Retirement: Paying it forward

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Mad Maxx
Posts: 46
Joined: Mon Jan 09, 2017 1:57 pm

Retirement: Paying it forward

Post by Mad Maxx »

A friend of mine who is retiring on 31 Dec 2018 was just at one of the "close out" seminars run by our Agency and he was told that, for those that were retiring on the last day of calendar year 2018, they could use the money they will get paid for their annual leave and the partial week (Dec 23-31) pay, to put towards their 2019 TSP contributions if they didn't need the funds to carry them through until their annuity check arrived. Anyone know any truth about that? Can I use my Annual Leave check for my TSP upon retirement? Does that work any time of year or just the end of the year? If that is the case, it could be very beneficial for me!

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fordest
Posts: 605
Joined: Wed Sep 26, 2012 3:48 pm

Re: Retirement: Paying it forward

Post by fordest »

I do know that PP 26 contributions do go toward the 2019 contribution limits so it stands to reason that he would be able to contribute that money that he earned in 2018 even if he were retired when the money was actually deposited
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chi7834a
Posts: 30
Joined: Fri Oct 06, 2017 3:26 pm

Re: Retirement: Paying it forward

Post by chi7834a »

I just retired last day of 2017. I don't know if anyone that was told that. If that's true, does the government match 5%? If so, I would have taken that if offered. Your annual leave check is considered "salary" and as such they not only take out federal tax but SS too. It's a total ripoff!

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mjedlin66
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Re: Retirement: Paying it forward

Post by mjedlin66 »

chi7834a wrote:I just retired last day of 2017. I don't know if anyone that was told that. If that's true, does the government match 5%? If so, I would have taken that if offered. Your annual leave check is considered "salary" and as such they not only take out federal tax but SS too. It's a total ripoff!
1. The government probably won't match unless they are paying you for regularly scheduled hours. For example, they do not match your OT. They only match 5% of your 80 hours. So if you are talking specifically about leave buy-back, I doubt they will match 5%. But if you stay on the books until your leave is exhausted, then you will definitely get the 5%.

2. It IS taxable wages.
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floridabre
Posts: 24
Joined: Thu Sep 11, 2014 7:48 am

Re: Retirement: Paying it forward

Post by floridabre »

mjedlin66 wrote:
chi7834a wrote:I just retired last day of 2017. I don't know if anyone that was told that. If that's true, does the government match 5%? If so, I would have taken that if offered. Your annual leave check is considered "salary" and as such they not only take out federal tax but SS too. It's a total ripoff!
1. The government probably won't match unless they are paying you for regularly scheduled hours. For example, they do not match your OT. They only match 5% of your 80 hours. So if you are talking specifically about leave buy-back, I doubt they will match 5%. But if you stay on the books until your leave is exhausted, then you will definitely get the 5%.

2. It IS taxable wages.

i am retiring effective 12/31. I was told that the payout for annual leave that is on the books as of that date MAY be paid with the payment for my last work days (pay period beginning 12/23 and ending 1/5) or the next pay cycle. I will likely have over 350 hours of annual leave remaining as of 12/31, also i have been told that the pay rate would be at the 2019 pay for the annual leave at least for the hours that would be available starting with the new year even though I am only allowed to carry 240 hours of annual leave into the new leave year. I am also getting a VSIP but they were not sure when that is paid and are looking into it. If it is possible, i would put the entire amount into TSP (subject to the contribution limits for 2019) to avoid income taxes (but given the timing of the payments they dont think this will be possible).

Further complicating the retirement and payment process is the potential government shutdown (starting as soon as 12/22) and/or possible decree of 12/31 a holiday or excused leave.

i havent decided yet, but i may process a change to my payroll to deposit to TSP at least 5 days worth of my regular pay - concern is how the payroll office handles the order processing the various "charges" for paycheck (TSP, FERS, SS (OASDI), FEHB, FSA, Charity, FEGLI, Medicare, Federal taxes and Dental/Vision ins.)

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