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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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DK_in_CO  
#1 Posted : Thursday, March 29, 2012 11:09:38 PM(UTC)
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Another Great article from Government Executive FYI.
 

Are You Counting on Social Security?

http://www.govexec.com/pay-benefits/retirement-planning/2012/03/are-you-counting-social-security/41612/?oref=voices-top

A lot of Helpful information regarding Social Security Benefits.
Fed1969  
#2 Posted : Friday, March 30, 2012 12:07:38 AM(UTC)
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Thank you for the information.  Many seniors are struggling because Social Security is their primary retirement fund.  The article indicated most Social Security recipients  do not pay taxes on this benefit.  

Federal retirees are fortunate to have a pension.  Many federal retirees also have TSP and or Social Security.
Kathi52  
#3 Posted : Friday, March 30, 2012 12:12:30 AM(UTC)
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Oh boy LOL! Sorry there Fed1969, I pay 25% in taxes every month. You do know the SSA rules do you not? You do know that SS is NOT intended as a retirement fund do you not? Please educate yourself.
martyb  
#4 Posted : Friday, March 30, 2012 12:38:41 AM(UTC)
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There's more to Fed1969 than meets the eye, Kathi...
Forum trolls to 0%
Kathi52  
#5 Posted : Friday, March 30, 2012 1:02:26 AM(UTC)
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Thanks martyb, yes, I know!
postalvet  
#6 Posted : Friday, March 30, 2012 7:41:59 AM(UTC)
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alright I have been quite long enough.  fed69 is a troll who only posts useless information to try to start trouble and run up their post count by posting on almost ever federalsoup forum.
Retired postal worker of 38 years who is willing to help even though some do not want to hear the truth.
Fed1969  
#7 Posted : Friday, March 30, 2012 8:01:27 AM(UTC)
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Kathi52 wrote:
Oh boy LOL! Sorry there Fed1969, I pay 25% in taxes every month. You do know the SSA rules do you not? You do know that SS is NOT intended as a retirement fund do you not? Please educate yourself.

You are fortunate to earn enough money to pay 25% in taxes every month.  Many Americans are not doing as well.  Even though SS is not intended  as a primary retirement fund, many seniors only have Social Security to live on.

Federal retires and employees are very fortunate to have enough income to pay income taxes each month.

LSA  
#8 Posted : Friday, March 30, 2012 8:30:53 AM(UTC)
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Most people jump at the Social Security Benefit when they are first eligible (e.g. age 62) and receive a substantially reduced benefit.  Federal Employees who can make it on their Basic Benefit Plan + TSP balance and any other income they receive (and if they are in good health) should consider waiting until 70 years of age to apply for Social Security. For every year over your full retirement age the Social Security Benefit increases by 7 %. That's 7 % on your money without risk, a nifty return. Can you beat that?

dhacker56  
#9 Posted : Friday, March 30, 2012 9:21:35 AM(UTC)
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LSA wrote:
Most people jump at the Social Security Benefit when they are first eligible (e.g. age 62) and receive a substantially reduced benefit.  Federal Employees who can make it on their Basic Benefit Plan + TSP balance and any other income they receive (and if they are in good health) should consider waiting until 70 years of age to apply for Social Security. For every year over your full retirement age the Social Security Benefit increases by 7 %. That's 7 % on your money without risk, a nifty return. Can you beat that?


It goes up7% per year but you are getting nothing for those years.  Now do one thing ADD all the $$ you did not get for the 8 years from 62 to 70.  Now figure the difference in you SSI payments.  Now divide the big number by the little one and figure out how long it will take to make up the large number.  You will be surprised how old you need to live until.
Fed1969  
#10 Posted : Friday, March 30, 2012 11:34:14 AM(UTC)
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A lot of people star Social Security benefits at age 62 not knowing how long they will live.  Some are concerned Social Security benefits will cut sometime during the next 20 years.
GoHuskers  
#11 Posted : Friday, March 30, 2012 12:16:13 PM(UTC)
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Have to agree with dhacker56 on this one. Here's a simplified example. Let's say your unreduced SS benefit is $1000. If your full retirement age is 66, and you take benefits beginning the month you're age 62 your benefit would be 75% of the unreduced benefit, or $750. If you wait until age 70, the benefit would be 128% of $1000, or $1280. Taking benefits at 62, for the 8 years from age 62-70 you would get a total of $72,000 in benefits. At age 70, the benefit amount is $530/mo less than if you had waited until 70. Dividing $72,000 by $530 you get a break even point of 135.8 months, or about 11 years and 4 months from age 70. And that doesn't even consider the additional income you would earn from investing those SS benefits (which you must not have needed to live on if waiting until 70 was an option). Unless you're really confident you'll live into the middle 80s or longer, taking the SS benefits earlier might be the best choice.GoHuskers2012-03-30 23:24:03
Kathi52  
#12 Posted : Saturday, March 31, 2012 7:39:09 AM(UTC)
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I also agree with dhacker56. My spouse is planning on taking his at 63 1/2. Btw, Fed 1969, yes we are very fortunate. No doubt about it! But that comes about from the decisions we made when younger and a lot of hard work and planning. :)
Fed1969  
#13 Posted : Saturday, March 31, 2012 11:26:37 AM(UTC)
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Kathi52 wrote:
I also agree with dhacker56. My spouse is planning on taking his at 63 1/2. Btw, Fed 1969, yes we are very fortunate. No doubt about it! But that comes about from the decisions we made when younger and a lot of hard work and planning. :)

Kathi,

I agree with you basic comments.

Good planning for retirement when one is young is a great and helped many have good finances in their retirement.  

Poor planning and over spending in younger years has caused many financial problems in retirement.

However, some have circumstances beyond their control and end up in low income jobs without retirement benefits and/or unemployment for many years out their lives. This leads to little or no retirement benefits other than Social Security.

Federal workers are fortunate to have a retirement benefit.
kgkistari  
#14 Posted : Monday, April 02, 2012 1:24:48 PM(UTC)
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I am going to start taking my SS benefits at age 62.  Yes, I know that if I live a very, very long life I will  lose money by doing this.  But, on the other hand who knows if I will live that very, very long life.  So, I'm willing to risk it.

 

Fed1969  
#15 Posted : Monday, April 02, 2012 9:12:55 PM(UTC)
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One unknown factor is if congress will change the rules to reduce benefits for those currently receiving Social Security.  Some members of congress suggest an income test and reduce or eliminate benefits for those that make over a certain income.
LSA  
#16 Posted : Tuesday, April 03, 2012 5:59:10 AM(UTC)
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If one is in bad health then you need to take the Social Security Security at the earliest possible age (62) pronto. If one is in good health they should wait (7% a year additional) until their full retirement age or even better age 70. It all comes out in the wash once you reach the break even point later on (i.e. the sum of all payments you would have gotten from age 62 = the sum of all the increased payments you have gotten stating at at age 66 or or even better age 70.) However, after that point the person who waited gets the continuation of that substantially increased Social Security when they really need it later on in old age when their TSP is nearly depleted and they are facing long term care expenses etc.

Again the strategy to wait to age 66, 67, 68, 69 or 70 should only be used for those in good health otherwise if you are in bad health jump for age 62 Benefits ASAP!

Many, if not most, jump at age 62 without even awareness of the 7% per year.


Not retiring yet  
#17 Posted : Tuesday, April 03, 2012 6:26:54 AM(UTC)
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Does this help?   it is an IRS calculation    

Base Amounts
The following base amounts are used in figuring your taxable Social Security:

Filing Status             Base      Additional
Single                    $25,000   $34,000
Head of Household         $25,000   $34,000
Married Filing Jointly    $32,000   $44,000
Married Filing Separately $0*
Qualifying Widow(er)      $25,000   $34,000
jacksonjosaf  
#18 Posted : Tuesday, April 03, 2012 3:08:31 PM(UTC)
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which plan is best suited for the people of 25-30..who wants to save money for there old age ?
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LSA  
#19 Posted : Tuesday, April 03, 2012 8:02:24 PM(UTC)
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Are you a Federal Employee?
- If so max out your TSP contribution each year
- If you have $s left over contribute to an IRA
- FERS Basic Benefit Annuity comes to you automatically for your 30 (+?) years of service (depends purely on your Salary) .  Max out your salary, get promotions.
- Social Security Benefit comes to you automatically for your years of service (depends purely on your Salary) and the age you start to draw it. Max out your salary, get promotions.



AFTeri  
#20 Posted : Tuesday, April 03, 2012 11:47:19 PM(UTC)
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I want to weigh in on this.  I have 48 quarters of SS and will also have a CSRS pension (17 days 5 hrs).
 
Because of my fed pension when I reach 62, the big book is opened (hey that is how it was explained on here some time ago) and it shows I will qualify for SS and immediately my annunity is reduced accordingly by the same amount. And if I had not put in for SS prior to my 62nd birthday, my annunity will be permenantly reduced.
 
Since my annunity will be reduced permenantly, I will gain no monitary benefit by waiting  at all. I'll take those few SS dollars at age 62 Clapand go on with my retirement.
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