Federal Employee trying to retire early...

[Kaufmanrider]

You sound like me Andys. I had to check the posters name to make sure it wasn't me. Retired at 49, LEO, 26 years plus 5.5 military. But I rolled my TSP into a self directed IRA and I am taking 72t withdrawals.

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[AndyS]

You sound like me Andys. I had to check the posters name to make sure it wasn't me. Retired at 49, LEO, 26 years plus 5.5 military. But I rolled my TSP into a self directed IRA and I am taking 72t withdrawals.

Sent from my SPH-L720 using Early Retirement Forum mobile app

Looking at your location .... maybe we worked together at some time?

Edit: After snooping through one of your past posts, I take it back. I did work with your agency on-and-off quite a bit through the years though. And I would not be at all surprised if you know my sister-in-law & brother-in-law.

 

[aoak]

Looking at your location .... maybe we worked together at some time?

Edit: After snooping through one of your past posts, I take it back. I did work with your agency on-and-off quite a bit through the years though. And I would not be at all surprised if you know my sister-in-law & brother-in-law.

If you retire early you can opt for "life expectancy" payments from TSP without penalty .... only hitch is you are stuck with receiving those payments till age 59.5 at which time they will allow you to change to a different disbursement option. I retired very early (LEO) at age 49 & that's what I'm doing. I have a sizeable TSP account though as I always put in the max (with matching) from day 1 with my agency for 26+ years.

It's effectively the same thing as a 72T ... just don't have to roll it out of TSP into an IRA.

Thank you for the insight on your experience with 72t withdrawals. Do you have to put in 20 years of service as an LEO for the Federal government? If so, you should not have any penalties on your pension withdrawals, right? In my case I have to retire at 30 years of service and at 55 years of age if I do not want to get penalized on my pension.

 

[aoak]

Forget my pension

Is it save to say that I should be planning my retirement at age 45 with the mindset that I will not have a pension? Even if I did get a pension, I believe that it would be very minimal. Since my pension would only be 30% of my high 3 salaries, I have felt that I should be entirely relying on my TSP.

Are there any Federal Retirees that have retired between 45 and 50 that can share their pension experience?

Thanks

 

[Proteus126]

Is it save to say that I should be planning my retirement at age 45 with the mindset that I will not have a pension? Even if I did get a pension, I believe that it would be very minimal. Since my pension would only be 30% of my high 3 salaries, I have felt that I should be entirely relying on my TSP.

Are there any Federal Retirees that have retired between 45 and 50 that can share their pension experience?

Thanks

I am still working, but I am a Fed in FERS and am looking at retiring at age 50.

No, don't forget about your pension. It won't be huge, but it will be useful. If you want to plan as if it didn't exist, to be conservative, be my guest.

Here are the details for your case (assumptions noted):
1. I assume you and your wife both began working for the Feds at age 22.
2. You do a "deferred retirement" by resigning at age 45. You will have 23 years of creditable service. Your wife resigns at age 41. She has 19 years of creditable service.
3. You both have 0.5 years of accumulated sick leave. For pension computation purposes that will bump you up to 23.5 years of service and her to 19.5.
4. I assume both your high-3s (in today's dollars) will be $100,000
5. I assume that inflation for the 17 years from your age 45 retirement to your age 62 onset of pension COLA will be 3%
6. You will be able to get your pension at age 62. Your wife will be able to draw hers when you are 66.
7. Pension math is: (service/100)*(high-3)/Inflation

Inflation from age 45 to 62 is 65% (you). From age 41 to 62 is 86% (her).
Inflation calculation is 1.03 ^ 17 (17 years of 3% inflation) = 1.65 for you.
Inflation calculation is 1.03 ^ 21 (21 years for her at 3%) = 1.86 for her.

Your FERS pension = [(23.5%)*($100,000) / 1.65] = $14,242 beginning at age 62

Her FERS pension = [(19.5%)*($100,000) / 1.86] = $10,484 beginning at her age 62 (your age 66).

Your wife's is a good bit less since she'd have 4 less years in service and 4 more years of sweating out no COLA.

That is all in today's dollars. I imagine it will be comparable to, but a little less than, your own Social Security age 62 benefit. I'd guess that will be around $18,000 in today's dollars. Same for your wife.

Your total age 62-66 income would be on you, and would be:
SS (you): $18,000
FERS (you): $14,000
-----
total: $32,000

66-onwards would be:
SS (you): $18,000
SS (her): $18,000
FERS (you): $14,000
FERS (her): $10,500
-----
total: $60,500


I hope my math was correct.

 

[AndyS]

Thank you for the insight on your experience with 72t withdrawals. Do you have to put in 20 years of service as an LEO for the Federal government? If so, you should not have any penalties on your pension withdrawals, right? In my case I have to retire at 30 years of service and at 55 years of age if I do not want to get penalized on my pension.

LEO/Firefighter/ATC retirement under FERS is: 20 years and age 50 - or - 25 years at any age. (I had 26 years at age 49 + I 'bought" my 4 years active duty military time ... so my annuity is calculated based upon 30 years)

No ... I have no penalties deducted from my annuity other than for survivor benefit for my spouse.

As to TSP ... my withdrawals would be penalized 10% like anyone else if I wasn't doing "life-expectancy" withdrawals for which there is no 10% penalty. I can change that option at age 59.5 There's a calculator on TSP website.