My retirement journey

[dave123]

Were the emails from BOP or OPM? Sounds like they were from BOP so OPM doesn't have your package. Keep in regular contact with the person processing your retirement at BOP. Until they send the package to OPM, OPM doesn't know you are retiring.

PO

Thanx for the replies.
The emails were from bop HRM. I kinda thought they were more or less the same as OPM in that they work together. Then again, perhaps OPM kicks in when my Data Sheet is received.

I got an email back from the person assigned to me today and she said she would send a packet with some more stuff for me to fill out after processing my data sheet. I'll update when she does. She also said she would run my numbers again for an estimate on my annuity.

 

[jimijr]

Dave, congratulations, you've earned it. I've been retired since 1/1/11 and have found it very easy to do, some readers here will recognize me. You have the leave -- they'll withhold 25% -- you have the supplement, you've been saving. I had five envelopes on hand with a thou in each, saved up just in case, but they weren't needed. If you've been federal all along, the supplement will equal SS; in my case it was about 2/3rds. When OPM comes through with your back pay it'll be a nice bundle.

My SS (take it at 62) plus FERS pension equal about 1/2 pay, net. It covers the monthly bills. Your house is paid off, mine is not. But I live for free because the IRA (exTSP) pays all housing costs. That is the key and you look to be in good shape, but remember the escrow account never goes away does it; you should see my insurance bills. Nevertheless I've taken 30k a year from the IRA, ~300K total, and its balance is right where it started in 2011. In 2019 I made a ton, hope y'all did. Money giving birth to money, a new experience for me. I can't spend it fast enough so I'm inviting my whole family down for a free Florida vacation. Invest wisely.

Are you a musician? It looks to me, you're overplaying it. Don't worry, be happy! From July1 you are your own man.

 

[evilanne]

Ok, I just said I was debt free until yesterday. Here is why.

Being 6 months out from retirement, I've found my retirement home (closed yesterday). I'm leaving the big city, with it's high taxes, high insurance costs, and just overall high cost of living. I'm moving to a small quiet town. I got a home by a lake. I really should have (and recommend) a downsize in retirement, but I splurged on a "dream home" on the lake. I'm not completely crazy, though, due to the fact it's in a small quiet area, it actually cost less than I believe I will get for my current, paid off, home. And the cost of living will go down for sure.

Yeah, I'm six months early, which will cost me extra in tax/insurance, etc, but there are benefits to consider:

1. I can move in at my leisure, no pressure. My current home will be empty and clean for buyers to view. My new home can get some upgrades while it is empty.
2. 3.5% interest rate, VA with no down payment made it cost feasible.
3. I didn't have to make a contingent offer when I bought the home. No stress of trying to balance moving into a new home while selling a home.

The con here is that if I have problems selling my current home, I may have to dip into TSP to keep up with the cost of 2 homes after I stop receiving full pay. I've researched the market and my realtor is a personal friend of over 30 years; and she is confident that the sale will not be a problem for the amount of money I will need.

Stay tuned to see how this part turns out

.

Depending on the market where you live, have you considered renting out your current home rather than selling?
I have a rental that has provided consistent income since 2005. The rent covered my mortgage at the time and cash flow has been good in retirement. You get to deduct expenses, including depreciation. You may want to consider it as an option and weigh the factors to see which is more beneficial for you.

I can relate to your post as I am in process of going into debt to purchase another house, which is fixer upper in another state. I'm not ready to sell my current home yet and not sure if I want to relocate permanently to new location since family is all here. I'm sure it will be an adventure.

 

[evilanne]

Jamison has a special guide for LEOs that may be helpful for you. I subscribed back in 2015 when agency offered early retirement. With the subscription, you can contact him directly to answer any questions you may have. DBA's post from another thread.

This ex Fed named Dan Jamison has been putting out a document he calls the FERSGUIDE. He used to give it out free, but starting in 2015 he started charging $15 when he retired. It's well worth buying! I have an old copy but can't find it right now so here is link I found online. I will probably buy his 2020 publication because of the law changes on withdrawal options.

Here is link to 2018 version....partial teaser copy.

https://www.fersguide.com/wp-content/uploads/2016/11/REGULAR-v2018-FERSGUIDE-TEASER.pdf

2014 version...full free version for special employees...read pp. 26 to 28. Page 26 states no penalty when withdrawing from TSP account and specifies you do pay penalty if you roll over your TSP to an IRA and then withdraw. Page 28 mentions 72(t) as option for true early withdrawal occurring before age 55
https://files.ctctcdn.com/ad61f4e9201/0fa2e5ae-8653-458f-b4dc-93daf544efa6.pdf

This is link to his site to buy the latest copy.
https://fersguide.com/

Best wishes!!!

 

[dave123]

Thanx for the input. Wanted to address some things here, and add some info.

First of all, a friend sent me a link to... my job on USAJOBS! Over 4 months to go and they have already announced my job opening. We are all just a pebble in the sea, as they say.

Anyway, thanx jimijr for the good news, I’m glad it worked for you, and hope it does for the rest of us as well. Key West? I know your insurance pain, I live in Miami The insurance on my new home is about ¼ of what I’m paying now, for a much higher payout as well.

As an aside, yes my home is paid off, but the new one is not. That is one of my biggest questions, should I pay off the new home (it's financed at 3.5%), or put the money into investments? I’m still up in the air on this one, advice appreciated.

As I’m writing this, the market is down 3k for the week! How does that impact my plans? Thank the good Lord that I moved all my TSP into G-fund a week ago!!

 

[dave123]

Thanx evilanne, I don’t think I want the issues with renters tearing up the place, not making payments, things breaking (I’ll live 3 hours away) etc. The only way I can see going this route would be if my home does not sell; hope that does not happen. In a perfect world, I would rent to good tenants that would be there for years, but I don’t think I want to roll those dice.

I’m going to look into that guide, thanx much.

edit: I found the book on amazon, I'm going to purchase it today.
https://www.amazon.com/FERSGUIDE-20..._1_1?keywords=fersguide&qid=1582841056&sr=8-1

 

[dave123]

Got an email from HRM today. The packet that I sent them was typed for me to sign. Unfortunately, they made a mistake on my wife's SSN, and only they can edit the form. So I sent an email to get the correction. Since I'm choosing a reduced annuity for my wife, the new form, when they send it, will need to be signed by her and notarized. Then after we sign and scan, I can send it back. At that point (it seems), the packet will be forwarded to OPM. I must also attach a copy of my marriage certificate. I'm assuming, if you have a divorce, remarriage, etc. that you would need copies of all the forms. Here is some text from the email:

Please include a copy of your marriage certificate.

SF 3107-1 - Certified Summary of Federal Service
In Section E, you will sign and date

SF 3107-2 - Spouse's Consent to Survivor Election
Please have your spouse complete in front of a notary.

SF 2818 - Continuation of Life Insurance
Sign and date in block 14 (Only print and return page 1)


FW-4P - Federal Tax Withholdings
Sign and date on the bottom of page 1 (Only print and return page 1)



Note: If your state requires you to pay state taxes and you would like them to be withheld from your retirement annuity, please also include a signed copy of your local state tax form. OPM will not withhold the state taxes from your interim payments, but they will deduct them once your annuity is adjudicated if we include the form in your packet. You can obtain a copy of your local state tax form from the internet or your local Human Resource Office.

 

[nnuut]

DAMN!

 

[PessOptimist]

All normal in my experience. Resubmit paperwork and there is still plenty of time. Hope you have a free notary at your bank or work.

FWIW, the state withholding form for me never got submitted. Oh well, income taxes your first and maybe second year of retirement will be off a little.

Look forward to the day.

PO

 

[dave123]

I was instructed to mail the forms (rather than e-mail) as they need originals. I got the paperwork notarized and sent it first class, certified, return receipt on 3/17/20,Tuesday. Hopefully they will get it soon.

I have to wonder how much the virus will slow things down..

 

[dave123]

Well, I sent the papers in on the 17th. Today is the 3rd. No reply. Time to send an email. perhaps the virus will negatively impact the process..

p.s. I hope that you are all safe and well.

 

[dave123]

Finally got an email:

Good morning,

I received your signed forms, everything looks good so I will be making official notification as well as posting your name on Sallyport. We do not normally mail your packet to NFC until 30 days prior to your retirement date so it will be the end of May before I send it. I will notify you once it is mailed out and attach a final closure letter that explains the process after retirement as well as a survey for you to complete at that time. If you have any questions before then please don't hesitate to contact me.

 

[nnuut]

Congratulations, I Love mine!

 

[dave123]

Well, got a fine "monkeywrench" in the plan today. Check out this email:

"As a result of the current public emergency (COVID-19) and the need for the Bureau to maintain staff, the Director will consider waiving the mandatory retirement age (57) for up to one year on a case-by-case basis for those staff who must mandatory retire this year.

Advise us of your desire and commitment to continue employment with the Bureau of Prisons."

So I may have the option of staying (I assume until the virus clears). Wow, that would change everything. Although I'm supporting 2 homes now, I would be way ahead getting full pay until my home sells! Not sure what "a case by case basis" means...

More annual leave to sell back, more money in the TSP; this could change everything - for the better!

Stay tuned.

 

[ravensfan]

That sounds awesome as this may provide the extra time you need to sell your house at a price that's acceptable to you. I would definitely pursue it. I would also ask the question if you are locked in to staying for the entire year or can you retire prior to that. Just thinking what happens if you sell your house in say September, would you be required to stay the full year, or could you retire after the house was sold.

As the saying goes, When one door closes, another one opens up. Good luck!!!

 

[dave123]

Thanx, Raven. We think alike. The first thing I asked HR was if I would be locked in for a year. They don't know and are going to check.

Reading the email, I don't think I will, but will need to make sure.

p.s. I like your cheesy uplifting quote

 

[dave123]

Got an offer for the home for exactly what I needed to get. I accepted and they set the closing for the same day that the government says I have to retire (originally).

So I may not need to stay (haven't been approved yet anyway).

Stay tuned

 

[dave123]

Update: Inspection found my septic system needs replacing. I came down to reflect this, and the buyer is still on board. I'll still get enough to pay of the new home, but a boat is not coming my way.

Appraisal next week, cross your fingers for me please.

I'm on sick leave until my final day. Never got a response on perhaps staying longer. If the sale falls through, I'll hope that comes in, otherwise, I'm out of my job and home on 6/30.

 

[tsptalk]

Congratulations, Dave!!

 

[nnuut]

Retirement is What's Happening. I've enjoyed mine, I hope you do the same.