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phased retirement
- Thread starter alfaman
- Start date
MrBill
New member
[FONT="]Congrats alfaman on approaching retirement. I retired last year and considered phased retirement before going. You need to be comfortable with your decision, but for me it came down to whether I liked my job; and how does the income versus my time working compare to full retirement.[/FONT]
[FONT="]
First, my job involved more stress than I cared to have and staying in that position didn't really appeal to me. Your position could differ quite differently from mine.[/FONT]
[FONT="]
As for the income versus time, my instructor at my retirement class got the students to think about how much they would make retired versus continuing working. You're only working for the difference. For me, giving up half my FERS and all of my supplement so I could work half time seemed a bit much; so I did the math for me (took me a little while to find my file with the numbers).[/FONT]
So, with my current salary = 100%, my retirement goal was 85%.
My retirement with just FERS and Supplement = 48% (30% FERS + 18% Supp).
My phased retirement = 65% (50% salary + 15% FERS). So, I am giving up 33% (1/2 FERS & all Supp) in order to earn 50% salary. So, in essence I would be working half time to earn 17% of my salary. While still incurring costs to work (gas, tolls) it didn’t seem to me to be worth the effort for that. The actual % is lower as TSP, SS, FERS, Medicare, etc still comes out of the salary portion (none of this comes out of retirement).
For me, my plan was always to withdraw from TSP once retired (which you can’t do in phased retirement, you’re still working), so a 2% annual withdrawal from my TSP would get about 19% of my salary which would get me to 67% (just over phased retirement) which to me made more sense than working half time. Plus, around another 2% would get me to 86% which was just over my goal. In the end I retired last year, and now pull 4% of my TSP annually.
If I would have been under CSRS the math is a lot better, my phased retirement would be around 81% of my salary. But I am not, so I didn’t have to weigh that option. Hope this was of some assistance to you in making your decision. Good luck.
[FONT="]
First, my job involved more stress than I cared to have and staying in that position didn't really appeal to me. Your position could differ quite differently from mine.[/FONT]
[FONT="]
As for the income versus time, my instructor at my retirement class got the students to think about how much they would make retired versus continuing working. You're only working for the difference. For me, giving up half my FERS and all of my supplement so I could work half time seemed a bit much; so I did the math for me (took me a little while to find my file with the numbers).[/FONT]
So, with my current salary = 100%, my retirement goal was 85%.
My retirement with just FERS and Supplement = 48% (30% FERS + 18% Supp).
My phased retirement = 65% (50% salary + 15% FERS). So, I am giving up 33% (1/2 FERS & all Supp) in order to earn 50% salary. So, in essence I would be working half time to earn 17% of my salary. While still incurring costs to work (gas, tolls) it didn’t seem to me to be worth the effort for that. The actual % is lower as TSP, SS, FERS, Medicare, etc still comes out of the salary portion (none of this comes out of retirement).
For me, my plan was always to withdraw from TSP once retired (which you can’t do in phased retirement, you’re still working), so a 2% annual withdrawal from my TSP would get about 19% of my salary which would get me to 67% (just over phased retirement) which to me made more sense than working half time. Plus, around another 2% would get me to 86% which was just over my goal. In the end I retired last year, and now pull 4% of my TSP annually.
If I would have been under CSRS the math is a lot better, my phased retirement would be around 81% of my salary. But I am not, so I didn’t have to weigh that option. Hope this was of some assistance to you in making your decision. Good luck.
"The great news is that the option is even better. With the Modernization Act, TSP participants can do an infinite number of in-service withdrawals when they turn 59 1/2. This means they can successfully use their money to ready themselves for retirement, transferring it to a Roth IRA and carry out a post-separation plan."
so my understanding is I can take some tsp while still working
so my understanding is I can take some tsp while still working
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