As a matter of record - pay periods usually start in mid December for the following years earnings. For proof of this - just look at the last ELS statement for last year and compare it to your W2. The gross pay will match w2 Social Security Wages which equates to a total of all earnings including OT and bonus - for those who get them.
Actual pay date is the date which affects when PPD1 will begin. If your agency pays 10 days after the PPD ends then you are nearly guaranteed to have a pay check which posts for the 2019 pay cycle if you retire on 2017/12/31 according to the last IRS publication I read on tax filing.
Pay is allocated for a tax year based on the date it is paid - not the date it is earned.
For an example of this - DOI pays 10 days after the end of the pay period - so for example doing the math - yyyy/01/01 - 10 days = yyyy/12/23 - 14 days (ppd) = yyyy/12/09 would be the earliest a PPD would begin in any year.
For 2018 - 2019 this is actually happening for DOI which has PPD 26 ending on 2018/12/08 with the 1st PPD for 2019 starting on 2018/12/09 - and paying out on 2019/01/01 (which effectively will be 2019/01/02 because 01 is a holiday). For an example of all of the following information - just refer to your last few years ELS's look at the date the final PPD paid out and go back in time from there.
Based on information you provided - if your PPD's match DOI's (many do) you'll have one full pay period and 9 days into the second of which all earnings would be contributed to 2019 income records. You do not have to be present - you only have to be gainfully employed and being on retirement leave counts until the day you end your employment.
On the shorter question - if you have sufficient funds to handle going into retirement - then spending the whole (or most) of the check toward TSP should not negatively impact you and would likely be a great investment depending on how much "Income" you are expecting to get in retirement. Taxes alone (or the exemption of pay from same) would be a really strong reason to do this (regular TSP contributions being pretax deductions) - providing you have funds to make ends meet until the date you start receiving SSA, Retirement and what your plans are for your TSP investments.
Simply stated - you'd have income that would not count against your tax burden for the next year - you also have to consider how much annual leave you may be selling to understand the full impact.
There are really too many questions in this request for guidance to give you any kind of clear answer - the best you could do would be to invest a little time and effort with a real financial adviser - not one who's after your money. Many fed credit unions have relations with investment advisers who also act as financial advisers for fed employees and retirees.. Check with one of them - but don't wait too long - you'll have to make the changes in TSP allocation early enough to actually have them post according to your wishes. Last time I tried to time this my agency did not post the request until the second pay period which would not work for you.
You'd have to have the election in your pay system at least a few days before the final PPD for 2018 starts - better idea would be to call your pay center and get their advice on when to get the TSP entry posted to avoid missing the date. On the basis of DOI schedules that means you'd have to have it in before 2018/11/24
On Wednesday, November 14, 2018, 4:21:40 PM PST, scsi_guru@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
I plan to retire on 12/31/18. I'm on the NFC payroll system and the 2019 tax year begins in 12/22/18 which will give me around a half pay period on the rolls. I guess I can contribute most of my paycheck to TSP but that would severely limit my last paycheck and I "may" need that to pay some bills. Thoughts? Suggestions?
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Posted by: MDJ <jonesmd2@yahoo.com>
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