Hoping to retire at 48

[January 2015]

I'm single (have a serious gf but not planning on getting married)

At age 48 I will receive a pension of about $1700/month (after health ins & taxes). I will not receive a cola on it until 65

All Bills are paid - no debt. I have tracked my expenses for the last 2 years and they are about $33,000 a year. With not working, I know I could shave some of that off in gas, using coupons, and just general cutting back.

I have about $100,000 in a money market account and about $400,000 in my TSP.

I plan to live on the $1700 along with a part time job that will bring roughly $1,000/month for as long as I can. Once it starts to get too tight, I will do an annuity on my tsp which should put me back in "comfortable" shape until I can start taking SS.

p.s. I have no kids and am in good health (thus far)

Thoughts? I tried to use the firecalc but it looks like it's just for figuring out how long our IRA will last you. ??

 

[martyb]

You do know that you won't be able to use the TSP until age 59 1/2, right?

edit: That is, without paying a 10% penalty in addition to regular fed & state (depending on your state) taxes.

 

[January 2015]

Hi Marty - According to the TSP staff, I can do an annuity on it as soon as I retire. Do you have different info? please share. Thanks!

 

[martyb]

Hmm....no, I don't have any different info, since I didn't look specifically into doing an annuity. Maybe I answered too quickly.... There are a number of other feds here, so maybe one of them will come along & clear this up. I was answering from the perspective of doing other types of TSP withdrawals. It hadn't occurred to me that purchasing an annuity would be any different. Annuity rates are so low right now, plus I just have this thing about giving up control of my money. I recognize that an annuity might work for others, though.

 

[racy]

Hi Jan,

A couple of things to consider:

* SS uses your highest 35 years of income to calculate benefits. Zeroes are inserted for every year short of 35. Increase Your Social Security Benefits By Working Full 35 Years

* Assuming your planned annuity is not inflation-protected, your buying power is going to erode significantly. Inflation Calculator - CalculatorWeb

 

[militaryman]

I think FERS receives cola at age 62 not 65

https://www.opm.gov/retirement-services/retirement-faqs/?cid=422637f6-1d45-4863-9549-b2b605155b40

 

[Kaufmanrider]

Is your 1700 a month your government pension or from another source?

If it is government, you must be a LEO/FF/ATC with 25 years service. If you are LEO/FF/ATC you will also get a FERs Special Supplement (percentage of your SS benefits). You will get COLA-light on your pension (but not the Special Supplement) as soon as you retire. All other Feds have to wait until 62 for a COLA and can retire at MRA.

Regarding TSP, yes, you can buy an annuity with no 10% penalty, or you can do monthly payments on your life expectancy computed by TSP or a dollar amount (Annuity or Amortization) based upon a 72T calculation.

I just retired. I'll be rolling my TSP into an IRA and doing 72T withdrawals to supplement my Fed Pension.

 

[January 2015]

Thanks all!

Racy - I will have about 30 years of work when I retire. 25 govt and 5 private plus I will continue to work part time. So I'm close!

Military Man - yes it's 62 not 65. I did know that, I must have made a typo. Thanks

Kaufmanrider - yes the 1700 is my govt pension. I have 25 yrs of service already and am taking early out. I know about the FERS Suppliment but am not eligible for that unil 62. What is this Cola-light?? no one has mentioned that to me ... just that I won't get a cola until 62. Just curious, why are you rolling your tsp into an IRA? Thanks for all the info

 

[MikeWillRetire]

If you are getting a VERA (early out), then you should be eligible to get the FERS supplement at your minimum retirement age (56 to 57 depending on your birth year).

 

[January 2015]

Hi Mike - Yes early out. Yes, you are correct. the FERS supplement actually starts at 56 and some months. thanks.
Anyone know about this COLA light??

 

[Kaufmanrider]

Hi Mike - Yes early out. Yes, you are correct. the FERS supplement actually starts at 56 and some months. thanks.
Anyone know about this COLA light??

Our (FERS) Cola is not a full COLA. We (retired Feds) call it Cola Light. See paragraph below.

I am rolling into an IRA because I can better diversify and not be restricted to 2 IFT's a month. I'll do 72t calculations for money from my IRA.

For Federal Employees Retirement System (FERS) or FERS Special benefits, if the increase in the CPI is 2 percent or less, the Cost-of-Living Adjustment (COLA) is equal to the CPI increase. If the CPI increase is more than 2 percent but no more than 3 percent, the Cost-of-Living Adjustment is 2 percent. If the CPI increase is more than 3 percent, the adjustment is 1 percent less than the CPI increase. The new amount is rounded down to the next whole dollar.