Posted on Thursday, 26th May 2011 by

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Six years and Counting

I’ve been retired 6 ½ years now and just turned 62… I’m eligible for SOCIAL SECURITY!!! I attended my nephew’s graduation party last week and for the first time understand how my aunts and uncles felt during similar events back in the 60s, 70s and 80s. Now Mary and I are in their shoes experiencing life’s constant ebb and flow and I might add I’m enjoying the perspective. Retirement and aging are good things as life renews and families experience life’s many twists and turns.

Unlike previous generations, many retirees today are healthy enough to stay active and involved. Opportunities abound for those willing to seek them out and staying active and healthy opens so many doors for all of us today. A recent report shows that retirees are scheduling more elective knee and hip surgeries than ever before to retain their strength and stamina. When I was 25 I told my wife I wanted to retire at age 55 to pursue other interests, travel, and grow a business and we are doing all of those things and more and I thank God every day for our good health and fortune.

Actually, I take on too many things. Just love doing about anything and everything within reason. I have too many hobbies, too many business ventures and too many irons in the fire and intend to keep things hot as long as I’m able. In preparation for our upcoming family reunion I was able to scan all of my Uncle Jack’s family slides from the 60s and 70s and will give all of my cousins a DVD with those precious memories this summer.  The slides were aging and some cracked so I had to get this done before it was too late. I purchased an “Imagelab” slide and negative scanner for $90 and went to work on the project. It was easy to do, took about a week to scan 2 cases of slides but it was well worth the effort. Most everyone that retires commits to compiling a photo album from drawers full of photos and slides accumulated throughout a life time, only a few succeed. However, scanners are making it much easier for all to do and I now hope to go through all of our old slides and photos this winter to finish the project.  I also have a drawer full of family history to organize.

After 6 years my government career is now securely in my rear view mirror and as time goes on more activities and time fade that picture a bit more with each passing year. However, I will always look back on those times, friendships, and experiences with fond memories and Mary and I focus on what lies ahead: More challenges, more opportunities, and the fascination of discovery around every corner, LIFE is a BLAST!

Social Security Supplements

Social Security Supplements paid to FERS retirees are often misunderstood and this supplement is less than what many expect. If you meet certain requirements, you will receive a Special Retirement Supplement which is paid as an annuity until you reach age 62. This supplement is somewhat similar to the Social Security benefit earned while you were employed by the Federal government. However, since the formula for the Special Supplement assumes a working life of 40 years, each year of FERS service is worth one-fortieth of the estimated Social Security benefit.  Therefore, the FERS Supplement is often significantly less than your Social Security benefits. The supplement ends at age 62 even if you elect to wait to apply for Social Security benefits.

You may be eligible for a Special Retirement Supplement if you retire:

  • After the Minimum Retirement Age (MRA) with 30 years of service;
  • At age 60 with 20 years of service; or
  • Upon involuntary or early voluntary retirement (age 50 with 20 years of service, or at any age with 25 years of service) after the U.S. Office of Personnel Management determines that your agency is undergoing a major reorganization, reduction-in-force (RIF) or transfer of function. You will not receive the Special Retirement Supplement until you reach your MRA.

TSP Penalties

A site visitor asked if she could use her TSP at retirement to purchase a home in full without having to pay an early withdrawal penalty if she is under age 59 ½. She plans to retire at age 57. After she contacted the TSP they advised her that 20% would be withheld from all payouts.

If you retire at age 55 or later there isn’t an early withdrawal 10% penalty and when you retire you can take a one-time lump sum payment for any purpose. Paying off your mortgage makes a huge difference when you retire providing you with more cash to work with plus you will save a good amount of interest whenever you pay off a loan early. All withdrawals are subject to federal taxes because the money in your account wasn’t taxed when earned. A minimum of 20% is withheld by the TSP from all withdrawals for federal tax purchases. Here is a link to the TSP Tax brochure, review page 4 for specifics. https://www.tsp.gov/PDF/formspubs/oc97-17.pdf

If you plan to pay off your mortgage when you retire it makes sense to increase your monthly mortgage payments now. Simply add the next month’s principal payment, or any amount that you can afford, to your current monthly payment to buy down the loan principal.  Call the mortgage company to find out what you next month’s principal payment is or ask them to provide an amortization schedule that lists each monthly interest and principal payment for the duration of your loan.  By paying more now, before retirement, you will have less to pay off when you retire and you will also become accustom to living on less before you leave.

 

Updates

  • COLA Update – NARFE reported the following on the 2012 COLA: “The CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) increased by 0.78 percent for the month of April 2011.  The new CPI-W index figure is now 221.743, which is 2.9 percent above the 2008 third-quarter average of 215.495, which is the base figure for determining the next COLA.  Thus, the CPI-W has surpassed the level needed to trigger COLA payments for 2012.  But because the relevant months for measurement are July, August, and September of this year, we will not know until then whether the CPI-W remains at a level high enough to trigger a COLA, and we will not know until then the magnitude of any COLA.”
  • How to be Financially Prepared When You Retire (FREE Report) – Site visitors requested a downloadable report outlining the retirement financial planning process that we offer online. Please copy and distribute this report to anyone interested in determining what they will have to live on in retirement.
  • 2011 Federal Employees Leave Chart – This free leave chart is available and we will soon have the 2012 calendar posted. This free and easy to use Leave Chart can be used to track your leave and work schedule. Pass it on to others in your organization.
  • We launched a new web site this week, www.nukejob.net for those exploring careers in the nuclear field. The site offers abundant resources including extensive job listings for anyone interested in these high paying careers and jobs.

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

Request a FREE Retirement Benefits Summary Analysis and receive a personal retirement analysis. A sample analysis is available for your review. This service is provided by independent agents that are not affiliated with www.federalretirement.net or Bookhaven Press LLC.

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

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (0)


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