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Retirement Planning


Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.


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JCStr  
#1 Posted : Monday, April 25, 2011 9:19:02 PM(UTC)
JCStr

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Spanky  
#2 Posted : Monday, April 25, 2011 10:38:39 PM(UTC)
Spanky

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JCStr wrote:
 
The same % that is taken out of your bi-weekly or monthly pay.  Factors are on your income and W-4 as to what tax bracket you are in...
 
the rock99  
#3 Posted : Tuesday, April 26, 2011 8:33:14 AM(UTC)
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Spanky wrote:
JCStr wrote:
 
The same % that is taken out of your bi-weekly or monthly pay.  Factors are on your income and W-4 as to what tax bracket you are in...
 
 
What you said is true only if it is included in a regular paycheck and not paid separately
 
follow this link
 
 
and look under "Supplemental Wages"
 


crpetersen  
#4 Posted : Tuesday, April 26, 2011 9:33:15 AM(UTC)
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The problem with the lump sum payout is that your total payout is looked at as if it is one pay period.  Then the system figures that you must be in a very high tax bracket and withholds a very large amount of taxes.  I expected (at 25%) to receive around $19,000, figuring that only federal tax would be withheld.  I received $14,000.
jgve1952  
#5 Posted : Wednesday, April 27, 2011 6:49:23 PM(UTC)
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crpetersen, it will all balance out with your tax return next year (for this year).  I will be in the same situation, but the way I look at it, it is "money in the bank," plus I also need a cushion, because I understand when you are finalized you get a lot of money at one time, which may or may not be taxed correctly.
crpetersen  
#6 Posted : Thursday, April 28, 2011 1:28:51 AM(UTC)
crpetersen

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I agree - taxes will be crazy the first year of retirement, so I'm glad they withheld additional federal taxes.  No state taxes are being withheld from my partial annuity payments, federal taxes are being withheld at a lower rate than they should be, etc.  Thankfully both state and federal taxes were withheld from my annual leave payout.  I figure that around mid-year I'll calculate how much should be withheld vs how much has been withheld and make any adjustments necessary with both tsp and opm.  
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