Freshly Retired - Got Some Questions

[TSATSO]

roskopfm: You asked about the Flexible Spending Account (FSA). I never had one of these accounts, so I have no direct knowledge on the subject. However, it took me about 3 minutes to find the answer online! I went to the FSA website ( https://www.fsafeds.com ). On the first page there is a link to a "Did you know...?" section. Jumped to that section, and near the bottom of the page is the answer to your exact question. The answer provided above by XL-entLady is correct: it seems you must "use it or lose it" prior to separation. Your question illustrates exactly what I was talking about when I said you must EDUCATE yourself about all the aspects of retirement. Asking questions here is one way to do it, but I think it is better to ferret out the answers yourself by going to the official sources of information. That way you not only get the answer to your specific question, but you also have the opportunity to learn a lot more. You might find answers to questions you hadn't even thought of!

 

[TSATSO]

clester: Interim payments. I wasn't eligible for the SS supplement, so don't know about that. As for the percentage of the interim payment - my experience seems to agree well with that of XL-entLady. My interim check is 88% of the amount given on my final pre-retirement estimate. As far as timing on the accrued annual leave payment, I did a lot better than XL-entLady. As I noted above, I retired halfway through PP-11. The paycheck for PP-11 was deposited in my account on the normal payday. Then, two weeks later on the next regular payday, the check for my accrued annual leave was deposited in my account! I was surprised it showed up so fast. This is why I think there may be significant differences in the timing of events, depending on each person's individual situation.

 

[TSATSO]

XL-entLady: I concur with your BENEFEDS billing experience - it is a little erratic. My first bill was for 3 months premium, my second bill for 2 months, and the third and forth (just got it yesterday) bills were for one month each. It seems like they have kind of "gotten up to speed" on my account, and the billing has smoothed out. I don't think they are actually too rigid on that "pay or be terminated" date. I had to go out of town for a month right after I retired, and I actually missed paying one of my invoices on time by about a week. Never heard anything about it from them, and the insurance still works, cuz I just used it last month.

Now it's MY turn to ask a question. Since you just got your OPM booklet, I'm hoping you will know the answer. What exactly was included, and not included, in the interim payments you were receiving? Was income tax withheld? Were your health insurance and life insurance premiums being deducted, or will you have to "make up" the payments on those items? These questions have really been bugging me, which is why I've been anxious to receive my booklet. I was gonna call and ask about it, but since it took you 9 months to get yours, I guess I'll be patient a bit longer. Thanks for any help you can give me, and I'll also take the opportunity to say thanks from all the other people you help with your thoughtful answers to questions. You are one of the "Go To" people on this forum, and your presence is greatly appreciated. Chuck Avery (TSATSO)

 

[GWILLIAMS]

I retired on May 31,2008. I will relate to you my experience. I was half CSRS and half FERS and ATC to boot so my computation was a little more complex than the average retiree. I did not recieve any interim deposits and it was the end of August that I recieved what was supposed to be my full annuity deposit. Of course it was much lower than the estimate given me by HR so I went to battle. After several back and forth emails(they don't answer their phone much) and several weeks, they saw the light and re-computed my annuity the way it should be. My question is, the new annuity seems a little high and I am wondering how often OPM audits these annuities for accuracy. I am worried that 5 yrs down the line I will get a bill for overpayment. I'm hoping OPM is right when they refigured the higher annuity and my HR person was wrong. As to the folks that are waiting 9 months for there final annuity figure, call and email them because something is not right to be taking that much time. Even with my complexity it only took them around 3 months and that is about the average of all the retirees that I have talked with. Good luck and enjoy retirement.

 

[XL-entLady]

XL-entLady: I concur with your BENEFEDS billing experience - it is a little erratic. My first bill was for 3 months premium, my second bill for 2 months, and the third and forth (just got it yesterday) bills were for one month each. It seems like they have kind of "gotten up to speed" on my account, and the billing has smoothed out. I don't think they are actually too rigid on that "pay or be terminated" date. I had to go out of town for a month right after I retired, and I actually missed paying one of my invoices on time by about a week. Never heard anything about it from them, and the insurance still works, cuz I just used it last month.

Now it's MY turn to ask a question. Since you just got your OPM booklet, I'm hoping you will know the answer. What exactly was included, and not included, in the interim payments you were receiving? Was income tax withheld? Were your health insurance and life insurance premiums being deducted, or will you have to "make up" the payments on those items? These questions have really been bugging me, which is why I've been anxious to receive my booklet. I was gonna call and ask about it, but since it took you 9 months to get yours, I guess I'll be patient a bit longer. Thanks for any help you can give me, and I'll also take the opportunity to say thanks from all the other people you help with your thoughtful answers to questions. You are one of the "Go To" people on this forum, and your presence is greatly appreciated. Chuck Avery (TSATSO)

Thanks for your kind words. In answer to your questions, my health and life insurance premiums were deducted. And your should be too. Regarding the income tax deduction, that depends on what you specified when you were filling out your retirement paperwork. I did not specify an amount of income tax to be withheld and none was (except for my annual leave payment, which was taxed at my normal active duty rate). But my retirement paperwork contained an area where I could specify what, if any, federal tax would be withheld. I will add as an aside that quarterly tax payments are a pain and I'm thinking about going onto the OPM site and getting a minimum amount of tax withheld so I don't have to deal with quarterly taxes.

Good luck,
Lady

 

[TSATSO]

GWILLIAMS: Thank you, Sir, for your input. We have more in common than just our retirement date. My federal employment history is also somewhat complex. First I had military time (Air Force), then civilian time under CSRS (FAA), and finally my most recent service under FERS (TSA). I bought back my military time, and it should be added to my CSRS time for annuity computation purposes. My final annuity should be calculated about 60% under CSRS rules, and 40% under FERS rules. One happy result of this blend: I should get at least a tiny benefit from some of my accumulated sick leave. I had 593 hours of sick time when I left the FAA. While with TSA, I saved up another 455 hours of sick time. Under the somewhat obscure rule governing this situation, I should be given credit for the lesser of the two amounts. The hours are converted to days, which are then added to my CSRS service time when calculating that component of my annuity. I keep saying "should" because I won't know for sure if any of this has actually happened until I get my OPM booklet and my final annuity calculation info. Keeping my fingers crossed.....

You bring up a very good point about the "finality" of your final annuity calculation. Do they ever go back and check these figures? I have no idea. My gut feeling is that unless someone down the line raised a question about your particular calculation, nobody would ever look at it again. It's simply a manpower versus work-load thing. They barely have enough people at OPM to handle all the NEW business. How could they possibly go back and re-run the calculations on all the existing annuities?

I will give them a little more time to send me my OPM booklet, and then I'll try to rattle the cage. This time of the year, it's hard to get anyone to concentrate on business. Anyway, I'm getting along OK on the interim payment. Thanks for adding your experience to this discussion.

 

[Scout333]

Thanks everyone! Its good to know what to expect. I'm eligible but still a ways from that ARD. Trying hard not to be one of those we used to call ROTJ(Retired on the job).

 

[TSATSO]

Me again. I just realized that when I wrote my "Retirement Timeline" (see earlier entry in this thread) I completely left out one of the most important items: my interaction with the TSP! Senility is so sad.... Anyway, just in case someone is actually reading this thread, and they said to themselves "Hey, what about the TSP thing?", well, here's how it went down:

The "cash flow" aspect of my retirement process could not have worked out any better! You'll recall that my last day of work was 5/31/2008, which was halfway through PP-11. After I quit it was one week until the end of PP-11, then another week until payday for PP-11. (in TSA you get paid one week after the end of the pay period) So 2 weeks after I quit I got the direct deposit for PP-11. Then, 2 weeks after that (on the next regular payday) I got the direct deposit for my accumulated annual leave. Two weeks after that (we're now up to the first week of July) I got the direct deposit for my first interim annuity payment. Also in the same week (and this is what I forgot in my timeline) I got a letter from the TSP saying that they had been informed of my separation from Federal service. They included several informative booklets on my withdrawal options, and a TSP-70 Request For Full Withdrawal info sheet and form. I filled out the form, and mailed it back the next day. Approximately 2 weeks after that (on July 25th) I got the direct deposit of my first TSP monthly withdrawal payment. The week following that, around the last day of July, I got my second interim annuity payment. Since that time, I have been getting my TSP direct deposit on or around the 25th of each month, and my interim annuity direct deposit on or around the last day of each month.

If you managed to get through that paragraph above without falling asleep, you can see why I'm saying my cash flow worked out so well. After I quit working, the checks kept coming in at nice regular intervals, and I was gradually switched over from bi-weekly paychecks to monthly paychecks. Couldn't have been any more painless!

Any questions, feel free to ask. Merry Christmas to all of you!

 

[RunningFool]

I have a retirement question for my mother, who recently retired from the post office. She is 84 and CSRS. She still pays for full medical insurance and I was thinking she should drop that and rely on Medicad, Medicare and maybe a supplimental. Also anybody have an opinion on Medicad part D.
Thanks

 

[EW_ret]

XL-entLady: I concur with your BENEFEDS billing experience - it is a little erratic. My first bill was for 3 months premium, my second bill for 2 months, and the third and forth (just got it yesterday) bills were for one month each. It seems like they have kind of "gotten up to speed" on my account, and the billing has smoothed out. I don't think they are actually too rigid on that "pay or be terminated" date. I had to go out of town for a month right after I retired, and I actually missed paying one of my invoices on time by about a week. Never heard anything about it from them, and the insurance still works, cuz I just used it last month.

Now it's MY turn to ask a question. Since you just got your OPM booklet, I'm hoping you will know the answer. What exactly was included, and not included, in the interim payments you were receiving? Was income tax withheld? Were your health insurance and life insurance premiums being deducted, or will you have to "make up" the payments on those items? These questions have really been bugging me, which is why I've been anxious to receive my booklet. I was gonna call and ask about it, but since it took you 9 months to get yours, I guess I'll be patient a bit longer. Thanks for any help you can give me, and I'll also take the opportunity to say thanks from all the other people you help with your thoughtful answers to questions. You are one of the "Go To" people on this forum, and your presence is greatly appreciated. Chuck Avery (TSATSO)

I can tell you how my retirement went in 2005. I was very fortunate that my first retirement paycheck was for full amount of annuity. It’s a travesty that OPM has not got it’s act together. Nobody should have to wait more than two months to get their final retirement pay adjudicated.

Regarding the flexible spending account, you need to use it or you lose it after your retirement date (i.e. the last day you work). The interim retirement payments just have federal tax withheld, based upon the last W-4 you completed while employed. OPM does not withhold for FEHB, FEDVIP, long-term care, or life insurance, or state taxes. There is a single "makeup payment" deposited into your account within a few weeks from when you receive the retirement handbook from OPM. This makeup payment is the difference between the full retirement pay and interim pay received for the entire period. OPM will also deduct for the monthly FEHB insurance and life insurance premiums for the entire interim pay period. The retiree must make their own payment arrangements to pay FEDVIP premiums and long term care insurance during the interim payments. Once you start receiving the full retirement annuity, deductions can be made for FEDVIP and long-term care insurance premiums. Also, the state tax withholding can be started, for most states.

 

[TSATSO]

RunningFool: Sorry, but I'm still 2 years away from having to worry about Medicare and the other associated programs, so I can't offer any opinion. Hope someone else will read your question and have some thoughts on the subject. I know it can be a complicated decision making process when you get to age 65, and many people seem to struggle with finding the right combination of insurance programs. Good luck.

 

[Zebra]

"interim” annuity payments "

Could you tell us what the approximate percentage compared to what you think your retirement annuity should be??

 

[TSATSO]

Zebra: I know this thread is getting kinda long, but if you look back to the 2nd page, you'll see this question has already been answered. In my case, the interim payment is about 88% of the amount shown on my final pre-retirement estimate. Another member of this group, XL-entLady, said her interim payments were about 90% of her final amount. Hope that helps you out in your planning.

 

[Zebra]

Thanks and sorry.........I didn't see that my question was answered on page 2........this is good info to plan to. 1 yr 11 months until I plan to retire.

 

[onegorgeous]

I will be retiring on Jan 3 2010 from CSRS and I need some advise whether to leave my TSP or roll-over to an IRA? My understanding is that you can not move you money between funds once you leave them is this true.

 

[EW_ret]

I will be retiring on Jan 3 2010 from CSRS and I need some advise whether to leave my TSP or roll-over to an IRA? My understanding is that you can not move you money between funds once you leave them is this true.

After you retire ,you can still move funds between the TSP funds using InterFund Transfers (IFTs). You must use the same rules of government employees, and are limited to two IFTs a calendar month, amd unlimited IFTs into the G fund. You cannot add/contribute any new money to your account.

 

[nnuut]

I will be retiring on Jan 3 2010 from CSRS and I need some advise whether to leave my TSP or roll-over to an IRA? My understanding is that you can not move you money between funds once you leave them is this true.

Hi onegorgeous, welcome to the message board, CONGRATULATIONS, I'm to retire on the same day!! Last day will be Friday December 31st. I'm going to leave my TSP money where it is and take Monthly Withdrawals. EW ret is right you can't donate but nothing else changes.
325 days!!! and we're out of there!!:laugh:

 

[TSATSO]

Just in case...

Haven't been by here for a while. Thought I'd pop this old thread up to the top, just in case it is still of interest to the newer members. Happy New Year.