Post-Retirement Talk: Discuss Strategies

[RazorCat]

I'm starting this thread in the hopes that fellow TSP members will share their strategies, plans, dreams, anything regarding retirement with other members. Hopefully, those members who are currently retired, and those who are looking forward to it in the near future will offer their thoughts.
What have you done since retiring? What do you plan to do after retirement? Work? Play? Travel? Does your spouse, significant other, still work?
Do you feel you are financially prepared to get the most out of your retirement? Do you worry about the future? Whatever You want to talk about.

I'm coming to the end of 29+ year career in Federal Law Enforcement. I've been fortunate enough to have spent my entire career at one institution and finally have the honor of being first on the seniority list this year. That turned out to be somewhat of a mixed bag. By reaching that milestone,
I've watched every person I started with, and those here before us, retire. And, in the months prior to retirement, they we're all repeatedly asked the same question by younger staff. "What do you plan to do after retirement?" Some had a definite, well thought out answer. Some didn't have a clue. It's the first question I'm asked when I meet someone I haven't seen in a while. Do I have a job lined up? Am I moving or staying in town? Is my retirement pay what I thought it would be? What did I do to prepare financially?

I'll kick it off. I hope some of you members with a great deal more knowledge on the subject than me will join in.

I'm retiring as a Regional I. T. Supervisor from the Federal Bureau of Prisons with 29.5 years. I'll be 56. While I understand the need to stay active and contribute in some way, and feel useful, I haven't decided whether I'll going back to work any time soon. At least, not in a conventional 9-5 type job where I'd most likely have to, at some point, answer to someone else. Been doing that since 1971. With the SSA limit for earnings at $15,120.00 before they start penalizing me it hardly seems worth it. Especially, after taxes, buying clothes, gas, lunches, etc. All the trappings that come with "going to work". My plan for now is to live off my LEO retirement and maintain a decent rate of return on my TSP and IRA that will match or exceed any reasonable withdrawals (3-5%) I might make. I don't plan to withdraw anything while my wife is still working. 2-3 years more by her estimate. So, the short term plan is to keep my BassCat in the water a couple days a week, take my wife to lunch often, enjoy picking up my 3 granddaughters at school once a week, got to their softball games, see my son more when he's not working, and start and finish several projects around the house. And travel, then travel some more. Oh, and go to the gym (because my wife says so).

So, what's your plan???



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[RazorCat]

I'm starting this thread in the hopes that fellow TSP members will share their strategies, plans, dreams, anything regarding retirement with other members. Hopefully, those members who are currently retired, and those who are looking forward to it in the near future will offer their thoughts.
What have you done since retiring? What do you plan to do after retirement? Work? Play? Travel? Does your spouse, significant other, still work?
Do you feel you are financially prepared to get the most out of your retirement? Do you worry about the future? Whatever You want to talk about.

I'm coming to the end of 29+ year career in Federal Law Enforcement. I've been fortunate enough to have spent my entire career at one institution and finally have the honor of being first on the seniority list this year. That turned out to be somewhat of a mixed bag. By reaching that milestone,
I've watched every person I started with, and those here before us, retire. And, in the months prior to retirement, they we're all repeatedly asked the same question by younger staff. "What do you plan to do after retirement?" Some had a definite, well thought out answer. Some didn't have a clue. It's the first question I'm asked when I meet someone I haven't seen in a while. Do I have a job lined up? Am I moving or staying in town? Is my retirement pay what I thought it would be? What did I do to prepare financially?

I'll kick it off. I hope some of you members with a great deal more knowledge on the subject than me will join in.

I'm retiring as a Regional I. T. Supervisor from the Federal Bureau of Prisons with 29.5 years. I'll be 56. While I understand the need to stay active and contribute in some way, and feel useful, I haven't decided whether I'll going back to work any time soon. At least, not in a conventional 9-5 type job where I'd most likely have to, at some point, answer to someone else. Been doing that since 1971. With the SSA limit for earnings at $15,120.00 before they start penalizing me it hardly seems worth it. Especially, after taxes, buying clothes, gas, lunches, etc. All the trappings that come with "going to work". My plan for now is to live off my LEO retirement and maintain a decent rate of return on my TSP and IRA that will match or exceed any reasonable withdrawals (3-5%) I might make. I don't plan to withdraw anything while my wife is still working. 2-3 years more by her estimate. So, the short term plan is to keep my BassCat in the water a couple days a week, take my wife to lunch often, enjoy picking up my 3 granddaughters at school once a week, got to their softball games, see my son more when he's not working, and start and finish several projects around the house. And travel, then travel some more. Oh, and go to the gym (because my wife says so).

So, what's your plan???

Would really like to hear from those of you that are already retired. Good information for the rest of us.
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[Kaufmanrider]

JR, I am not retired yet but will be at the end of year. Similar to you, I have 25+ years LEO, plus 6 military. Difference is I am only 49.
When, or if, I opt to go back to work I'll have no cap until I reach my MRA age. That gives me 6-7 years before I have to worry about the SS penalty.

Are you CSRS? If so, I wish I had your retirement, but such is life. You deal with the hand you were dealt.

I will be rolling my TSP into a self-directed IRA.

I am working on my plan but right now I am looking to diversify mainly into dividend stocks and a "couch potato" collection of ETF funds.

 

[Birchtree]

Any time you can lock up capital gains to defer the IRS you are ahead of the game on your terms. And capital gains pass to an heir easily with a step up in basis - that means the accumulated capital gains are tax free to your heir. Obama hasn't discovered this mechanism yet.

 

[tsptalk]

I'm starting this thread in the hopes that fellow TSP members will share their strategies, plans, dreams, anything regarding retirement with other members.​

Good idea, jrwash. But I'm going to move this from the "Rules" Forum to a more appropriate forum.

 

[RazorCat]

I'm FERS. Missed CSRS by about 4 months, and actually just fine with it. The key to FERS is contributing to TSP. I was lucky enough to be able to contribute the maximum allowed all these years, and make a decent average return. A lot due to TSPTALK. Trust me, not easy at times. But, it's paid off. The combination of LEO retirement, FERS supplement, and TSP withdrawal (when I start taking one in a couple of years) will meet or exceed what I would have gotten under CSRS. Both good retirement plans.
Just have to figure out how to make work for you.

 

[DreamboatAnnie]

One of my goals for retirement was to own a house that was fully paid off one year before the year i would be eligible for retirement. So when i bought home, i made sure there was no prepayment penalty, and then used Excel to create a amortization schedule for the number of years until retirement to compute how much I needed to pay each month to fully pay it off in x years (I.e. less than 30 years). If you do that when you buy your first home, it does not result in significantly higher payments. Then I set up my budget and set up auto payments for that amount. Time flies and it is just one more way to be ready and be debt free at retirement. Hope someone including young folks might benefit from doing that!

 

[nnuut]

One of my goals for retirement was to own a house that was fully paid off one year before the year i would be eligible for retirement. So when i bought home, i made sure there was no prepayment penalty, and then used Excel to create a amortization schedule for the number of years until retirement to compute how much I needed to pay each month to fully pay it off in x years (I.e. less than 30 years). If you do that when you buy your first home, it does not result in significantly higher payments. Then I set up my budget and set up auto payments for that amount. Time flies and it is just one more way to be ready and be debt free at retirement. Hope someone including young folks might benefit from doing that!

That's what I did, Paid off a 30 year loan in 12 years, saved so much money you can't belive. Did it 4 yaers ago if I had paid the payment plan I would pay until 2025.

 

[alevin]

I started my loan paydown program on the 2d house, 8 years after buying the first. took me another 7 years, but done awhile back. Helps not to buy too much house in the first place. Higher interest rates mean lower home prices, I bought at the right times, lucky I guess. principal paydown comes fast when home price is low to start with. all those mortgage payments I'm not making are letting me max out tsp-still not easy, but possible because no mortgage. and roth is also marginally doable too at this point.

 

[PessOptimist]

Just a thought - helps to only buy one house at at time.

 

[DreamboatAnnie]

Also a good thing to increase your contribution percentage to TSP each year by the COLA percentage you get...pain free way to max out TSP. You don' t miss what you never got in a paycheck...too bad we've gone so long without a COLA...

 

[alevin]

Just a thought - helps to only buy one house at at time.

He's got a point there too, you know. those of us who move around with .gov end up being serial homebuyers. I buy one, live in it, sell it, buy the next, live in it, haven't sold that one yet-its paid off and I haven't been inclined to move since then.

Now I do have a very middle-middleclass friend in private sector who doesn't have a dime in the stock market, her retirement is all in real estate. but she sweats anytime she has a vacancy in one of her rentals.

 

[RazorCat]

Also a good thing to increase your contribution percentage to TSP each year by the COLA percentage you get...pain free way to max out TSP. You don' t miss what you never got in a paycheck...too bad we've gone so long without a COLA...

I totally agree. That's how I was able to work mine up to maximum years ago. Anybody remember the good old days when we got those huge 4-5-6% raises??? Part of the COLA went to TSP, part went to the take home pay. My wife and I adopted the attitude that it was money we couldn't use until retirement. Period. TSP contributions weren't considered disposable income that we could redirect elsewhere. TRust me, It wasn't easy at times. Except for a couple of really lean years when my kids were in college, I never reduced my TSP contributions. Dropped them by 4% from max for 2 years to get the boys thru and still make ends meet. Once college was done, we got back to max on TSP and then refinanced the house with a very low interest (3.25)% loan my CU offered.
Took a total of 12 years to pay off our present home. That was 4 years ago and we're staying put. To me, those were always the two key elements to retiring financially secure at any age. But, especially mid-50s to early 60s.

 

[RazorCat]

I totally agree. That's how I was able to work mine up to maximum years ago. Anybody remember the good old days when we got those huge 4-5-6% raises??? Part of the COLA went to TSP, part went to the take home pay. My wife and I adopted the attitude that it was money we couldn't use until retirement. Period. TSP contributions weren't considered disposable income that we could redirect elsewhere. TRust me, It wasn't easy at times. Except for a couple of really lean years when my kids were in college, I never reduced my TSP contributions. Dropped them by 4% from max for 2 years to get the boys thru and still make ends meet. Once college was done, we got back to max on TSP and then refinanced the house with a very low interest (3.25)% loan my CU offered. Took a total of 12 years to pay off our present home. That was 4 years ago and we're staying put. To me, those were always the two key elements to retiring financially secure at any age. But, especially mid-50s to early 60s.

I'll admit it's much easier looking back from where you're at today, then it is looking forward to where you want to be one day. But, if you're one of those that's looking 10-15-20 years down the road to retirement you have to find a plan you can live with, and then stick with it for the long haul. Or have a rich Uncle or win the Lotto.

 

[Birchtree]

I am reaping the beauty of dollar cost averaging over many years. I pity the folks that react to every up and down in the market place. If we pulled back 5% it would feel like death. But in truth, it would do little to the bull market technicals. Most of the areas of this market are in bull market mode. Riding the gravy train to even more gains.

 

[Scout333]

Hello Fellow TSP'rs, I'm considering my options for TSP withdrawals at retirement. I am well past 59.5 age for relief from penalties. For those who have already made their choices what did you choose and why? I am considering leaving everything in the TSP and withdrawing 4-5% a year until it runs out. Should meet the requirement to start withdrawing at age 70 1/2 to avoid withdrawal penalties (not one you wish to run afoul of-they basically take your money. Ideas???

 

[RazorCat]

Hello Fellow TSP'rs, I'm considering my options for TSP withdrawals at retirement. I am well past 59.5 age for relief from penalties. For those who have already made their choices what did you choose and why? I am considering leaving everything in the TSP and withdrawing 4-5% a year until it runs out. Should meet the requirement to start withdrawing at age 70 1/2 to avoid withdrawal penalties (not one you wish to run afoul of-they basically take your money. Ideas???

I'm leaving 50% of my current balance in TSP, moving 50% to a self directed IRA. A large portion of that will be invested with Vertical Alliance. A company I've invested in successfully for many years now. I plan to build on my TSP and the IRA for a couple more years while my wife is still working and make no withdrawals during that time. We'll be 58 in 2 years. I believe you have to start enjoying the fruits of your labors while you're young enough to do so. I'll slow down some when I get older. Much, much older.
I'm LEO retirement, so I've planned my income stream accordingly. I believe I have a plan that will work for as long as I'm around.

Income 56-58: FERS LEO annuity, FERS supplement, Wife's salary. Only if necessary, minimal TSP withdrawals, or part time employment (if someone holds me at gunpoint).
Income 59-62: FERS LEO annuity, FERS supplement, TSP withdrawals equaling 5-6% annually. Wife retired, time to travel. ALOT.
Income 63-66: FERS LEO annuity, TSP withdrawals equaling 4-5% annually, wife applies for SS benefits, I apply for FASF (file as spouse first) SS benefit which is estimated to be around 40% of her SS benefit. Applying for FASF doesn't affect my SS benefit at FRA (66.5).
Income 66-? : FERS LEO annuity, TSP withdrawals equaling 3-4% annually (or less), Wife's SS, Apply for my SS benefit at FRA (66.5).
By waiting until Full Retirement Age to withdraw my SS I insure that my spouse gets full survivor benefits one day.
By TSP estimates, the funds left in my TSP will last me well into my 90s if I withdraw at 6% annually at a 5-6% return. I believe I'll be withdrawing much less in later years.
I would love some feedback on this. Am I on the right track? Any holes in the plan. There are alot of seasoned retirees on here whose opinion would be valuable.

 

[Frixxxx]

Hello Fellow TSP'rs,... I am considering leaving everything in the TSP and withdrawing 4-5% a year until it runs out. Should meet the requirement to start withdrawing at age 70 1/2 to avoid withdrawal penalties (not one you wish to run afoul of-they basically take your money. Ideas???

Hopefully by the time you reach mandatory retirements, it won't be a bother. MRD's are not designed to drain accounts, just get the money back into circulation. The calculations are pretty much based on performance and value, to ensure that you are meeting your end of the bargain for taking advantage of the tax-deferrment.

Income 63-66: FERS LEO annuity, TSP withdrawals equaling 4-5% annually, wife applies for SS benefits, I apply for FASF (file as spouse first) SS benefit which is estimated to be around 40% of her SS benefit. Applying for FASF doesn't affect my SS benefit at FRA (66.5).I would love some feedback on this. Am I on the right track? Any holes in the plan. There are alot of seasoned retirees on here whose opinion would be valuable.

Question, I'm reviewing the SS supplement information. I'm confused on how you can draw on your wife's SS without causing the supplement to be affected. Do you have a link?

 

[Scout333]

Hopefully by the time you reach mandatory retirements, it won't be a bother. MRD's are not designed to drain accounts, just get the money back into circulation. The calculations are pretty much based on performance and value, to ensure that you are meeting your end of the bargain for taking advantage of the tax-deferrment.


Question, I'm reviewing the SS supplement information. I'm confused on how you can draw on your wife's SS without causing the supplement to be affected. Do you have a link?

Would that be the Windfall Elimination Provision? Is that the one that reduces your SS benefit by two thirds? I lucked out and missed that provision as an "offset" employee I had over 30 years of earnings subject to SS taxes, etc. It is wicked. Does it apply when you draw on your spouse's earnings which I guess is your original question?

 

[Frixxxx]

Would that be the Windfall Elimination Provision? Is that the one that reduces your SS benefit by two thirds? I lucked out and missed that provision as an "offset" employee I had over 30 years of earnings subject to SS taxes, etc. It is wicked. Does it apply when you draw on your spouse's earnings which I guess is your original question?

Well, not really, but good topic.

My issue - My wife is 6 years older than me.

I will retire at 57, with 31 years. I have always paid SS.

Since I will be 57, I qualify for SS Supplement. When I turn 62, my wife is well into drawing SS. I guess what I didn't realize until now is that the supplement will end at 62 (jr's example) and he will file against his wife for the 40% which will offset the supplement.

That was confusing for me at first, but re-read it to get the message.