#45 – SRS & COLA, SS Payback, Help my TSP!

SRS and COLA, Social Security pay back, and help my TSP! All on today’s Fednobabble.com,

This is Fednobabble.com where Kevin and Cassie make federal retirement benefits understandable for humans like you. These two don’t hold back as they answer questions from the Fed Pilot workshops and webinars or from questions submitted by you at Fednobabble.com. Y

You know, Cassie, that music gets stuck in my head.

I’m singing it sometimes when I realized, what the heck am I doing, that’s all stuck in my head. That’s no good.

Oh, that’s awful. Yeah, it is.

Yeah, it is. All right, let’s get going. All the questions, OK?

What if I get another job after I retire and I don’t get the SRS? What? I still not receive a COLA on it. Right.

That’s why I put it in here. Guys, it’s a little confusing. It’s not OK. What are you quite talking about. Right.

OK, well, let’s take this in like different pieces. What if I get another job after I retire and I don’t get the SRS? So what are you thinking? That you’re not going to get the SRS because you don’t have a job? That’s not true, right? For those of you who don’t know what the special retirement supplement is, it is a benefit that you get from the federal government that is based on your estimated Social Security amount for age 62.

And it is for FERS employees only that they will get a portion of that benefit between their retirement age, whatever that is, to age 62. If you retire at 62 or after, you will not receive this benefit.

Right? Right. And the special retirement supplement is subject to the earnings. Yes. That is very similar to Social Security. Right. But it is not contingent on whether or not you have employment. So I just want to be clear on on that before we get any further that the next with I still will not receive a COLA. Well, cost of living adjustment has nothing to do with the SRS.

Yes, there is no COLA that. No, there is no COLA on SRS.

It’s not not on your pension until age 62 either. Right. So I’m really confused on how all of this is working together for this employee. But I hope that we can give some some definite clarification so that whoever this is has this question. I hope that they’re listening and I hope that they can really understand what these benefits are and what the differences are to these to these things. So that way they can make sure that they understand what and how they work.

Yeah. So, again, these these questions come in from the Fed Pilot webinars. So these are actual questions by attendees who go to the webinar. And I pulled this one in, even though it didn’t make a lot of sense because I thought there are a number of points that we could talk about and you hit them all that we could talk about when it comes to SRS and when you get the COLA and when you don’t what it is. So you hit it all.

So honestly, I wasn’t expecting you to really answer this because it’s unanswerable, but you hit all the points that I was hoping you would hit, so you’re well done.

OK, that’s what I think this one is going to make a little bit more sense.

OK, if you take Social Security at sixty two, is it true you can pay back and draw at a later age and higher rate?

So basically what they’re referring to is that when you went when someone draws Social Security, they basically lock in their prime.

Are there the amount that they’re going to get for the most part? Right. And so that’s that’s the end. And there’s COLA on top of that. But let’s say they lock in that amount.

So that’s the amount that they’ll get from that point on every year that you don’t take Social Security from 60 to 70, it goes up by about eight percent. So what they’re saying is, OK, what if I took it at 62? And then I thought, oh, hey, I want the higher the higher amount that I would get. So can I pay it back and get the higher amount later on to make it look like I didn’t even I didn’t take it until later.

And and I Cassie correct me if I’m wrong, but I think the rule now is that you can pay if you stop it and pay it back within the first twelve months you can. But if it’s after that then you’re stuck with that amount, is that right. Yeah, I’m trying to look up on my notes and just get that clarification, by the way, Cassie’s, everyone has to know that Cassie’s notes are crazy awesome.

They are the amount of notes that you have taken over the years from what different rules are. And and it just is mind boggling so and so.

I think it’s pretty cool that you have all those notes. I’m not quite as good of a note taker as you are. And so you’ve got this whole library. I mean, you could write volumes, I swear, and just, hey, I’m just going to publish my notes. It wouldn’t make a lot of sense to a lot of people, but yeah.

OK, so I. I don’t have it. I don’t have it in here. OK, except for that.

Her notes are great, except for that one point. That’s all I know. But I believe it. That’s it. That’s it. That 12 months is the cutoff.

I’d have to do some research on that one because this is something that is simply not asked very frequently, which is probably why don’t have the know one. I know that there is. And I want to say it’s called a Social Security. Is that the refund or are redo?

I think it’s a Social Security redo where you pay back your Social Security amounts, whatever you’ve acquired or they’ve given you, and then you simply suspend or put on hold the draw age. And I believe you can only do it once. You can’t do this. I believe so.

But and so I haven’t looked up this recently, which is why I’m not going to say that there’s a time limit on it, but there very well could be. I just simply don’t want to give the wrong time limit out. Sure. So, yeah, if you get in touch with a financial professional and you’re curious about this and they’re not sure about the answer, please have them submit it to Fednobabble.com and we will definitely be able to answer that for you in a dove deep into that.

Yeah. And I think a lot of people will who are watching or listening will be saying, well, no, you know, that’s not going to be an issue for me here. Here’s the real issue is that there are people who right now will say no, but they put themselves accidentally in a situation where this does become a real thing. And so people will say, you know what, I’m going to retire and I’m not going to need to work.

So I’ll just draw Social Security. I don’t need to pay it back because I’ll just get what I get and I’m good with that. Then they retire, draw Social Security and they realize I’m not making as much money as I thought. It’s not coming in like. So I think I might have to go back to work. Well, you know, if that’s if that’s after this, you know, that time of being able to pay it back, then they’re stuck or then they start think, OK, well, maybe I can pay it back now and and then later on because I’m going to keep working, because I’m going to get hit with the earnings test.

And so a lot of people think, well, that’s you know, that’s not for me when it might be depending on what situation you put yourself in and it sneaks up on people.

I think that I’m simply going to look this up and we can put the link regarding the Social Security review in there. So that way they have the information, but they don’t have rather than submitting the question, because obviously we’ve already had this question and I don’t want to have to delay any further. I’m just going to provide the link in the comment section or what have you. So, I mean, we can get this answered and you have the most relevant and up to date information, because even if there is a time limit, I can’t say that it’s going to change or not change for the future.

So we’re just going to link to this so that when you guys can can get all of the information. And if you have any further questions about it, please go to the Social Security office or talk with a financial professional and they’ll be able to help answer some questions because they’ll be up to date on it.

Yep, that is what they do. Good. All right. Thank you. Let’s do question number three, OK?

I need help with where to put money in TSP to make the most money over time. Can you help me with that?

So in the. Fed Pilot workshops in the what I say is in the accumulation stage, in the really for now employment stage of the TSP, there are two goals to grow your money and to keep taxes as low as possible. Grown, though, right?

So last time or last episode or two episodes ago, we talked about the ROTH versus traditional. That’s the keep the taxes low. This one is where out of the GFC. Yes. And I do. I put my money to have it. Well, yeah.

Basically to have it grow as much as possible, given my circumstances. And any time we say, given my circumstances, we always reply with it depends.

Right. Every time.

That’s right. And we can’t help with that. One of our financial advisers. And we don’t have enough of your personal information to tell you our financial picture, I should say, to tell you whether or not you should be in the fund as opposed to the seed fund or how much you should be putting in those different funds to make the most beneficial for you. So talk with a financial professional or financial advisor, hopefully one that is first in the federal benefits, because they’ll understand what those different funds are and how they work together and they’ll be able to help you with that.

If you don’t have anybody, go to Fednobabble.com. We’re going to get you in touch with somebody who’s been in our trusted network to be able to help you distill down it. Is that going to be financially advantageous over the G fund or S fund as well? And how do we coordinate all of those different funds and get the most for our money? And should I be contributing to the ROTH side or the traditional on the you know what? I’m contributing to the TSP.

You know, there are going to be able to tell you exactly not only which account, but which funds to to allocate your money to and how much to put in to get it to where you need to be in retirement. I think that’s another really good question. Is here OK, how do I make the most money over time? How much do I need?

What’s my goal? Right.

Because that can be different for everybody.

It yeah, it is different for everyone. Right.

What do you want in retirement? And so I think that, you know, we’re going to take a look at not only can I have the most money, but am I also going to be able to get the amount that I need to do what I want? Yeah.

In retirement and Cassie one thing I’ll say about these questions sometimes were asked the question like this. Me, you, someone in our trusted network of finance professionals will ask a question.

We’ll say something like, well, it depends. Right. Then I’ll come back and say, OK, yeah, of course it depends. But can you just give me an overall what you think I should do? And we we have to say no, really, seriously. It depends. We can’t even give you a hey, you know, I know it depends. But if you did this, you’ll be just fine. There isn’t anything like that.

It really is individual. And you have to talk with a finance professional to make sure that it’s right for you specifically.

And and that’s I’d like to be able to say, well, I mean, for example, we could go through the GFC and I and talk about the strengths and weaknesses of each one. But that doesn’t that doesn’t tell the story behind the numbers. It just gives you some facts. And that’s it. It doesn’t say how it will affect you or what it can do for you, good or bad.

So, again, it’s important to do that overall. If you would please share this, like it, do whatever, all that good stuff. Subscribe and make sure your coworkers know about this so that they can come and learn a ton and be prepared for their retirement. Cassie last words of wisdom.

Take action. Don’t forget that no action is still taking action.

It is. It is. All right. Thanks, everyone.

We’ll see you in the next episode

To get Cassie’s comprehensive report on your federal retirement benefits. At no cost, no obligation and no sales pitch. Go to Fednobabble.com while you’re there. Submit a question for them to answer on the show.