![Re: [TSPStrategy] Best Dates to Retire 2023](http://2.bp.blogspot.com/-erTXCq61ULM/TmHYAQBZ0GI/AAAAAAAACCs/6cBX54Dn6Gs/s110-c/default.png "Re: [TSPStrategy] Best Dates to Retire 2023")
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While many federal employees are planning to retire at the end of this year, it's not too early for those who are looking ahead to leaving sometime in 2023 to start thinking about the optimum date.
This downloadable calendar will help you plan your best date for a 2023 retirement. The idea is to maximize your retirement benefit and lump sum payment for accrued annual leave, whether you're under the Civil Service Retirement System, CSRS Offset or the Federal Employees Retirement System.
You'll notice that some dates on the calendar are specially highlighted. These are the very best dates for 2023. Some are designated specifically for CSRS and CSRS Offset, and some just for FERS retirees. If there is not a designation of CSRS or FERS, then it is a great day for all immediate, voluntary retirements. These dates are within the first three days of the month for CSRS and CSRS Offset retirements. For FERS, they are generally days at the end of the month.
One FERS date, June 30, is not only at the end of the month, but also the end of a leave period. This is a particularly good date, because it allows for one last accumulation of annual leave to create a larger lump sum payout. And Nov. 30, which falls on a Thursday, could be a great day for FERS employees who work a compressed work schedule—as long as they can complete their 80 hours of work by close of business on the 30th.
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On Sep 27, 2022, at 11:37 PM, Locutusoftexas <mrweyl@hotmail.com> wrote:
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Carlos,
Actually the Zweig Model merely declares the market a buy or a sell. The latest declaration (a sell) stands until the opposite signal is given. The model generates a number of points so that readings near the maximum possible indicate a buy and readings near the minimum indicate a sell. Take the current situation: The model is currently reading 2 our of 10 possible points, which is in definite sell territory. Sometime in the future the number of points will begin to rise as the particular indicators (like changes in the Federal Reserve Discount Rate) become more positive. The sell signal remains in force until eventually, the indicators become positive enough to give a buy signal.
The comments about changes in November are entirely my expectations about future Federal Reserve interest rate increases, based on what Powell has done in the past. I could be entirely wrong. If the Federal Reserve continues with its current plan, then the sell signal by the Zweig model gives a reasonable expectation of stock price performance in the near future. If the Federal Reserve decides not to raise interest rates in November, then stock prices might increase strongly, even though the Zweig model is still giving a sell signal. This is the problem with trying to time the market.
Situations like the present one (a scary down market) are very difficult for long-term buy-and-hold investors. That is why I pointed to a future less negative change in Fed policy which I believe is possible based on Powell's behavior.
I believe that the best investment policy is to maintain a preferred asset allocation and ignore models that give information on market timing.
Sorry if I just added to the background noise and confusion.
Good luck,
Tex
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Sorry you are still in equities.
On Sep 25, 2022, at 7:54 PM, Carlos Miranda <mirandarts@gmail.com> wrote:
So the Zweig Model is saying more selling for now but a recovery will start soon? Like possibly November?
Carlos Miranda
On Sep 25, 2022, at 6:13 PM, Locutusoftexas <mrweyl@hotmail.com> wrote:
Fellow board members,
Since the Fed has raised the funds and discount rates, I would like to report the Zweig model results. The official reading is not the worst possible number but let us say that it is in very very strong sell territory. The only reading that is positive is consumer consolidated credit, which has surprised me by not indicating a dangerous level of consumer debt.
That having been said, my trend indicator is also very close to the minimum vale that it achieved in either 2020 or at the market low earlier this year. Usually that happens before a bear market rally. It did in 2020 and earlier this year.
Housing has declined significantly due to the 3% increase in mortgage rates. According to Ed Yardeni, housing is the main driver of the economy. You might remember that housing cratered in 2007-8, which preceded the financial crisis. However, note that a big decline has already happened. That usually precedes a recovery.
My reading of Powell is that he follows the politics. In October 2018, he stopped raising interest rates when the president complained about it. Now everyone (President Biden) has focused on inflation, so he is squeezing interest rates to reduce inflation. What this tells me is that after the election in November, he will suddenly have a change of heart and put a pause on interest rate increases in order to minimize the severity of any recession. If that were to happen, then the markets would scream higher.
Similarly, the Ukraine war could have a decided turn toward ending, no matter what Putin is doing now. That would drive energy prices to very low levels and cause gasoline prices to plummet, thereby eliminating the most visible sign of inflation.
What am I saying? Look, the way the universe works is that good things happen as well as bad. Notice that our big events of the past 6 years have all been terribly bad: 100 year pandemic, highly inflationary invasion of Ukraine (generating a worldwide humanitarian crisis) and massive destabilizing political upheaval worldwide and nationally. The Universe will deliver a spectacular upside surprise because that is the way it works (Generalized Second Law of Thermodynamics).
Just sayin'.
Good luck,
Tex
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On Sep 25, 2022, at 7:54 PM, Carlos Miranda <mirandarts@gmail.com> wrote:
So the Zweig Model is saying more selling for now but a recovery will start soon? Like possibly November?
Carlos MirandaMirandarts@gmail.com
On Sep 25, 2022, at 6:13 PM, Locutusoftexas <mrweyl@hotmail.com> wrote:
Fellow board members,
Since the Fed has raised the funds and discount rates, I would like to report the Zweig model results. The official reading is not the worst possible number but let us say that it is in very very strong sell territory. The only reading that is positive is consumer consolidated credit, which has surprised me by not indicating a dangerous level of consumer debt.
That having been said, my trend indicator is also very close to the minimum vale that it achieved in either 2020 or at the market low earlier this year. Usually that happens before a bear market rally. It did in 2020 and earlier this year.
Housing has declined significantly due to the 3% increase in mortgage rates. According to Ed Yardeni, housing is the main driver of the economy. You might remember that housing cratered in 2007-8, which preceded the financial crisis. However, note that a big decline has already happened. That usually precedes a recovery.
My reading of Powell is that he follows the politics. In October 2018, he stopped raising interest rates when the president complained about it. Now everyone (President Biden) has focused on inflation, so he is squeezing interest rates to reduce inflation. What this tells me is that after the election in November, he will suddenly have a change of heart and put a pause on interest rate increases in order to minimize the severity of any recession. If that were to happen, then the markets would scream higher.
Similarly, the Ukraine war could have a decided turn toward ending, no matter what Putin is doing now. That would drive energy prices to very low levels and cause gasoline prices to plummet, thereby eliminating the most visible sign of inflation.
What am I saying? Look, the way the universe works is that good things happen as well as bad. Notice that our big events of the past 6 years have all been terribly bad: 100 year pandemic, highly inflationary invasion of Ukraine (generating a worldwide humanitarian crisis) and massive destabilizing political upheaval worldwide and nationally. The Universe will deliver a spectacular upside surprise because that is the way it works (Generalized Second Law of Thermodynamics).
Just sayin'.
Good luck,
Tex
On Sep 25, 2022, at 6:13 PM, Locutusoftexas <mrweyl@hotmail.com> wrote:
Fellow board members,
Since the Fed has raised the funds and discount rates, I would like to report the Zweig model results. The official reading is not the worst possible number but let us say that it is in very very strong sell territory. The only reading that is positive is consumer consolidated credit, which has surprised me by not indicating a dangerous level of consumer debt.
That having been said, my trend indicator is also very close to the minimum vale that it achieved in either 2020 or at the market low earlier this year. Usually that happens before a bear market rally. It did in 2020 and earlier this year.
Housing has declined significantly due to the 3% increase in mortgage rates. According to Ed Yardeni, housing is the main driver of the economy. You might remember that housing cratered in 2007-8, which preceded the financial crisis. However, note that a big decline has already happened. That usually precedes a recovery.
My reading of Powell is that he follows the politics. In October 2018, he stopped raising interest rates when the president complained about it. Now everyone (President Biden) has focused on inflation, so he is squeezing interest rates to reduce inflation. What this tells me is that after the election in November, he will suddenly have a change of heart and put a pause on interest rate increases in order to minimize the severity of any recession. If that were to happen, then the markets would scream higher.
Similarly, the Ukraine war could have a decided turn toward ending, no matter what Putin is doing now. That would drive energy prices to very low levels and cause gasoline prices to plummet, thereby eliminating the most visible sign of inflation.
What am I saying? Look, the way the universe works is that good things happen as well as bad. Notice that our big events of the past 6 years have all been terribly bad: 100 year pandemic, highly inflationary invasion of Ukraine (generating a worldwide humanitarian crisis) and massive destabilizing political upheaval worldwide and nationally. The Universe will deliver a spectacular upside surprise because that is the way it works (Generalized Second Law of Thermodynamics).
Just sayin'.
Good luck,
Tex
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As of Thursday, lawmakers and the White House had just eight days to complete negotiations and pass a short-term measure to fund the government and avert a shutdown beginning next weekend.
Although lawmakers generally seek to avoid lapses in appropriations in election years, a number of issues have prevented them from reaching agreement thus far, including requests from the Biden administration for additional aid for Ukraine, coronavirus response funding, and the permitting reform proposal from Sen. Joe Manchin, D-W.V. Appropriators also are reportedly at odds over how long a continuing resolution should run, with conservatives urging the deal to go until 2023 in the hopes that Republicans gain majorities in the House and Senate.
Here is what federal employees can expect in terms of pay and benefits if the government shutters, based on guidance from the Office of Personnel Management, updated last year after a number of updates were signed into law following the 35-day partial government shutdown that began in late 2018.
Salaries: Furloughed federal workers and employees who have been deemed essential and forced to work during a lapse in appropriations will not be paid for the duration of the shutdown, although thanks to a 2019 law, they all will automatically be granted back pay to cover the shutdown once funding is restored. Congress previously had to approve back pay for furloughed federal workers following each shutdown, but that process was automated after the 2018-2019 appropriations lapse.
Similarly, employees who worked overtime during the shutdown will be granted premium pay, albeit not until the government is funded.
Bonuses: Agencies may award performance bonuses during a shutdown, but those awards won't be paid until after the government reopens.
Unemployment: Federal workers who are furloughed are eligible for unemployment compensation in some states. But in many cases, they must return the money once they receive back pay.
Health care: Furloughed feds will maintain their coverage under the Federal Employees Health Benefits Program during a lapse in appropriations. Premiums accrue over the course of a shutdown, and then are taken out of employees' first paycheck after the government reopens.
Similarly, employees enrolled in the Federal Employees Dental and Vision Insurance Program will maintain their coverage, with unpaid premiums being withheld from their first post-shutdown paycheck. This marks a shift from previous shutdowns, when—if the shutdown persisted for longer than two pay periods—insurance carriers could allow those employees' policies to lapse.
Additionally, federal workers may now make changes to their insurance plans due to significant life events during a shutdown. Regulations issued by OPM in 2020 clarified that agency HR employees, previously furloughed during appropriations lapses, are deemed essential for the purposes of handling FEHBP enrollments.
Retirement benefits: Federal retirees in the Civil Service Retirement System and the Federal Employees Retirement System will still receive their scheduled annuity payments during a shutdown. Contributions to the Thrift Savings Plan will be paused until the government reopens.
Leave: Federal workers cannot substitute paid leave for unpaid furloughs when the government is closed. Previously scheduled leave that occurs during a lapse in appropriations will be cancelled, although OPM stressed that does not mean excepted employees cannot request time off during a lapse in appropriations.
"This does not mean that an excepted employee cannot seek approval to be excused from duty during a lapse," OPM wrote. "An agency may excuse an excepted employee from duty and place the employee in furlough status for approved periods. An agency may allow an excepted employee to be off duty during periods when the employee was previously scheduled to be on paid leave."
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Next week, I'll present the Best Dates to Retire 2023 calendar. Before that, let's look at the rules and requirements for retiring from federal service. They can make a difference in picking a retirement date.
Voluntary retirement annuities under the Civil Service Retirement System, CSRS Offset and the Federal Employees Retirement System who meet age and service requirements.
For CSRS, that means:
The FERS requirements are a bit more complicated, you must meet one of the following criteria:
Suppose James is under FERS and is planning to retire on June 30, 2023 at age 60, after 24 years of service. This is a Friday at the end of a leave period. He will be paid his full biweekly salary and will gain his final leave accrual for this period (eight hours of annual leave and four hours of sick leave). His first monthly retirement benefit payment will be for the month of July, with the payment due on Aug. 1.
Although James reached his 60th birthday on June 14, he waited to retire until the last day of June so he would receive his salary through June 30. His retirement wouldn't commence until July 1 either way. This resulted in James receiving an additional 12 days of salary and one additional leave accrual before his retirement begins.
Under both CSRS and FERS, retirement annuities start the first day of the month after the employee separates from service and meets the age and service requirements. But under CSRS, the annuities of employees who are on the job for three days or fewer in the month of retirement commence on the day after separation or the day after pay ceases.
This three-day grace period allows most CSRS benefits to start the next day. But if the first and second days of the month are weekend days, then retiring on the third of the month will reduce the retirement benefit by 3/30 of the first payment, while only increasing the last paycheck by one day of salary payment. In this case, it might be more advantageous to retire on the last day of the month, rather than the third day of the following month.
Months in which the third day falls on a Wednesday, Thursday or Friday are great days for CSRS employees to retire. If Friday is also the end of a two-week leave period, so much the better. Remember that you accrue leave once you complete 80 hours of work (or your scheduled tour of duty). If the third of the month is a weekend day or Monday or Tuesday, the benefit should be weighed more carefully.
Suppose Judy plans to retire under CSRS on Friday, June 2, 2023. This is the last work day of a leave period, which means she will have completed her 80 hours of work, allowing her to accrue her final eight hours of annual leave. Suppose her final salary is $85,000, or $40.73 per hour. Retiring on June 2 instead of May 31 increases her lump sum annual leave payment by $325 ($40.73 x 8). She also increases her service by an additional two days and if she uses June 3 (Saturday) as her effective date of retirement, she gains an additional three days of service. This could help if her final amount of creditable service plus unused sick leave credit ends in 27, 28 or 29 days, because another two or three days can result in an additional 1/12 of 2% of her high-three average salary in the CSRS retirement computation formula.
The downside to retiring on June 2 is that Judy is trading two days of salary for two days of retired pay. If her high-three average salary is $80,750 and she is retiring with 40 years and six months of service (including credit for her unused sick leave), her retirement would computed at 77% x $80,750. That's $62,177 a year, or $172.70 a day. Eight hours of continued employment is worth $325 a day.
Remember that you must complete 80 hours of work by the end of a two-week leave period to be paid your full salary for your final two weeks at work and earn your final accrual for annual and sick leave. Retiring prior to completing your work for your final leave period will result in no leave accrual. Leave is not prorated.
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The Employee Benefit Research Institute's 2022 Retirement Confidence Survey found unmarried women workers and retirees have lower retirement confidence than their married counterparts and are more likely to have lower incomes and assets. In a recent issue brief headlined "The Perfect Storm — Factors Contributing to Lower Retirement Confidence Among Women Who Are Not Married" our guest today unpacks the data on women's retirement confidence.
Craig Copeland is Director of Wealth Benefits Research at the Employee Benefit Research Institute. He joined the podcast to discuss the survey, its findings and how women are set up for retirement.
To request a transcript of this episode email webmaster@govexec.com
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