Question's about retirement

Managing your TSP and alternate investment options after retirement or separation from service.

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GUTK
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Joined: Wed Jun 28, 2017 2:42 pm

Re: Question's about retirement

Post by GUTK »

Seeking retirement advice. I retired from the military after 20 years. After alimony bringing home $1250 a month from my Mil Retirement. I am currently 55 yrs old with 17 years Civil Service. I have over $300K in my TSP. When I hit my MRA+20 (at age 58) my monthly Civ Svs annuity is $1512.00 (using the EBIS calculator). The missing factor I am totally confused about is Soc Security.

From what I understand I can start drawing the Soc Sec Supplement at my MRA+20 age 58 (is that correct?). Since the money I will be recieving from TSP, Civ Svs and Military retirement are not income the Social Security Administration will not be able to deduct $1 from your benefits for each $2 you earn above $16,920 (correct?).

When I hit my MRA at age 58 I will have worked over 40 years contributing to Soc Security. So I should be able to draw the Soc Sec Supplement risk free correct? Currently my age 62 SSI benefit is $1,575 a month so this amount will not change if I draw on it at age 58.
Last edited by GUTK on Thu Jun 29, 2017 2:28 pm, edited 1 time in total.

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evilanne
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Re: Question's about retirement

Post by evilanne »

With only 20 years civil service you would have to work 2 more years to get the Supplement at age 60 and it only accounts for your civil service time (excludes military time). http://www.fedweek.com/reg-jones-expert ... plement-4/
&
https://www.opm.gov/retirement-services ... k/c051.pdf

GUTK
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Joined: Wed Jun 28, 2017 2:42 pm

Re: Question's about retirement

Post by GUTK »

evilanne -- thanks much!!!!

From reading that, I apply the formula 1575 (SSI annuity at 62) X 22 FERS yrs / 40 yrs = $866.25. Great, nice to figure this out without having to be a rocket scientist.

As a follow-up question; is it true, If I retire before age 60 I face a 5% per year reduction in my Civil Svs retirement pay (5/12 of a percent per month)?

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evilanne
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Re: Question's about retirement

Post by evilanne »

Not sure about MRA + 20 you really need to read the regulations or call CPOL.
Dan Jamison’s FERS Guide is pretty good reference https://fersguide.com cost $10 for 1 year subscription and you could email him questions, which I did before I retired.

For regular retirement there really isn't a penalty under FERS other than you only get 1% per year times average high 3 salary. I retired early under VERA with 28.7 years but I will get the supplement once I reach my MRA, there was no penalty under FERS but there was for those under CSRS/Offset so that may also be true for MRA + 20.

Kpop
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Joined: Fri Jan 27, 2017 9:52 pm

Re: Question's about retirement

Post by Kpop »

ArrieS wrote:
crondanet5 wrote:FCOR


FCOR YTD performance -1.37% -0.69, adding dividends back in it's still -0.16.

G Fund TYD performance +0.81%

Doesn't look the same to me.


Not even close.

mindofmush
Posts: 353
Joined: Mon Jul 02, 2012 1:38 pm

Re: Question's about retirement

Post by mindofmush »

Anybody looking for a replacement fund for the G fund needs to stick with the TSP because they don't have enough confidence in their own investing abilities.

You don't imitate a limited system when better alternatives exist, like inverse funds/ETFs FOR example.
mo meng, mo ching (which loosely means: no money, no life)

TSPBuilder
Posts: 259
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Re: Question's about retirement

Post by TSPBuilder »

John316 wrote:Is there a penalty in this scenario - say at age 56 you take a full retirement, going out at your MRA with 37 years service. You do not want to leave any money in the TSP, so you open a Traditional IRA with say, Vanguard. You transfer say 300,000. Now, once the transaction is complete, can you begin to withdraw money from this IRA if you choose, even though you are not 59 and a half?


Hello John316,

I am retiring in 2.5 months everything I've read and heard says that if you take it out of TSP and put it in an IRA on the outside you will be penalized for withdrawal unless you withdraw based on life expectancy. That is the only reason I am considering leaving 1 to 3 years worth of supplemental money in TSP (until 59.5) and moving the rest to Profunds (no fees except yearly $15 maint. fee, inverse funds, leveraged funds). Confirm by calling TSP and the place you want to transfer money to. I haven't done that yet.

Ericdelee
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Re: Question's about retirement

Post by Ericdelee »

philmiec wrote:It's my understanding that you will not be hit with the 10% penalty since you've completed 30 years service and are officially retired when you begin drawing your monthly pension. And yes, you will be eligible for a social security payment at age 62. The supplement pays you a portion of your SS payment between age 57 and 62. At 62 you can start drawing your regular payment.

30 years of service or 30 years of Active Federal Service?
I know some NG folks with 20 Active Federal; but have like 32 years of total service.

Suzanne
Posts: 18
Joined: Wed Dec 05, 2012 3:45 pm

Re: Question's about retirement

Post by Suzanne »

I retired 4 years ago at 56 years old with 36 years of service. I’ve been taking a monthly distribution since I retired. I took a lot of risk when I was working and am now a little more diversified with C60 S16 F16 G8. My biggest question is, what is a good retirement mix? Im planning on leaving it TSP unless I can be convinced to roll it over.

NUC SHARK
Posts: 36
Joined: Tue Oct 03, 2017 4:02 pm

Re: Question's about retirementou

Post by NUC SHARK »

congrats on your retirement., regarding your current mix i would say it is still leaning aggressive. Have you considered the TSP Lifecycle funds? the L Income I believe is the most conservative. And then the L 2030 fund is a little bit more risky and so forth as the funds go out in years. your decision really depends on the level of your risk tolerance given several factors, like age, health, overall economy and if you still want it to grow or maintain the balance at current level considering your distributions adjusting for annual inflation.

the good thing with the G fund is you’ll never lose money. But the bad thing about the G fund is you risk it not keeping up with inflation and therefore effectively reducing the value of your portfolio

And finally, I am one of those TSPers that would say leave it in the TSP because of its low costs.

but certainly interested in others thoughts

good luck

Bubba
Posts: 394
Joined: Thu Mar 05, 2020 3:40 am

Re: Question's about retirement

Post by Bubba »

GUTK wrote: Thu Jun 29, 2017 2:03 pm Seeking retirement advice. I retired from the military after 20 years. After alimony bringing home $1250 a month from my Mil Retirement. I am currently 55 yrs old with 17 years Civil Service. I have over $300K in my TSP. When I hit my MRA+20 (at age 58) my monthly Civ Svs annuity is $1512.00 (using the EBIS calculator). The missing factor I am totally confused about is Soc Security.

From what I understand I can start drawing the Soc Sec Supplement at my MRA+20 age 58 (is that correct?). Since the money I will be recieving from TSP, Civ Svs and Military retirement are not income the Social Security Administration will not be able to deduct $1 from your benefits for each $2 you earn above $16,920 (correct?).

When I hit my MRA at age 58 I will have worked over 40 years contributing to Soc Security. So I should be able to draw the Soc Sec Supplement risk free correct? Currently my age 62 SSI benefit is $1,575 a month so this amount will not change if I draw on it at age 58.
A very important thing I recently learned is that if you retire before the age of 62, then you don't receive any COLAs to your FERS until the age of 62. So, normally that's not a big deal, but there are quite a few expecting another bout of higher inflation coming our way (who really knows, right?). In any case, just assume that if you do the prior to 62, any inflation will eat at your annuity. After 62 you do receive COLAs.

Bubba
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Re: Question's about retirement

Post by Bubba »

Suzanne wrote: Tue Mar 19, 2024 11:43 pm I retired 4 years ago at 56 years old with 36 years of service. I’ve been taking a monthly distribution since I retired. I took a lot of risk when I was working and am now a little more diversified with C60 S16 F16 G8. My biggest question is, what is a good retirement mix? Im planning on leaving it TSP unless I can be convinced to roll it over.
I would suggest you look at Paulmerriman.com. He's an excellent advice giver (all for free!) and also provides suggestions on the TSP. He gives advice according to age and other things.

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Scarfinger
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Re: Question's about retirement

Post by Scarfinger »

Bubba wrote: Wed Mar 20, 2024 5:36 am
Suzanne wrote: Tue Mar 19, 2024 11:43 pm I retired 4 years ago at 56 years old with 36 years of service. I’ve been taking a monthly distribution since I retired. I took a lot of risk when I was working and am now a little more diversified with C60 S16 F16 G8. My biggest question is, what is a good retirement mix? Im planning on leaving it TSP unless I can be convinced to roll it over.
I would suggest you look at Paulmerriman.com. He's an excellent advice giver (all for free!) and also provides suggestions on the TSP. He gives advice according to age and other things.
I second Paul Merriman for investment information. I am assuming you are 60 years old. I would base your allocation on your time remaining until death. You will still need a good amount of equities to fight inflation. I would suggest looking at some L fund allocation ratios. For Example if you expect to live another 20 years, maybe the L2045 fund ratios. The L funds are diversified and will slowly progress you to more safety as you get older.

I would suggest 80 equity / 20 bonds up to the traditional 60/40 split. At most I would go 50/50 if you are more conservative. You will need some equities to fight inflation. Ultimately it will come down to what you are comfortable with.

You can probably spend hours and hours lamenting over the perfect ratio. Another issue you may come across is... what is the correct withdrawal strategy/percentage.

You could (or should) get advice from a fee-only fiduciary for some professional advice.
I am just an average Joe. I have no clue to what the market will do.
TimboSlice wrote: "People really need to stop overthinking this."
Paul Merriman 2 fund strat: (age - 25) x2.5 = TDF + balance into S fund or variation of

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evilanne
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Re: Question's about retirement

Post by evilanne »

Suzanne wrote: Tue Mar 19, 2024 11:43 pm I retired 4 years ago at 56 years old with 36 years of service. I’ve been taking a monthly distribution since I retired. I took a lot of risk when I was working and am now a little more diversified with C60 S16 F16 G8. My biggest question is, what is a good retirement mix? Im planning on leaving it TSP unless I can be convinced to roll it over.
I was planning on leaving it in TSP until they changed the website and just rolled over a little over 25% into an IRA and probably will do some more transfers this year. I'm way more conservative than what you are but even with taking LE payments for 6 years my balance still grew.

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evilanne
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Re: Question's about retirement

Post by evilanne »

Bubba wrote: Wed Mar 20, 2024 5:34 am A very important thing I recently learned is that if you retire before the age of 62, then you don't receive any COLAs to your FERS until the age of 62. So, normally that's not a big deal, but there are quite a few expecting another bout of higher inflation coming our way (who really knows, right?). In any case, just assume that if you do the prior to 62, any inflation will eat at your annuity. After 62 you do receive COLAs.
You are correct on the No COLAa until 62 but if you have enough years service for early retirement you get the FERS Supplement that more than makes up for the COLA
- At or after the MRA with at least 30 years of service;
- At age 60 with at least 20 years of service;
https://www.opm.gov/retirement-center/p ... k/c051.pdf see page 4 (6 on pdf)

You also have TSP to supplement your pension or offset inflation. If you retire before your MRA under one of the categories, you do not get your FERS Supplement until you reach MRA. The amount is reduced if you earn more than a certain amount each year, similar to what SSA establishes for those take SSA before FRA. They take away $1 for every $2 over the threshold.

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Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

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