What s Your Best Retirement Date?

Transcription

1 What s Your Best Retirement Date? A NARFE Federal Benefits Institute Webinar Presented by Tammy Flanagan 1 Sponsored by

2 Consider all of the moving parts! Civil Service Retirement System (CSRS) Federal Employees Retirement System (FERS) TSP CSRS Social Security FERS 2 Sponsored by

3 When do you plan to retire? End of the year Annual Leave Taxes Pay increase Summer Weather Maximize Thrift Savings Plan (TSP) Taxes Anytime Good dates every month Work-related reasons Family reasons 3 Sponsored by

4 OPM Retirement Processing Months Claims received Claims Processed 60 days or less (Monthly) Average # of days for longer cases December 2016 February 2017 September November (2016) 29,914 22, % 96 days 19,337 19, % 95 days June August (2016) 21,985 19, % 112 days March May (2016) 20,192 28, % 104 days 4 Sponsored by

5 Is there a magic date? 5 Sponsored by

6 Start with Basic CSRS or FERS Benefit Continuation of insurance Lifetime income Primary income for some 6 Sponsored by

7 If I have this much service: 5 10 years Date for CSRS or FERS retirement: Anytime years It depends 20 or more years End of the month (or first 3 days for CSRS) 7 Sponsored by

8 End of the Leave Year? December 31, 2017? or January 1, 2 or 3, 2018? or January 6, 2018? 8 Sponsored by

9 Apply to Any Month CSRS Only: 1 st, 2 nd or 3 rd day FERS or CSRS: Last day of the month End of the leave period Sept. 1 (or 2) Sept. 16 Sept Sponsored by

10 Commencing Date of CSRS Retirement 1 st 2 nd 3 rd 4 th last day of the month Next day Next day Next day 1 st of the next month 10 Sponsored by

11 Commencing Date of FERS Retirement 1 st 2 nd 3 rd 4 th last day of the month 1 st of the next month 11 Sponsored by

12 Other Considerations FEHBP FEGLI 5-year test Family Health Issues Children / Grands Can you afford to retire? Are you looking for a second career? 12 Sponsored by

13 Next: Timing Social Security 13 Sponsored by

14 Social Security Considerations Still Working? Need the money? How long will I live? Earnings limit No limit after full retirement age Yes? No? Less money, more years More money, fewer years 14 Sponsored by

15 Spousal Considerations Dual entitlement Qualify for strategy File and suspend (ended May 1, 2016) Restrict application to spouse (age 62 before 2016) Former spouse Widow 15 Sponsored by

16 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 16 Sponsored by

17 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 17 Sponsored by

18 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 18 Sponsored by

19 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 19 Sponsored by

20 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 20 Sponsored by

21 Harry: Full Retirement Age: 66 / Benefit = Sally: No earned benefit Harry files at 66 Sally remarries age 83: Continues Sally files at 62 $700 Betty (ex-wife) Harry dies at 81 / Sally widow 21 Sponsored by

22 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: CSRS Retirement: $3,000 Harry files 66 Betty (ex-wife) Sally files at 62 $700 offset by $2,000 = $0 Harry dies at 81 / Sally Widow offset by $2,000 = $0 22 Sponsored by

23 Harry: Full Retirement Age: 66 / Benefit = Sally: CSRS Retirement: $3,000 Harry files 66 Betty (ex-wife) Sally files at 62 $700 offset by $2,000 = $0 Harry dies at 81 / Sally Widow offset by $2,000 = $0 23 Sponsored by

24 Harry: Full Retirement Age: 66 / Benefit = Sally: CSRS Retirement: $3,000 Harry files 66 Betty (ex-wife) Sally files at 62 $700 offset by $2,000 = $0 Harry dies at 81 / Sally Widow offset by $2,000 = $0 24 Sponsored by

25 Harry: Full Retirement Age: 66 / Benefit = Sally: CSRS Retirement: $3,000 Harry files 66 Betty (ex-wife) Sally files at 62 $700 offset by $2,000 = $0 Harry dies at 81 / Sally Widow offset by $2,000 = $0 25 Sponsored by

26 Harry: Full Retirement Age: 66 / Benefit = Sally: CSRS Retirement: $3,000 Harry files 66 Betty (ex-wife) Sally files at 62 $700 offset by $2,000 = $0 Harry dies at 81 / Sally Widow offset by $2,000 = $0 26 Sponsored by

27 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry files age 66 $2,000 Sally dies at 81 / Harry widow $3,840 Sally files at 70 $3, Sponsored by

28 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry files age 66 $2,000 Sally dies at 81 / Harry widow $3,840 Sally files at 70 $3, Sponsored by

29 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry files age 66 $2,000 Sally dies at 81 / Harry widow $3,840 Sally files at 70 $3, Sponsored by

30 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry files age 66 $2,000 Sally dies at 81 / Harry widow $3,840 Sally files at 70 $3, Sponsored by

31 Total Benefit at 85 Sally $459,888 Harry $360,000 $167,200 (widow) Combined $987, Sponsored by

32 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry delays to age 70 $2,640 Harry dies at 81 / Sally widow $2,640 Sally files at 62 $1, Sponsored by

33 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry delays to age 70 $2,640 Harry dies at 81 / Sally widow $2,640 Sally files at 62 $1, Sponsored by

34 Harry: Full Retirement Age: 66 / Benefit = $2,000 Sally: Full Retirement Age: 66 / Benefit = $2,600 Harry delays to age 70 $2,640 Harry dies at 81 / Sally widow $2,640 Sally files at 62 $1, Sponsored by

35 Total Benefit at 85 Sally $444,600 $126,720 (widow) Harry $348,480 Combined $919, Sponsored by

36 Live to 92! File: Age 62 File: Age 70 $1,500 / month $2,640 / month $18,000 / year $31,680 / year $540,000 / 30 years $696,960 / 22 years 36 Sponsored by

37 Live to 72 File: Age 62 File: Age 70 $1,500 / month $2,640 / month $18,000 / year $31,680 / year $180,000 / 10 years $63,360 / 2 years 37 Sponsored by

38 The Icing on the Cake! Retirement Savings Plans Thrift Savings Plan Individual retirement account 401(k), 403(b), etc. 38 Sponsored by

39 Monthly Income Retirement stream When needed Peck at it Long-Term Care Inheritance Legacy Combine Options %Income %as needed 39 Sponsored by

40 Taxes and TSP 55 or older? Under 55? Special Provisions 70 ½ or older? Life Expectancy Payout Annuity Payout allpublications.html 40 Sponsored by

41 Over age 70 ½ and retired? Do you need monthly income? Do you plan to reinvest the money? Do you want someone else to inherit the money? 41 Sponsored by

42 Example of TSP Payout Age 65 Spouse: Age 65 Balance $250,000 Rate of return: 5 percent 42 Sponsored by

43 Monthly Payment Specific Dollar Amount Life Expectancy Balance stays in TSP G, F, C, S, I Funds L Funds Beneficiary 43 Sponsored by

44 Age Fixed Dollar Life Expectancy Payment Year-End Balance Payment Year-End Balance 65 $1, $244, $ $250, $1, $237, $1, $250, $1, $231, $1, $249, $1, $224, $1, $248, $1, $216, $1, $246, $1, $209, $1, $243, $1, $201, $ $246, $1, $192, $ $248, $1, $184, $ $250, Sponsored by

45 Age Fixed Dollar Life Expectancy Payment Year-End Balance Payment Year-End Balance 82 $1, $81, $1, $248, $1, $67, $1, $245, $1, $52, $1, $241, $1, $36, $1, $236, $1, $19, $1, $231, $1, $2, $1, $225, $1, $0.00 $1, $218, $0.00 $0.00 $1, $210, $0.00 $0.00 $1, $202, Sponsored by

46 TSP Annuity MetLife Lifetime payments Cash refund / 10-year certain / None Level payments / Increasing payments Joint annuity / Single annuity Interest rate index fixed: March 2017: 2.375% February 2016: 2.125% 46 Sponsored by

47 Age Increasing Payments / Annuity Option % Survivor 50% Survivor 100% Survivor w/cash 50% Survivor w/cash 65 $ $ $ $ $ $ $ $ $ $1, $ $ $ $1, $ $ $ $1, $ $1, $ $1, $ $1, $ $1, $ $1, $ $1, $ $1, $ $1, $ $1, Sponsored by

48 Level Payments / Annuity Option 2.375% Age 100% Survivor 50% Survivor 100% Survivor w/cash 65 $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, Sponsored by

49 Federal Benefits: Financial Planning: Tax Planning: Estate Planning: Agency Retirement Specialist Consultant Fiduciary Professional IRS Publications CPA Estate Planning Attorney Elder law Attorney 49 Sponsored by

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