The Ultimate FERS Retirement Checklist at 10, 5, 3, and 1 Years from Retirement
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- เผยแพร่เมื่อ 30 เม.ย. 2023
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I dropped FEGLI a little while back but I think it would be great to add to your list that people check into funeral planning vs. paying more for Life Insurance, unless the have dependents, it made much more sense for me to buy my funeral package and drop life insurance all together. Cremation plan and service $2500, and exactly what I want.
At all ages find out your max allowable yearly TSP contribution limit and divide by 26 (some years 27) to calculate your per pay period TSP contribution to maximize contributions and deferred tax and to evenly spread out matching. Try to get steady raises and promotions (if not too stressful) to raise your 3 year high average salary. At age 50, start using the catch up plan to raise TSP contributions thousands of dollars. Keep your spouse working full time for a long time with their own 401k plan and hopefully their own pension plan. That way you may not need pension survivor's benefits and can max out your pension checks (survivor's benefits reduce your pension pay out). Consider having no kids or just one kid. At age 55 FEGLI premiums start to sky rocket and a 5 year intervals thereafter, so seriously consider dropping out of FEGLI unless you are at high risk of dying from a known disease. Plan to retire on the last day of the month when you reach 30 years for no penalty and for no pay gap between last salaried day and first day of pension calculation (first day of the month). Plan for extra retirement money in the form of the FERS annuity supplement which is a bridge to social security if you retire before age 62 until age 62 (a free money benefit). Keep a cash reserve as a cushion while working and to wait out market downturns after retirement. I was 100% C fund for 29 years which worked out great, riding out each recession and bouncing back better than ever and then going exponential under President Trump, but not sure that Biden's chaotic economy can bounce back. Don't invest in individual stocks or crypto (too risky), and instead invest diversified in the C fund (S&P top 500 companies). If you retire near the end of the year, a big annual leave lump sum conversion payout will be taxed to the max, so maybe wait to retire until beginning of the following year. Same with your TSP retirement withdrawals, you might want to wait until the start of the next year to be in a lower tax bracket. Sick leave is converted to years of service in pension calculation but does not get you to 30 years sooner. Plan for much less withholding and more % net take home pay in retirement. My 30 years plus 1 year 1 month of sick leave (31.1 years of service in pension calculation) plus FERS Annuity supplement take home pay ended up being about 50% of my working take home pay (not just 31.1% of my working take home pay) which is Awesome! My checking account has actually doubled on my retirement income checks in 9 months of retirement without dipping into savings or my TSP because I have always lived under my means. Sick leave conversion is calculated to the month and not to the day so use the GRB calculator to avoid leaving 29 unused sick days on the table. Use near end time leave days constructively to finish home projects, renovations, and window replacements so your retirement time is more free time and fewer chores. Tailor your FEHB to just what you need so you don't pay too much for a Cadillac plan. Don't retire with ANY debt, mortgages, or car payments, as they just suck the money out of your pension. Clean out your office really well because you don't want to be remembered as the slob/hoarder guy. A colleague of mine left with 50 used Styrofoam coffee cups all over his office! Be extra nice and kind to your coworkers because nobody likes people who vent their old grievances before they leave. Learn new skills and hobbies to stay active such as Pickleball, tennis, billiards, archery, bicycling, strength training, fishing, hiking, etc. Keep in great shape before and after retirement. I can do 43 pull ups in a row at age 60. You'll get the most out of your pension by living forever (or longer than your life expectancy at least).
One extra tip which I wish I had applied: If you retire mid year, look up the that year's TSP contribution limit (plus the catch up plan if age 50 or older) and divide by the pay periods in your final year. I made the mistake of dividing by the entire year's number of pay periods (26) when I should have divided by 13 pay periods. that would have doubled my pay period contributions, allowed me to max out the contribution limit in my final year, lowered my taxable income even more, and bought more C Fund shares when the market was down and shares were at a discount.
the key is being debt free and knowing your total expenses, then the math is easy
No one is ever debt free. You always have bills to pay that are variable
This is really really great stuff. Keep up the good work!
This was great. Glad to know this. Kind of wish you posted it 10 years ago.
Good advice.Wish I had seen this 10 years ago.
I have a decent background in this subject but appreciate your videos.
Thank you
Thank you for all you do. Can you cover all of us air reserve technicians (ART) cover when and how to retire? we are different than most FERS employees.
If you’re moving to Florida, check the prices on retirement homes.
Agree, and I'd rethink it all together, FL real estate in general is in turmoil and its very expensive and not looking to get cheaper anytime soon!
I live here for past 42 years. It’s by far still cheaper than most places. Taxes and my home is good. Only because I’m in my home for 20 years
Great video. I’m 5 1/2 years away from retirement, December 2028 is my date. Going to cash in on about 400 hrs of Annual leave. 240 plus whatever I have in my last year hopefully about 160 hours. Rest of your tips are great. Thanks for sharing !
Sounds almost exactly like my plan!
@@LittleCabin I’ll have 36 years 10 months with DOD. pension, social security and TSP. 3 legged stool should give me about 85-90% of pre-retirement income.
Congrats Stephen! Question- how is that lump sum taxed? Is it like a bonus where they take almost half out? Or is it like a regular paycheck where they take state/fed/SS/health insurance, ect out?
@@seanblake4688 thanks! I believe it’ll be like your standard salary so all taxes apply (federal, state and local) and social security etc.
a few questions I am updating my beneficiaries. I am single. Do I still need to have survivor benefits? I have been on FEHB since 2006. But recently I swritched back to Blue Cross after being on Aetna for 3 years. Would this be a problem?
I have 24 years 8 months of combined military service, I turn 60 in Feb. I have 16 years with postal service as a rural carrier, my body not going to make it. Hate the idea of not being able to complete the second retirement and not sure if I'm excited about the idea of paying to combine to two(buy back)
Have a question. I've been working at a VA for 12 years and thinking about working at a consolidated unit. Does this affect my pension,tsp, vacation, or anything else? Thanks in advance.😊😊😊
Question,
Can J roll over my Roth TSP into my Roth IRA and for the traditional TSP can I take that in a lump sum? I have a large amount in both Roth TSP and Roth IRA but I’m not sure if there a max you can transfer over. I wanted to take the lump sum in the traditional TSP and live off that for a few years after retirement and not touch the Roth money for a few more years.
How much federal taxes should you with hold from your pension?
Hey Dallen, love your videos! I listen all the time.
I had a question regarding fehb and getting it before you are 5 years out, how does that work if I have TRICARE prime for retirees? Is there still the 5 year requirement or does your TRICARE count?
If you were covered under TRICARE or CHAMPUS during the 5-year period immediately preceding retirement, you will be eligible to carry FEHB into retirement as long as you are enrolled in a FEHB plan before retirement.
I wish that I had found you 10 years ago.
Is 75% fegli still free after retirement? Thanks
Tricare counts toward the 5 years for FEHB...correct?
Yes, that's what I was told.
Don't take any chances - check with H.R.
Actually my date is March 3rd. LOL