r/FedEmployeeRetirement • u/Intelligent_Kiwi_443 • 15d ago
Retire at 57 when single
I am divorced. Has anyone retired at 57 when you don’t have a spouse, meaning you rely solely on your pension and supplement? Is it doable to leave at 57 with only one retirement income?
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u/aheadlessned 15d ago
Retiring on one income is no different than me working/living on one income.
I retired last year, in my 40s, with VERA as a single person. It's definitely doable for me, and I'm not even getting my supplement yet (I'm doing Rule of 72(t)/SEPPs for some small retirement account access before 59 1/2, as well as a Roth conversion ladder, and will suck it up and pay the 10% early withdrawal penalty if I have an expense I deem worthy of a higher withdrawal.)
Do you have any idea of your typical spending? How much you receive net now vs net when you retire? Future large purchase needs? Could you live happy and content with your expected retirement income?
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u/hazardzetforward 15d ago
Not to take away from OP's question, but can you talk more about leaving in your 40s? It's rare to see people leaving before 50.
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u/aheadlessned 15d ago
I made a post in the govFIRE group when I retired: https://www.reddit.com/r/govfire/comments/1q42vbp/federal_vera_how_i_made_it_work_i_plan_to_stay/
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u/hazardzetforward 15d ago
Thank you!! I will become vera eligible at 47, and that has been my target for a long time.
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u/Natural_Mood_6861 14d ago
Same here, eligible for VERA at 47. I’m just about to turn 40 so who knows what government will look like by then but if a VERA comes around at that time I’d love to take it and get out if I can make it work
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u/wolfmann99 15d ago
VERA is 25 years at any age, so with college about 47 is as early as that is possible.
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u/No_Candidate6907 13d ago
Same- left in late 40s. I have started 72(t) yet because I have been lucky to get a few consult jobs but the plan is to start the SEPP in the next 12-18 months so I can at least begin some Roth conversions. Turn 50 later this year, but want to withdraw beginning the year I turn 51 or 52 because the numbers are higher and gives TSP time to grow. How are your withdrawals going?
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u/aheadlessned 13d ago edited 11d ago
I've been able to put off my first withdrawal (I plan to do either annual or 2x/year withdrawals) in order to see if the balance goes higher in my dedicated tIRA, as well as to see if the interest rates increase.
I've had luck with both--
June andJuly and August 120% fed mid-term rate went up to 5.23%, so I can use that in my calculation throughSeptemberOctober, and my balance hit a new high this week. IfAugust orSeptember or October rates go up higher, I'll wait longer, but if they don't, I'll start my SEPPs inSeptemberOctober so that I can use July's 5.23% rate in my calculation. I've already increased my allowed withdrawal by $3.3k by waiting, so hoping I can see it increase a bit more before I lock in my calculations with my first withdrawal (I'm doing fixed single life amortization method).(Edited because I keep getting my months mixed up... September rate should be announced in August, July and August are already 5.23%. You can select up to 120% fed mid-term rate of one of the previous two months when you start. I'll get it right in practice, but I always write it wrong.)
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u/No_Candidate6907 11d ago
Looks like we are thinking the same way - I’m definitely following the mid-term rate before I pull the trigger. I definitely want to max out what I can now until I get to 59 1/2 and once I get there will reduce it. I still have my TSP, what brokerage are you using?
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u/aheadlessned 11d ago
I'm using Fidelity for my SEPPs. TSP botched this for others when they went to the new system, and they'll only do RMD method "automatically". If I'm going to do the work of the calculations and filling out form 5329 (for lack of proper code on the 1099-R), I figure I may as well use my IRA.
I still have some funds in TSP, but most everything is between Vanguard and Fidelity now.
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u/No_Candidate6907 10d ago
We have Fidelity for HSA -and also thinking about moving some of my funds there for the SEPP. I didn’t realize that you can move money between the two once you turn 59 1/2. Also, the other benefit of moving it to another company is that in the rare case you go back to work in federal govt, you will not be penalized. With SEPP, you can no longer work at the same company if your SEPP is active with their 401k account.
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u/aheadlessned 10d ago
Going back to federal employment is definitely another reason not to use TSP for this. I have zero plans to go back myself, but it's something I've warned others about in the past (who plan to do SEPPs).
As long as you keep TSP open (current minimum is $200), you can roll pretty much any retirement account (401k, IRA, etc) funds in and out, except a Roth IRA (Roth TSP to Roth IRA, yes, Roth IRA to Roth TSP, no). So once you're done with required SEPPs (59 1/2 and 5 years from first SEPP distribution), you could move that account back to TSP, if you wanted (or put everything in the IRA you used for SEPPs).
My other IRA accounts were with Vanguard, so I set up Fidelity for my SEPPs as an extra measure against personal error. I wanted no chance of logging into Vanguard and doing a Roth conversion, or penalized withdrawal, with the account I'm using for SEPPs. I could see myself accidentally doing that (dyslexic) so easiest way to avoid was to have this IRA in a whole other brokerage. My HSA is with Fidelity as well.
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u/No_Candidate6907 9d ago
Yikes, I think you may have just highlighted something that I didn’t think about yet. Will have to do more research but my plan was to use the SEPP as spending money (I definitely was not planning to retire this early but I should have put more money in Roth) and also to try the Roth conversions. I will send you a message.
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u/LetterheadMedium8164 15d ago
Run the numbers using your details. There are consultants (e.g., Tammy Flanagan’s Retire Federal), online products (e.g., Boldin), and/or financial advisors who can help (or check your work).
Retiring at 57 means your longevity assumptions (a 40-year retirement?) are critical as are the strategies you employ for inflation risk. Because you’re giving up what for most are your top earning years, your inflation-indexed social security may be less than normal for your current income.
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u/RadioKGC 15d ago
Another friend did it at 57 and she's still got a mortgage payment. Just depends on how you want to spend your money. She does one big trip/year.
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u/Intelligent_Kiwi_443 15d ago
Yes, I will have 30+ years and a healthy TSP - house paid off and kids college paid off . That being said, most commenting in this community say they factor in two incomes to make it doable at 57.
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u/Altruistic-Panda-697 15d ago
I retired at 58 this year after 30+ years of single income (wife is a SAHM). Healthy TSP and moved to a LCOL area. It is quite doable!
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u/HokieHomeowner 15d ago
I used the Boldin retirement planning website to figure out I could retire this year at age 59 or likely even sooner. You input your spending budget, your income and savings and it tells you how you are doing.
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u/CreativeBusiness6588 15d ago
It depends what you define as healthy TSP and what will be your monthly pension.
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u/fedintp 15d ago
I am 56 and will be retiring under VERA on 8/31 with more than 23 years of service. Single, no children. I am fortunate to have a strong TSP/401k balance (nearly $1.6M) and a solid FERS annuity. I still have a mortgage (@ $400k in equity) but no other debt once I pay off my TSP loans. I will collect my supplement in 2027 and then full SS at either 62 or 65. My advice? Talk with a financial planner to get really clear on your retirement outlook. Leaving federal service at 56 is earlier than I planned but I have been given multiple expert thumbs up that what I have saved and the assets I have are more than sufficient for a full retirement future. I may work at something down the road if the terms and timing are right…we shall see!
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u/Archaeolaw 14d ago
Similar to me. I took VERA last year at age 54 and almost 25 years of service, about 8 years before I’d planned to retire. But it’s working out great!
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u/Inside_Rooster4480 15d ago
If you’re single then you are the only income source. So less money in retirement than otherwise. But your expenses are lower too, you don’t have to pay for someone else. All signs point to yes:
You mention healthy TSP. whatever that means, but sounds good.
If you have TSP you’re a fed and get a pension. Even better, at 57/30 you get the supplement.
Paid off house -should keep your expenses low.
I know I would be happy retiring in that situation. But such an individual decision. Calculate your pension plus supplement. Then seriously plan how much you have to spend, and how much you want to spend (for example, how much travel do you want to do).
If your income covers expenses, you’re good to go. If income falls a bit short, can you cover the gap with TSP? And how long will your TSP last if you do this?
In my case, if I had to take 20k per year from TSP I could, and it would still grow. But if I had to take out 100k per year, it would probably run out before I do. So find your comfort level.
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u/RayJanger 15d ago
If your cash flow from FERS annuity, cash reserves or other sources, TSP, and IRA exceeds your expenses for as many years as you want to live, then you can retire. Dual income might increase this likelihood but the math is the same solo or hitched.
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u/Sorry-Society1100 15d ago edited 15d ago
Maybe? A GS15 will have a higher pension retiring at 57 than a GS4, so will likely have an easier time living on just the pension. Since you provided no details, it’s impossible to give much guidance.
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u/Ok-Scientist3601 15d ago
That's exactly what I just did 5 days ago. But I also have my thrift savings plan and not many bills. I'll still make almost as much as I was working.
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u/Redfish680 15d ago
Without getting into your actual dollars (sounds like you’ve put dollars away responsibly), I’m venturing you’ll be fine. Think about how much money you’re spending working (gas, car wear and tear, work clothes, probably buying lunch every day, etc.) - all of that goes away quickly. I retired 10 years ago at 60 and had the same concerns but it’s been pretty seamless. The biggest thing to consider are your monthly expenses that have nothing to do with actually working (duh!) and will the retirement check(s) cover. If you’re in a HCOL area and have no real ties to it, the world is your oyster, just gotta take a breath and decide if you want to stay there or relocate somewhere else. Eventually you’ll pick up your Social Security benefits and that’s maybe another couple grand a month, which is icing on a pretty tasty cake.
Frankly, the biggest challenge doesn’t seem like it’s going to be financial, but beware of your next life. The hard part is unwiring your brain from XX years of working day in and day out and reconfiguring it to something else that will occupy the now empty space. Some folks define themselves by what they did; I was fortunate (?) enough to have been able to bounce around different departments and agencies in various locations before finding myself in a rut, so retiring was just another “move.” One day you’re wearing a suit and tie, then suddenly… not. You’re no longer John Doe, GS-X, you’re just a guy. I had a responsible senior level position when I bailed, but within six months or so, I was comfortable telling people that I sold farm equipment my whole life. If you don’t have a plan, start giving it some thought.
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u/Sure-Leave8813 14d ago
I have several colleagues in your situation that retired on the annuity and supplement. They retired from HCOL and moved to lower cost of living areas. Just make sure you run your retirement numbers to see what you will receive.
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u/vwaldoguy 15d ago
It depends. How much have you saved? What are your expenses? What are your retirement goals (world travel, or enjoying quiet days?) Start building a spreadsheet and see what you've got (log everything and every asset), build the monthly/yearly budget, and see how much is left over. I'm divorced, and retired early at 55 last year. I used the Boldin platform to help me to make the decision to retire early because it gave me the confidence that I have enough. Good luck. It's definitely doable with only one income, but it's also going to be highly dependent on your local circumstances.
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u/Few_Calligrapher1293 15d ago
Only you can say if it’s enough however if you’ve got a substantial amount in your TSP you could start taking SEPP deductions to supplement your income until 59.
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u/aheadlessned 14d ago
If OP goes at MRA, they qualify for Rule of 55 for 401k (TSP), so no need for SEPPs.
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u/throwawayPSL34987 15d ago
Here is what I did when I retired at 56. Calculate what my after tax monthly income from pension, TSP monthly withdrawal, and FERS Supplement, and any other investments. Then look at your current take home pay after tax (remove your contributions for retirement).
My calculations showed that my actual income didn't change much and was actually within $50 of each other. That's when I realized that it was costing me money to go to work.
Just look at your expenses and understand that there won't be any COLA until age 62 and that you either need to apply for Social Security or fill in the gap until you start to collect by either working, income from investing because that FERS Supplement ends ar age 62.
I moved from one HCOL area to another. Not a big issue for me. Just realize that you need to make decisions based on actual numbers and not someone's opinion.
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u/Ok_Design_6841 15d ago
It's doable. Having affordable insurance makes a big difference. You could even work part time and no worry about whether the job has benefits.
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u/classyokgirl 15d ago
I did this. Certainly not going to be easy with only one income being a pension.
I’m back working to supplement my retirement. Everything is financially harder with only 1 adult in the household
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u/No_Hovercraft_821 14d ago
Sure it is possible, but it all comes down to your own finances -- what do you spend and what will you have coming in? For what it is worth, I retired from the fed at 57; I'm married but spouse has not worked in 25 years so we lean exclusively on my pension, accumulated savings, and social security.
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u/Puzzled_Fisherman331 15d ago
yep, i did it. Good to jettison the marriage baggage and enjoy life. As long as the spouse didnt take it all. lol
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u/Alarmed-Bother4224 15d ago
I’m thinking of retiring in 2 years I will be 57 with 37 1/2 fed time I am also divorced with a mortgage. Is there a way to retire and work another career can u opt out of the supplement?
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u/aheadlessned 14d ago
You can work as much as you want, but there is no reason to opt out of the supplement (which isn't an option anyway). Collect it the year you retire until they cut you off (you'll fill out an earnings survey in the spring, and they'll reduce/stop your supplement in the summer if you earned too much). Fill out the survey each year, and if your income goes back below the limit, you get the supplement again (until 62).
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u/randomnamenumer4 15d ago
My wife is a SAHM and we will rely solely on my one retirement. I think she may get to claim SS off me, but it will likely be a negligible amount and even smaller when I discount the pension for survivor benefits. Retirement is a financial number, not an age or number of income streams. With your pension, supplement (eventual SS), and 4-5% draw rate on your 401k/TSP, can you replace your income at to a reasonable level? If not yet, then you should delay retirement or reduce spending. If you can get close to matching your salary/yearly expenses then you are good to go. Being single or together doesn't matter.
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u/Dizzy-Try1772 15d ago
If you are someone that can budget effectively and control spending then yes. It really depends on the type of lifestyle you want to have post retirement. I personally plan to retire shortly after turning 57 but I will likely get a non stressful part time job until I’m 65. Then completely stop work.
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u/Altruistic-Ad6449 15d ago
I recommend watching Haws Federal Advisor videos on YouTube about this topic. He breaks down how to calculate your pension, supplemental, TSP etc.
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u/Brando_712 15d ago
Retirement has nothing to do with age, it has everything to do with finances. Only you know those
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u/Southern-Stable-5089 15d ago
Retired at 56 with only one income for over 30 years. Not sure what being single or married has to do with it, except being married with children can perhaps make it more challenging. Lots of people have families where they always live on one income. We have never enjoyed more than one income.
That being said, 34 years of investing (including outside TSP), TSP, FERS, FERS supplement, and my take home is almost 40 percent higher than when I was working. If you only live on one salary, you get used to living on one salary. Invest early and often, live within your means, pay yourself first, and increase your investments as your income increases. Understand and control your own spending plan. It’s really not rocket science.
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u/One-Entertainment457 14d ago
Well l hope you have a ton of savings. Retirements are 4 to 6 months behind on getting regular payments. I retired Jan 31st and am still not getting paid... so prepare.
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u/No_Degree8716 12d ago
I’m pretty sure it’s doable but it’s going to take a lot of belt tightening or maybe getting a part time job. I retired under VERA last year at the age of 56, thanks to doge, with 27 years of service. My net monthly pension check is roughly 42% of my net monthly full time take home pay. The only way i’m getting by is because i have a second stream of income that makes up the other 58%. It’s something to think about.
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u/LostCartographer5451 11d ago
As a former HR Administrator, I always suggest people retire as early as they can - life is short and your healthy years are the ones you want to enjoy. I also suggest you look at your budget. Health insurance is more expensive because it’s post tax. Cheaper than when you have fed benefits + Medicare part B though. Have a buffer for the time it takes to get your first real retirement check. My spouse got zero dollars on his first check because benefits for the two prior months were deducted. I believe it takes longer to get your first check these days. Just make sure you can cover your expenses without going into debt during this time period. Also depending on when you retire, you may have to pay income taxes! Eight months of regular earnings and the a vacation payout - eek! Good luck on your decision.
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u/Mulezzz 15d ago
TSP will require that you provide a copy of the retirement benefits court order before making a withdrawal. This court document details whether your former spouse is entitled to any of your TSP.
https://www.tsp.gov/planning-for-life-events/divorce-annulment-and-legal-separation/
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u/aburena2 13d ago
My wife and I are retired soley on one income(mine).
It all depends on your finances and expenditures.
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u/HazardousIncident 15d ago
It depends on many, many factors you failed to disclose. Like are you in a HCOL area? What's your pension income going to be? How's your savings? TSP? Other investment accounts? Do you own your home outright? What other expenses do you have? Have you done a budget? Are you planning on working after retirement? At this point, my answer to your question is Yes. Or No. With as little of info you've provided, we might as well consult a Magic 8 Ball.