FERs Retirees, anyone?

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I retired at the end of the month. My TSP withdrawal is usually on the 23rd of the month. Occassionally, it is withdrawn on the 21st-22nd.
 
mar69 said:
I retired at the end of the month. My TSP withdrawal is usually on the 23rd of the month. Occassionally, it is withdrawn on the 21st-22nd.
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Were you CSRS or were you FERS? wondering if that makes a difference.
 
If I remember correctly, PA is an earned income state so there is no tax on TSP distrubutions when retired. I lived in PA for 4 years in the 90's and it irked me that my TSP contributions were included in my annual salary for state tax purposes.


Maricar19 said:
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.

pmaloney said:
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.
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Maricar19 said:
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?

...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
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Maricar19,

So I went back and looked at my last 2 quarterly statements...my guess is that the TSP target date is consistently on the 20th. HOWEVER....if the 20th is NOT a "business day", then it gets deducted a day or even 2 earlier, on the 18th or 19th.

Harder to tell about the posting date in your bank account...mine goes into my USAA checking account, and they credit your balance as soon as they receive notice of the "pending" direct deposit (usually the day before)....that's pretty cool, and they do that for my pension, and the Wife's, too. OTOH, our credit union, which get's my Wife's tiny deposit from her State of FL pension, doesn't show it until the money is in their hot little hands ! In either case, it's about a 3 business day lag time...

RE: the distribution from TSP...yes, you lock in that gain or loss, on your withdrawal amount, when the withdrawal hits, depending on where you are in your TSP trade ! That bothered me at first..."Buy low ; sell high !" ...but I don't know of any way to "game" the system, without maybe wasting a precious IFT...I've just learned to accept it ! :smile:

HTH !


Stoplight...
 
Maricar19 said:
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 ...
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Yup ! As a FERS Guy, I followed the recommendations, and retired EOM !


Stoplight...
 
weatherweenie said:
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.?
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WW,

That's a great question, that I haven't seen asked before !!!

FWIW...My high-3 was calculated based on my locality pay scale at that time, not the "Rest of the US" !!! For me, I retired in a part of FL that's not in any locality pay, but my high-3 calcs were based on what I made when I was in the Baltimore-Washington region.

I've often thought...IF your high-3 comes at the end of your career (mine didn't !), one might consider taking a lateral into a higher locality pay area for 3 years, if your Agency allows it...bite the bullet for 3 years, then retire back to where you WANT to live !!!

Never crunched the numbers to see if that would even make sense, with PCS expenses, cost of living, etc etc...but it's an interesting thought !!! :smile: Talk about gaming the system !!!


Stoplight...
 
SLight,

The way you correlated the proportionate distribution with possibly losing/ wasting an IFT is excellent.
.."Let the chips fall where they may..."

Maricar19 said:
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.
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Stoplight said:
Maricar19,

So I went back and looked at my last 2 quarterly statements...my guess is that the TSP target date is consistently on the 20th. HOWEVER....if the 20th is NOT a "business day", then it gets deducted a day or even 2 earlier, on the 18th or 19th.

Harder to tell about the posting date in your bank account...mine goes into my USAA checking account, and they credit your balance as soon as they receive notice of the "pending" direct deposit (usually the day before)....that's pretty cool, and they do that for my pension, and the Wife's, too. OTOH, our credit union, which get's my Wife's tiny deposit from her State of FL pension, doesn't show it until the money is in their hot little hands ! In either case, it's about a 3 business day lag time...

RE: the distribution from TSP...yes, you lock in that gain or loss, on your withdrawal amount, when the withdrawal hits, depending on where you are in your TSP trade ! That bothered me at first..."Buy low ; sell high !" ...but I don't know of any way to "game" the system, without maybe wasting a precious IFT...I've just learned to accept it ! :smile:

HTH !


Stoplight...
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Regarding using/wasting an IFT: I could imagine that in the future (for me), there will be months that the withdrawal will come from one fund or another anyway. If I continue to follow the Plus System, I will either be 100% in G or 100% in the market in one of the other funds. I don't plan to be in a mixture or Lifecycle fund post retirement so this all may end up being a moot point.

We shall see. Good conversation however and I appreciate the dialogue very much.

Frank
 
Lakebound said:
Regarding using/wasting an IFT: I could imagine that in the future (for me), there will be months that the withdrawal will come from one fund or another anyway. If I continue to follow the Plus System, I will either be 100% in G or 100% in the market in one of the other funds. I don't plan to be in a mixture or Lifecycle fund post retirement so this all may end up being a moot point.

We shall see. Good conversation however and I appreciate the dialogue very much.

Frank
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Yes- Frank ....."Let the chips fall where they may..." I am not savvy enough to do the math to see how much effect proportionate distribution has if one is on a certain fund allocation.
 
Maricar19 said:
Yes- Frank ....."Let the chips fall where they may..." I am not savvy enough to do the math to see how much effect proportionate distribution has if one is on a certain fund allocation.
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Frank and MC,

At this point, it's a moot point for me, too !!! My TSP account runs dry sometime this year, and my primary retirement "investment vehicle" becomes my, and the Wife's, rolled-over brokerage IRAs !

I still need to do some research on withdrawals from the IRA, but I THINK I can pull it "as needed", AND from the "cash balance" rather than at the proportions someone else sez...another reason I'm a believer in rolling TSP into an IRA !!! :D


Stoplight...
 
Stoplight said:
Frank and MC,

At this point, it's a moot point for me, too !!! My TSP account runs dry sometime this year, and my primary retirement "investment vehicle" becomes my, and the Wife's, rolled-over brokerage IRAs !

I still need to do some research on withdrawals from the IRA, but I THINK I can pull it "as needed", AND from the "cash balance" rather than at the proportions someone else sez...another reason I'm a believer in rolling TSP into an IRA !!! :D


Stoplight...
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hey Stoplight, you will still be around, wont't you?
 
Maricar19 said:
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...
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Maricar19, I ran into this on Consuelo Mack WealthTrack: Consuelo Mack WEALTHTRACK: The right track to your financial health. : WealthTrack which I watch on PBS. More of her guests started espousing this after the 2008 crash. The context is people who were already retired with the standard 60/40 bond/stock split. With the lowering interest rates on their fixed income investments, these retirees weren't receiving enough income to live on. They were being encouraged to take on more risk to make up the difference while keeping 5 years of living expenses in safety.

The last time I saw one of her guests talking about this was last fall, but unless you subscribe to her service you can only get transcripts from the last couple of shows. Here is a transcript I found still available of when Mary Beth Franklin was on: Fidelity Funds | Stock Discussion Forums

Here are some links I found online talking about these buckets of money as they call them.

How Much Stock Should You Own in Retirement? - WSJ

Reduce Stock Exposure in Retirement, or Gradually Increase It?

Increase Stock Allocations In Retirement? Maybe, Maybe Not
 
Maricar19 said:
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."
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I can't find the article now, but another concern about the proportionate distributions is for people who opened a Roth TSP and want to retire now. The Roth option is new and has to be open for 5 years before you can start withdrawing form it or you encure a penalty. The problem is the proportionate distributions won't let you withdraw only from the regular TSP. The article I read, and now can't find, basically said that you had to withdraw your funds and split them into traditional and Roth IRAs. I guess the rollover of the older traditional TSP satisfied the 5 year requiremnt so you could draw from that one and wait on the Roth. There were still other gotchas like the 59.5 age requirements. If I can ever find that story I'll post it here. The moral of the story is: if you are within 5 years of retirement don't open a Roth TSP.
 
For those folks talking about our high 3 years, remember those aren't actual calendar or even fiscal years. The FERS pension is calculated on our highest 36 consecutive months.
 
Cactus said:
For those folks talking about our high 3 years, remember those aren't actual calendar or even fiscal years. The FERS pension is calculated on our highest 36 consecutive months.
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so waiting for the end of January after the COLA really doesn't help much? I know some who have done this.
seams like its better to acquire as much annual leave as possible and leave at the end of December. Sound right?
thanks
 
Valkyrie said:
so waiting for the end of January after the COLA really doesn't help much? I know some who have done this.
seams like its better to acquire as much annual leave as possible and leave at the end of December. Sound right?
thanks
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V,

Sounds WAY right !!! Technically speaking, I guess you could say waiting for the COLA would result in "more" on your pension check, but it's the OTHER 35 months that would keep it down !

Take the AL money and run !


Stoplight...
 
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