PessOptimist's Retirement Story

[uscfanhawaii]

Update time. First the discussions with my bosses. Tuesday or Wednesday I was in my immediate boss’s office talking about stuff when our supervisor came in. My boss was bantering with me about my retirement date as usual. The supervisor asked if something had changed. I made it perfectly clear that I was retiring at the end of the year. They do keep trying and I guess I should be flattered?
Yesterday my boss came in to my office to discuss things and mentioned that I had 33.5 hours time off award that I cannot sell back and I should get them on the leave schedule. Nice of him to remind me and a confirmation they have accepted that I am leaving.
According to my spread sheet I have 42 10 hour tours of duty left. Minus 3.35 that is 38.65 days. I better get the work stuff prioritized cause that time will be gone before I even know it is.
Actual retirement stuff now.
I submitted the package to the HR retirement person who is brand new as the person handling my retirement moved on. Great. He seems to be doing OK. He says “everything looks good”. Time will tell.
One would think that the SF3107 would be all you need. You also need a SF52 requesting retirement where you have to state a reason for requesting retirement. They also need statement of military service, marriage certificate(s), SF2818 about FEGLI life insurance and W4s for fed and state withholding. Some of this is in my eOPF folder but whatever. All must be paper copies signed in ink.
Left to do so far:
Submit a new request for a Retirement Benefits Estimate next week as my pay changes 10/14/18.
Get rid of items on my “moveable property account”. (there is no signed paperwork involved here about becoming responsible for property-it just appears on your account)
Get files off my “personal” drive on the agency system. (seems real simple but…too big to zip and send in an email, can copy it to a thumb drive but only agency approved thumb drive which you cannot insert to a personal device to download)
Get rid of paper in the office.
Try to get rid of stuff left in office by previous occupant. Or leave it for new occupant.
Try to get pertinent information to people about current/ongoing/shelved projects.

PO

Hey PO, flattery is one thing but tell them to put the $$ where their mouth is.
We had one guy who supervisors really wanted him to stay on for another year....they ended up giving him a 25% salary bonus to get him to stay!

 

[PessOptimist]

Hey PO, flattery is one thing but tell them to put the $$ where their mouth is.
We had one guy who supervisors really wanted him to stay on for another year....they ended up giving him a 25% salary bonus to get him to stay!

Having the usual posting problems.

I am a WB employee so pay increases are determined by negotiations between agency and appointed bargaining unit.
No pay increase enticements possible. If I stick around I get the same pay and all encumbrances associated with the current position PD be damned.

The only possibility would be a contractor position with a tight PD. It is not going to happen.

PO

 

[PessOptimist]

A recap here that may help someone. How the heck do you figure out if you can retire and survive on your FERS retirement? Short answer is you probably can’t. This applies to immediate retirement.

If you are retiring between age 62 and MRA you will get a FERS supplement. If that applies to you, look it up on the OPM site. https://www.opm.gov/retirement-services/publications-forms/pamphlets/ri90-8.pdf will get you started. There will be other links in a search but OPM is the only .gov one.

First thing is to contact your HR office and request a Retirement Benefits Estimate. If the local HR person says no, elevate it. The program my agency uses is FedHRNavigator.

The way I approached the current salary thing was to pretty much ignore it. It will scare the **** out of you because the retirement benefit estimate is probably about 15-25% of your current pay after survivors benefits and health insurance are deducted unless you have the FERS supplement. If you aren’t eligible for the FERS supplement it means you are over age 62 and should go to https://www.ssa.gov/myaccount/ and log in or establish an account and get your latest Social Security Statement. Add the monthly amount estimated in the FERS retirement benefits estimate to the amount on the social security statement. If you are eligible for the supplement forget the part about social security and use the amount on your retirement benefits estimate. This will be your take home pay before withholding after you retire. Subtract the estimated income tax from this amount. Likely between 12 and 15%. This will be your new take home pay after retirement.

Now get the amount you actually receive from your agency per pay period and multiply by two. Subtract this amount from your new take home pay after retirement. This figure will be what you probably need to make up if you continue your current spending habits. Figure out where that amount will come from. TSP withdrawals, another job, spouse SS.

If the above is confusing maybe this will help.
[TABLE="width: 653"]
[TR]
[TD]current take home from agency per month[/TD]
[TD]FERS retirement amount per month[/TD]
[TD]SS per month[/TD]
[TD]total post retirement income per month[/TD]
[TD]taxes on total post retirement income per month at 15%[/TD]
[TD]post tax post retirement income[/TD]
[TD]what you have to make up per month to continue current income[/TD]
[/TR]
[TR]
[TD]$3,000.00[/TD]
[TD]$1,000.00[/TD]
[TD]$1,000.00[/TD]
[TD]$2,000.00[/TD]
[TD]$300.00[/TD]
[TD]$1,700.00[/TD]
[TD]$1,300.00[/TD]
[/TR]
[/TABLE]

Financial managers will tell you that you must factor in all income and above all buy their product or perish from lack of money. If the only thing changing is the income from your .fed job, the rest stays the same.

My approach to getting rid of the noise surrounding retirement.

PO

 

[uscfanhawaii]

If you follow Tammy Flannagan at govexec.com, you will recall that she also had some good news to consider when looking at retirement finances.

No more 7.5% FICA tax.
No more 3.5% Medicare tax.
Depending on your state, no state tax on Pension or Soc Sec.
No more 10-15% deduction for TSP saving.
Possibly lower transportation costs (no commuting).

Of course, depending on your own retirement situation, there may be additional costs.
Travel costs, if travel is in your future.
Health Care costs will eventually catch up to everyone.
Long Term Care costs, especially if you don't have LTC insurance.

Bottom line.....make (and follow) a budget with all of these things in mind!!

 

[PessOptimist]

If you follow Tammy Flannagan at govexec.com, you will recall that she also had some good news to consider when looking at retirement finances.

No more 7.5% FICA tax.
No more 3.5% Medicare tax.
Depending on your state, no state tax on Pension or Soc Sec.
No more 10-15% deduction for TSP saving.
Possibly lower transportation costs (no commuting).

Of course, depending on your own retirement situation, there may be additional costs.
Travel costs, if travel is in your future.
Health Care costs will eventually catch up to everyone.
Long Term Care costs, especially if you don't have LTC insurance.

Bottom line.....make (and follow) a budget with all of these things in mind!!

Yes, yes, yes. Plan, plan, plan. Everyone's situation is different as to income but the bottom line is what is coming in to the house now v what will come in post retirement and how to make up the deficit.

PO

 

[evilanne]

Get files off my “personal” drive on the agency system. (seems real simple but…too big to zip and send in an email, can copy it to a thumb drive but only agency approved thumb drive which you cannot insert to a personal device to download)

What about CD or DVD? That is what I did.


If you planned well, TSP should make up any deficit (part of the 3 legged stool) along with other savings/investments. As USCFan points out, there are many deductions from your work paycheck that you will not have in retirement.

 

[Scout333]

Yes, yes, yes. Plan, plan, plan. Everyone's situation is different as to income but the bottom line is what is coming in to the house now v what will come in post retirement and how to make up the deficit.

PO

Eggzackly! Healthcare cost is a really big deal. Even with excellent health insurance and medicare! As we age healthcare costs continue to go up, unfortunately we ain't getting any younger. LOL

 

[PessOptimist]

I woke up this morning with a question about taxes on my FERS annuity. IRS pub 721 leads me to believe the Survivor Benefit Premium is not taxable for fed income tax. Other comments here and there say it is.

The question is, if my yearly FERS annuity is $22,222.22 and the Survivor Benefit Premium is $2222.22, leaving me $20,000, is the taxable amount for fed income tax $22,222.22 or $20,000?

I thought I would ask an actual FERS annuity recipient.

PO

 

[PessOptimist]

FWIW, I found this in the autosaved content and decided to post it. Must have been a surly firewall thing.

Having the same problem today. I'll try later.

What about CD or DVD? That is what I did.

I will have to read the rules about that. It's still "removable media". I will get the stuff before I leave. While inconvenient these rules about removable media are valid because people will find a thumb drive lying around and stick it in the computer to see what's on it. Results of that action vary. Just me pointing out that simple tasks often are more involved than first seems. AKA whining.

If you planned well, TSP should make up any deficit (part of the 3 legged stool) along with other savings/investments. As USCFan points out, there are many deductions from your work paycheck that you will not have in retirement.

That's the idea. Fortunately for me my TSP balance will make up that deficit beyond my life expectancy. Shows why you should stuff every cent you can in TSP and/or some other instrument of your choosing.


All these deductions to the paycheck, most of which go away are why I decided to go with the take home now v then strategy. You do have to plan for withholding and medical care deductions. Some you can have paid out of the annuity or SS and some you have to pay after you get the money.


Good luck all


PO

 

[PessOptimist]

Got my final Retirement Benefits Estimate today. Needed because my high three changed by a whole $271. That’s about $64 per year. However, I also needed it to estimate my sickness. I screwed that up a bit by using sick leave to take SO to doctor’s appointments. It turns out I will have 128 hours that will not count. It also means one month less service credit which appears to cost $48 per year in the annuity. Oh gee. Should I have taken annual instead? No.

I am taking tomorrow off as I have 33.5 hours time off award to use that I cannot sell back. Have already got 20 more hours approved. That means 27 work days left. I may not feel well some of them but will accommodate the promises I have made.

Extend my retirement date out at least 8 days to make the sick leave count? Not possible, the leave year ends 1/3/19 and I have right now 208 hours projected use/lose. Take the rest of the year off and work longer to save those sick leave hours? No.

If you are really worried about squeezing all you can out of your bennies, figure out your projected sick leave balance more than two months in advance.

About that sick leave balance. They tell you it is based on 6 hours per day. NOT. My retirement estimate states 22 days or 128 hours. “* After use of the maximum creditable unused sick leave, you will have 22 days of potentially creditable service that will not be included in your annuity calculations because it is less than a full month. This is equivalent to 128 hours of sick leave that will not be used if you separate on the date selected. This information is being provided to you only to assist you in selecting the best date for your retirement.”

22x6=132. The actual calculation they use is based on the OPM 2087 work hours per year. Divided by 12 it equals 173.917 which they tell you is 174 hours per month. Divide that by 30 and you get 5.797 which is the actual factor they used to calculate the 128 hours. Actually 127.539 hours. I have no idea how many decimal places they use.

This is all explained at: https://www.opm.gov/policy-data-ove...rly-rates-of-pay-using-the-2087-hour-divisor/

Best of luck in your retirement planning.

PO

 

[nnuut]

I cashed in the Maximum Annual Leave when I retired, got over $17K after taxes.

 

[PessOptimist]

I will too. 448 hours. Gonna be a little more than yours but pay went up since you retired.

 

[uscfanhawaii]

Got my final Retirement Benefits Estimate today. Needed because my high three changed by a whole $271. That’s about $64 per year. However, I also needed it to estimate my sickness. I screwed that up a bit by using sick leave to take SO to doctor’s appointments. It turns out I will have 128 hours that will not count. It also means one month less service credit which appears to cost $48 per year in the annuity. Oh gee. Should I have taken annual instead? No.

I am taking tomorrow off as I have 33.5 hours time off award to use that I cannot sell back. Have already got 20 more hours approved. That means 27 work days left. I may not feel well some of them but will accommodate the promises I have made.

Extend my retirement date out at least 8 days to make the sick leave count? Not possible, the leave year ends 1/3/19 and I have right now 208 hours projected use/lose. Take the rest of the year off and work longer to save those sick leave hours? No.

If you are really worried about squeezing all you can out of your bennies, figure out your projected sick leave balance more than two months in advance.

About that sick leave balance. They tell you it is based on 6 hours per day. NOT. My retirement estimate states 22 days or 128 hours. “* After use of the maximum creditable unused sick leave, you will have 22 days of potentially creditable service that will not be included in your annuity calculations because it is less than a full month. This is equivalent to 128 hours of sick leave that will not be used if you separate on the date selected. This information is being provided to you only to assist you in selecting the best date for your retirement.”

22x6=132. The actual calculation they use is based on the OPM 2087 work hours per year. Divided by 12 it equals 173.917 which they tell you is 174 hours per month. Divide that by 30 and you get 5.797 which is the actual factor they used to calculate the 128 hours. Actually 127.539 hours. I have no idea how many decimal places they use.

This is all explained at: https://www.opm.gov/policy-data-ove...rly-rates-of-pay-using-the-2087-hour-divisor/

Best of luck in your retirement planning.

PO

I was also led to believe that the SL was added onto whatever was left over from full months of service time, making it even harder to nail down.
Did they say anything about that?

 

[PessOptimist]

I was also led to believe that the SL was added onto whatever was left over from full months of service time, making it even harder to nail down.
Did they say anything about that?

Not sure exactly what you are asking but yes it is. Here are a couple of snips out of estimates I asked for. You need to ask for one of these if your agency will provide it.

In both I have 21y 6m and 23 days service credit.

In the first one I have 0y 0m 29d unused sick leave credit which adds to the total service credit.

In the second one I have 0y 1m 9d unused sick leave credit which adds to the total service credit.


Annuity Computation Service Credit
YY MM DD Description
21 6 23 FERS General Service Credit
0 0 29 FERS General Unused Sick Leave Credit
21 7 22 Total FERS Service Credit
* After use of the maximum creditable unused sick leave, you will have 22 days of potentially creditable service that will not be included in your annuity calculations because it is less than a full month. This is equivalent to 128 hours of sick leave that will not be used if you separate on the date selected. This information is being provided to you only to assist you in selecting the best date for your retirement.

Annuity Computation Service Credit
YY MM DD Description
21 6 23 FERS General Service Credit
0 1 9 FERS General Unused Sick Leave Credit
21 8 2 Total FERS Service Credit
* After use of the maximum creditable unused sick leave, you will have 2 days of potentially creditable service that will not be included in your annuity calculations because it is less than a full month. This is equivalent to 12 hours of sick leave that will not be used if you separate on the date selected. This information is being provided to you only to assist you in selecting the best date for your retirement.

I should not have used those 79.7 hours which was actually 8 days on my work schedule but still counts as 10 for retirement credit. Confused yet? Good! Your employer wants you to be that way.

Your sick leave is added on to your leftover full months of service time, just by OPMs calculations.

PO

 

[PessOptimist]

Time grows short. 23 work days left minus 2 time off award days scheduled = 21 work days.

Trimming down the to do list. Main one now is to get rid of “moveable property” that has appeared on my list as others have left. Next priority is getting the exit check list and finding out who is going to be on leave in December. A lot of people have no back up to sign the sheet.

Perils of leaving at the end of the year in a bureaucracy.

Looking forward to being unemployed.

PO

 

[PessOptimist]

Stopped by the local HR person's office today. She was out. Her admin assistant checked her list and found I wasn't on it. I submitted the paperwork to the mercenary HR retirement people, told all of my chain of command but turns out my local HR office is "out of the loop". The admin promised she would create a checklist for out processing and email it to me. I need to start working on that this week.

There seems to be a few of us who post here that are retiring 12/31/18. Please keep me and all updated on your own retirement process, especially the OPM part of it and when you actually get your full annuity amount.

Thanks

PO

 

[PessOptimist]

I'm beyond committed to retiring on 12/31...will likely take that final day off (hopefully to head to the Rose Bowl) so like you I have 22 work days left, assuming POTUS gives us 12/24 off. I'll finish the year with 380 hours of annual leave, and 2250 hours of sick leave to be applied to my CSRS time and FERS time, giving me a total of 35 years and 9 months. My pension will equate to 38.6% of my high-3 thanks to the little boost from my CSRS years.

Nobody has offered up a checkout checklist for me yet, but I know it exists so I need to ask soon. My replacement has been hired finally, but won't start until 12/23, and will be on leave that week, meaning her first day in the office will be on 1/2/19...my position requires lots of turnover/training...so nice planning! I'll be able to meet with her for much of December though thanks to the DOD office where she come from being a good sport, and just a few blocks away from my office. One thing I've done to complicate my exit is that for the first time in decades I'm changing health insurance. I'm switching to the new BCBS Focus plan since it looks like it will save my wife and I a TON of money, over $100/month. But HR said I can't make the switch online due to my retirement and have to use the old fashioned SF 2809 form and have OPM process it...so I've turned that in, and OPM will process it as part of my package, at glacial speed no doubt.

As for the markets, argh, this is what Jim Puplava on financialsense.com has been screaming about recently in his podcasts, don't get hurt by "sequential risk" right before retirement...taking a 10% or more whack in the months before retiring wasn't in the plan, but I'll deal with it. Fortunately we will have a pretty good income stream outside of the TSP so it's not the end of the world for me. Not fun though watching it melt away though. There's lots of divergences present now that "should" kick off a big rally as soon as tomorrow, but what "should" happen hasn't stopped the stampede of panicked sellers lately. The Fed needs to speak up soon and stop this or it could just all-out collapse I'm afraid.

Yup, past the point of no return. Not sure how many days I will be working out of the ones left. I finish with 448 hours annual leave and around 158 hours sick leave, 118 that don’t count for anything so I may start feeling ill. 118 hours is not worth worrying about. Total FERS time 21 y 7 m. No where near as high as your percentage (23.7) but I’ll take it.

I am replying to your post from my account talk in my retirement thread. Seems to fit better.

HR person was absent again today as was her admin. No check list yet. Maybe they will be in tomorrow but it’s a half day so… I am taking 10 hours time off award Monday so I will get back to it Tuesday. No one is shadowing me, my supervisor asked me Thursday to confirm I was leaving so she can start processing the job announcement. I want to switch my health insurance from BCBS basic+family to basic+1 to save a few bucks. I wanted to do it last year but wife was on a cruise and I was told when the change was processed her medical id card would be no good. So now my on line HR site says to go to Benefed which has nothing to do with BCBS and the FEPBlue site gives no option to change plans. Maybe the HR person can tell me if she comes to work. Maybe the 2809 is the way. Maybe waiting until after I retire is the way. It will be complicated enough with BCBS becoming secondary payer to Medicare.

Fortunately, I also will have a pretty good income stream outside TSP. TSP withdrawals are to make the take home income the same as now. It still should last 25 years or so. The question is when to move that 15% out of C fund to G and at what loss.

Best of luck and keep posting about the day to day things leading up to retirement.

PO

 

[PessOptimist]

About 10 work days left! I worked a day off Friday to go to a project planning meeting so I will say about 10 days since more meetings may come up this month. I got over being pissed about it and no shadow and everyone freaking out. I’ll work when requested until 12/31/18, then I will enjoy being unemployed.

HR person contacted me last week and asked me to attend a leader’s meeting where they were to discuss new paperless out processing. IT leader said anyone can request electronic out processing. Next day I met with HR person and she watched me request electronic “off board” I was in the app later that day because I have to check my groups tickets and found my out processing request had been immediately closed because you can’t request your own off board. No emails automatically sent to anyone. Told HR who said she would check it out. No notification so far. Only been a week. Fortunately, I know what I have to do so will initiate it on my own.

Someone in this thread mentioned that you don’t have to even tell your agency you are retiring and they have little to do with the process of actually retiring from government service. This remains true but once your agency finally figures out you are gone there are a few actions they need to take such as paying for your leave sell back and terminating your access to stuff. I guess they will figure it out. Retiring-wise, it appears to be a good thing my agency has little to do with the actual process of transferring to OPM.

PO

 

[PessOptimist]

One week retired and not much to report. Last update was 12/10/18 so minor things happened.

Got all the moveable property transferred off my account. Copied contents of my personal drive to approved media.

On the last day a project manager came to the office to get an update on a project. I had previously emailed PM about where to find the docs. Showed PM again. PM said thanks.

Had a going away luncheon on 12/20. Got a little soppy. I was given a couple gift cards. I should declare them on my taxes?

Turning the badge over to the security guard was a little strange, knowing how final that was.

The new paperless out processing did not send me any messages about things I needed to do before leaving. The old paper out processing sheet would have. (I know, I initialed a lot of them)

Got a LES as normal and paid on 1/3. Should get a LES next week and should get paid on 1/17 for final pp. AL lump sum should be received by 2/1/19.

Got a package from my agency today with copies of forms and a cover letter explaining pay and when I should get my CSA number from OPM.

Minor things that could have been more perfect. I forgot about when I get paid for working what dates. Did not carry the TSP CUC forward to tax year 2019 so missed the chance to put an additional $450 in to TSP. Also may not have 448 hours sell back AL as I didn’t work a full pay period before the leave year ended. Conflicting information about that but my last LES will tell what they do. I may only have 440 hours.

It appears that all agencies involved are not shut down so hopefully my retirement process will proceed at the normal pace.

Thought: the acronym for the OPM on line site is SOL. I have known that acronym for years. Just thinking.
PO

 

[Scout333]

Best of luck PO! Hope your retirement processing goes smoothly!