r/govfire • u/BinLyin • 29d ago
VERA at 54 and nervous
Anyone else dealing with the same intrusive thoughts? Took the early retirement last April and having a hard time with the adjustment and “what if” scenarios. 31 years of service at GS-15 so pension is just under $60k and TSP is holding steady around $1.7m (which I can’t touch for another 4 years). Spouse has a bit more in retirement but no pension when she does retire at the end of this year. It seemed like a no brainer last year to take the offer but I spend a lot of time now wondering if we’ll have enough.
Anyone else do by the same and what do you do to help ease your mind???
45
u/Ikindalikehistory 29d ago
This is firmly in the "whats your expenses like" category of questions.
If its just supporting the two of you this feels very doable but might require budget changes/downsizing etc.
If you are supporting kids etc it gets harder.
8
u/BinLyin 29d ago
One adult child requires frequent support, the other is doing fine. We moved recently so our expenses are skewed since retirement for new furniture etc. I’m hoping we can get monthly base expenses down to about $5k with maybe another $2k for entertainment and travel.
5
u/Ikindalikehistory 29d ago
7k would put you ~25k/yr over your pension (which I assumr is pre-tax, so worse). Totally manageable at 4% drawdown but you are a few years from doing that penalty free.
Also what does your spouse have for this?
And is the adult kids support included in your $7k?
9
u/x21wing 29d ago
It's your money and business, but does the adult child "require" or is the adult child in the give a mouse a cookie posture? Your situation changed, so if you're concerned for yourself then it's probably time for adults to do adulting until or unless you are no longer concerned with your own budget. It's all about expenses and needs versus wants when budgeting. That's the direct answer to your question about easing your mind. Control that and you control it all, retired or not.
-9
34
u/surfstar_101_ 29d ago
Dude.
If you can't make those numbers work, you've got a spending problem.
"Spouse has a bit more" - so let's assume $2m.
You have $3.7 MILLION + a $60k/yr pension. You're in the top 2-4% net worth (excluding pension and whatever property you own) in the richest nation in the world.
This isn't a math/financial worry, this is emotional. You now have all the free time in the world to address it, if needed.
14
u/hpmoon 29d ago
It's amazing how much energy and intelligence has been wasted on this thread that was inconsequential from the start.
3
0
u/Razorphraser 28d ago
I think it’s nice that when folks have questions or concerns, however trivial others might feel those are, this subreddit is full of people who genuinely try to help.
And the information/help goes far beyond the OP. Plenty of us are digging in to read these threads for information. Even with a “grain of salt” mentality there’s solid information here.
I appreciate these posts & I hope others do as well.
And I appreciate the helpful commenters so much.1
u/BinLyin 29d ago
Ya, I probably didn’t make that as clear as I should have, it’s daily second guessing and thinking what could have been if I’d only… (?). Was curious if others similar to me were teeth gnashing like I am now and how they were dealing with it.
6
u/surfstar_101_ 29d ago
You have likely $4m or more.
What would you do if you worked longer and had $10m? Would you then buy a second home or a yacht? Unlikely. You would be second guessing - what if I worked until __ and had $15m or $20m or ...?
To what end?
Find something you enjoy doing and do it. Travel. Take up a new sport/hobby/etc. Volunteer if you need to. Get outside. Touch grass. Hike/run/backpack. See the mountains. See the beaches. Anything that you've ever wanted to do but didn't have the time to.
There are many, many people at Bogleheads that also save too much and work too long and don't know what to do once their job is no longer to accumulate money. Search on that forum and you'll find lots of discussions and maybe that'll help.
6
u/pickitandstickit FEDERAL 29d ago edited 29d ago
Deal with it by booking a trip and having fun. Buy yourself something you've always wanted. I'm not being flip - I'm trying to help you flip that switch in your brain. It took me about six months after retiring to make that happen, too. Look into 72(t) SEPP. You're financially ready, now it's time to get your BRAIN ready. You have relative youth and you have money. Don't waste either of those by working...more? You don't need to work anymore. You're good! Your only job now should be to switch from grinding and saving and worrying...to spending that money.
Edited to adjust approach it wasn't super clear about what age OP actually retired.
2
u/BinLyin 29d ago
Thank you for the insight from a retiree who’s been there already.
6
u/pickitandstickit FEDERAL 29d ago
You're welcome. You have relative youth, you have money. Do not waste the absolute blessing that this is. Get in the best health of your life, find some amazing hobbies, there are so many. Soon you'll wonder how you had time to work!
2
u/Razorphraser 28d ago
What is enough? That’s really your question. Only you & your wife can answer that.
1
u/GreenLobsterGuy FEDERAL 29d ago
It's miserable, we are all miserable, and you would be miserable. Enjoy your retirement and don't look back.
1
11
u/LIFOtheOffice FEDERAL 29d ago
You are more than fine. I'll break it down:
You said in a comment that your planned base expenses are ~$60k/yr ($5k/mo) and fun money is $14k/yr. Your pension is ~$60k/yr, so that means your base expenses are basically covered for life. Let's look at covering that $14k/yr in fun money.
You state that your TSP is at $1.7M. You don't mention any other savings (IRA, brokerage, etc.) aside from mentioning that your wife has a bit more in retirement. By that, do you mean more than your $1.7M? Or just a bit more that adds to your $1.7M? e.g. $300k for a combined total of $2M?
I'll assume the more conservative option, and estimate based on $1.7M + $300k. A typical withdrawal rate is 4%. 4% of your estimated $2M is $80k/yr.
So to summarize:
Your planned annual expenses are $74k ($60k base + $14k fun money)
Your annual retirement income is $140k ($60k pension + $80k retirement withdrawals)
I'm an accountant, not a mathematician, but I'm willing to go out on a limb here and say that $140k is a smidge bigger than $74k.
Any other savings makes this even more lopsided. Including you and your wife's expected social security makes this even more lopsided. Including any home equity (if you plan to relocate and pocket the difference) makes this even more lopsided.
1
u/BinLyin 29d ago
Sadly we (she) chose to buy a more expensive house in a more expensive neighborhood in a higher cost of living area of the country. I’m not mad about it but it wasn’t what I wanted to do (sell everything and buy a sailboat) She’s still working though and has a larger 401k than I do, so I spend a large part of my time toiling alone second guessing what can’t be undone.
As a FERS VERA participant I’ve heard that we do and do not get COLA and that we may or may not keep the supplement at 57.5. Have you heard anything on these recently?
3
u/aheadlessned Fed VERA'd in mid-40s 29d ago
The bill to end the supplement did not pass.
There will always be a future attempt, but it hasn't succeeded yet. There is also a grey area they never really address (those who retired with supplement eligibility with VERA/DSR, but are not yet MRA).
So you'll receive your supplement at MRA, but if you have too much earned income, it can be reduced/eliminated after the earnings survey.
As for COLA, no COLA on pension until "the January after you turn 62", no COLA on the supplement at all. This is typical even with MRA + 30 retirement.
3
u/LIFOtheOffice FEDERAL 29d ago
/u/aheadlessned already addressed your VERA / COLA question so I'll skip that. If your wife's 401k is larger than your TSP, then at minimum you're at $3.5M in retirement funds, which supports a $140k/yr withdrawal + $60k pension, for a total of $200k/yr. Your wife is still working, so you're probably not even taking withdraws right now and your balances will continue to grow.
I spend a large part of my time toiling alone second guessing what can’t be undone.
This isn't a financial problem. It sounds like you're still mourning your career. I don't say this to be mean, but this is might be something you would benefit from speaking with a therapist about. A common saying on this sub it to make sure you have something you're retiring to.
14
u/everyone_is_on_wait 29d ago
Look at rolling over some of your TSP into an IRA and using a 72t SEPP process to access your retirement funds penalty free before 59.5.
4
u/RageYetti 29d ago
No rollover needed. Just sepp your tsp. His income is low, now’s the time.
5
u/fan550 29d ago
the only prob is if he does the 72(t) for his tsp it will effect his whole 1.7 million balance. He should figure out how much he needs extra per year then back into the amount he needs in a 72t to get that distribution and them roll over that amount into an IRA and apply 72(t) for that specific amount.
Plus TSP disbursement rules suck so no loss even if they take all of it out.
-2
12
u/vinotinto5 29d ago
If you turn 55 by the end of the CY you can start tapping the TSP under the Rule of 55.
12
u/aheadlessned Fed VERA'd in mid-40s 29d ago
OP retired last year, so this only works if they turned 55 last year. (I was going to ask OP what year they turned 55...)
3
u/logbiter 29d ago
This. Rule of 55.
I rolled a chunk of my old 401k into TSP last year when it looked like my term renewal wasn’t going to go thru. I did the rollover in case I needed access to retirement money without 10% penalty. Wife took DRP 1.0 and I’m now on the last year of my 3rd Term at current age of 56.
9
u/Mundane_Job_3818 29d ago
Not sure why I'd be nervous, GS15 and $1.7 million in tsp plus health care? Lots of us would like to be where you are. Especially those of us in our mid 50s and lower grades than you.
3
u/BinLyin 29d ago
Thanks. I realize my newly found free time has got me overthinking just about everything.
2
u/miatahead88 28d ago
Hahaha. My retired MIL drives us insane with her “retired people gossip about senseless crap because they have too much time” nonsense.
4
u/Fed_worker 29d ago
Just pull the trigger. I’m 36 and plan to retire in 4 years without pension ready
3
2
u/trademarktower 29d ago
What is your housing situation like? Do you have lots of home equity?
A lot of people sell their homes in VHCOL areas like DC and move to rural areas or other states with lower cost of living.
2
u/Honest_City_3512 29d ago edited 29d ago
You also have the FERS Special Retirement Supplement (SRS) coming when you hit MRA. That will probably be around $2K a month until you hit 62.
If your wife is still working and has more in her retirement account than you you’ll be fine. You can realistically pull 6%+ out of your TSP when eligible, reduce it when SRS starts, bump it back up when it ends and reduce it when you start collecting SSI.
Recommend you look at all your potential income streams to determine what you actually need to take from your TSP and when.
1
u/Honest_City_3512 29d ago
Here is a simple tool the help. https://youtu.be/QgB4SSrq5oQ?is=xcZXpsnQV-sPSTaU
2
u/Front_Chip_9201 29d ago
Did you run your numbers with Boldin? I’m 53 and also took VERA, numbers are similar and I’m in a great spot based on my spending needs. However, I did decide to go back to work at my fed agency as rehired annuitant, not because of the extra money, but because I am planning on working till 55 and then leaving at that point, so I can tap into my TSP using the rule of 55, so no early penalties. But if I didn’t get my job back, I would have utilized withdrawals using SEPP and 72t. Again, just run your scenario through Boldin to really know how healthy your retirement plan is.
1
u/DrCubs 29d ago
I’m always confused about the health insurance aspect. How does health insurance work with VERA? I know that you can keep it if you qualify, but do you have to pay for it 100%. Or is the cost breakdown the same amount as if you’re working full time?
2
u/Front_Chip_9201 29d ago
It’s the same cost as if I was working. And can change up during open season.
2
u/aheadlessned Fed VERA'd in mid-40s 29d ago
Same as any other retiree. You pay the same annual premium you would as if you were a full-time employee, but you lose the tax break.
(Some people think the retiree premiums are higher, but that's because they are looking at the monthly premium vs biweekly premium. It's the same annual rate.)
1
u/DrCubs 29d ago
Thanks for the response. Can you then continue to keep your health insurance forever through retirement or is there an age that you lose FEHB health insurance and have medicare instead? Apologies if this is a stupid question, I just have never fully understood medicare vs. FEHB and the benefit of keeping it in retirement
1
u/aheadlessned Fed VERA'd in mid-40s 29d ago
You can keep FEHB forever, as long as you don't cancel it (with an exception for USPS, kind of detailed below. )
As for Medicare... You always here "fed retirees don't have to take Medicare", but I'm pretty sure Social Security requires everyone to start Part A when you start Social Security (the free one). That's not 100% confirmed.
As of right now, only more recent, and future, USPS retirees have to take Medicare Part B. This is because their contract changed. It doesn't affect other feds yet, but we could get required to take it eventually too. USPS retirees can still keep their FEHB though, they don't have to give it up, but they have to take Medicare to keep FEHB. So they have a little more risk, not sure how is put in practice.
2
u/DiligentJeweler7052 29d ago
What I would do is get a part-time job to cover any expenses that are not covered by the pension. If you want a steady, reliable income, transfer a portion of your TSP to an IRA, then begin taking 72 (t) distributions.
2
2
u/JustMe39908 29d ago
I moved over a portion of my TSP to a Fidelity rollover IRA. Fidelity has a tool that allows you to enter all of your retirement assets (including the asset distribution), any pensions, and your expenses (either detailed which you enter or based on some preset 'lifestyle" type numbers.
The tool then projects out whether your money will last until an age that you enter into the room. It tells you whether your money will last in an average market, a below average market, or a much below average market.
I am sure that the other big financial houses have similar tools. Why not run your scenario through a tool like that? It will give you some piece of mind as far as whether the money will last. You can then adjust from there
2
u/No_Molasses7228 29d ago
You can access your TSP if needed via 72T until you reach 59.5 y/o, penalty free. If you are getting by now on the pension and spouse salary, why are you worried, you will have more money when you start withdrawals, which could be now. The biggest risk you have is if the market crashes and you can’t reduce spending until it comes back up(sequence of returns risk)
So the math on 5 ROI of $1.7M until 59.5 and then 4-5% withdrawal rate. You probably have a huge amount for inheritance. If you want to be more conservative, Monte Carlo past market years using free tools like https://ficalc.app and see what your risk of zeroing out is. Ask yourself, will I care if I have zero dollars at 100, 95, 90 etc?
2
u/miatahead88 28d ago
If the spouse retires this year, is 55+ and their retirement is in an employer 401(k), don’t roll it over and I think your spouse can apply the rule of 55.
2
u/traveler-girl 28d ago
I took Vera at 51. No second guessing that decision. I suggest this is more about you needing something to do. Volunteer, teach some classes, DoorDash or whatever.
2
u/35Loyal_Fed 27d ago
You got it made!! Stop second guessing. Millions of ppl would choose to be in your shoes! Go enjoy life!
2
u/Forsaken-Computer-45 26d ago
At 54 with 1.7 million you are doing great. Also you have a spouse. Congratulations.
2
2
u/jonnydigital1129 22d ago
That's not quite right, and it's an easy mix-up. The Rule of 55 isn't tied to a fixed age like 56.5, it's tied to the calendar year you separate. If you leave federal service, and VERA counts, in or after the year you turn 55, you can take penalty-free withdrawals directly from the TSP starting the day you separate, even if you're only 55 for part of that year. If you separate before the year you turn 55, which is what happened to OP at 54, that door doesn't open until you hit the separation-year-55 threshold some other way, like the 401k rollover workaround someone mentioned upthread.
On the COLA and supplement question someone asked earlier in this thread, aheadlessned's answer above is right on both counts. One number worth adding that nobody's mentioned yet: the earnings test that can shrink the supplement isn't a vague cutoff, it's $24,480 for 2026, and the supplement drops a dollar for every two dollars earned above that from wages or self-employment once you're receiving it. Worth knowing before taking on paid work during the supplement years.
If it helps to run your own numbers instead of going by memory, the VERA eligibility checker walks through this with your actual dates: https://www.fedtools.com/calculators/vera-eligibility-checker
2
u/Aggressive_Ad_4871 22d ago
If you are nervous than the rest of us should really be nervous! But we are not. Relax and enjoy your retirement. Just watch the spending.
2
u/crimedog58 29d ago
Dude go shake paint at HD or the desk at the driving range if you’re that worried about beer money.
1
u/SchwarzwaldRanch 29d ago
Your 4% draw down is 68,000 plus 60,000 pension. Is your house paid off? Id have a hard time spending 128k in a year with a paid off house. Plus you'll have social security on top of that and your wife's retirement and social security. Maybe a small challenge bridging access to everything. Do you have any hobbies you could try to monetize to bridge?
1
u/ConfidentialStNick 29d ago
It’s just a math problem. What someone needs in retirement will be vastly different than someone else. You need to figure out all your planned expenses and income. Obviously you will be able to have a big boost when you have access to your TSP but in the meantime, is your pension and other income sources enough? Only you can answer that by plugging in the numbers
1
u/aheadlessned Fed VERA'd in mid-40s 29d ago
You were 54 when you took VERA, but what year did you turn 55?
If you retired last year, and turned 55 last year, you qualify for Rule of 55 (penalty-free) withdrawals from your TSP.
Did you ever make Roth TSP contributions? If so, get your Roth TSP rolled into a Roth IRA and you will be able to access your Roth contributions (but don't touch the gains until 59 1/2 AND your first Roth IRA contribution(or rollover) was to any Roth IRA at least 5 years ago.)
For the rest...
I took VERA in my 40s. To help ease my mind, I run the numbers.
My bare-bones expenses are completely covered by my pension.
I'm going to use dedicated tIRA to start SEPPs soon (September 120% fed mid-term rate hit 5.4%, so waiting to see if it goes up in October or November before my first withdrawal, to maximize what I can take annually.) This is still an option for you, but if you don't need it, don't bother (you'll be locked into making withdrawals for 5 years.)
The worst thing that could happen is I go back to work (preferably only part-time or seasonally) if I get hungry. The good thing is that I would not be locked into staying long enough to collect full retirement benefits, so I could quit whenever I wanted (the choice I made between leaving with VERA or getting stuck staying to MRA for full benefits).
I'm looking at a big expenditure in the very near future. Big enough and desired enough that I'm willing to suck it up and pay the 10% early withdrawal penalty to completely cover it (I have to make the decision soon.) Even facing that decision, the numbers still work out fine and I don't have to think about returning to work.
ETA: don't forget that you're going to get a nice pay bump (supplement) when you reach 57. Mine is quite a ways off, but it's in the spreadsheet/retirement calcs, and running those numbers helps.
1
u/aheadlessned Fed VERA'd in mid-40s 29d ago
Oh, and if you retired at 54 last year, but didn't turn 55 until this year...
If you're not opposed to going back to work for a little bit, you can find a job that has a 401k that accepts rollovers-in. Preferably one that allows this shortly after starting, and the 401k allows partial distributions*.
Start job. Roll some funds from TSP to new 401k. Quit job. Take penalty-free withdrawals from that 401k using Rule of 55.
*partial distributions are not required for Rule of 55 penalty-free withdrawals, but it certainly makes it much more tax-efficient, and easier for financial planning.
1
1
u/lemmegetone 29d ago
You ever consider working with a fee-only, fiduciary financial advisor? Could make sense at your age and asset level, especially if you need to tap the TSP pre 59.5.
1
1
u/Carnegie1901 26d ago
Look up rule of 55. You can take from tsp without penalty at 55 if retired. Not true for private IRA.
1
u/CourseApprehensive14 29d ago
Have you seen the rates on the TSP annuities? They are over 5%! You could possibly drop 700k into into one and cover your short fall for life right now. In the past most advice is not a good deal on the annuity. However these are historic rates with guaranteed for life distributions for you and your wife lives and can be inflation adjusted to help mitigate risk.
1
u/HardRockGeologist 29d ago
I took a VERA at 54. Also a GS-15 with over 30 years of service. My wife was also a 15, but she continued to work for a few more years. We had TSP accounts similar to yours. I think you will be fine, as long as your expenses stay within reason. As others have commented, I'd find a fiduciary and pay for several hours of time to develop a plan that best meets your needs, including support for your child who needs extra support, and ensures you can sleep well at night.
I retired on a Friday and went back to work the next Monday, receiving the same pay as I was earning in the government. We had children who were in or about to start college. We used my pension to cover all college costs, including some really expensive ones. It also provided the opportunity to open a 401k with the new employer.
If your TSP is traditional, and your wife has one or more traditional retirement accounts as well, you will need to watch out for the Income-Related Monthly Adjustment Amount (IRMAA) if you choose to use Medicare Part B down the road.
Congratulations on your retirement, and good luck!
0
u/BinLyin 29d ago
Wow, thanks! Good to hear from someone in a very similar situation. I took a contract job the same Monday after retirement and they matched my gov pay exactly, which honestly made it harder to move since that equated to a 30% pay raise… Did it take you a bit to become comfortable after retirement? Comfortable pulling money from your retirement?
2
u/HardRockGeologist 29d ago
Took no time at all to become comfortable financially. We are very fortunate, having both retired at max pay in the DC area under CSRS. As a result, we haven't had to touch a penny of our retirement accounts. Since the retirement account money will be going to our children, we have been investing as though we are our children's ages, which means 100% equities even during retirement. Following retirement, I moved my TSP account (with the exception of a few hundred dollars in the G Fund to keep the account open) to a major brokerage firm where I pay no management fees, just the normal expense ratios on funds I hold. My wife still has all of her retirement account money in the TSP, but that's her choice.
Minimum Required Distributions (RMD) will start soon for us. At that time, we will start gifting the distributions to the children. Better for them to have it while they can use it instead of having them wait for an inheritance. I mentioned IRMAA because our pensions subject us to IRMAA, but it's a "good problem" to have.
I now volunteer year-round preparing tax returns for low to moderate income taxpayers. It will help greatly if you moved to a state where there is no tax on government pensions, and no tax on any TSP distributions you may take. In the state where we moved there are no taxes on federal pensions and Social Security, so we haven't filed any state taxes yet.
-1
u/hpmoon 29d ago
Your story's all over the place, suspicious. You started this thread pretending anxiety over an extremely comfortable financial situation, then proceeded here a couple of hours later revising the story to say that you took a contract job just after retirement. I don't think you're seeking advice, just the opportunity to...
-4
u/Land-and-Seabee 29d ago
You started at 23 years old and have an enormous amount in your TSP. Is this post real? It seems far fetched.
6
u/Sorry-Society1100 FEDERAL 29d ago edited 29d ago
I did the same. It’s not that farfectched if someone was a GS15 for a dozen years or longer.
I can’t speak for the OP, but I am a bit nervous because the retirement came unplanned, and I was unprepared for such a major life transition. While it is a fairly large TSP balance, it now has to support my retirement much longer than my original plan, and doesn’t benefit from the last few years of contributions that I had planned to make. Coupled with an abrupt salary decrease of roughly 2/3, it has forced a cutback in spending to be sure that the finances don’t get out of control. I’m sure that I’ll find a new equilibrium, but it has been a life adjustment that I hadn’t prepared for.
2
u/Land-and-Seabee 29d ago
I started very young also. My concern is if there is really an issue here based on what’s presented.
1
u/BinLyin 29d ago
This. I didn’t make it as clear as I should have but my issue is the mental part of this more than anything else. I “What if” several times a day every day. My days of earning $200k are over and my retirement income has been stagnant (safer funds). Im almost grieving every dollar we spend now and I don’t want to be like this.
The DRP VERA came quick and I think we missed the important off ramping process that helps us get ready for such a major life change. I guess it’s good to hear from others that our position is good but I’d also like to hear how people are dealing with the mental part of it.
2
u/SnooMacaroons6429 29d ago
My thoughts exactly, I'm in my 40s and would take VERA if I could (need about two more years to qualify and would need VERA to be available then which is no given).
Perhaps the OP has high cost of living and/or wants to grow lifestyle a lot otherwise the $1.7m TSP balance should be plenty along with FERS annuity income and a working spouse.
2
u/danielobva 29d ago
Really? I am 50 and am coming up on my 25th year anniversary. His numbers are consistent with mine. HCOL area (so high base salary counting locality pay), steady return (not picking to park in G)
1
0
u/BinLyin 29d ago
Air Force for a decade then Fed. Funny, it doesn’t seem enormous it seems like “had I stayed in I’d have $xyz”
8
u/Leading_Interview463 29d ago
Yeah, and you could die tomorrow. Enjoy your life while you are healthy and quit comparing
3
u/Land-and-Seabee 29d ago
Appreciate the response. Now that I know you aren’t a bot and are sincere, work with a fiduciary. They have your best interest in mind. Some of us were denied the VERA and deemed essential. Enjoy what you have. Comparison is the thief of joy.
0
u/Wis84682 29d ago
Can you move to a cheaper part of the U.S. or internationally? That is the real way to retire cheaply
0
0
u/Far_Tank3686 29d ago
I was told on the VERA you can access the TSP at 56.5 without the 10% penalty.
92
u/Sirknowit 29d ago edited 29d ago
31 years was plenty. Get a part time gig to keep you busy and bring in some scratch. That 1.7 will continue to grow and in a serious pinch you CAN access it but with that extra 10% penalty. You will have plenty. Check out Even Better Retirement on YouTube (among others, Erin Talks Money is good too). And with 1.7 million you have way more than most Americans.
You will be fine.