What have you (LEO/FF/ATC) done with your TSP after retirement?

[MacGuffin]

Hello Folks,

As you can see, I'm brand new to this forum. I was attending a group meeting at the office a couple of weeks ago, and I was awarded my 20 year pin. Then it hit me... Holy Cow! My retirement is closer than I realized. I am eligible in five years and my plan is to punch out at that time - I'll be 50 years old.

I have been doing quite a bit of research online as far as TSP withdrawal options are concerned, and WOW! There are outright contradictions all over the place. For example, a 10% penalty will be assessed if withdrawals occur before 55 - or, no it won't be assessed due to the Pension Protection Act of 2006. So, I figured the best way to find out the real scoop is to connect with those of you that have actually exercised your withdrawal options.

I know plenty of CSRS retired LEOs, but they're in a different game altogether. I do talk to a (FERS) retired Deputy U.S. Marshal from time to time. He opted for the MetLife annuity. And, he is happy with it. The caveat is, however, the rate was higher at the time he bought his annuity. Right now, the rate is very low! But, then again, so are the amounts for the life expectancy tables. I was looking hard at setting my own amount for monthly withdrawals after punching in the figures on the TSP website, and I was happy with what I was seeing as far as a potential monthly amount along with sustainability of the remaining balance last until I'm in my late eighties. But, is it worth writing off a 10% hit for the penalty each month until age 59 1/2?

So, this is why I ask, what have you done?

Thanks in advance!

 

[RealMoneyIssues]

MacGuffin, welcome and good luck. I cannot help you with your question, but there are tons here that can. I just wanted to stop by and welcome you.

Have a great day !!
RMI

 

[nnuut]

Welcome MacGuffin and best of luck with your TSP.
Norman, retired CSRS!

 

[Handballer]

Welcome MacGuffin to our world. I retired (FERS) several years ago and over the age of 65. I am taking the monthly payments and am happy with it. I am withdrawing $700 a month and hope to make that amount (and more) with my investments in TSP.

If I were you I'd consider working more years past 50 years of age. Unless you are already rich, you may need the money in years to come. thanks for joining us. We need another pretty face.

 

[Kaufmanrider]

MacGuffin, I am in the same boat you are, sort of. I'll have 25 years LEO next year and can retire at 48 years old (well, two months before I turn 49). Plus I bought back 5 years military. I have had retirement comp's done and the numbers look good. I look at take home pay after all deductions compared to my take home pay while working. TSP is going to be the key if I can go next year or wait a little longer.

I believe we have to follow 72T rules. There is a good website www.72T.net. I have a friend who retired at 50 as a LEO and took a lump sum. After he filed taxes the IRS wrote and informed him he owed the 10% penalty for early withdrawal. He challenged it, collect documents, when to the IRS and submitted the documents and won. After about two weeks they notified him that he qualified as a Public Safety Officer. Either the IRS screwed up on him, or we do qualify and no one wants to say it. I do know the AFGE and I believe Federal Law Enforcement Officer Association believe we don't qualify and have requested Congress amend and clarify the Pension Protection Act of 2006. So I am leaning toward the IRS messing up. They IRS person he dealt with admitted they don't deal with Public Safety Officers and were unaware of the exemptions and IRS codes etc., concerning PSO's. He said my friends information was news to him.

A co-worker goes to church with a retired ATC. He claims the retired ATC took out money and has not had to pay the 10%, supposedly he was 53. He is going to try and get more details.

As of now it's a crap shoot? I plan on playing it safe at this point and doing a 72T calculation. So my plans/retirement date will hinge on the interest rate amount for a 72T and the dollar amount of my TSP. Unless something definitive comes up.

Remember, as LEO we will get annual COLA's for our FERS annuity (if there is one), but not for our FERS Special Supplement (Social Security offset). So a 72T based on life expectancy, recalculated annually will also increase yearly, that is as long as we make more in interest in our TSP than we withdrew annually.

If you do a 72T, it's locked in for 5 years or until you turn 59 1/2, whichever is later. But there are variations withing 72 T (anuity, Amoritization, life expectancy) and you can do one change between them while doing the withdrawal.

And worst case a another job, maybe part time? As LEO/FF/ATF, we have no earnings cap until we reach or Minimum Retirement Age. After that, if you make over a certain dollar amount your FERS Special Supplement is reduced, kind of like what they do for Social Security Recipients.

I told my wife maybe I'll get a job at Home Depot or Lowes watering plants in the outside garden section for about 20 hours a week. Enought to keep my busy and give me a little pocket money to pay for gas in my Harley.

Hello Folks,

As you can see, I'm brand new to this forum. I was attending a group meeting at the office a couple of weeks ago, and I was awarded my 20 year pin. Then it hit me... Holy Cow! My retirement is closer than I realized. I am eligible in five years and my plan is to punch out at that time - I'll be 50 years old.

I have been doing quite a bit of research online as far as TSP withdrawal options are concerned, and WOW! There are outright contradictions all over the place. For example, a 10% penalty will be assessed if withdrawals occur before 55 - or, no it won't be assessed due to the Pension Protection Act of 2006. So, I figured the best way to find out the real scoop is to connect with those of you that have actually exercised your withdrawal options.

I know plenty of CSRS retired LEOs, but they're in a different game altogether. I do talk to a (FERS) retired Deputy U.S. Marshal from time to time. He opted for the MetLife annuity. And, he is happy with it. The caveat is, however, the rate was higher at the time he bought his annuity. Right now, the rate is very low! But, then again, so are the amounts for the life expectancy tables. I was looking hard at setting my own amount for monthly withdrawals after punching in the figures on the TSP website, and I was happy with what I was seeing as far as a potential monthly amount along with sustainability of the remaining balance last until I'm in my late eighties. But, is it worth writing off a 10% hit for the penalty each month until age 59 1/2?

So, this is why I ask, what have you done?

Thanks in advance!

 

[SkyPilot]

As LEO's who are PSO, we get the exemption for the Defined Benefit. Our TSP Accounts are not Defined Benefits, but rather Defined Contributions and as such qualify for no other exemption other than being exempt from the 10% penalty if we retire in the year in which we turn 55 (or if we withdraw according to 72t rules).

Again, we receive the PSO exemption just like all other PSO's.

Although we would like to think we could extend the PSO exemption to other types of accounts, only Defined Benefits qualify, no matter if you are a FLEO, or a PSO with any other local or state agency.

Nobody gets the PSO exemption of Defined Contribution accounts.

In other words, it is the type of account that qualifies for the exemption (Pension vs 401k and the like), not the agency status of the PSO. All PSO are treated the same, except for the FLEO who get's special exemption from 10% penalty in the year in which they turn 55).

I bet state and county PSO's would love to get our (FLEO PSO) exemption!