Thoughts on this idea?

[ripper]

I've always planned on retiring when I first became fully eligible, which will be 1/1/15. I will be 59 y/o then and have 30 yrs. FERS service.
But now I'm considering sticking around just a little bit longer due to an idea I recently had.
I'm considering working into 2015, putting the max amount of each paycheck into the Roth TSP. I would also put the max contribution into my 2015 Roth IRA. I figure I would have to work about six months to be able to do this and then I would retire. I would then transfer my TSP into my IRA's and wouldn't take any distributions that year, keeping my taxable income lower and giving me a better benefit for my Roth contribution. I currently have more than enough money in a regular account to live well for over a year without any income.
About the only negative I can see with doing this is giving six more months of my life to "the man". But I feel like I'd be glad I did it - being able to put about $30k extra into a Roth account that I could withdraw from tax-free later.
I should add that I don't hate my job, but I don't really look forward to going to work each day, either.
I'd appreciate any feedback on this idea. I'm afraid there may be some other drawbacks - other than working a little longer - that I'm missing.

 

[Birchtree]

All tax basis is based on adjusted gross income and anytime you can control that factor you are better off.

 

[k0nkuzh0n]

I guess I missed the benefit.. Outside of the increased matching contribution, PTO, and more salary. Which if that is the benefit one is looking for, you'd never retire.

Outside of TSP matching, I don't see a point in putting money into a ROTH, as it won't be taxed any differently than if you put it under your mattress.

 

[nnuut]

I retired 3 months from being 65, why did I do that? To maxmize my retirement check, SSA check, and TSP. Figure it out you are taking a big cut by retireing early. How much would you get if you worked longer while maxmizing your retirement funds and investments?

 

[PessOptimist]

At 62 with >20 years the FERS mutiplier for your annuity goes from 1% to 1.1%.

 

[Buster]

I retired 3 months from being 65, why did I do that? To maxmize my retirement check, SSA check, and TSP. Figure it out you are taking a big cut by retireing early. How much would you get if you worked longer while maxmizing your retirement funds and investments?

Norm, you and I don't have a dog in this hunt..we are CSRS and our terms are very different than FERS...I pulled the plug at age 55 with 36 years..if I had stayed working I was going to make a whole 1.95/hour more while working than retired..

Since most of my adult career was as a Government Employee under CSRS, I am not yet eligible in terms of quarters worked under the SSA..so I'm working now for a couple of more years as a private civilian to earn SS eligibility of 40 quarters....RE TSP:..Again under CSRS non funds matching..So as soon as I retired I rolled all my TSP money into a IRA that pays dividends at least 5% annually guaranteed....I din't dare trust my money any longer to the azzholes at TSP...

Last time I worked for $1.95/hour was in 1972 making pizzas...taint worth it.

 

[nnuut]

Norm, you and I don't have a dog in this hunt..we are CSRS and our terms are very different than FERS...I pulled the plug at age 55 with 36 years..if I had stayed working I was going to make a whole 1.95/hour more while working than retired..

Since most of my adult career was as a Government Employee under CSRS, I am not yet eligible in terms of quarters worked under the SSA..so I'm working now for a couple of more years as a private civilian to earn SS eligibility of 40 quarters....RE TSP:..Again under CSRS non funds matching..So as soon as I retired I rolled all my TSP money into a IRA that pays dividends at least 5% annually guaranteed....I din't dare trust my money any longer to the azzholes at TSP...

Last time I worked for $1.95/hour was in 1972 making pizzas...taint worth it.

I could have retired at 58 with 30 years. That was 56.25% of my high 3. I worked 7 more years which meant 14% more a year including pay raises. Your SSA will be cut by 60% with 40 quarters due to the WEP. Haven't touched my TSP it's my emergency fund until I'm 70 1/2 then mandatory disbursements start.

 

[Buster]

Your SSA will be cut by 60% with 40 quarters due to the WEP. .

Yes But, 40% of something is better than 100% of nothing..

As far as that extra 14% (@ 2%/year, yes I understand how that works)..I considered 4 more years to 40 years of service and that would be, let me see now, 1 + 2, carry the 1, that would = 8% more..nope not good enough reason to hang around for all the BS harassment from upper management and all the bullsh!t politics of the job..I made that 8% projected for 20 more years of life in just the last 18 months as a private civilian employee ..To make it simpler to understand ..I made in the last 18 months, the same money that I would have made at 8% in 20 years....a no brainer of which way to go..

And before anyone says; "why did you retire if you still wanted to work?"..I say; cuz I'm now making 3 to 4 times the take home pay I use to make as a full time Government employee, with my retirement income..

 

[nasa1974]

We all have different reasons for retiring. Finacially can you retire? Are you mentally ready to retire and what do you plan to do after retiring? The bottom line is do your homework.

 

[nnuut]

Yes But, 40% of something is better than 100% of nothing..

As far as that extra 14% (@ 2%/year, yes I understand how that works)..I considered 4 more years to 40 years of service and that would be, let me see now, 1 + 2, carry the 1, that would = 8% more..nope not good enough reason to hang around for all the BS harassment from upper management and all the bullsh!t politics of the job..I made that 8% projected for 20 more years of life in just the last 18 months as a private civilian employee ..To make it simpler to understand ..I made in the last 18 months, the same money that I would have made at 8% in 20 years....a no brainer of which way to go..

And before anyone says; "why did you retire if you still wanted to work?"..I say; cuz I'm now making 3 to 4 times the take home pay I use to make as a full time Government employee, with my retirement income..

Money talks Buster, you DaMan!

 

[nnuut]

Thrift Savings Plan (TSP) Overview

 

[ripper]

Thanks for the replies. I appreciate them.
I think the most important thing to keep in mind when choosing when to retire - as was previously mentioned - is that it's an individual decision. We are each unique, including our retirement goals and our own ideas of financial security. But I certainly enjoy hearing the opinions of others.
My goal has always been to be able to retire ASAP and have a retirement income that is greater than when I was working. Fortunately, it presently appears that I will be able to meet that goal, although I realize nothing is certain. I would put my contributions into the Roth TSP since I expect my taxable income to be greater when I retire than it is now.
Keeping busy (and happy) after I retire shouldn't be a problem. I've worked part-time for 14 years as a sports writer for the local newspaper. I primarily cover local sporting events but also cover national events when I'm able to get time off from work and travel. Retiring would allow me the flexibility to travel to a greater number of national events, which I'm sure I would enjoy.
I also have some rental properties which would be much easier to manage if I was retired. But I have to admit that I'm getting a bit tired of "tenants and toilets" and will more than likely sell them after I retire, especially since I plan on spending my winter months in a warmer climate.
Most importantly, I have two grandchildren who I rarely get to see since they live about 1,000 miles away. It would be great to see them more often.
I'm still unsure as to what I will do. I'll probably remain that way until the time comes when I have to make a decision. But it's not a major issue and I think I'll be satisfied with whichever I choose.