Q. I am 49 and a postal employee under FERS with 24 1/2 years of service. My job has been abolished and the whole RIF process ends on Sept. 9 of this year. I turn 50 before that date so I could possibly qualify for a Discontinued Service retirement or involuntary separation. If I retire under those circumstances, is there a TSP early withdrawal penalty incurred under an involuntary retirement? Would I be eligible for the Social Security supplement as well? A. You would only be eligible for the special retirement supplement when you reach your minimum retirement age, which…
Monthly Archives: April, 2011
Q. I was wrongfully terminated from federal service in 2010. The case was settled out of court, after seven months. During that time I was no longer in Civil Service and could not legally contribute to my TSP and, seeing I had no income, I removed my TSP so that I could continue to pay bills and maintain my mortgage. I was 50 years old at the item of the wrongful termination, I have paid the required taxes, but now I am subject to the penalty due to no fault of my own. As part of the agreement with the…
Q. I am a FERS employee, still working and plan to retire on Jan. 12, 2013 when I will be 74 years of age (my initial RMD has been delayed as I am still employed). Note that 2012 has 27 pay periods. Since I will be employed through all of 2012, when I retire, will I be required to take a RMD for 2012? Will my first RMD be for 2013 payable by the end of 2014? A. Your first required distribution will be for calendar year 2013 and the distribution will be due by April 1, 2014.
Q. I am a FERS employee retiring on Jan. 12, 2013. Since 2012 has 27 pay periods, does a contribution to my TSP for the pay period ending Jan. 12, 2013 count as a contribution to the 2012 calendar year or the 2013 calendar year? A. Since at least part of the contribution was based on earnings for 2013 and the pay and payment will be processed in 2013, it should count toward the 2013 limit, but you’ll need to check with your payroll office to be sure.
Q. What is the maximum Roth IRA contribution for 2010 once I have reached my 2010 TSP contribution limit? A. The maximum contribution for 2010 is $5,000 If you are under age 50, and $6,000 if you are age 50 or older. Your contribution may be further limited, however, according to your income and marital status.
Q. I have the lifecycle funds 2030 and 2040, and also the I and S funds. I distribute 25 percent of my account to all four. I also am putting money in them and it, too, is divided into all four of them. I want to know which is the best one to invest in. I am in the Army and I won’t retire for another 10 years or so? A. Without the proper understanding of your circumstances and analysis, it is impossible to give you good advice. The TSP suggests that you select the appropriate L Fund and invest…
Q. I am a clerk with almost 28 years’ service in the Postal Service and am 60 years old. If I decide to retire this year, can I choose a monthly allotment from my TSP and then when I am 62, change the amount of that allotment from when I retired at 60? Or am I locked in to that amount? A. You may change the amount of the payment once each year in January.