Preparing to retire checklist

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VictoriaF
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Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 10:44 am

I will be retiring in early 2014. The date has been moving, and now it seems that instead of leaving during the first couple months, I may wait a bit longer. I'd like to have a checklist of the important do's and don't to avoid significant oversights. I wanted to wait with these decisions until I finish my paper, but right now I have to make next-year benefits decisions, and they force my hand.

I am a Federal employee and all my questions are in the context of the Federal benefits.

1. Health and dental insurance.
I am planning to continue with my current plans. Once I retire, I will switch to Temporary Continuation of Coverage (TCC), the Federal version of COBRA.

2. Flexible spending account: LEX
Currently I use HDHP with HSA plus LEX for out-of-packet dental and vision expenses.
I am planning NOT to put any new money into LEX, because I will probably not have the time to use it.

3. Health Savings Accounts (HSA) brings up several questions:
- My insurance company GEHA contributes $62.5 monthly into the HSA on my behalf. I normally add my own money via the payroll deduction to reach the annual maximum.
- Can I still top up my HSA account early in the year?
- As I am planning to use the same HDHP/HSA combination before and after the retirement (the latter in the form of TCC), are there circumstances under which I would run against the IRS rules for maximizing annual HSA contributions?

4. Catch up TSP contributions
Normally, I make the catch-up contributions early in the year, and spread regular contributions evenly. However during the retirement year I will have fewer paychecks, and I don't know yet how many. I could make all contributions early, but then I'd lose the match.
- Can I still make catch up contribution early in the year?
- What will happen if I retire before I have a chance to make maximum "normal" (non-catch up) contributions.

5. Any other missing parts?
- Are there other things that are better done while still working than in retirement?

Thank you,

Victoria
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jebmke
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Re: Preparing to retire checklist

Post by jebmke » Sat Nov 23, 2013 10:48 am

For those who regularly make charitable donations each year, often the last year of working is a peak tax year and a good time to consider bunching several years of charitable donations into one year using a donor advised fund. The most tax efficient way to do this is with appreciated securities.

Did you consider making the title of this thread "Not planning to work any more." :wink:
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Re: Preparing to retire checklist

Post by Professor Emeritus » Sat Nov 23, 2013 11:44 am

You have not said which retirement system you are in and how many years of service and your conditions of retirement or age . DW was just approved for FERS retirement and her healthcare simply continues into retirement without change.

"To continue your health benefits enrollment into retirement, you must: (1) have retired on an immediate annuity (that is, an annuity which begins to accrue no later than one month after the date of your final separation); and (2) have been continuously enrolled (or covered as a family member) in any FEHB Program plan (not necessarily the same plan) for the five years of service immediately preceding retirement, or if less than five years, for all service since your first opportunity to enroll."

The federal retirement process can be very cumbersome but eventually you get your annuity.
But any checklist depends on your plan,age years of service etc.

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VictoriaF
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 11:51 am

Professor Emeritus wrote:You have not said which retirement system you are in and how many years of service and your conditions of retirement or age . DW was just approved for FERS retirement and her healthcare simply continues into retirement without change.

"To continue your health benefits enrollment into retirement, you must: (1) have retired on an immediate annuity (that is, an annuity which begins to accrue no later than one month after the date of your final separation); and (2) have been continuously enrolled (or covered as a family member) in any FEHB Program plan (not necessarily the same plan) for the five years of service immediately preceding retirement, or if less than five years, for all service since your first opportunity to enroll."

The federal retirement process can be very cumbersome but eventually you get your annuity.
But any checklist depends on your plan,age years of service etc.
I am under FERS and retiring under the Minimum Retirement Age+10 (MRA+10) provision. The problem with MRA+10 is that I am losing 5% of my pension for every year that I am under the age of 62. Therefore, I want to postpone collecting the pension by at least 18 months, which would increase it by 7.5%. During the first 18 months, I would get the Temporary Continuation of Coverage (TCC) insurance, the Federal version of COBRA. After that, I may just request a reduced pension or use ACA for the remainder of the years until I reach 62.

Victoria
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Re: Preparing to retire checklist

Post by kramer » Sat Nov 23, 2013 12:34 pm

I think you want to get all the credit cards you will need before retiring and losing your earned income. I know you mentioned some long term travel plans, so specifically this would mean getting those low foreign transaction fee credit cards all set up while still earning an income.

Your health insurance will continue, but I don't know if this will include dental. Dental work is something you might want to get done before quitting. Same goes for eye examinations. Paying for dental and eye exam insurance made no sense for me in my situation once I retired.

If you are planning on traveling extensively shortly after retiring, there are additional recommendations that I would make.

Edit: Sorry, Victoria, I realize now that your post is more specifically about Federal workplace and retirement issues, so what I have stated above may not apply.

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VictoriaF
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 12:41 pm

Thank you, Kramer.

I'll check if dental insurance is subject to TCC (COBRA) and if I can keep it in retirement. I also thought that if I needed extensive dental work, I could do it abroad, e.g., in Mexico.

Right now, my credit cards are from PenFed and State Department Federal Credit Union, the latter is a PIN+Chip VISA. I think they are pretty low-fee. Which ones would you recommend for international travel?

Victoria
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btenny
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Re: Preparing to retire checklist

Post by btenny » Sat Nov 23, 2013 1:14 pm

Before you retire make sure you purchase any big items you will need in the next say 5 years. Anything that requires credit financing like a car or home should be bought while you are working and drawing a salary. If you are going to downsize your residence and buy a small condo or home do it now. Same with buying a new car. Do it now. No bank will give early retirees good loan terms and may even turn you down completely as you have no firm regular "income stream". Lots of assets do not count. Later on after you draw SS and your pension and ahve been in retirement affew years it may be OK as then you will have firm tax records showing a "income stream".

Does the fed give you a big salary you last year due to "cashing in" vacation and sick leave? If so I would consider some sort of plan to split the extra income into different years to reduce your tax libility. It is no fun paying 40% or more in taxes on that bonus money.

Congratulations. I am sure you will enjoy retirment.....

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VictoriaF
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 1:29 pm

btenny wrote:Before you retire make sure you purchase any big items you will need in the next say 5 years. Anything that requires credit financing like a car or home should be bought while you are working and drawing a salary. If you are going to downsize your residence and buy a small condo or home do it now. Same with buying a new car. Do it now. No bank will give early retirees good loan terms and may even turn you down completely as you have no firm regular "income stream". Lots of assets do not count. Later on after you draw SS and your pension and ahve been in retirement affew years it may be OK as then you will have firm tax records showing a "income stream".

Does the fed give you a big salary you last year due to "cashing in" vacation and sick leave? If so I would consider some sort of plan to split the extra income into different years to reduce your tax libility. It is no fun paying 40% or more in taxes on that bonus money.

Congratulations. I am sure you will enjoy retirment.....
Hi Bill,

I am renting and want to move to another rental within a walking distance to D.C. I am planning to get a new apartment while I am still getting a paycheck. I am not interested in buying, but if it changes in several years, I will either buy it with cash or a large down-payment.

I will need a new car soon, but I will buy it with cash.

My unused sick leave will be added to my years of service, thus increasing my pension but not providing me with a lump-sum. I also have 30 days of carry over annual leave (vacations). I prefer to use up this leave and then retire, rather than retire a month earlier and get cash. The reason is the 5%/year reduction I mentioned earlier.

Thank you,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

btenny
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Re: Preparing to retire checklist

Post by btenny » Sat Nov 23, 2013 1:58 pm

You might want to look at cars now. Paying cash for cars in retirement has some issues if you have to take the money out of IRA accounts and pay taxes on the money. I went up in tax brackets enough later in retirement to make leasing worth while. Likewise paying cash for cars and houses in early retirement uses up a lot of your taxable monies early before you can draw SS/pensions and may not be the right cash flow model. Just thinking...

Also are you going to do Roth conversions for a few years after you retire? Or is your retirement set up that way? I did not do this while I was first retired and making no money. Now any money I need from my IRA is taxed at 25% or so due to drawing pensions and SS. It would have been perfect for me to do Roth conversions from age 52-56 as I was in the 5-15% tax bracket.

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Re: Preparing to retire checklist

Post by island » Sat Nov 23, 2013 2:19 pm

jebmke wrote:For those who regularly make charitable donations each year, often the last year of working is a peak tax year and a good time to consider bunching several years of charitable donations into one year using a donor advised fund. The most tax efficient way to do this is with appreciated securities.
Jebmke- I don't know much about donor advisor funds. I get that an advantage is funds in a DAF have the potential to grow until distributed and the doner has some control over when distributed so not blown all at once, but regarding the tax write off, it's the same whether contributing to charity directly or thru a DAF correct? For example, if in 2014 I donate 25K to a charity directly or create a DAF, the tax deduction taken in 2014 is the same with no further tax breaks for the DAF, yes?

Thanks.

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 2:28 pm

btenny wrote:You might want to look at cars now. Paying cash for cars in retirement has some issues if you have to take the money out of IRA accounts and pay taxes on the money. I went up in tax brackets enough later in retirement to make leasing worth while. Likewise paying cash for cars and houses in early retirement uses up a lot of your taxable monies early before you can draw SS/pensions and may not be the right cash flow model. Just thinking...

Also are you going to do Roth conversions for a few years after you retire? Or is your retirement set up that way? I did not do this while I was first retired and making no money. Now any money I need from my IRA is taxed at 25% or so due to drawing pensions and SS. It would have been perfect for me to do Roth conversions from age 52-56 as I was in the 5-15% tax bracket.
I have sufficient funds in taxable accounts to last until Social Security and beyond. I want to finish Roth conversions before Social Security starts, but first I'd like to wait a year or so in case TSP starts allowing In-plan Roth Rollovers (IRR). Otherwise, I will have to move my TSP funds into an IRA and lose access to the G Fund.

I think I am doomed to the 25% bracket from the start due to the pensions. I also had an idea of moving to Florida to avoid the state income tax on Roth conversions. I may still do that.

My next car will most likely be under $20k and I will pay for it with cash. I am not even sure when I will need a new car. Right now I walk to work. When I move to Rosslyn, I will walk or take Metro most of the time. I am also planning to spend several months every year abroad during which time my car would be idle.

Thank you again!

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 2:43 pm

I just thought of another thing I will need to consider. Let's say I retire in the middle of 2014, and my TCC (COBRA) lasts 18 months from the middle of 2014 to the end of 2015. In January 2016, I will need to decide either to take a reduced Federal pension in order to start using the Federal health insurance or enroll in ACA until I could get the full pension.

In order to get a subsidized ACA insurance in 2016, I may need to have low income in 2015. And so, I could not do Roth conversions in 2015, the year of my lowest tax bracket. Is this correct?

Does ACA look at the previous-year income to determine the premiums in the current year? Or ACA looks at the income projections for the year when it starts?

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Preparing to retire checklist

Post by jebmke » Sat Nov 23, 2013 3:06 pm

island wrote:
jebmke wrote:For those who regularly make charitable donations each year, often the last year of working is a peak tax year and a good time to consider bunching several years of charitable donations into one year using a donor advised fund. The most tax efficient way to do this is with appreciated securities.
Jebmke- I don't know much about donor advisor funds. I get that an advantage is funds in a DAF have the potential to grow until distributed and the doner has some control over when distributed so not blown all at once, but regarding the tax write off, it's the same whether contributing to charity directly or thru a DAF correct? For example, if in 2014 I donate 25K to a charity directly or create a DAF, the tax deduction taken in 2014 is the same with no further tax breaks for the DAF, yes?

Thanks.
Yes, it is the same. The idea of bunching is to pull future deductions into the current year. For example, suppose you are about to retire at age 60 and your tax rate is high -- say 35%. Further, since you may be deferring SS and withdrawals from your IRAs to age 70, so your tax rate from age 61-69 might be low, say 10%. Maybe your average donations would expect to run $5,000 per year (ie., routine donations to church, various charities). The idea here is to take 10 years of donations ($50K) and put it in the DAF the year you retire. The deduction is worth 35% ($17.5K) whereas if you waited and did $5K per year in the future, your deduction would be worth 10% ($5K). Sure, you could just donate it all to your charities in one year and then tell them to go away for 10 years. But that isn't always easy.

The other big advantage of a DAF is that you can donate to charities anonymously. This is one way to keep your name off the various lists that get circulated around, especially by local organizations.
When you discover that you are riding a dead horse, the best strategy is to dismount.

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Re: Preparing to retire checklist

Post by Calm Man » Sat Nov 23, 2013 3:14 pm

Victoria,
It is always difficult to anticipate what taxes and other things will be like in the future. It seems that recently the feds have been changing things up in big ways almost every year. Particularly regarding ACA we have NO IDEA what it will be like in 2 years especially as we see all the quantum weirdness developing now. It might tunnel into something else, become resurrected, die or who knows. So keep everything flexible and assume you will pay regular costs and then if you get lucky, great.

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 3:32 pm

Calm Man wrote:Victoria,
It is always difficult to anticipate what taxes and other things will be like in the future. It seems that recently the feds have been changing things up in big ways almost every year. Particularly regarding ACA we have NO IDEA what it will be like in 2 years especially as we see all the quantum weirdness developing now. It might tunnel into something else, become resurrected, die or who knows. So keep everything flexible and assume you will pay regular costs and then if you get lucky, great.
Calm Man,

It's fair enough. Still, these decisions have consequences, and the more consequences I am aware of now the fewer surprises I will face later. For example, I was lazy to read about ACA and assumed that it works like college financial aid, by looking at the previous year income. Then it struck me that it could work very differently, by looking at the income in the year of using it. While ACA is likely to evolve, whether it looks at the previous year or the current year will persist. No?

Victoria
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Re: Preparing to retire checklist

Post by Outer Marker » Sat Nov 23, 2013 3:36 pm

Will you have a full 35 years of good earnings for purposes of calculating your social security annual benefit amount? If you're retiring early, I'd work long enough into the year to max out the 2014 SSI amount, so as to drop off a "zero" or low earning number early in your career.

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 3:42 pm

Outer Marker wrote:Will you have a full 35 years of good earnings for purposes of calculating your social security annual benefit amount? If you're retiring early, I'd work long enough into the year to max out the 2014 SSI amount, so as to drop off a "zero" or low earning number early in your career.
I have a few "zero" years and one of them will be replaced by 2014, but I really don't want to wait until I get the full 2014 SS pay. I was ready to retire in April 2013, and have been delaying it for non-financial reasons. It I start maximizing money, it will become a slippery slope towards never retiring.

Victoria
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Re: Preparing to retire checklist

Post by Ged » Sat Nov 23, 2013 4:02 pm

Bunching deductions such as charitable contributions is great in your last year. You can also look at deferring income. For example don't rebalance until after your income drops.

island
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Re: Preparing to retire checklist

Post by island » Sat Nov 23, 2013 4:32 pm

jebmke wrote:
island wrote:
jebmke wrote:For those who regularly make charitable donations each year, often the last year of working is a peak tax year and a good time to consider bunching several years of charitable donations into one year using a donor advised fund. The most tax efficient way to do this is with appreciated securities.
Jebmke- I don't know much about donor advisor funds. I get that an advantage is funds in a DAF have the potential to grow until distributed and the doner has some control over when distributed so not blown all at once, but regarding the tax write off, it's the same whether contributing to charity directly or thru a DAF correct? For example, if in 2014 I donate 25K to a charity directly or create a DAF, the tax deduction taken in 2014 is the same with no further tax breaks for the DAF, yes?

Thanks.
Yes, it is the same. The idea of bunching is to pull future deductions into the current year. For example, suppose you are about to retire at age 60 and your tax rate is high -- say 35%. Further, since you may be deferring SS and withdrawals from your IRAs to age 70, so your tax rate from age 61-69 might be low, say 10%. Maybe your average donations would expect to run $5,000 per year (ie., routine donations to church, various charities). The idea here is to take 10 years of donations ($50K) and put it in the DAF the year you retire. The deduction is worth 35% ($17.5K) whereas if you waited and did $5K per year in the future, your deduction would be worth 10% ($5K). Sure, you could just donate it all to your charities in one year and then tell them to go away for 10 years. But that isn't always easy.

The other big advantage of a DAF is that you can donate to charities anonymously. This is one way to keep your name off the various lists that get circulated around, especially by local organizations.

Ahhh I see. You're example was really helpful. Thank you. I've really got to start thinking in terms of my tax rate and good point about the anonymity. Hate being hounded for more after donating. Gotta be where the expression "no good deed goes unpunished" came from. :greedy.


Victoria- Congrats and good luck with your retirement planning you lucky girl you! Hope you don't mind the momentary threadjack. It's a great post and very informative.
From the responses I get the impression it can be difficult to get credit when retired, even with a history of great credit and sufficient savings? Surprising since it doesn't seem to stop people with crappy credit.

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Re: Preparing to retire checklist

Post by Watty » Sat Nov 23, 2013 5:19 pm

One thing that you should do is to get a very good physical before your put in your retirement notice to try to find any issues that might come up soon after you retire. If it finds anything major then it might make sense to deal with it while you are still on the payroll. Ask your doctor if there are any test that might be worth doing even if the insurance does not normally pay for them and you have to pay for them yourself.
Last edited by Watty on Sat Nov 23, 2013 5:41 pm, edited 1 time in total.

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Re: Preparing to retire checklist

Post by c.Alvin » Sat Nov 23, 2013 5:38 pm

I was well prepared and had all documents approved far in advance. I was told it would take OPM 2-3 months to settle my account and verify all information. It actually took OPM 6 months to determine my final benefits. I am covered under the CSRS-OFFSET program. I received half my projected monthly benefits from OPM for first 6 months. Fortunately, Social Security provided their full monthly benefit on schedule. Just letting you know OPM moves at the speed of a glacier, before global warming.

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Re: Preparing to retire checklist

Post by btenny » Sat Nov 23, 2013 5:39 pm

You are in the same position I was in. You can pospone taking your pension and let it increase in value and live on your cash for a few years after you retire. So those years you can also do Roth conversions (because you will have essentially zero income) up to the top of the 15% bracket which I see as a good deal. You also may be right that you will be elgible for a good deal on ACA those years as well but who knows. So I guess you have some studying and finance modeling to do versus your health insurance needs and your spending and taxes, etc.. I found it a good deal to let my pension ride for 4 years but I did not need to worry about health insurance. I got insurance (at a cost) from my employer until Medicare kicked in.

Also you may want to check in detail on SS via a full office visit and set down if you have less than 35 years paid. A friend of mine ended up having to work every winter at the ski resort for 5 years to become fully elgible for SS even though he taught at a university and worked for State for 40 years. I guess some number of those years were zero for some reason and he was not elgible until he worked a few more years and paid SSI taxes at some salary.

I second the suggestion to get a complete physical and dental checkup and full eye test and new glasses if needed. And apply for some Term Life Insurance if you need it. I bought term life as a backstop to not taking the spousal reduction in my pension. But your situation may be different...

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 5:55 pm

island wrote:Victoria- Congrats and good luck with your retirement planning you lucky girl you! Hope you don't mind the momentary threadjack. It's a great post and very informative.
From the responses I get the impression it can be difficult to get credit when retired, even with a history of great credit and sufficient savings? Surprising since it doesn't seem to stop people with crappy credit.
Thank you, Island,

I am also surprised about potential difficulties with credit, but I don't have any need for it in foreseeable future.

Victoria
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 6:00 pm

Watty wrote:One thing that you should do is to get a very good physical before your put in your retirement notice to try to find any issues that might come up soon after you retire. If it finds anything major then it might make sense to deal with it while you are still on the payroll. Ask your doctor if there are any test that might be worth doing even if the insurance does not normally pay for them and you have to pay for them yourself.
Watty,

It's an excellent suggestion. My annual physicals are usually uneventful, but last year I got to discuss Behavioral Economics with my primary physician. She is an Israeli, and when I mentioned that both Kahneman and Ariely are from Israel, she got interested. Next time, I will ask her to look for potential problems.

Thanks!

Victoria
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 6:14 pm

c.Alvin wrote:I was well prepared and had all documents approved far in advance. I was told it would take OPM 2-3 months to settle my account and verify all information. It actually took OPM 6 months to determine my final benefits. I am covered under the CSRS-OFFSET program. I received half my projected monthly benefits from OPM for first 6 months. Fortunately, Social Security provided their full monthly benefit on schedule. Just letting you know OPM moves at the speed of a glacier, before global warming.
I was wondering how long it would take OPM to do the paperwork. I am on FERS, but my complications are that I want to postpone the commencing date of the annuity to reduce the age reduction and I want to use TCC for 18 months.

Thank you,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 6:33 pm

btenny wrote:You are in the same position I was in. You can pospone taking your pension and let it increase in value and live on your cash for a few years after you retire. So those years you can also do Roth conversions (because you will have essentially zero income) up to the top of the 15% bracket which I see as a good deal. You also may be right that you will be elgible for a good deal on ACA those years as well but who knows. So I guess you have some studying and finance modeling to do versus your health insurance needs and your spending and taxes, etc.. I found it a good deal to let my pension ride for 4 years but I did not need to worry about health insurance. I got insurance (at a cost) from my employer until Medicare kicked in.
I can't do Roth conversions within the 15% bracket, because I have another pension from a former employer Lucent-Bell Labs. Currently, I am eligible for a retiree health insurance from Alcatel-Lucent, but I don't know if it will still be viable in 2016. ALU may terminate it due to ACA or its financial inability to continue supporting its retirees. After I got access to the Federal health insurance, I lost interest in the ALU retiree insurance. Perhaps, I should revisit it.
btenny wrote:Also you may want to check in detail on SS via a full office visit and set down if you have less than 35 years paid. A friend of mine ended up having to work every winter at the ski resort for 5 years to become fully elgible for SS even though he taught at a university and worked for State for 40 years. I guess some number of those years were zero for some reason and he was not elgible until he worked a few more years and paid SSI taxes at some salary.
I receive my Social Security statements every year and they are accurate. I have fewer than 35 years of employment, because I came to the U.S. as an adult and lost some time getting the first job, in initial low-paid jobs, and then in grad school. But I made up for that time pretty well, and waiting to collect Social Security at the age of 70 will more than compensate for fewer years of employment.
btenny wrote:I second the suggestion to get a complete physical and dental checkup and full eye test and new glasses if needed. And apply for some Term Life Insurance if you need it. I bought term life as a backstop to not taking the spousal reduction in my pension. But your situation may be different...
I will definitely schedule an extensive physical.

Thank you again,

Victoria
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Re: Preparing to retire checklist

Post by The Wizard » Sat Nov 23, 2013 6:42 pm

VictoriaF wrote:
island wrote:Victoria- Congrats and good luck with your retirement planning you lucky girl you! Hope you don't mind the momentary threadjack. It's a great post and very informative.
From the responses I get the impression it can be difficult to get credit when retired, even with a history of great credit and sufficient savings? Surprising since it doesn't seem to stop people with crappy credit.
Thank you, Island,

I am also surprised about potential difficulties with credit, but I don't have any need for it in foreseeable future.

Victoria
Credit should not be a problem.
I got a new Cap One card a few months after I retired with a $20K limit and no foreign transaction fees.
I punched my numbers in online and got approved the same day, perhaps with outdated income info I'm not sure.
Credit bureaus don't really know my salary to begin with, only if I pay my bills, right?

Anyway I need to get ANOTHER CC soon, with chip & pin functionality. Don't expect any problems there either...
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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 6:47 pm

The Wizard wrote:Credit should not be a problem.
I got a new Cap One card a few months after I retired with a $20K limit and no foreign transaction fees.
I punched my numbers in online and got approved the same day, perhaps with outdated income info I'm not sure.
Credit bureaus don't really know my salary to begin with, only if I pay my bills, right?

Anyway I need to get ANOTHER CC soon, with chip & pin functionality. Don't expect any problems there either...
Hi The Wizard,

You retired in March, if I remember correctly. May I ask, what did you do about the flexible spending accounts and 401(k) catch-up contributions for this year?

Thank you,

Victoria
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Re: Preparing to retire checklist

Post by Diogenes » Sat Nov 23, 2013 8:31 pm

Victoria,

You may wish to look here, if you have not already:
https://federalsoup.federaldaily.com/de ... retirement

A bit more informed for the Federal worker.

If you can keep your Federal Healthcare and avoid the the Obamacare mess by all means do so. I doubt any other Federal worker in your position would consider relying on Obamacare.

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 9:15 pm

Diogenes,

Your soup is greatly appreciated. It will keep me Fed-up {smile}.

To clarify, I am not planning to rely on Obamacare for a long time. I am considering it as an interim solution that would enable me to postpone the commencing date of the annuity until I am 62, in order to avoid the age reduction of 5% per year (5/12% per month).

Thank you,

Victoria
Last edited by VictoriaF on Sun Nov 24, 2013 8:43 pm, edited 1 time in total.
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Re: Preparing to retire checklist

Post by ChrisC » Sat Nov 23, 2013 9:25 pm

I retired on June 29 of this year after 35 years of creditable federal service under CSRS. Here are a few things for you to consider

1. Credit Issues

If you plan to finance or refinance a residential mortgage, start and complete the application process well in advance of your retirement date. And don't volunteer to tell your lender that you plan to retire -- this would only place you behind the eight ball of lending underwriting -- you won't get a loan until 6-12 months of retirement pension payments if you disclose retirement plans. Moreover, loan underwriting is especially tough these days regardless of income and stable employment. My wife and I went through the pain of financing the purchase of our retirement home and it was excruciating even for us with FICO scores of 800 plus, stable employment and enough funds in taxable accounts to pay for the house in cash. BTW, I don't think one encounters the same issues in applying for new credit cards or an increase in credit card limits, but, as a precaution, I did obtain a $40K increase in my credit card limit while I was employed 8 months before I retired. Recently, as a retiree, I obtained a new credit card with a $20K limit with no issues. If you can make payments to the Federal Government or OPM through pay.gov, while you're an employee, consider using a credit card for the payments to get reward points or cash rebates. In retirement, I'm becoming more of a points/frequent flyer miles junkee and I'm planning on making several bucket list travel trips leveraging my rewards or points.


2. FSA.

Perhaps they have changed things around. But I thought that FSA plans don't require you to fund the full amount of planned yearly contributions as a precondition for one to exhaust all planned contributions for medical expenses that might in fact occur earlier in the year. I believe, for example, if you plan to contribute $5k to an FSA, and retire on February 28 (and made only 4 pay periods of FSA contributions) but incurred $5k in eligible FSA medical expenses by February 28, you're entitled to get reimbursed for the full $5K of incurred medical expenses. I know some people might think this is an unfair gap that unfairly benefits folks who might be tainted with the idea that they are "gaming" the system, but this is a gap that's been around for a while and it is completely tolerated by the IRS, unless they have recently changed the rules. I wouldn't worry about there being a shortage in FSA plans administered by plan custodians because the funding for this gap comes from participants who forfeited use of their contributions by not using their contributed funds by the end of the year.

3. HSA.

I recommend you front-load the maximum amount of HSA contributions for 2014 during the pay periods you're employed. I did this in 2013 over 12 pay periods mainly because of the uncertainty over whether OPM deducts the payments from your annuity and I wanted to have the pre-tax treatment of my employee deductions scored correctly for 2013 taxes. OPM does not deduct any payments from your interim annuity except federal income taxes so the status of any contributions during the interim period is kind of baffling to me. Front-loading or "topping-off" your annual contributions does put a hurt on your pay period net income, but it's one less headache I had to deal with during the remaining part of the year. I'm not aware of any rules, OPM or IRS driven, that prevent you from front-loading HSA payments as long as you continue to be covered by a HDHP. In fact, I've front-load all HSA contributions this year (including catch-up and spousal catch-up).

4. 401K/TSP

I also recommend you front-load these contributions, which I did for my plans, to fund at the maximum IRS contribution levels. As CSRS, I didn't get a match, but my former agency (one of several so-called FIRREA financial regulatory agencies) had its own 401K plan with a matching contribution. I made sure I got the entire match from my agency's 401K plan. I think TSP works a bit differently than the way my agency had its 401K plan (for example, my agency had a "true catch-up for matching contributions" at the end of the calendar year but TSP might only match per pay period and not have a true yearly match of an employee's salary.

Finally, don't underestimate the ability of OPM to prolong the retirement process so plan to have sufficient funds to take care of stuff. My agency and NSF, which handles payroll for my former agency, were super in the process. My paperwork was completed, verified and sent to OPM within two weeks of retirement. And I received my lump sum within 3 weeks of retirement. I was assigned an OPM specialist in August and I'm still on interim status and waiting to be finalized.

Ditto on Federal Soup; it's a good bulletin board with lots of valuable information for retirees and those planning on retirement.

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Re: Preparing to retire checklist

Post by VictoriaF » Sat Nov 23, 2013 9:50 pm

ChrisC wrote:I retired on June 29 of this year after 35 years of creditable federal service under CSRS. Here are a few things for you to consider
Congratulations, Chris!
ChrisC wrote:1. Credit Issues

...If you can make payments to the Federal Government or OPM through pay.gov, while you're an employee, consider using a credit card for the payments to get reward points or cash rebates. In retirement, I'm becoming more of a points/frequent flyer miles junkee and I'm planning on making several bucket list travel trips leveraging my rewards or points.
In what situations does one pay to the government through pay.gov? So far I have been only on the receiving end.

I will postpone my FERS MRA+10 annuity by 18 months (or longer), and during that time I will use TCC, temporary continuation of coverage of my FEHB. I will have to pay for TCC out of packet, but it will go to GEHA. I wonder if I could use a credit card for that.

ChrisC wrote:2. FSA.

Perhaps they have changed things around...
The rules are still the same, but I am contributing to HSA and LEX, not FSA. LEX covers only dental and vision expenses, and I just don't foresee any expenses that need to be covered in the first few month.
ChrisC wrote:3. HSA.

I recommend you front-load the maximum amount of HSA contributions for 2014 during the pay periods you're employed...
Thank you, will do! You are making a great point that once I'm off the payroll, HSA contributions and the rest will become quite chaotic.
ChrisC wrote:4. 401K/TSP

I also recommend you front-load these contributions, which I did for my plans, to fund at the maximum IRS contribution levels...
Thanks, this is helpful. When I give my 2-months notice, I will have 4 pay-periods to make all my remaining annual TSP contributions. I can do it, because I have plenty of cash.
ChrisC wrote:Finally, don't underestimate the ability of OPM to prolong the retirement process so plan to have sufficient funds to take care of stuff...

Ditto on Federal Soup; it's a good bulletin board with lots of valuable information for retirees and those planning on retirement.
Excellent information, I greatly appreciate it,

Victoria
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Re: Preparing to retire checklist

Post by ChrisC » Sat Nov 23, 2013 10:48 pm

VictoriaF wrote: In what situations does one pay to the government through pay.gov? So far I have been only on the receiving end.
I was able to make payments to OPM for the Voluntary Contribution Program, open only to CSRS employees, through pay.gov. I believe OPM might also accept payments for service deposit credit that way as well. My agency also accepted employee tuition/training payments through pay.gov. Some agencies use pay.gov to accept payment of debt owed to the agency from employees (overpayments of pay, travel reimbursement, etc.)

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Re: Preparing to retire checklist

Post by Calm Man » Sat Nov 23, 2013 10:54 pm

VictoriaF wrote:
Calm Man wrote:Victoria,
It is always difficult to anticipate what taxes and other things will be like in the future. It seems that recently the feds have been changing things up in big ways almost every year. Particularly regarding ACA we have NO IDEA what it will be like in 2 years especially as we see all the quantum weirdness developing now. It might tunnel into something else, become resurrected, die or who knows. So keep everything flexible and assume you will pay regular costs and then if you get lucky, great.
Calm Man,

It's fair enough. Still, these decisions have consequences, and the more consequences I am aware of now the fewer surprises I will face later. For example, I was lazy to read about ACA and assumed that it works like college financial aid, by looking at the previous year income. Then it struck me that it could work very differently, by looking at the income in the year of using it. While ACA is likely to evolve, whether it looks at the previous year or the current year will persist. No?

Victoria
You are correct. From what I understand, the individual seeking subsidies estimates their income for the year in question and gets the subsidies or even tax credits up front. When they file, which literally is a year plus 3 months or even a year plus 9 months later, the IRS supposedly reconciles this. As I read about it, people are intentionally underestimating income as it costs them nothing and they have a no downside gamble that IRS never catches up with them (probably a good bet especially if the law is overturned in the next few years). Also, under the law, IRS has no power to extract the money from the person. They can only get it from a potential refund. So there are strategies being discussed already to underestimate income and then make sure they won't get nabbed by IRS by under-withholding (not too much to get a penalty) so that a refund is not due. This seems pretty easy to execute and I cannot imagine the fraud that is going to occur with this program. As a taxpayer it frightens me.

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Re: Preparing to retire checklist

Post by kramer » Sun Nov 24, 2013 12:36 am

Victoria, I always use this page to evaluate credit and debit card deals, the list is usually kept current and it covers all the major credit and debit cards:

http://www.flyerguide.com/wiki/index.ph ... n_Exchange

I have really enjoyed using my Schwab debit card for overseas ATM withdrawals as they also reimburse the ATM fees in addition to charging 0% foreign transaction fee.

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Re: Preparing to retire checklist

Post by TheGreyingDuke » Sun Nov 24, 2013 2:30 am

VictoriaF wrote:
Watty wrote:One thing that you should do is to get a very good physical before your put in your retirement notice to try to find any issues that might come up soon after you retire. If it finds anything major then it might make sense to deal with it while you are still on the payroll. Ask your doctor if there are any test that might be worth doing even if the insurance does not normally pay for them and you have to pay for them yourself.
Watty,

It's an excellent suggestion. My annual physicals are usually uneventful, but last year I got to discuss Behavioral Economics with my primary physician. She is an Israeli, and when I mentioned that both Kahneman and Ariely are from Israel, she got interested. Next time, I will ask her to look for potential problems.

Thanks!

Victoria
Let me dissent on this, the idea that there is some magic in extensive diagnostic tests is not corroborated by the research. There are certain tests that make sense, depending on your age, sex, family history and the sort. There are countless examples of "findings" that turn up serendipitously that then suggest further investigations, leading to potentially harmful procedures. The specialists and equipment manufacturers do out well with all this, but it is one of the reasons why the costs of healthcare in the US far outstrip those elsewhere without measurable benefits.

Recently new recommendations on breast cancer screening and prostate screening were opposed by these very interests.

I would suggest a conversation with your doc, review your history, that of your family, all risk factors that are present for you and do what is called for, nothing more, nothing exotic.
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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 7:24 am

Calm Man wrote:
VictoriaF wrote:
Calm Man wrote:Victoria,
It is always difficult to anticipate what taxes and other things will be like in the future. It seems that recently the feds have been changing things up in big ways almost every year. Particularly regarding ACA we have NO IDEA what it will be like in 2 years especially as we see all the quantum weirdness developing now. It might tunnel into something else, become resurrected, die or who knows. So keep everything flexible and assume you will pay regular costs and then if you get lucky, great.
Calm Man,

It's fair enough. Still, these decisions have consequences, and the more consequences I am aware of now the fewer surprises I will face later. For example, I was lazy to read about ACA and assumed that it works like college financial aid, by looking at the previous year income. Then it struck me that it could work very differently, by looking at the income in the year of using it. While ACA is likely to evolve, whether it looks at the previous year or the current year will persist. No?

Victoria
You are correct. From what I understand, the individual seeking subsidies estimates their income for the year in question and gets the subsidies or even tax credits up front. When they file, which literally is a year plus 3 months or even a year plus 9 months later, the IRS supposedly reconciles this. As I read about it, people are intentionally underestimating income as it costs them nothing and they have a no downside gamble that IRS never catches up with them (probably a good bet especially if the law is overturned in the next few years). Also, under the law, IRS has no power to extract the money from the person. They can only get it from a potential refund. So there are strategies being discussed already to underestimate income and then make sure they won't get nabbed by IRS by under-withholding (not too much to get a penalty) so that a refund is not due. This seems pretty easy to execute and I cannot imagine the fraud that is going to occur with this program. As a taxpayer it frightens me.
So in the extreme, everyone can claim low income, qualify for the greatest subsidies, and never have to reconcile? This looks like such an egregious loophole that it will be closed quickly. In the past this type of information would take time to propagate, but with the Web and social networking it becomes actionable immediately.

I will have to read about ACA to see how it relates to my circumstances. But it appears that it does not have any bearing on me in the near term and I can wait until people start using it and report their experiences.

Victoria
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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 7:25 am

kramer wrote:Victoria, I always use this page to evaluate credit and debit card deals, the list is usually kept current and it covers all the major credit and debit cards:

http://www.flyerguide.com/wiki/index.ph ... n_Exchange

I have really enjoyed using my Schwab debit card for overseas ATM withdrawals as they also reimburse the ATM fees in addition to charging 0% foreign transaction fee.
Thank you, Kramer,

Victoria
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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 8:29 am

TheGreyingDuke wrote:
Let me dissent on this, the idea that there is some magic in extensive diagnostic tests is not corroborated by the research...

I would suggest a conversation with your doc, review your history, that of your family, all risk factors that are present for you and do what is called for, nothing more, nothing exotic.
Your point is well taken. I generally favor minimal medicine and avoid unnecessary testing. But there are some screening procedures that should be done sooner or later, and I will ask to get them sooner. You used the word "exotic," and now I am curious what procedures you have in mind. In the meantime my imagination is running wild.

Victoria
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Re: Preparing to retire checklist

Post by The Wizard » Sun Nov 24, 2013 9:10 am

VictoriaF wrote:
The Wizard wrote:Credit should not be a problem.
I got a new Cap One card a few months after I retired with a $20K limit and no foreign transaction fees.
I punched my numbers in online and got approved the same day, perhaps with outdated income info I'm not sure.
Credit bureaus don't really know my salary to begin with, only if I pay my bills, right?

Anyway I need to get ANOTHER CC soon, with chip & pin functionality. Don't expect any problems there either...
Hi The Wizard,

You retired in March, if I remember correctly. May I ask, what did you do about the flexible spending accounts and 401(k) catch-up contributions for this year?

Thank you,

Victoria
Friday March 8, correct.
I never had an FSA so didn't have to deal with that.
I had a 403b, not a 401k (they're similar) and contribs halted with my last weekly paycheck. I have way too much in tax sheltered anyway compared to after tax.
I am continuing to max out my $6500 Roth IRA for this year.

I was not a federal employee so my details differ.
Transitioning all of my insurances from payroll deduction to auto withdrawals from my checking account went smoothly.
Setting up my retirement income stream took several weeks longer than expected but in the end worked out fine.
Because my retirement "take-home pay" from tax-sheltered accounts is about the same as my net pay from employment, I didn't feel much need to do anything creative regarding motor vehicles, annual physical, or income tax related issues.

I'm 8 months into retirement at this point and no unexpected issues have arisen.
I did a quick run of this years eventual income taxes using TaxCaster and have decided on a modest Roth conversion amount to do in the next month...
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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 9:20 am

The Wizard wrote:
VictoriaF wrote:Hi The Wizard,

You retired in March, if I remember correctly. May I ask, what did you do about the flexible spending accounts and 401(k) catch-up contributions for this year?

Thank you,

Victoria
Friday March 8, correct.
I never had an FSA so didn't have to deal with that.
I had a 403b, not a 401k (they're similar) and contribs halted with my last weekly paycheck. I have way too much in tax sheltered anyway compared to after tax.
I am continuing to max out my $6500 Roth IRA for this year.

I was not a federal employee so my details differ.
Transitioning all of my insurances from payroll deduction to auto withdrawals from my checking account went smoothly.
Setting up my retirement income stream took several weeks longer than expected but in the end worked out fine.
Because my retirement "take-home pay" from tax-sheltered accounts is about the same as my net pay from employment, I didn't feel much need to do anything creative regarding motor vehicles, annual physical, or income tax related issues.

I'm 8 months into retirement at this point and no unexpected issues have arisen.
I did a quick run of this years eventual income taxes using TaxCaster and have decided on a modest Roth conversion amount to do in the next month...
Excellent.

As I am contemplating a Federal retirement, I am
thinkin' to myself "This could be heaven and this could be hell".

From reading Federal Soup recommended earlier, I am amazed in how many ways the OPM can bungle it.

Victoria
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Re: Preparing to retire checklist

Post by Phineas J. Whoopee » Sun Nov 24, 2013 9:28 am

Calm Man wrote:...
You are correct. From what I understand, the individual seeking subsidies estimates their income for the year in question and gets the subsidies or even tax credits up front. When they file, which literally is a year plus 3 months or even a year plus 9 months later, the IRS supposedly reconciles this. As I read about it, people are intentionally underestimating income as it costs them nothing and they have a no downside gamble that IRS never catches up with them (probably a good bet especially if the law is overturned in the next few years). Also, under the law, IRS has no power to extract the money from the person. They can only get it from a potential refund. So there are strategies being discussed already to underestimate income and then make sure they won't get nabbed by IRS by under-withholding (not too much to get a penalty) so that a refund is not due. This seems pretty easy to execute and I cannot imagine the fraud that is going to occur with this program. As a taxpayer it frightens me.
The underlined bit is absolutely false. I don't know among whom it's "being discussed," but the discussers will be in for a rude awakening if they move from discussing tax fraud to committing it.

The only thing the IRS doesn't have the power to collect in the way you described is the penalty tax for going without insurance. The premium tax credit is right in there with everything else. The IRS won't "reconcile" it. The discussers will, on their tax forms, where they calculate how much of a credit they've received and how much they were due. If they got more than they were due, they pay back the excess. If it's the opposite, it comes off what otherwise would be their taxes.

The only way for them to "then make sure they won't get nabbed by IRS by [for?] under-withholding" is to lie on their tax returns and hope the automated systems that check W2s and 1090s and that sort of thing are broken.

PJW
Last edited by Phineas J. Whoopee on Sun Nov 24, 2013 2:10 pm, edited 1 time in total.

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Re: Preparing to retire checklist

Post by Dandy » Sun Nov 24, 2013 12:07 pm

If you use/have a flexible spending account check the rules on what you can and cannot do in the year you retire. e.g. if you retire March 31st can you only include expense incurred on or before that date?
Will you have dental benefits continued after retirement? If not, schedule any serious work before retirement.
Any employment discounts that will not be available when you retire? e.g. my company had a 17% discount on Verizon so I got a new phone and 2 year contract before retirement.
Keep track of people you want to stay in touch with that only have your work number or you only have their work number it is on your work PC. Same with email addresses etc.

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Re: Preparing to retire checklist

Post by leonard » Sun Nov 24, 2013 1:11 pm

VictoriaF wrote:I will be retiring in early 2014. The date has been moving, and now it seems that instead of leaving during the first couple months, I may wait a bit longer. I'd like to have a checklist of the important do's and don't to avoid significant oversights. I wanted to wait with these decisions until I finish my paper, but right now I have to make next-year benefits decisions, and they force my hand.

I am a Federal employee and all my questions are in the context of the Federal benefits.

1. Health and dental insurance.
I am planning to continue with my current plans. Once I retire, I will switch to Temporary Continuation of Coverage (TCC), the Federal version of COBRA.

2. Flexible spending account: LEX
Currently I use HDHP with HSA plus LEX for out-of-packet dental and vision expenses.
I am planning NOT to put any new money into LEX, because I will probably not have the time to use it.

3. Health Savings Accounts (HSA) brings up several questions:
- My insurance company GEHA contributes $62.5 monthly into the HSA on my behalf. I normally add my own money via the payroll deduction to reach the annual maximum.
- Can I still top up my HSA account early in the year?
- As I am planning to use the same HDHP/HSA combination before and after the retirement (the latter in the form of TCC), are there circumstances under which I would run against the IRS rules for maximizing annual HSA contributions?

4. Catch up TSP contributions
Normally, I make the catch-up contributions early in the year, and spread regular contributions evenly. However during the retirement year I will have fewer paychecks, and I don't know yet how many. I could make all contributions early, but then I'd lose the match.
- Can I still make catch up contribution early in the year?
- What will happen if I retire before I have a chance to make maximum "normal" (non-catch up) contributions.

5. Any other missing parts?
- Are there other things that are better done while still working than in retirement?

Thank you,

Victoria
Any plans to take out significant loans. Perhaps home or auto. Not that I am suggesting them.

But, obtaining a loan may be easier if you have proof of employment.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.

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Re: Preparing to retire checklist

Post by leonard » Sun Nov 24, 2013 1:15 pm

Another thing to consider - you may want to do some tax planning to shift income and or deductible expenses between high earning year (this year) and next year. Some things like property taxes could be moved up a year. Other income could be moved up a year or shifted out, depending on which year minimizes taxes.

Another thing - if you plan to make any major portfolio shifts in the next year - rebalancing or taking out cash for a purchase etc. You may want to time those changes to either this year or next - again depending on tax minimization.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.

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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 3:10 pm

Dandy wrote:If you use/have a flexible spending account check the rules on what you can and cannot do in the year you retire. e.g. if you retire March 31st can you only include expense incurred on or before that date?
Will you have dental benefits continued after retirement? If not, schedule any serious work before retirement.
Any employment discounts that will not be available when you retire? e.g. my company had a 17% discount on Verizon so I got a new phone and 2 year contract before retirement.
Keep track of people you want to stay in touch with that only have your work number or you only have their work number it is on your work PC. Same with email addresses etc.
I could use the entire LEX allocation during the first few months, but I just don't foresee any work. I had a dental appointment recently and everything was fine.

I don't use employment discounts. I'll to check if we have any and what they are.

Getting personal contact information is a great idea. Thanks!

Victoria
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Re: Preparing to retire checklist

Post by VictoriaF » Sun Nov 24, 2013 3:20 pm

Thank you, Leonard,

I don't foresee any loans, and I don't have any property taxes. If I decide to buy a car, I will pay cash. The only thing I need to do is to move to a new apartment while I am still getting a paycheck. Landlords may not trust me that I have enough cash, and they may have no mechanism for collecting large deposits.

My portfolio has been prepared for the retirement well in advance. One thing I did not do was selling stock in taxable accounts, because I wanted to stretch my meager TLH losses to have annual $3,000 deductions. Starting next year, I will have no more TLH losses left and will start selling stocks in taxable accounts while simultaneously buying them in tax-deferred accounts. The reason for this is to reduce the risk of my taxable accounts that will have to last for a while.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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klneutral
Posts: 187
Joined: Wed Nov 10, 2010 9:18 am

Re: Preparing to retire checklist

Post by klneutral » Mon Nov 25, 2013 11:40 am

If you are over age 60, might want to get a shingles vaccine, if you have not already. I am under the impression that insurance companies usually will not pay for it until age 60.

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HomerJ
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Joined: Fri Jun 06, 2008 12:50 pm

Re: Preparing to retire checklist

Post by HomerJ » Mon Nov 25, 2013 11:53 am

btenny wrote:Before you retire make sure you purchase any big items you will need in the next say 5 years. Anything that requires credit financing like a car or home should be bought while you are working and drawing a salary. If you are going to downsize your residence and buy a small condo or home do it now. Same with buying a new car. Do it now. No bank will give early retirees good loan terms and may even turn you down completely as you have no firm regular "income stream"
If one has to borrow to buy a car or a home, I'd suggest not retiring yet.

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VictoriaF
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Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Preparing to retire checklist

Post by VictoriaF » Wed Mar 12, 2014 2:08 pm

An update.

As many of you have advised, I front-loaded my HSA and TSP contributions during the initial few pay-periods of this year, so that now I can contribute up to the TSP maximum in any remaining week of the year, while still getting the employer match.

I also got an extensive medical testing with perfect results.

Today I've met with my Agency's retirement specialist. She seemed very competent and answered my questions to my satisfaction. As I will have more questions, I will talk to her again. The only questions she could not answer were related to my dental insurance via Benefeds:
1. After retiring, I can continue my health insurance (FEHB) via TCC (Temporary Continuation of Coverage, a Federal counterpart of COBRA) for 18 months. Can I similarly continue my dental coverage?
2. Let's say, my TCC ends in February 2016, and at that time I will request my deferred Federal pension and reestablish FEHB. Can I get my dental benefit at the same time, or I have to wait until the enrollment period in November 2016, to get covered starting in 2017?

Thanks again to everybody for very helpful comments,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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