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Retire Mortgage FREE, Contact List, Caution – Use or Lose Date Issue, and UPDATES!

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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 [2]. 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 [3] 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 [4].

Retirement Contact List Update

A number of visitors ask us to provide a downloadable file for our Master Retiree Contact List [5] 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 [5] 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 [6], and what you need to do starting a year before you retire [7].

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 [8] 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 [6] 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 [9] .


Learn more about your benefits [12], employment [13], and financial planning issues [14] on our site and visit our Blog frequently at https://fedretire.net [15] 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.

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