Voluntary Contributions CSRS


Q. I work for the FBI and belong to the CSRS.  I’ve managed to put some money aside in a voluntary contributions account.  I’ve heard that it is now possible to transfer the entire amount from the VC account into a private Roth IRA account.  I’ve set up a brokerage account at USAA for the money, but no one at the Office of Personnel Management  seems to be able to advise me if there are tax implications in moving the money, or if the money has to be moved by Dec. 31.

A.  OPM will not give you tax advice. You’ll need to hire a tax adviser for that, someone who will prepare and stand behind your return will be best.
You can “convert” the VC balance to a Roth IRA, and you may roll the taxable interest to your TSP account. Any distributions of taxable money from the VC account will be subject to tax in the year they are distributed, unless rolled over to another Qualified Retirement Plan or IRA. Under current law, you have until the end of the year to avoid the earnings limit on Roth IRA conversions.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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