Freshly Retired - Got Some Questions

[TSATSO]

Greetings to the Collective! I am 62 years old, and freshly retired from TSA - my last work day was May 31st. I am now in the "limbo" between my working life, and my retired life, and while I wait for my paperwork to slowly filter through the system, I have a couple questions for those who have gone before me. First one concerns payment of accrued annual leave. I had 40 days on the books when I quit. My final paycheck (PP-11) has now been posted, and did not include payment for the accrued leave. When might I expect to get the payment for the leave? Will I get any kind of paper or electronic notification of the payment, or will it just pop up in my direct deposit account without any warning? Second question concerns the TSP. I have decided to try the "monthly payments" system, where I will attempt to draw off the earnings and keep the principal more or less intact. I have read all the posts at this forum on the subject, and I think it will work for me. I am wondering about two things. First, when do they sell the shares to fund your monthly check? Does it happen the last working day of the month or what. Also, if you have your TSP money split up into several of the funds (part of it in "G", part of it in "C", etc.), how do they work selling the shares in that case. Would they sell some of the "G" shares, and some of the "C" shares? How do they decided how many shares to sell from each fund you hold? I am 100% in "G" fund at the moment, so this question is just something I'm curious about. I'm sure many more questions will pop up as I go along, and I will look to the members of this forum as a valuable source of info. Thanks in advance, Chuck Avery (TSATSO)

 

[Guest2]

The resistance to reading your thread was futile (star trek analogy).
The Collective (another star trek analogy) will be around soon, I'm sure,
to help you with your questions. I just wanted to welcome you aboard.

 

[luv2read]

You will be assimilated. The collective is always adding to its knowledge base (us). Welcome!

 

[XL-entLady]

my last work day was May 31st.
Welcome to the retired world. It's a much less stressful place!
I am now in the "limbo" between my working life, and my retired life, and while I wait for my paperwork to slowly filter through the system, I have a couple questions for those who have gone before me. First one concerns payment of accrued annual leave. I had 40 days on the books when I quit. My final paycheck (PP-11) has now been posted, and did not include payment for the accrued leave. When might I expect to get the payment for the leave?
I know 3 people, including myself, who have retired recently, and it took about 2 months for each of us.
Will I get any kind of paper or electronic notification of the payment, or will it just pop up in my direct deposit account without any warning?
It's just a magic "pop." One day your direct deposit account will look much healthier than it did a day before. But you'll eventually get some paperwork on it. It's just that the paperwork will come after the fact.
Second question concerns the TSP. I have decided to try the "monthly payments" system, where I will attempt to draw off the earnings and keep the principal more or less intact.
Good choice. Me too, and so far I've made much more than I've withdrawn.
I have read all the posts at this forum on the subject, and I think it will work for me. I am wondering about two things. First, when do they sell the shares to fund your monthly check? Does it happen the last working day of the month or what.
You get a direct deposit starting one month after the TSP receives and approves your request, and it doesn't come on the first or last day of the month. It can be any time. Just figure about four weeks after the date on the letter that you get saying the TSP received your request.
Also, if you have your TSP money split up into several of the funds (part of it in "G", part of it in "C", etc.), how do they work selling the shares in that case. Would they sell some of the "G" shares, and some of the "C" shares?
They take the money right off the top and reallocate the remaining shares based on your current allocation percentage.
How do they decided how many shares to sell from each fund you hold? I am 100% in "G" fund at the moment, so this question is just something I'm curious about. I'm sure many more questions will pop up as I go along, and I will look to the members of this forum as a valuable source of info. Thanks in advance, Chuck Avery (TSATSO)

Hope that helps. Welcome! This MB is a great place to get information and to just hang with friends who become family.

Lady

 

[TSATSO]

Thanx for the replies. Good to know this group includes some Trekkies! To XL-entLady - thanks for taking the time to give details. I think I understand your answer, in regard to removing cash from multiple funds. You are saying that they take the combined total value of all of the shares you own, and subtract the amount of your monthly withdrawal. Then they take the remaining total value of your account, and divide it up among whatever funds you own, in whatever percentage you have elected. Is this correct? I think you partially answered my question about when the monthly payment is removed from your account. You said the first payment comes about 4 weeks after they get your request. But what about all the months after that? You (and everyone else who is doing this) gets a direct deposit each month. Do they process all the payments on the same day, like for instance the last day of the month? In that case everyone would get the deposit into their account about the same time. This would seem the only logical way to do it. But I could be wrong. Thanx for all your help. Chuck Avery (TSATSO)

 

[XL-entLady]

Thanx for the replies. Good to know this group includes some Trekkies! To XL-entLady - thanks for taking the time to give details. I think I understand your answer, in regard to removing cash from multiple funds. You are saying that they take the combined total value of all of the shares you own, and subtract the amount of your monthly withdrawal. Then they take the remaining total value of your account, and divide it up among whatever funds you own, in whatever percentage you have elected. Is this correct?
Yes, that's exactly right.
I think you partially answered my question about when the monthly payment is removed from your account. You said the first payment comes about 4 weeks after they get your request. But what about all the months after that?
Same day of the month as your 1st payment, just a month later. If you get your first payment on July 10, for example, then you'll get your next payment on August 10, and all future payments on or near the 10th of each month.
You (and everyone else who is doing this) gets a direct deposit each month. Do they process all the payments on the same day, like for instance the last day of the month?
Nope. Spread out through the month, based on approval date, as explained.
In that case everyone would get the deposit into their account about the same time. This would seem the only logical way to do it.
"Logical? Logical? The TSP don't need no stinkin' Logical!" (BTW, the recent Treasure of Sierra Madre clip was fun to watch!)

Please don't hesitate to ask additional questions or clarifications. I'm glad to help as I can.

Lady

 

[TSATSO]

By the way, after I posted this question, I realized it probably should have gone into the "TSP Strategies > Retirement Talk" section. Sorry about that. If I have more questions (and I will) I will post them in that area.

 

[luv2read]

A moderator could move this thread to that forum if you request it.

 

[Elgallo]

To avoid drawing down your total account you cannot have all your beans in the G fund. That is unless what your draw monthly percentage wise is LESS than the interest earned p/month by the G fund which currently appx. 4% per year. If your draw was 2% p/year you be OK and your principal would grow 2%.

I retire in appx 18 months and I am currently 100% in the market C,S and I. I also plan to make monthly draws of 1-4% PA depending on my needs. However I anticipate over time to realize an average return on my principal of a conservative 7-10%. If successful my principal will grow at 3-6% year over year. Conceivably I could die with as much or more money than I started with the day after I retired.

Check this site and run some Monte Carlo simulations


http://firecalc.com/

 

[TSATSO]

I have no heirs, so I'm not concerned with retaining a big chunk of cash to pass on. I only have to take care of myself and my wife. We have other sources of revenue besides the TSP account. I am going to try my best to draw my TSP account down to zero just before we both pass away. Of course the timing may be a little tricky, but I'll do the best I can. I have used the following calculation to arrive at the amount I will request for my initial monthly withdrawal. I used 1 penny per share per week as the average assumed rate of "interest" in the "G" fund. My final contribution has gone into my account, so my number of shares is now fixed, until I start making withdrawals. My total number of shares times $00.01 equals the number of dollars per week that my account generates. I multiplied the "weekly gain" times 4 to get the "monthly" amount generated by my account. That figure, rounded DOWN to the next even 100 dollars, will be the initial monthly amount I will remove from my account. I have run this plan on a spreadsheet, and it looks like it will keep my principal fairly well intact. Of course, I can always adjust it once a year to "tweak" the result. I will (hopefully) follow this procedure until I hit the 70.5 years-of-age mark. At that time, I will let the TSP calculate the mandatory withdrawal required to meet the IRS rules, and go with that number.

 

[readytoretire]

I have reviewed all of these posts and can see the plan if all the beans are in G, but how best can we estimate interest gain on the other funds [sorry, but I am a little blonde]...thank you

 

[TSATSO]

Hello "Readytoretire", it was nice of you to drop by my old thread, and bring it to the top of the stack. The answer to your question is easy: you cannot be sure of the future performance of any of the funds...all you can do is make a educated guess. As recent events have impacted all of the markets, we have seen that even the G fund is not as predictable as I had hoped. I am 100% in G, and have now been receiving my payments out of my TSP account for 5 months. My original plan has worked well up to now. The value of my account has increased at the same rate that I have been withdrawing shares, so the net value has remained fairly constant. HOWEVER, since the G Fund interest rate dropped the first of this month (it is no longer paying the 1 penny per share per week), I had to modify my plan. Instead of using 4 cents per share per month, I am now using 3 cents per share per month as the predicted interest rate. I submitted a TSP-73 last week and changed my monthly payment to match the new calculated rate of return. Since we can only change our payout once a year, you can never be sure it's going to work out exactly right. I think I will be close, unless something really drastic happens. The only advice I can give you is to watch the markets between now and your retirement date, and try to come up with a conservative estimate of what your TSP account might generate after you retire. There are many people here with a lot more experience than me, and if you ask questions, they will try to help you. Good luck with your future retirement.

 

[Handballer]

I have a couple questions for those who have gone before me. First one concerns payment of accrued annual leave. I had 40 days on the books when I quit. My final paycheck (PP-11) has now been posted, and did not include payment for the accrued leave. When might I expect to get the payment for the leave? Will I get any kind of paper or electronic notification of the payment, or will it just pop up in my direct deposit account without any warning?

Hi Chuck. I'm newly retired too. My first day of retirement was November 1, 2008. My lump sum for annual leave was paid for the 11/8/08 - 11/20/08 pay period. I received my DOD Civilian Leave and Earning Statement showing the above. I was a FERS employee working for the Army. I'm hoping us FERS former employees will be able to collect money for our unused sick leave sooner than later. I haven't made any plans for receiving my TSP yet but will need to soon as I figure what my expenses will be looking forward.

Oops. I now see Chucks message was posted way back in June. And I spent so long working up this reply. Owell, I don't work no more.

 

[Frixxxx]

Oops. I now see Chucks message was posted way back in June. And I spent so long working up this reply. Owell, I don't work no more.

You should keep a diary here, or another thread of your own, on the transition. I know I would like to see how certain events unfold as you transition. I think your issues and these peoples' brains could be a beacon to those of us still preparing for a retirement.

Congrats

E

 

[TSATSO]

Greetings Handballer! Welcome to the good life. I have a lot of free time on my hands, too. I have thought about posting a short synopsis of my retirement experience, but wasn't sure how interesting it would be to others. Seems that at least Frixxxx is interested in this kind of stuff, so I'll try putting it in my next post. I originally wrote this up for some of the Old Guys where I worked, so they might have some clue what to expect. I was the first one to retire at our airport since TSA was rolled out, so I was pretty much on my own. Hope this is some help to others following the same path. Luck to all, Chuck Avery (TSATSO)

 

[TSATSO]

Here is how my retirement went:

FERS Retirement Process Timeline


12 Months before PRD (Planned Retirement Date): Attended Pre-Retirement Seminar sponsored by my employer (TSA) and presented by Snow-Cap Agency, Inc. (www.snow-cap.com). This one-day program was extremely informative and helpful! I urge every FERS employee to attend a class of this type at least one year before retirement, if not earlier. Either get your employer to sponsor the class, or pay for it yourself, but make sure you get to at least one! Very Important!

9 Months before PRD: Sent letter to my HR Services office notifying them of my planned retirement date, and requesting a annuity estimate plus a preliminary summary of all my federal service.

8 Months before PRD: Received my annuity estimate and service summary from HR Services. This is a very important document! Read it over carefully. This is your last chance to catch and correct any errors in your service record!

7 Months before PRD: Submitted a SF2817 Life Insurance Election form making adjustments to my insurance coverage in anticipation of upcoming retirement.

3 Months before PRD: Mailed my SF3107 Application for Immediate Retirement to TSA HR Services.

2 Months before PRD: Received a new up-dated annuity estimate from HR Services, which reflected the changes in my desired insurance coverage plus the increase in my base pay for the new year.

ARD (Actual Retirement Date) May 31, 2008. Last Day Of Work!!!!! We had cake!

ARD + 15 days: Received Statement of Earnings and Leave for my last pay period (PP-11, 2008). (Since I retired on May 31, I actually only worked one week in PP-11. My local pay officer had to wait one week until the end of PP-11 to submit my retirement folder to HR services. This may have caused everything that happened after my ARD to be delayed by a week or so.)

ARD + 20 days: Received letter from National Finance Center (NFC) advising me that my “official record of retirement deductions” had been sent to the Office of Personnel Management (OPM) via a Register of Separations, and gave me the register number in case I needed it for some reason.

ARD + 25 days: Received a letter from OPM welcoming me to the Federal Employees Retirement System. It said they had started work on my retirement application, and it included my Retirement Services Reference Card. This card contains your Civil Service Annuitant (CSA) number, and is very important because you must use this number anytime you contact OPM for any reason. The letter also explained that my FEHB health insurance and my life insurance would continue without interruption.

ARD + 30 days: Received a Statement of Earnings and Leave for PP-12, which included only one item - the pay for my accumulated annual leave. This was a surprise, as I didn’t expect to get another SEL. I was glad they did it this way because it gave me an early look at my total taxable income for 2008. The money (I sold back 320 hours of leave) was direct deposited into my checking account. The same day I also received a copy of a SF50 Notification of Personnel Action, showing my retirement date etc.

ARD + 32 days: A “mystery” direct deposit showed up in my checking account. I assumed it was the first interim annuity payment, since it was fairly close to the annuity estimate I had gotten earlier.

ARD + 35 days: Received a letter from OPM saying I had been placed in “interim payment status“, and verifying that the mystery deposit was indeed my first interim annuity payment. The 2-page letter also explained a number of other things, and said that the interim payments would continue until they completed work on my application. Once my application is finalized, I will get a retirement benefits booklet which will show the exact amount of my annuity payment, and will also supposedly include a full accounting of everything I have been paid (or not paid) from my ARD up to that point.

ARD + 45 days: Received letter from BENEFEDS explaining how my VSP vision insurance premiums would be handled. Basically they said, “Don’t worry about it“. My VSP Insurance would continue without interruption. However, they could not resume automatic deduction of premiums until my annuity amount was finalized. It said they would bill me directly whenever a VSP premium payment became due.

ARD + 3 months: Received a bill from BENEFEDS for three months of VSP insurance premiums.

ARD + 5 months: Received another bill from BENEFEDS for two months VSP premium.

ARD + 6 months: Another bill from BENEFEDS for one month VSP premium.

It has now been six and a half months since my retirement date. I have been getting “interim” annuity payments for 6 months. I am beginning to wonder how long it is going to take for OPM to finalize my retirement application, and send me the elusive Retirement Benefits Booklet. Initially, I was very impressed with how quickly everything moved along, but now the process seems to have stalled out. Perhaps other recent FERS retirees can offer some guesstimate on how long this last step in the process might take?

If anyone has any questions about my experience with the retirement process, I would be glad to answer. However, the process may vary greatly depending on which agency you work for, and what your individual situation is, so anything I say should be taken with a grain of salt. The best thing you can do to insure a smooth departure from government service is EDUCATE yourself! There are many resources out there to help you, including the great people on this forum. All you have to do is ask.

 

[roskopfm]

regarding Flex Spending, if you have money left when you retire (or quit), do you lose it?

 

[XL-entLady]

It's been 9 months since I retired, and I just got my OPM booklet the other day. I am hoping that means that my January 2009 auto-deposit amount will finally be my actual payment rather than an interim one.

My only real problem while I have been waiting for my retirement paperwork to finalize is that I won't get a bill from BENEFEDS for my vision and/or dental insurance premium for a couple of months and then I'll get a letter saying that it has to be paid by x date or it will be terminated. I've tried to pay it ahead and that hasn't worked either. But that ongoing insurance glitch has been my only problem while I'm waiting.

As far as losing money left in a Flexible Spending Account, I'm not positive but I think that you do have to use it or lose it. I made sure that there wasn't any left in my flex account by getting both new contact lenses and those rimless glasses like Sarah Pallin wears (but I had them first :laugh before I left active duty.

Lady

 

[clester]

I plan to retire May 31. Couple of clarifications and questions.

Have the interim annuity checks been about 80% of the annuity like they say? Was the supplement a partial also? Annual leave was direct deposited the next pay period?

Thanks

 

[XL-entLady]

I plan to retire May 31. Couple of clarifications and questions.

Have the interim annuity checks been about 80% of the annuity like they say? Was the supplement a partial also? Annual leave was direct deposited the next pay period?

Thanks

My interim check was more like 90%. If by supplement you mean the Social Security type interim check you get from 60 to 62, I didn't get that one so I don't know. My annual leave was deposited about 2 1/2 months after I retired - just showed up in my account one day. I didn't get the paperwork on it for almost 3 weeks after the $ arrived.

Lady