Posted on Friday, 29th October 2010 by

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Retire Mortgage FREE

Here is a viable plan for retiring mortgage free. The TSP recently reported their 2011 Thrift Savings Plan (TSP) contribution limits. The limits will be unchanged for 2011 and remain at $16,500 and an additional $5,500 for the catch-up contributions for anyone over 50. Employees approaching retirement over age 50 should try to max out their contributions if possible to improve their retirement savings. This is especially important for CSRS employees that don’t receive an employer match.

Most will have to learn to live on less in retirement, a fact of life these days. And one way to become accustomed to less income is to start putting away more when you are still working into your TSP account. Starting about ten years prior to retirement I saved all annual pay increases by increasing my allotment to the TSP, Credit Union, and through savings bond deductions. When I retired, my take home pay was the same amount it was in 1995, ten years before I retired. When I turned age 50 I contributed the maximum allowed at the time to my TSP through catch-up contributions and when I did retire my monthly annuity check was larger than what I was taking home when I was working full time. The bonus was that I had a lot more savings because of how I invested my TSP and saved my annual pay increases. I actually started this process much earlier. Around 1990 I started putting away half of my annual pay increase so I worked my way slowing into the process.

The additional catch-up contributions will help you become accustom to working with less income. Most will earn less in retirement and this action can help you in other ways as well. An employee could also pay off their mortgage by applying their annual pay increases to the mortgage and retire mortgage free or have enough additional money in their Thrift Plan that at retirement they could take out a one-time withdrawal and pay off their mortgage. Planning is the key and when you learn to live on less and the money is out-of-sight and out-of-mind you won’t miss it.

Review other ways to save and economize in retirement.

Retirement Contact List Update

A number of visitors ask us to provide a downloadable file for our Master Retiree Contact List so they could place a copy with their retirement paperwork and to forward to others who need this information. We updated the contact list and converted it to a PDF file for your use and feel free to forward it to others that need this information.

We receive calls from annuitants and survivors alike that often have no idea who to contact and this list will help if the retiree keeps it close at hand and places it with their retirement paperwork and in their estate plans. Additional resources were added with informative links to other critical information for those planning their retirement including the Best Date to Retire, and what you need to do starting a year before you retire.

Caution – Use or Lose Date Issue

Feds are allowed to carry over 240 hours of annual leave and in the last year of employment many don’t take leave and accumulate an additional 208 hours that would have been earned their last year of employment. This 448 hours of leave is sold back when you retire as long as you leave before the use or loose annual leave date. This date changes every year.

The advantage is that you can sell this back and collect almost 3 months’ salary the first year you are retired. This year you have to retire by the end of pay period 26, Saturday, January 1, 2011, this year’s annual leave use or lose date. Usually it is sometime in early January. Here is a list of use or lose dates out to the year 2020 that is available from OPM. Check with your agency to insure they aren’t using a different calendar.

This is the date when employees lose annual leave over 240 hours.  If someone retires or resigns before this date, it is all paid out. So if the use or lose date is January 1st, then the leave would stay on the books until the 1st.  Everything over 240 drops off the books on the next day.

Generally it is advantageous to retire under CSRS on the 30th, 31st, 1st, 2nd, or 3rd, to minimize your days without income. With FERS by the 30th or 31st.  However this year the use or lose date is prior to the 3rd, so most people will retire at the end of December… unless they have less than 240 hours of annual leave. You will find several articles on The Best Day to Retire on our site. Don’t confuse your date of final separation that you enter in Section B2 on your retirement application form with your retirement effective date .


  • Adding a child under Age 26 to Your FEHB Account – There are some misconceptions surrounding this issue.  You can add a child under age 26 to your FEHB coverage now however it won’t take effect until the New Year. All you have to do is call your health care provider and they can add your under age 26 children to your policy. There coverage will start in 2011.  I have Blue Cross Blue Shield and called their toll free number at 1-800-779-6945 to confirm this information.  You don’t have to wait until open season to add a child; it just won’t be effective until 2011. For more information on Open Season visit our FEHB page.
  • FEHB Plan Premium Increases for 2011 – The average increase is reported to be 7.2% however my plan costs increased 12%! The health care legislation was sold as a way to REDUCE our costs and just the opposite is happening. Insurers must now provide coverage for children under age 26 and other onerous regulations were implemented that is driving up costs. A number of major corporations like McDonalds were granted waivers so they would not have to cancel health care coverage for their employees. You will find the Health Care Reform article listed in the next entry informative.
  • W2 Changes Coming Your Way – There is an email message going around reporting that in 2011 our W2 forms will include as taxable income the value of the health care benefit paid by employers and in our case Uncle Sam. The new health care legislation does require employers to report their contributions on W2s starting in 2011. However, the health care benefits will not be considered as taxable income and there was a one year delay issued. Employers can add this information voluntarily earlier if they desire. There is a good article on this subject titled Health Care Reform: 13 Tax Changes on the Way that you may find interesting.  There is a lot of misinformation floating around and much of it is due to the fact that few of our representatives actually read and understood the new 2200 page health care legislation before they passed the law.
  • Election Day – November 2, 2011. Exercise your right and vote this November. Stop either on the way to or after work to vote November 2nd.

Learn more about your benefits, employment, and financial planning issues on our site and visit our Blog frequently at to read all forum articles.

Visit our other informative sites

The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.

Last 5 posts by Dennis Damp


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3 Responses to “Retire Mortgage FREE, Contact List, Caution – Use or Lose Date Issue, and UPDATES!”

  1. Bill Shelton Says:

    I am a retired DoD employee awaiting the retirement of my federal employee spouse. I have noticed that while some states have no income taxes, others do not tax social security and/or federal pensions. Given that TSP/401K/IRA distributions have a taxable side that is separate from social security and federal pensions, is anyone looking at the benefit of retireing in a tax friendly state? What about higher sales or property taxes to recoup no income taxes? Where can I go for federal employee specific information in these areas?

  2. Dennis Damp Says:

    A very good questions. NARFE publishes a comprehensive listing of “State Tax Treatment of Federal Annuities” that you will find very informative. I highly recommend annuitants subscribe to NARFE. Here is a link for helpful associations: I sent you a copy of the NARFE article in question direct from the NARFE site.

  3. Dennis Damp Says:

    A very good questions. NARFE publishes a comprehensive listing of “State Tax Treatment of Federal Annuities that you will find very informative. I highly recommend annuitants subscribe to NARFE. Here is a link for helpful associations: I sent you a copy of the NARFE article in question direct from the NARFE site.

    let me know if this was helpful?