Question 1
Does the necessity of having health insurance for five years before retirement also apply to vision and dental insurance?
Answer 1
No, the 5 year rule does not apply for vision and dental (FEDVIP) to be able to keep it into retirement.
The only requirement to keep your dental and vision is to retire with an immediate retirement.
Even if you were never enrolled during your career you can pick up the coverage in retirement as long as you retired with an immediate retirement. To be eligible for an immediate retirement you have to meeting one of the following:
-Age 62 with 5 years of service
-Age 60 with 20 years of service
-MRA (minimum retirement age) with 30 years of service
-MRA with 10 years of service (but your pension will be reduced)
Question 2
I am contributing the annual maximum to my TSP plus catch up. Can I also contribute the annual maximum to an outside traditional IRA with a mutual fund company?
Answer 2
You can always use a traditional IRA on top of your TSP but your income level will determine whether or not you can deduct those contributions.
I go deep into this in this article here: https://hawsfederaladvisors.com/can-i-invest-in-the-tsp-and-a-ira-roth-ira-at-the-same-time/
Question 3
I am eligible and want to retire within 6 months from my LEO fed job. I am 55 years old. I have debt and a heloc amounting to $48,000. I have a 157,000 mortgage and am considering a refinance to $210,000 for 30 years to get my mortgage lowered and have it absorb my debt. My home is currently worth about $320,000. I’m worried about taking on a new 30 year mortgage and don’t want to have a mortgage for the rest of my life. I only plan on staying in this home for 3-5 yrs. When I sell my home, would it be feasible to have enough profit that I could afford a home with a smaller mortgage loan of approx. $100,000 with $120,000 being paid into it from the profit of my home sale?
Answer 3
There are 3 things that I would worry about in this situation.
1st, whenever you do a refinance there are closing costs and fees involved. And since you are not planning on being in your current home for very long (only 3-5 years) you will want to make sure that this is enough time to recoup the cost of the refinance through the savings of a refinance.
2nd, It does seem feasible to purchase a cheaper home in 3-5 with about half of the cost coming from the profit from your current home. That being said, the prices of homes can fluctuate substantially over time so that is something to watch.
3rd, you mention that you don’t want to have a mortgage for the rest of your life so you will want to come up with a plan to make this happen. This may be a 15 year mortgage or some other strategy to get it paid in less than 30 years.
