Author: David Fielder

ABOUT DAVID FIELDER OF POSTAL BENEFITS GROUP David Fielder is President of Postal Benefits group (www.postalbenefitsgroup.net) the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits. David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits - download a free copy of his book at www.thepostalbook.com. Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date. If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

Taxes and Your TSP by David Fielder

tsp by david fielder

You’ve heard the old saying “The Devil is in the details”, well the TSP is a great example of that.   If you go to the TSP.gov website there are thousands of pages of information they expect you to know and understand.   Even if you had the time, who would want to read that stuff?   Well part of my job is to read the stuff that no to read and determine what parts of the information are useful to postal employees.  One of the most disturbing parts I found pertains to taxation of a non-spouses beneficiary when a current or former employee passes on. I think it is very important and wanted to shed some light on the situation here.

1.) Taxes on your heirs:   I always say in my seminars, “the good news is you work for the government, the bad news is you work for the government.”.   What does that mean? Well you have a great paying job and benefits but you have to also remember that your employer is in the tax business and will create rules that benefit them as a result.

Let’s take John a postal employee who passes away and has $200,000 in his TSP. He has listed his only son as beneficiary.   The money will pass to John but before he receives the money John will be taxed on the entire $200,000.    If his son already has a job making $75,000 a year the $200,000 TSP inheritance will make John pay taxes as if he made $275k that year!   Obviously, would this result in a higher tax bracket and in some cases reduces the amount heirs will receive by nearly 40% plus a reduction of whatever the son’s State Income taxes happen to be.

Now let’s look at this same situation if John had (at 59.5 or older or at retirement) rolled his TSP into a traditional IRA.   Now when John passes his son can use what is called a “STRETCH IRA” to reduce the taxes he might owe.   Using the Stretch IRA concept would allow a beneficiary to elect to receive either the full amount in the IRA or it allows them to “stretch” the payments out over their life expectancy. For example if John’s son is 45 the IRS will allow him to spread that $200,000 out over 45 years.   In this example John’s son would only have to pay taxes on roughly $4,000 each year versus paying taxes on the lump sum like he would from the TSP.

Taxes by David Fielder

The obvious question is why can’t the TSP stretch those payments like everyone else?     In my opinion there are two primary reasons they won’t do it. First, they are in the tax business.   Think about how many postal employees pass away every year. Think about how much TSP money is passing to heirs.   That’s a huge stream of revenue for the government.   Second, the TSP always brags about their low fees.   Well along with low fees come fewer services and options.   Because they collect very few fees, they are not willing to service the stretch payments to your beneficiaries.

If you are 59.5 or older or retired you can roll your TSP into a traditional IRA and offer your heirs the opportunity to take advantage of Stretch IRAs and other option the TSP does not offer that a Postal Benefits expert may be able to help you with. If you would like to learn more or have any questions please feel free to give me a call.

More from David Fielder

David Fielder Author Page

Postal Benefits Group: Delaying Social Security

Solving the FERS Retirement Puzzle by David Fielder

Getting the FERS Flu before Retirement? by David Fielder

Postal Benefits: The Good, The Bad, and The Ugly of the TSP by David Fielder

David Fielder
Tuesday 4 April 2017

David Fielder

President

Postal Benefits Group

www.postalbenefitsgroup.net

Office: 636-875-5306

Cell:     314-540-2802

David@postalbenefitsgroup.net

 

Getting the FERS Flu before Retirement? by David Fielder

David Fielder

David Fielder discusses retirement maximization strategies such as the FERS Flu.

I get asked about getting the FERS Flu be soon-to-be retirees at most retirement seminars. It’s a good question and if you call Shared Services and ask their opinion. However, if you aren’t retiring in the next three months, they will tell you to send a letter with your request. If you ask your manager whether you should use your sick leave before retirement, the chances are that you won’t get an with your best interests in mind. Here is the nitty-gritty on whether or not you should use your accumulated sick leave. You can make the choice for yourself.

Let’s look at what you get for your sick leave. Before January 2014, FERS employees were receiving credit for 50% of their sick leave. After January 2014, FERS employees started receiving full credit for sick leave. For example, if a postal employee had one year of accumulated sick leave then that would be added to the calculation of his pension. Please be aware, however, that sick leave cannot be used to meet service requirements. For example, if you have 29 years of service, one year of accumulated sick leave, and your minimum retirement age (MRA) is 30 years of service, you must work an additional year to reach your MRA. Once you fulfill your 30-year requirement, however, you will be paid for 31 years because your year of accumulated sick leave is factored into your pension.

FERS Flu

The government standard for a full year of work is 2,087 hours. Let’s look at an example of what sick leave is worth. If you have an average salary of $56,000, then a full year of sick leave would add 1% more to your pension. To take it a step further, having the full year of sick leave would add $560/year to the employee’s pension. Now, what if you took two months of sick leave just before retirement, how would that affect your pension? If you take 160 hours of sick leave, then that may reduce your pension by as much as $42.88 a year. Keep in mind, as an employee in this example, you will get paid his full salary of $4,666 while on sick leave.

If the employee is retired for 30 years then he will have sacrificed $1,286.00 in pension payments during retirement ($42.88 x 30 years), however, he would receive $4,666 in income during his month of sick leave. Kind of a no-brainer huh?

David Fielder President

Postal Benefits Group

Office: 636-875-5306

Cell: 315-540-2802

David@postalbenefitsgroup.net

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

Solving the FERS Retirement Puzzle by David Fielder

David FielderDavid Fielder – Postal Benefits Group

I’ve had the privilege of counseling over 10,000 postal employees over my career.   Each one of these employees had different situations and circumstances that influenced when they should retire.   Notice I said SHOULD retire and not when they COULD retire.     As you approach retirement its important to know your numbers so you can determine when you SHOULD retire and not just when you are eligible.

The best way I can illustrate my point is to use some actual employee scenarios.

SCENARIO #1

Dale was a FERS employee who had 30 years and had met his Minimum Retirement Age of 57.   He was eligible to retire and called me to make sure he knew his numbers.   Here were his numbers:

Net pension would be       $1,100

FERS Supplement                 $900

_____________________________________

Total Fixed Income:         $2,000

 

Dale was bringing home $1,500 every two weeks working and his budget was based on making that much per month.     As you can see he was $1,000 a month short of what he needed.   Dale had an option to draw the money he needed from the TSP but he only had $200,000 in the TSP.   As a general rule employees should not draw more than 3% of their TSP balance annually to lessen the chances of running out of money.     If Dale took out the 3% he was still going to be short on what he needed.

SOLUTION:

Dale and I discussed his specific situation and both came the conclusion that he didn’t want to retire and feel broke.   He asked my opinion of when he should retire and I suggest age 62.   Look at how his numbers changed by working until 62:

Net Pension would be $1,350

SSI at 62                         $1,550

__________________________________

Total Fixed Income:     $2,900

Not only did Dale increase his monthly income by $900/month for life, but he also contributed an additional $50,000 to his TSP.   Now Dale has $250,000 in his TSP and the 3% he can draw per year from the TSP will bring his retirement income per month to over $3,500 a month.

SCENARIO #2

Paula has worked 20 years for the postal service and is eligible to retire because she has reached the age of 60. She wasn’t sure if she could afford to retire so she called me to run her numbers.

Net pension:                     $900

FERS Supplement:         $750

_________________________________

Total Fixed Income:     $1,650

Paula’s pension and supplement were not enough for her to retire. She needed about $3,000 a month to live comfortably in retirement.   Paula’s case is a good example of how the TSP can compensate for working a shorter career.   Paula had accumulated over $325,000 in her TSP.     We looked at her risk tolerance and found a program where she could draw 4% of the balance for the rest of her life and never worry about running out of money.   This program gave Paula another $1,083/month which more than covered what she needed for retirement.

CONCLUSION:

Every employee has unique circumstances that must be considered when considering retirement.     There is no “one-size-fits-all” when it comes to retirement.     The first thing you must do is know your numbers.   How much will you make a month (factoring in all deductions) based on a given retirement date.   Second you have to know how much you need in retirement. For most people, they need just as much per month as they do working unless homes are being paid off.   Last, you have to factor in the TSP and determine YOUR best date to retire.

If the idea of retirement and running all these numbers intimidates you we are here to help.   We have been offering retirement seminars through postal unions for years and we are confident we can get you the answers you need.

David Fielder

President

Postal Benefits Group

Office:   636-875-5206

david@postalbenefitsgroup.net

David Fielder Author Page

Other David Fielder Articles

Delaying Social Security by David FielderPostal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Solving the FERS Retirement Puzzle by David Fielder

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees.    David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other.  Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars.    David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

TSP Roth Withdrawals by DAVID FIELDER

A few years ago federal and postal employees were given a Roth option within their Thrift Savings Plan (TSP); the employee cannot contribute to the TSP Roth (TSPR) unless they are contributing the full 5% that is matched by the government.  Employees that are saving more than 5% in their TSP can put any amount over 5% into their TSPR.

In this article I would like to cover the unique way the government crafted its plan for withdrawal of TSPR funds.  Obviously, the benefit of the TSPR is that you can contribute after-tax dollars and have those funds grow tax-free over your career, and then withdraw those funds tax free in retirement.    If you ask anyone these days, most will tell you that they expect tax rates to rise in the future.  This makes a strong argument for investing in the TSPR.

Let’s look at a hypothetical example of an employee who wants to withdraw funds from their TSPR in retirement from 62-66 to get their full social security check.   This is a smart plan for any federal retiree in that you can defer your SSI and get the larger amount without any taxable distributions coming out of your TSP.  Unfortunately, the way the government has the TSPR set up this cannot be done.

It is important to remember that you work for the government.   We always say in our retirement seminars “The good news is you work for the government.   The bad news if you work for the government.”  The government is in the tax business so there are policies and procedures they impose on federal employees that are advantageous to them.

Let’s look at our example again.  Let’s assume Fred wants to pull $20,000.00 out of his TSPR for 4 years to get him to 66.  Any normal Roth IRA outside the government will allow you to take all the money from your Roth and incur zero tax liability.  The TSP forces employees to take money from their normal TSP every time they take money from their TSPR because they are in the tax business, therefore if Fred wants $20,000.00, the TSP forces him to take $10,000.00 from the TSPR and the other $10,000.00 from the normal TSP which is taxed at 20%.  Now instead of Fred getting $20,000.00, he will get $18,000.00 because of the taxes he has to pay.

This is surprising to most federal employees, and most of them don’t find out until they make the withdrawal request.

I want you to know this information ahead of time so you can make plans that benefit you and your family in retirement.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

david@postalbenefitsgroup.net

Other David Fielder Articles

Delaying Social Security by David FielderPostal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group, possibly the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. Mr. Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David Fielder has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David Fielder to present retirement seminars and he has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

Postal Benefits Group: Delaying Social Security

Delaying Social Security by David Fielder of Postal Benefits Group

postal benefitWhen you’re considering your Postal Benefits – The choice of when to start drawing Social Security is significant, and Postal employees have to take several factors into consideration.  In this article I will illustrate a popular method many employees are using to get the most out of their postal retirement benefits.

Let’s look at some basics before we get into making any choices.  As a postal employee, if you draw your Social Security at 62, you are penalized for drawing it early.   Social Security considers full retirement age as 66.  Social Security raises your benefit 8% per year for each year over 62 you wait.  We get questions all the time asking how to calculate your SSI benefit if you choose to draw between 62 and 66.  If your SSI statement says you will draw $1250 at age 62 and you are looking at drawing at age 64 you would calculate:

$1,250 x 1.08% = $1,350 at age 63

$1,350 x 1.08% = $1,458 at age 64

Now lets look at the choice to delay Social Security.  After counseling thousands of Postal employees we know that if you wait until 66 to draw Social Security, it will mean approximately $500 more a month in benefit.   Let’s use that number to evaluate our options.

If Joe chooses to draw SSI at 62 and their benefit at 62 is $1,250 he will draw 4 years of income more than if he started at 66.   The total amount he would draw over this period would be $60,000.

Now let’s look at Sue who waited until 66 to draw her SSI.  She will get $500/more a month than Joe.  This means that Sue will need to live to at least 76 to match what Joe has drawn out.  However, every year that Sue lives past 76 will be profit over what Joe will draw the rest of his life.

Let’s put a couple of things in perspective here.  Five hundred dollars a month is a lot of money.  For the average postal employee this is the equivalent of working 10 years more for the Post office.  Most will agree that waiting until 66 is a good choice.  However, life happens and most people have to start drawing at 62 out of necessity.

As a postal employee you have some tools at your disposal you can use to increase your overall retirement income.  One of these tools is your TSP and if used correctly can dramatically increase your retirement income.

Joe is retiring at 62 and needs $1,200 a month on top of his FERS pension to live comfortably.    He has $150,000 in his TSP at retirement.   Our suggestion to Joe at 62 is to draw the $1,200/month from the TSP and wait to draw his SSI at 66.  Joe will draw $57,600 from his TSP from 62-66.  As long as Joe lives to 76 any income he will draw past 76 will be pure profit from deferring his SSI.   Because people are living longer these days. ;if Joe lives to age 90 he will profit $84,000 on his SSI.

Not only does delaying SSI to 66 help the employee but, when the employee passes away the Survivor Benefit is higher as well.  All things considered, the difference is almost always over $100,000.

The decision to delay SSI is a big decision.  In order for you to make the right choice we encourage you to let us conduct a benefit review.  We will calculate your pension, estimate deductions from your check-stub and advise you on the retirement process and what to expect.  The review is free and in most cases done over the phone.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

david@postalbenefitsgroup.net

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars.  David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

Postal Benefits: The Good The Bad and The Ugly of the TSP

David Fielder

There couldn’t be a better title for this article.  There are aspects of the TSP that are Good, Bad and downright Ugly.  As the President of Postal Benefits Group our goal today, as it is every day, is to educate you on these issues so you can draw your own conclusions and do what’s best for you and your family as you look to maximize your Postal Benefits.

TSP – THE GOOD

TSP has Low Fees:  The .29% you are charged is the lowest of any employer sponsored plan in the US.

Matching TSP Funds for FERS employees:  Let’s face it, it is free money, so everyone should  take advantage of it by putting at least 5% in your TSP.

TSP Withdrawals after separation but before age 59.5:  This is somewhat unknown by but it is a very large postal benefit if you are retiring before age 59.5.  If you are retiring at an age over 55, you can pull money from your TSP without a 10% penalty.  If you have already rolled your TSP money over, you will have to wait until age 59.5 to avoid the penalty.  Only withdrawals from the TSP after age 55 and after separation are exempt from the 10% penalty.

TSP – THE BAD

TSP has Limited Access:  Once you retire, you have a total of two opportunities to withdraw anything but a monthly payment.  To reiterate, once you retire you have two opportunities (over your entire retirement) to draw any sum of money not a set monthly payment.  The TSP has millions of “customers,” and in order to keep the cost low, they have to limit your access.  If you establish a monthly payment, those are permanent for one year.  Again, they don’t want to give you too many options because of the number of “customers” they have.

TSP Annuities:  Many postal employees know this is an undesirable option.  This option involves converting your TSP into a second pension that is paid by Met Life.  The downside of taking the TSP annuity is that you lose access to your cash, your money no longer grows, and in most cases you disinherit your children.  I’ve been advising postal employees for over eight years and I’ve never found a situation where the TSP annuity made sense.

TSP – THE UGLY

In every retirement seminar, I always make the comment: “The good news is that you work for the government, the bad news is that you work for the government.”    The government is in the tax business and that’s the “bad” of the TSP.

Let’s take a look at an example to make the point: Joe who is a retired postal employee, is married to Sally and has $200,000.00 in his TSP.  Both Joe and Sally take a vacation together and tragically die in a car crash.  Joe and Sally had two kids, Scott and Lisa.  Under the TSP rules, Scott and Lisa get their money but not before the entire amount is taxed as if Scott and Lisa had made all the money this year.  Scott and Lisa will see 20-39.6% of the money taken in federal taxes.

Now let’s look at the same example but if the money was outside the TSP and with a private company in an IRA.   The money would transfer to the children, but, the money would be spread out or “stretched” over their life expectancy.  This would result in only $2,000.00 or $3,000.00 of the $100,000.00 being taxable for each child.  People ask me all the time why the TSP would have such a rule.  Again, remember the government is in the tax business.  This one rule makes them hundreds of millions in tax revenue each year.

There are a lot of moving parts when it comes to your retirement and benefits.   Deciding where to move your TSP is a big decision.  Your local financial advisor probably does not know how the TSP works.  Even worse, financial planners can be incapable of putting their clients into programs that are safe.  If you would like assistance in finding a plan that is guaranteed, and at the same time provide you the access you need please don’t hesitate to contact us.

David Fielder

President

Postal Benefits Group

Phone:  636-875-5306

david@postalbenefitsgroup.net

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

Delaying Social Security by David FielderPostal Benefits Group

Postponed/Deferred Retirement –DAVID FIELDER of Postal Benefits Group

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.

The figures mentioned in the article are hypothetical and for illustrative purposes only. The formula and calculations have not been verified or reviewed for accuracy by PSRetirement.com or any of its affiliates. Please contact your financial professional with any questions. The opinions in this article do not necessarily represent those of PSRetirement.com.

Postal Benefits Group: Postponed/Deferred Retirement

Postponed / Deferred Retirement – DAVID FIELDER of Postal Benefits Group

postal benefitsWe get questions all the time about postal benefits and from postal employees wanting to retire early but do not have either the years of service or the age requirements.  You can retire without having the years of service or age requirements but it depends on your specific situation.  In this article I will cover the differences and help some of you determine which option is best for you.

Postal Benefits and Postponed Retirement:  The better option of the Two

If you have reached your minimum retirement age but do not have your thirty years of service, you can request a Postponed Retirement.    In a Postponed Retirement you “postpone” your pension until you reach the age of sixty (as long as you have at least twenty years of service.  If you have less than twenty years of service, you have to wait until age sixty-two to draw your pension).  By postponing your pension you avoid the five percent penalty for each year you are under age sixty-two.  For example, if an employee was fifty-eight years old, had twenty-five years of service and decided to take an optional early retirement, but did not elect to postpone his pension he would see a 20% penalty off of his pension permanently.

If this same employee elected the postponed retirement, he could avoid the penalty. In our example, the postponement involves retiring at age fifty-eight and not drawing any pension or benefits from age fifty-eight through sixty.   Once he turns sixty, he can start his pension and enroll in the federal health program like everyone else.

Deferred Retirement – using the ‘David Fielder’ method:

Deferred retirement is for those employees who have not reached their MRA.   As long as you have at least five years of service, you can “defer” your pension until age sixty-two and not pay a penalty.    The unfortunate part of the deferred retirement is that you are not able to continue the federal health plan into retirement.  I recently spoke with an employee who is fifty-four years old and has twenty-two years worth of experience.  He had found another job outside the Post Office where he would rather work, and wanted to know if he could retire.  The answer is yes he can retire, but he will not be able to draw his pension until age sixty (he had twenty-two years of experience, so he can draw at age sixty versus age sixty-two) and won’t have access to the federal health plan.

It is critically important that postal employees receive guidance about their postal benefits and work toward maximizing these types of decisions.  One mistake can cost thousands of dollars in retirement.  Each postal employee is different and must evaluate decisions such as these, independent of what anyone else might have done in the same situation.  When we conduct retirement seminars across the country, we always tell employees there is no “one size fits all” when it comes to your benefits.  Each employee will evaluate the same situation differently.  If you would like help or direction on how to navigate the retirement process please feel free to contact me.

David Fielder

President

Postal Benefits Group

Office:  636-875-5306

david@postalbenefitsgroup.net

Other David Fielder Articles

Withdrawing From Your TSP Roth by DAVID FIELDERPOSTAL BENEFITS GROUP

Delaying Social Security by David FielderPostal Benefits Group

The Good The Bad and The Ugly of the TSP by DAVID FIELDER

 

About David Fielder of Postal Benefits Group

David Fielder is President of Postal Benefits group the largest and most well-known company in the Country specializing in retirement planning and seminars for postal employees. David Fielder has personally counseled over 5,000 postal employees on their postal retirement benefits and holds numerous certifications, and with thousands of hours spent helping postal employees gives him experience and practical knowledge about postal benefits like no other. Experience is everything when it comes to counseling postal employees on their postal benefits.
David has conducted over 75 retirement seminars over the last 8 years and is the author of THE POSTAL BOOK, a great resource for postal employees seeking to maximize their Postal Retirement benefits
Numerous postal unions have contracted Postal Benefits Group and David to present retirement seminars. David has been contracted by the APWU for retirement seminars in over 40 states to date.
If you have questions on retirement and want a down to earth expert to give you answers you can actually understand, David Fielder is the quite possibly the best resource you will find anywhere.