Am I Better Off Waiting Until After Jan. 1 To Retire?

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Question: I retired under FERS from the VAMC just to return 1 year later to be re-employed as an annuitant. I am planning to retire for good this year. I’ll have been reemployed for three years in February 2023. Would it be better to wait and retire the end of January 2023?
Reg’s Response: When you retire again, you’ll be entitled to a supplemental annuity based on your years and full months of service.

Retiring on January 31 would entitle you to one more month of service and be used in your annuity computation. Also, since that supplemental annuity will be calculated using your biweekly pay rate for your entire period of reemployment, the annual pay increase that goes into effect on January 1, 2023, would give you a two-pay period bump in your annuity computation.

Reg Jones is the resident expert on retirement and the federal government at Federal Times. From 1979 until 1995, he served as an assistant director of the U.S. Office of Personnel Management handling recruiting and examining, white and blue collar pay, retirement, insurance and other issues. Opinions expressed are his own.

Citation-The Federal Times- November 14, 2022

TSP Millionaire Count Falls Again

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Only about six-tenths of TSP account holders who had at least $1 million on investment at the start of the year now can say the same, with the number falling to 65,494 in the latest accounting, through September.

That’s down by some 7,000 from the count through June, by more than 47,000 from year-end 2021 and by about 33,000 over the 12 months since September 2021.

Compared to year-end 2021, the 81,557 with accounts between $750,000 and $1 million and the 187,615 between $500,000 and $750,000 are down by about 24,000 and 33,000, while the 513,037 with accounts between $250,000 and $500,000 are down by about 25,000.

The largest TSP account as of September was just under $6.5 million, while as of year-end 2021 the largest account — possibly, but not necessarily, the same one — was just under $11 million.

The TSP recently reported separately that through September the average account balance for those under FERS had fallen about $30,000 to about $150,000 at the start of the year, while the average CSRS investor account had fallen by nearly as much to about $169,000.

The TSP stock funds posted strong gains in October, however.

Citation: FedWeek
Published: November 8, 2022

What Happens if You Leave Money in the TSP After Separation

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At some point in the future, you will separate from federal service. After you separate you will be able to withdraw money from your Thrift Savings Plan account. The TSP doesn’t care why you separated, it might be due to retirement, or you may choose to resign prior to becoming eligible for retirement. Regardless of the reason for your separation, don’t expect immediate access to your funds; you must clear the payroll system first. It usually takes around thirty days before the TSP is even aware that you have left federal service.
Many separated employees will choose to roll (transfer) their funds into an outside IRA or other tax deferred account. But you can also leave your funds in the TSP if you want (the Thrift Board encourages you to not transfer your funds out of the TSP). The rest of this article will discuss what happens if you leave your money with the TSP. Please click HERE to read more.

The Fed just hiked interest rates by 0.75% for the 4th straight time

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The Fed just hiked interest rates by 0.75% for the 4th straight time — escalating fears of a global recession. But here’s why soon-to-be retirees shouldn’t panic

The Fed just hiked interest rates by 0.75% for the 4th straight time — escalating fears of a global recession. But here’s why soon-to-be retirees shouldn’t panic

The Fed just announced its sixth rate hike this year — and some economists predict future increases will take the key rate to over 5%, triggering a recession in 2023.

The federal funds rate has already jumped three percentage points since March, with the newest 0.75% raise closing in on a range of 3.75 to 4%.

It’s becoming more expensive to borrow even as stubborn inflation keeps prices high, and Americans are feeling the strain on their retirement savings.

In fact, four in 10 older Americans are delaying retirement in the midst of challenging economic conditions, according to the Nationwide Retirement Institute — double those who were pushing back retirement last year.

Click HERE to read more.

October Returns a Treat for TSP Stock Fund Investors

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All three stock-based TSP funds posted strong gains in October, led by the small company stock S fund, up 8.59 percent and followed by an 8.1 percent gain in the large company stock C fund and a 5.98 percent gain in the international stock I fund.

Despite the gains, those funds still are down year-to-date by 23.83, 17.7 and 22.9 percent, respectively; for the last 12 months they are down 27.24, 14.61 and 22.74 percent.

The bond F fund dropped 1.26 percent in October, for a year-to-date loss of 15.38 percent and a 12-month loss of 15.4 percent. The always-gaining G fund rose 0.34 percent in the month and is up 2.29 percent for the year and 2.55 percent over the last 12 months.
Click HERE to read more.