week...kinda like the 3 day settlement rule with stock transactions !!!

I've never tried to change it with TSP...just plan my "cash flow" around those dates they started me on !!! I wonder if it differs, depending on when you submit your paperwork ??? I have no clue !!!


Stoplight...

 

[Maricar19]

Maybe I should start a new thread to poll retired members of TSP talk regarding retirement dates and TSP distribution dates. Or maybe I can ask Tom to do it...he has a wider audience...

 

[weatherweenie]

Does anyone know, when they determine your high 3 for your annuity, if you have your pay adjusted with locality pay, does your high 3 calculation use your locality pay, or some other pay scale such as the Rest of the U.S.?

 

[Maricar19]

Does anyone know, when they determine your high 3 for your annuity, if you have your pay adjusted with locality pay, does your high 3 calculation use your locality pay, or some other pay scale such as the Rest of the U.S.?

..."Your basic FERS retirement annuity is computed based on your length of service and "high-3" average pay. The high-3 is calculated by adding your highest salary for three consecutive years, then dividing the amount by three. Usually this is your last three years of federal service. The high-3 average pay includes locality pay and annual premiums for standby duty and availability if applicable. Other pay such as differentials, overtime, allowances and others are not ..."

Quoted from: http://www.federalretirement.net/fers_annuity.htm#Annuity_Basics

 

[jkenjohnson]

Does anyone know, when they determine your high 3 for your annuity, if you have your pay adjusted with locality pay, does your high 3 calculation use your locality pay, or some other pay scale such as the Rest of the U.S.?

What ever it is it is crappy. I wish I was CSRS.

 

[weatherweenie]

What ever it is it is crappy. I wish I was CSRS.

Or the other way to look at it is, it's WAY better than a lot of the nation's workers, who don't get any annuity.

 

[Maricar19]

Or the other way to look at it is, it's WAY better than a lot of the nation's workers, who don't get any annuity.

Agree to both of you..Jkenj and Ww..I wish I were CSRS, in the same token, my big fat a$$ is thankful I have guaranteed FERS annuity to look forward to other than SS..

 

[Birchtree]

Once retired your whole life is controlled by your AGI - try and keep it low and fly below the Obama taxes. When you are in control you have more flexibility - an IRA can be slowly converted to a Roth IRA over time and then you can really fly.

 

[clester]

What ever it is it is crappy. I wish I was CSRS.

It hasn't affected us the last few years but fers cola is usually less than csrs

 

[Maricar19]

Once retired your whole life is controlled by your AGI - try and keep it low and fly below the Obama taxes. When you are in control you have more flexibility - an IRA can be slowly converted to a Roth IRA over time and then you can really fly.

That is interesting...gradual conversion overtime of traditional to Roth!
I have to do the math on that and see what $ amount over time will not be as painful as a one time conversion.
Thanks Btree.

 

[Maricar19]

Chart for state retirement taxes(2013)
http://i.mktw.net/_newsimages/pdf/state-taxation-retirement-income-table.pdf


Articles: Looking for a retirement haven? Tax friendly state? Some are more detailed than others.
Taxes by State
State-by-State Guide to Taxes on Retirees-Kiplinger-this allows you to compare up to 5 states!
12 States Without Pension or Social Security Taxes - US News - this one is includes property taxes and sales taxes

TSPtalkers: If you have time, please check threads#43 and #59- maybe you can help out..

 

[Maricar19]

Chimps still stuck in research labs despite promise of retirement - CNN.com