Q. I see that 2012 will have 27 pay periods. In current and previous years I divide the maximum allowable TSP and catch-up contributions by 26 to calculate my payroll deductions. Is the process the same in 2012, but divide by 27? Or should I stick with 26 pay periods because 2012 will run to Jan. 12, 2013 and so pay period 27 will be in both tax years 2012 and 2013? A. Pay and reporting schedules are agency-specific, so you’ll have to ask your payroll or HR officer this question.
Yearly Archives: 2011
Q. I am a CSRS/FERS offset employee with 31 years and I have been offered the VERA/VISP. I would like to know how my retirement would be calculated for a VERA/VISP and how will it affect my retirement. How do I find out what the numbers will look like for a retirement check before I decide to take the buyout? I also have been depositing the max in my TSP account and I see that the government is not required to match it. Is it the agency you work for that decides if the government matches the TSP or not?…
Q. I am 58 years old, in FERS, and plan to retire in two months. I am going to roll over my TSP into an IRA and take a large disbursement to pay some bills and get set up. I understand, at retirement, that this one-time disbursement will not be subject to the 10 percent early withdrawal penalty. However, I have an outstanding loan balance with my TSP. I wanted to use part of my disbursement to pay this loan off, but have been told by TSP it will be considered another disbursement — but it will not be subject…
Q. I am taking VIRA/VSIP and am age 53. I have 26 years time in service and my minimum retirement age with 30 years of service is in 2015 at age 57. When can I access my TSP funds without being subject to the 10 percent withdrawal penalty? 1. Most literature indicates that if you retire early in the year 55 or later, you can withdraw immediately without penalty. 2. The TSP board (I called twice already) says only 59½. 3. The FERS handbook states you can withdraw without penalty at MRA with 30 years (my case 57). I would…
Q. I retired December 2010, at age 53. I would like to withdraw my 401(k) but understand the penalties involved since I separated before age 55. Under “exceptions” in the tax code there is a “qualified public safety employee” exception to the rule. Do 6C government employees fall under this? A. To the best of my knowledge, the qualified public safety employee exception only applies to defined benefit pension plans, not defined contribution plans like the TSP or a 401(k). A bill to change this – HR 6157 – was introduced in 2008, but never made it out of committee.
Q. With talk of the Postal Service downsizing I was wondering: I am 48 years old, have 25 years at the Postal Service and four years active military. I realize at 25 years I can retire, regardless of age. But can I access any of my TSP without penalty or must I wait until my MRA of 56? How about the Special Retirement Supplement? Mike Miles: A. If you retire before the calendar year in which you’ll reach age 55, your TSP withdrawals will be subject to the early withdrawal penalty until you reach age 59 1/2, unless you can…
Q. In running various scenarios using the TSP website calculators for TSP payout options (life expectancy and/or specific dollar amount) I notice that all the monthly amounts paid will drop off sharply sometime soon after a person reaches 100-plus years of age. What if a centenarian is still in relatively good health by that time and still needs the income from the TSP? Also what about the effects of inflation after so many years? Does a person need to plan to reinvest some TSP payout into another type of investment in order to provide for very late old age? A. …
Q. I would like to know the best way of accessing all the money in my TSP account while avoiding IRS early distribution penalties. Here is my situation: * I am CSRS Offset and retiring on Jan. 31 with 30 years of service. * I will turn 55 on Sept. 1, 2012. * I have $92,000 with the TSP. I need to withdraw virtually all of my TSP account to pay off all my high-interest loans. How soon can I withdraw the TSP account funds without the IRS early distribution penalty? A. Since you are retiring during the calendar year…
Q. Why is the government taxing my retirement money when it’s already been taxed? A. Is it? Please provide a specific example. Your TSP distributions were not taxed before you contributed the money. Your CSRS or FERS annuity payments are partially tax-exempt, allowing the return of your contributions to be excluded from re-taxation during your lifetime.
Q. If I receive a Voluntary Early Retirement Authority at age 54, when and what options will I have to withdraw money from my TSP account? It is my understanding I have to be 55 before I can withdraw money without the penalty. I assume I would be able to start the date I turn 55 and if that is true, are the same withdrawal options available to me as if I retired after I turned 55? Also, if I take monthly payments, when can I change those? A. Once you separate from service, you may take a lump-sum withdrawal…