If an employee retires (or leaves civil service) in the middle of a pay period, does s/he have any TSP contributions taken out? And are any automatic or matching contributions made in that instance?
I'm asking because I'm planning to retire (a long time from now) at the end of the calendar year, which will be in the middle of a pay period. So I want to make sure I get as much out of the system as possible.
Contribution question for partial pay period
Moderator: Aitrus
Re: Contribution question for partial pay period
Welcome, quidam65!
Most retirement advisors will suggest that you retire at the end of a pay period because they don't pro-rate, they truncate. If you want to get the most out of the system, perhaps consider retiring at the end of the last pay period of the year, which usually ends in January, so you can pick up the annual pay raise.
Of course, at age 54 with 32 years of service, if you really want to get the most out of the system, you could retire just two years from now and capture the special retirement supplement as well as your FERS annuity. Just using a rough guess on your situation, that supplement is worth about $15K per year up to age 62, or $90K total. Not to mention six years of beach time while you're still young! Now that's working the system!
Most retirement advisors will suggest that you retire at the end of a pay period because they don't pro-rate, they truncate. If you want to get the most out of the system, perhaps consider retiring at the end of the last pay period of the year, which usually ends in January, so you can pick up the annual pay raise.
Of course, at age 54 with 32 years of service, if you really want to get the most out of the system, you could retire just two years from now and capture the special retirement supplement as well as your FERS annuity. Just using a rough guess on your situation, that supplement is worth about $15K per year up to age 62, or $90K total. Not to mention six years of beach time while you're still young! Now that's working the system!
Re: Contribution question for partial pay period
It is preferable to retire at the end of the pay period as rcozby said, but I think they still will deduct regular TSP if you have it as a percentage term. If you have dollar amount, you have to have enough earning to cover or they won't take it. I got the 1% matching but since they screwed up my regular TSP, I don't know if I would have gotten the other matching but think it would be likely since they paid the 1% automatic
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