Q. When calculating the required minimum distribution for the 2011 tax form, do you use the Individual Retirement Account balance ending Dec. 31, 2010? A. Yes, although under certain circumstances, adjustments may be required. See IRS Publication 590 for details.
Monthly Archives: February, 2012
Q. I am a Civil Service Retirement System employee, hired in 1979 and contemplating retiring April 3, 2013. 1. I will be subject to the windfall elimination provision because I earned 40 credits of Social Security eligibility prior to my federal employment. But my spouse is also eligible for Social Security and started receiving Social Security benefits of more than $1,900 a month (gross) starting last month (January 2012), whereas the Social Security Administration has estimated that my Social Security benefits would be approximately $385 a month (gross). Would I be eligible for spousal Social Security benefits? 2. A financial planner…
Q. I’m an Air National Guard military technician, and I’ll be retiring this July at my minimum retirement age of 56. I plan on making monthly withdrawals from my Federal Employees Retirement System Thrift Savings Plan at that time. I know I won’t have to pay a penalty on these FERS TSP withdrawals, but do I have to wait until the age of 59½ to start withdrawals without paying the penalty? Can I roll my military TSP into my FERS TSP when I retire? A. You may combine your military and civilian TSP accounts. Visit www.tsp.gov and search for form…
Q. I’m 72, and I must make a decision on Thrift Savings Plan withdrawals. I do not need any additional monthly income. Is there any advice/guidance on what options are best to take? Is it better to take a TSP annuity or to purchase one from another insurance company? A. I don’t know why you’d use your TSP assets to buy an annuity if you don’t need income, particularly with interest rates so low. I suggest you manage your TSP and have them send you the Required Minimum Distribution each year. You can then reinvest the money, after taxes, in a taxable account.
Q. Is it possible to look at the historical rates of return of the various Thrift Savings Plan funds and predict an allocation for a nominal return of 6 percent, or am I better off looking into the Life Cycle funds and trying to predict the return from there? (Past performance of the L Fund income just falls short of 6 percent). My goal is to make an average of 6 percent per year on my current TSP balance to reach my retirement goal. A. Yes, it’s possible. But you shouldn’t rely on a prediction based on so little data.…
Q. I am a federal employee and would like to have Mike Miles’ contact information at Variplan LLC. I am interested in hiring him for financial planning, retirement benefits counseling, etc. If you have his phone number and email address, I would appreciate it. A. Email is best: mmiles@variplan.com.
Q. I am 59 years old, and will be 60 in July. I will have 42 years of government service in October, at which time I plan to retire. I am weighing my options. If my agency offers a buyout, should I leave in the spring or stay for my 80 percent? I am not sure how much I’ll be losing, but I am so close now. I’m just not sure what to do. I certainly could use the $25,000 (minus approximately $8,000 in taxes). Please give me your ideas. A. You are asking for specific analysis and advice, which I…