Retirement transition from July 1st to November 26th

Below you will see how my Retirement played out from July 1st until November 26th. I consolidated all my retirement post into one post so it would be easier to find. 

 

July 16th: 

Just a little talk about retirement and what’s been happening. A lot of my peers will retire very soon or will in the next few years. We all wonder how things works, so as the pieces fall into place for me, I will post them here. I just received my last working paycheck. The pay period that I got credit for was only 40 hours. Yes, I was on leave. Did I earn any vacation or sick leave for 40 hours of work pay? No! So if you are doing your math to end up with a zero leave balance for sick or annual leave, remember that. You do not earn leave for half or partial weeks. You must work 80 to earn leave. Just so you know, I ended up with a perfect zero balance for sick leave. Those that know about our sign in system for requesting leave, looking at working shifts and sign in, is called WMT. I was closed out the exact day I retired. If you need to know something, get it before the last day. I just checked it out for fun. As I trasition from working emplyoee to retired employee, I will post the events. 

 

I now officially have crossed that line in the sand where I have ZERO new money going into my retirement account or TSP. Scary times indeed. Will I stay invested and ride the monthly moves. Yes. As of today, I am 100% invested as a 20 year old. Meaning? I have 100% of my money in high risk C, S, and I. I will ride the monthly moves in my retirement as I did when I worked. This is the only thing I know and it’s the only way I know to keep my money growing for my future needs. I chose not take a monthly withdrawel nor did I take a 1 time withdrawel. I left my TSP in the TSP and with the TSP.gov website. Warning if you do not know. If you move your TSP into a TD Ameritrade or that type of account and away from the TSP.gov organization, you will lose you ATC early retriement rules and will have to pay 10% penalty on any monies you withdrawl to spend. That’s all I’ve got for the moment. 

 

July22nd:

I retired from the FAA officially on June 30, 2017. I got my letter to inform me that the Office of Personnel Management (OPM) has gotten my retirement package from the FAA and it has been certified correct. This as of 7/17/17. As of 7/22/2017 I can still access Employee Express but I assume that will change soon and OPM will give me a new PIN and website address to access my monthly income soon. I am really looking forward to my pay cut, (humor). Since I decided not to withdraw no money from my TSP, I will be curious if I can afford to live off the annuity alone. Those that are young with many years of work in front of them, do not take these litte details serious, but they should. 

 

July 29th: 

You all know that I retired officially June 30th. I spent over half my life in that place and I really didn’t expect anything from Government. I always told people we are just a number and a warm body and once they are down with you, poof forgotten. So take care of yourself and family. So when this showed up in the mail this week, I was surprised. I got a plaque for my 30 years of service. I also got notification from OPM about the transition from employed to retired. I and you eventually will be given a new webiste and CSA number to access your 1099r, address changes, and your annuity stuff. So I’ve been out for almost 1 month and things seem to be moving along nicely. Not sure if I will get a pay check August 1st or not. But I do expect by September 1st, that I will at least start receiving interim checks. 

 

 August 6th:

This week in retirement I got my first interim check. Not to shocking because I did a little math in the beginning and had a pretty good idea of what that amount might look like. The only deduction of pay that I can see today is Federal. The way I understand it, no state taxes with be withheld from the interim checks. I assume my Health Insurance is being paid, but I have no physical proof yet.  I still have access to Employee Express. I now have temporary access to the OPM website to get access to pay info because they mailed me a temporary password. So in one month the transition from Employee Express to OPM CSA page is almost complete. Annual Leave payout check has still not been received. I am officially 5 weeks into retirement. 

 

I need to say this one more time for all my peeps that are already retired or getting ready to retire. You can’t run from stocks. If you run it properly, you will be ok. But you can’t run from stocks. Read please and make sure you click to page 11. 

 

I hope some of the retired peeps and some of the soon to be retired peeps read that short Kiplinger article I linked at the beginning of this blog. Our C, S, and I funds that trade inside the TSP are some of the most tame non-egressive mutual funds in the world. On top of that, they are cheap to run with expensive that are ridicoulosly low. Do not think of our Stock funds as being in stocks. Think of them as being invested in Mutual Funds. No one stock will ever kill your portfolio. Our C-fund has over 500 stocks invested inside. The Small Cap has somewhere bettwen 4500-5000 stocks inside. So watch the trends and watch the percentages. The worst thing you can do is watch the dollar figures inside your account. Why? It’s great when things are good, but the second you have a week or two of bad returns, your gut will tell you jerk your money out. But, if at the end of each month you have a positive return percentage wise, the cash amount in your account will reflect that. Watch you PIP and watch your percentage return monthly. 

 

Example: If I told you in one month you took a 1% loss in your account, would you move your money to safety? If I told you in one month you had a $10,000 loss, would you move your money? Believe me as you age and your account grows, this is going to happen. 1% of 1 million is a $10,000 loss. 

 

Example 2: If you had a gain of 11.87% since the January 1, 2017 and had a $135,000 gain, would that 1% loss of $10,000 in one month really hurt? 

 

Example 2 are my actual numbers since January 1, 2017, but have not taken a loss yet. I am not bragging. Please do not take it that way. Like the Kiplinger article said, you cannot run from stocks. Baby sit your money as I teach here and it will work out. 

 

August 13th:

On the Retirement front this week not much to report, but I can see by logging into Employee Express that my annual leave payout will be made this week. So we will call that 6-7 weeks after retirement date. Also looks like they took out Medicare, Federal, State, and SS. All total for me I got about 67% of the total amount and the rest to taxes. Yes, your annual leave payout does count as YTD income. I am all zero’ed out now, so no more pay for me except retirement annuity checks. In case I didn’t mention it, I chose not to withdrawl any funds from my TSP, so it will be annutiy plus stipend until I feel the urge. 

 

September 3rd:

The only retirement news that I have for you this week is that I got my second paycheck and it is still an interim check. Not a big deal, but I’m sure a few of you are curious how long it takes to begin receiving your permanent payout.

 

September 16th:

etirement news: CSA site has entered it’s final phase on my pay after 78 days. I got an email this week stating this. 

 

Assigned to Specialist:Your retirement application has been assigned to an OPM retirement specialist for calculation of your annuity benefit.

 

So I can only hope that by October 1st or November 1st, I will finally know what my final monthly paycheck will be.

 

October 6th:

On a retirement front, I got a letter from OPM today asking me to finalize my selection of type of retirement. I was a little surprised to see this since I made that selection on the forms when I filled them out and submitted months ago. The form they sent me is a Retirement Provision Election. I have 2 choices. ATC MRA+30 annuity, and Regular ATC annuity. If I select the first choice, no raises on my FERS annuity until I reach the age of 62, but I get 1.7% for each year of service. The second choice gives me 1.7% on the first 20 years and 1% for the remaining and I get raises. I’ll take my chances and select choice 1. I have enough in my TSP account that I will be ok. So the final numbers came in and I was pleased. The estimates that I got 9 months ago compared to the actual reported to me today was within $10. According to some of the previous retirees that I have spoken to in recent months, I will also get back pay on all annuity checks received to date and correct annuity payment when it is all settled. Let’s just say I’m pleased with the actual amount compared to the estimated paymets. I was getting a little worried they had screwed something up. 

 

So it has been 98 days since my actual retirement day and 188 days since I filed. I now have a final reported annuity amount. When I actually start getting that final amount, is still an unknown. 

 

October 15th:

Retirement news: It is final. I submitted my request for a retirement amount back in December 2016. I got my answer about 6-8 weeks later. That estimate was within $4. How awesome is that? I am pleased. I will be able to live on my retirement less all the deductions that I do not have to pay anymore, at almost the same level without withdrawing from TSP. If I took money from my TSP, I could equal or exceed. So from Retirement day, June 30th, it took until October 11th to go through the entire process. 113 days counting weekends to get your final monthly payout with stipend.

 

Your new CSA page will look like this once they have finalized your account. Some other details. Your health insurance is being paid as you move along even though it doesn’t show in the intermin checks. No state tax is being withheld and it still will not be unless you select it with the 3rd item down, first column. You will get back pay for those short Intermin checks, which for me was 3 months worth of back pay. I’ll take it. So now, I just live my life and let the working people do what the working people do. Time for me to sit back and enjoy the fruits of my labors. 

 

October 29th:

I had a conversation with one of my peeps this week that just retired and I asked if they were still invested in the C, S, and I. Their reply was, “no, I wimped out and I’m only invested in the L-Income.” Let me be clear here. There is absoultely nothing wrong with that move and every single professional investor would tell a newly retired individual to stay in the stock market, but the majority should be in safe funds. They are doing exactly as they should. Based on my number research of all past action, show all newly retired peeps should be invested in the L-Income or L-2020. As time passes, these two funds will almost be an exact images of each other because the L-2020 will cease to exist after December 2020. So it becomes more conservative as time marches on. Each investor has their own risk tolerance but the only fund that I do not promote unless the markets are all flagged as monthly sells, is the G-fund. You are outright losing money via inflation and if you are making withdrawals, it’s a double whammy. So do your homework and research the numbers. 

 

November 20th:

On November 17, 2017, President Trump signed into law the TSP Modernization Act of 2017, which will provide TSP participants with more flexible withdrawal options. The law eliminates the statutory prohibition on multiple post-separation withdrawals and multiple age-based withdrawals while a participant is still working. It also removes the restriction that participants cannot take partial post-separation withdrawals if they’ve already taken an age-based in-service withdrawal. Though it has no effect on required minimum distributions mandated by the Internal Revenue Code, the law also allows separated participants who are over age 70½ to remain in the TSP, eliminating the requirement to make a withdrawal election on an entire account balance. Participants will also be able to stop monthly payments, change payment frequency, or elect to purchase an annuity while receiving monthly payments.

The Executive Director of the FRTIB has the authority to establish parameters regarding this new ability to take multiple withdrawals, and the law gives the FRTIB up to two years to make the regulatory and operational changes necessary to enact these changes.

November 26th: 

I am going to throw some raw numbers at you to make you think, you cannot invest using fear, but if you have a method that will make you mechanical, you can sleep. I taught myself to be this way before I retired. I wanted to be able to make decisions with my retirement account without having to pay someone to do it for me. I also needed it to be a method that would not be greedy which normally creates dumb decisions. Been there done that. I know eventually all these making new record highs will end and eventually I will be invested 100% G-fund when my monthly moves turn negative. But until that happens, I can sleep and know that my retirement account will continue to grow faster than inflation. Now those numbers. My last deposit in my TSP account was July 18th, 2017 because of retirement. My account has grown $73,217. Since December 31st 2016, my account has grown $200,000. So to my followers, specially those that are retired, you heard me talk when we worked together and you knew I was working on a system that would allow me to run my account once I retired. I am doing that and nothing has changed since retiring. There is no way that these gains I have experienced recently can continue. But it doesn’t matter people, if we have a 5 to 10% drop in prices and I give  $50 to $100,000 back, I still had a major gain that I would have lost being overly conservative. Here is the kicker. The C-fund, S-fund, and I-fund that some think are so risky are nothing more than glorified mutual funds. If the markets get pounded, mutual funds would take a smaller hit. Inversely, you will never get the most gains to the upside. Taking your money out of the TSP and investing into individual stock picks is what I consider insane. That is what I call full risk. I have never considered the C, S, and I risky. So, those that worked with me and talked with me daily knew this about me. For those that follow me now that I have never met, you now understand more about why I do what I do. I am not here to tell you what to do or change your methods, but to teach you how to be calm and mechanical so you can sleep. Listening to the TV or radio news and or banter from someone that will never show your their actual returns, creates fear and bad moves. I put all my numbers out here for all to see and I even copy and paste directly from my TSP account, my PIP. I also let you see first hand how I come to these decisions. Keep it simple. Keep it mechanical. 12 decisions a year. Anyone can do this.