My retirement journey

[dave123]

Hello. I don't know if this will interest anyone, but I thought I would start a thread on the retirement process for federal workers. I have an old Chevy truck , and the forums have lots of "build threads" where owners document their journey building their rides.

Kinda cool, thought I could do something along that line here. I do hope that others give me advice as I navigate these waters.

What better way for people to learn as they approach this difficult process down the line, than to see the mistakes and successes of those who have gone before them?

 

[dave123]

Ok, so this is where I am now:

Federal law enforcement, mandatory retirement at the end of June, 2020. (I will be 57 years old).

My TSP is currently around 250K. I messed up during the early years, only putting in the amount that the government would match - 5%. I was also way too conservative, riding G fund for years, totally ignoring the one day that I would need the money.

Let me drop some advice here - don't be like me!

Invest the most you possibly can in TSP, and watch it, learn and actively manage the TSP. You can also use the "year funds" - example 2020, 2030, etc. will manage it for you if you don't want to mess it up.

I'm currently putting in the max, but man - I should have done this years ago.

 

[dave123]

Here is some humble advice; and the part that I did get right:

Stay out of debt! I made a rule for myself when I got my first credit card - I would never under any circumstances carry a balance. Now I know that there may well be emergencies in your life that make this impossible, but that sweet entertainment system that you can't afford does not make the list.

I've been blessed, and can say I have never once in my life paid a penny interest on a credit card. The payoff? Until yesterday, I was totally debt free, and have a credit rating north of 800, which is an asset you want to have.

My wife and I both have newer vehicles paid off. Mine has a bumper to bumper life time warranty from the manufacturer; her's has a life time power-train from the manufacturer. Hoping to avoid as much auto related retirement bills.

Oh, I paid my home off early as well.

We had to live less extravagant to do these things, but considered it worth the delayed life enjoyment.

Just something to consider as you approach retirement.

 

[dave123]

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

 

[dave123]

How much money will I receive in retirement?

We are truly blessed as federal workers to get a pension. Even more those of us that are law enforcement, as the credit for LEO is higher. How many of my friends have no pension at all? Too many.

So, I got my retirement pension, or annuity as the govt. calls it, estimated by government retirement personnel. You can do this once every year once you are getting close to retirement. It's a "pretty close" ballpark estimate. If you have a question how to do this, PM me and I will give you the info.

I recommend you do this to get an approximation of what you will receive in retirement.

After tax and health insurance, it will be less than 1/2 my base pay. Ouch - I was hoping for more!

This really scared me until I spoke to someone who helped me understand the numbers a little more. You have to remember that comparing this number to your current salary is apples to oranges.

Don't compare this number to your gross pay, but rather to your take home (net) pay. I actually found that this number was, after all my current deductions, not that far from my net pay. I feel a little better now.

I plan to take social security at 62 (when my FERS supplement) ends. I know this is a controversial decision, but give me more payments, money that I can use and invest now, rather than waiting until I'm really old for a bigger payment. This is something I think you should research if you haven't already - it's an important consideration with pros and cons on both sides.

Remember, your retirement is a 3 legged beast:
1. Pension
2. TSP
3. Social Security

Don't forget to carefully consider your survivor benefit choice, full, partial, or none. This will impact the numbers, and more importantly, the money your significant other will receive if you die.

 

[dave123]

Another thing about my projected pension; after I received the numbers, I adjusted how much money I have coming out of my pay going straight to my savings account to match - see if I can live on what I will be making on retirement! It's not a perfect example, we still have my wife's pay, and the cost of living will be less, but at the very least, it helped me add to my savings! Just something to consider.

Ok so we are pretty much up to date. I was told by the finance center to contact them once I was 6 months out from retirement to get the paperwork started. Going to do that Tuesday. I will post the results.

Feel free to add any advice or comments to this thread. I want to learn as much as I can, and hopefully avoid mistakes, as well as helping others.

 

[Scout333]

Another thing about my projected pension; after I received the numbers, I adjusted how much money I have coming out of my pay going straight to my savings account to match - see if I can live on what I will be making on retirement! It's not a perfect example, we still have my wife's pay, and the cost of living will be less, but at the very least, it helped me add to my savings! Just something to consider.

Ok so we are pretty much up to date. I was told by the finance center to contact them once I was 6 months out from retirement to get the paperwork started. Going to do that Tuesday. I will post the results.

Feel free to add any advice or comments to this thread. I want to learn as much as I can, and hopefully avoid mistakes, as well as helping others.

Just one thought, OPM and retirement processing is very slow. Can take anywhere from 2-6 months from your actual retirement date to receive your final correct retirement check. One idea is to save your annual leave which provides a nice little pot of money for the interim. Sounds like you may have this issue somewhat covered by adjusting your current pay which should give you a little nest egg until you get your retirement checks. Look around on the TSP site as there are a number of retirees who have posted their journeys. Best of luck to you!

 

[nnuut]

Yep, when I retired I cashed in the Maximum AL and received $17 Grand to hold me over. That Check only took 2 weeks to receive.

 

[dave123]

Thank you scout, I hadn't seen another thread like this, I will look.

I failed to mention that I carried 240 (max) annual leave into this year and plan to take no leave this year. So I will get that money when I separate from service. Many of my fellow employees retire at the end of the year so they can get the 240 plus a whole year of unused pay - I prefer full checks until June and 6 months of exta annual leave; another thing to consider. Nice catch.

 

[PessOptimist]

Sounds like you have a good plan. FWIW my leave sell back came with my last pay check, the normal payday after my last work day.

Somewhat scary time this is for everyone. If you have any questions, no matter if they seem trivial, post them. Best of luck and enjoy the new house.

PO

 

[dave123]

Looks like OPM wants me to wait until Feb 1st to get things started. Oh well. Just read Scouts thread on retirement, I do home I get paid quicker than he did!

 

[Scout333]

Dave , try the Retirement and IRA Talk Forum there are quite a few retirement story threads. Just scroll through. Lots of great information there!
https://www.tsptalk.com/mb/retiremen...ent-story.html

 

[dave123]

Received an email from the DOJ today notifying me of my upcoming mandatory retirement. June 30th is the last day.
I've been a government employee (state, fed, military) since 1981, and now they are done with me. Chills..

Attached is a form to claim unemployment. I hadn't considered this option; is it possible to collect some unemployment and
a pension? I've never been without a job since I was a teenager, so I wouldn't mind taking a little free money for once.

Of course, as stated above, I intend to continue working, but I wouldn't mind a little unemployment until I find something.

Opinions?

 

[jarc02]

When I was seasonal with the IRS I was able to collect UI when I was furloughed- even voluntary early furlough. My state asks if I am collecting a pension when I applied for weekly benefits. I assume they would reduce my benefit had I also received a pension. I think you should check with your HR department or your state UI office.


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[dave123]

Ok, got an update:

I never got around to contacting OPM, but they are on to me. I got a couple of emails today.

The first was an "exit survey." Here is some text.

As the Bureau Personnel Director, I have received notification of your upcoming separation from the Bureau of Prisons. On behalf of the Bureau, I would like to express regret that you are leaving the BOP and wish you the best in your future endeavor.

However, before you leave I ask your assistance by completing our online Exit Survey for departing staff.

I doubt I will do the survey, but it is interesting in that the wheels of the government are turning.

Is it just me, or should endeavor be endeavors?

 

[dave123]

The second email I received today was titled "Re: Mandatory Retirement Data Letter."

"My name is ... and I have been assigned to process your mandatory retirement." Attached was a form called a "Retirement Data Sheet. It's a PDF that you edit, sign and return. Luckily, I have my bank account number, wife's SSN, etc. memorized, so I was able to send it back today.

I was going to copy the text here, give an idea of the stuff you need; but it's over 2200 words.

Interested to see how quickly things move from here!

 

[James48843]

Cool thread, thanks!

Just a note for others- When I was 50, my “plan” was that I was going to use all my annual leave as the little nest egg for when I retired at a planned aged 62 or 63. I never really socked away a big savings account for use “just in case”.

Then I had a heart attack at age 55, bypass surgery at age 56, and have struggled with some serious arthritis at age 58 that made it difficult to walk. Now I’m low on leave, going to end up returning this summer at age 59 3/4, and will only have about 2 weeks annual leave in the bank when I finally retire.

My advice to folks is to figure out a way, when you are age 40, to save like 50k, on the side, for a carry-through emergency fund. Just in case. I’m actually working the last six months of my career just trying to stretch it out and save enough $$$ to make it from the earlier-then planned retirement date, until I know for sure the OPM monthly retirement check, plus the FERS supplement, plus the Army Guard retirement at age 60 all are hitting the bank simultaneously. I don’t want to have to prematurely deplete a significant chunk of my TSP early.

Good luck.


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[PessOptimist]

Ok, got an update:

I never got around to contacting OPM, but they are on to me. I got a couple of emails today.

The first was an "exit survey." Here is some text.

As the Bureau Personnel Director, I have received notification of your upcoming separation from the Bureau of Prisons. On behalf of the Bureau, I would like to express regret that you are leaving the BOP and wish you the best in your future endeavor.

However, before you leave I ask your assistance by completing our online Exit Survey for departing staff.

I doubt I will do the survey, but it is interesting in that the wheels of the government are turning.

Is it just me, or should endeavor be endeavors?

Probably should be endeavors. You said mandatory retirement. What is it the Director regrets? The rules or you leaving?:laugh: Not dissing your email. It is nice to get some recognition when you retire. I actually got a letter in the mail from my Administrator. The first paragraph expresses thanks for my 21 years of service. The second commends me for my support of a project that happened in 1993. I retired in 2018. Well, I attribute that to the fact everyone working in my division was retired by the time I did. Directors/Administrators depend on input to their staff.

Now I've told my war story in your thread, best of luck in your retirement, filling out that form and getting an answer to the UI question. Best of luck in your endeavor(s). 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

 

[nasa1974]

Ok, got an update:

I never got around to contacting OPM, but they are on to me. I got a couple of emails today.

Is it just me, or should endeavor be endeavors?

Either is correct. Looking at retirement as singular endeavor would be correct. But if you were planning to do multiple things while retired it should be endeavors.

Anyway, not to turn this into a "proper use of words" thread, saw this in an online article. They used the word "weather" instead of "whether".

Good luck and enjoy

 

[kave]

Good advice James!