Q. I was a federal employee for 10 years, and I want to make a withdrawal of a portion of my funds. How badly will I be penalized for making the withdrawal? I went through a divorce as of Nov. 7, and I am in hardship of funds. A. The answer depends upon your circumstances. If you are talking about the Thrift Savings Plan, you will be subject to the 10 percent early withdrawal penalty on any earnings if you are under age 59½ and don’t qualify for at least one of the exceptions listed on Page 7 of the…
Yearly Archives: 2012
Q. What factors determine whether it is better to pay insurance premiums with pretax dollars or waive that and pay with after-tax money? My thought is that by paying with after-tax money, taxable income is increased, thereby increasing the Social Security entitlement. How do you determine if that is more beneficial than the reduced tax liability now? A. The answer depends on your circumstances and a number of assumptions about the future. The issue is discussed on the Office of Personnel Management website at www.opm.gov/insure/archive/health/pretaxfehb/qanda/23.asp.
Q. I will be eligible to retire Dec. 4 with both minimum retirement age and years of service under FERS. I would like to wait until Jan. 31 to retire to complete a project. I will have 240 hours of annual leave going into 2013. The combination of my lump-sum payment for my annual leave and my January wage earnings would exceed the Social Security earnings limit for 2013. Since the Social Security earning limit is the same as the FERS annuity supplement earnings limit, would this make me ineligible for the special retirement supplement for 2013? If I put all…
Q. In 2011, following 18 years of government service at age 60, my excepted service position ended unexpectedly. My retirement pension is small: $589. My first payment arrived February. I had $10,000 in savings with Fidelity but used that to live on, considering the lack of income for two to three months and basic living requirements: mortgage, insurance, car payments, son leaving for college, etc. I paid taxes on that money, approximately $3,000 or more. That money is now gone. When I retired, I had two Thrift Savings Plan loans that were rolled in as income on my taxes. They…
Q. Can a retiree withdraw money from the Thrift Savings Plan more than once? How many times? A. You are allowed one partial withdrawal and one full withdrawal per lifetime. The full withdrawal can be taken as a series of monthly payments, which you can terminate with a lump sum distribution of the remainder. The withdrawal limits are clearly explained at www.tsp.gov.
Q. I am an unmarried federal employee. I max out my contribution to the Thrift Savings Plan. I plan to work until at least 62, which will give me 21 years of service, or possibly until 65 with 24 years. As a federal employee in FERS and with TSP, what is the best way to provide income for two siblings when I die? I am not opposed to taking a reduction in monthly benefits if that is the best way to do so. My home will be paid off in 2014. I have no other debt and live on about…
Q. I have 33 years in and am under CSRS. I will be 60 years old in May. I served less than two years in the Army in my 20s. I am a WG-8 making almost $25 an hour. I receive correspondence statements from Social Security that if I retire at age 62, I would be eligible for approximately $300 based on a second job 12 years ago and jobs before joining the government in the 1980s. 1. Should I buy back the time I have in the Army? 2. Will the buyback help increase my Social Security? Or will…
Q. Since I won’t be forced to take the required minimum distribution until six years from now, I’m going to take your advice and transfer my money from the G Fund to one of the L funds. I can’t put money into the Thrift Savings Plan anymore, since I’m retired. How do I determine which L Fund to put my money in? A. If I were you, I’d put my money into the L Fund that most closely corresponds to my life expectancy.
Q. I have six years in the Navy. I understand I can pay back/down those years for maximum retirement benefit. I’m 48 years old, have no savings and started this job to get on with planning for the future. I am a GS-7, step 1. I’m planning on contributing at least 5 percent a month of my pay, and I understand the Veterans Affairs Department will match 4 percent. I’d like to retire at 62ish. Here is a copy of my latest leave and earnings statement: ———————————————————————- Pay Period: 12-22 Name: ALLEN, TROY J Gross Pay 1,586.40 Federal Tax Amt Withheld 179.76…
Q. For about 10 years, I have been taking money out of my IRA using the Rule 72(t) with no issues. I am 58 years old and am planning to continue doing this well past when I turn 59½. Our daughter has some very high college expenses. I understand you can take funds out of an IRA to help pay for eligible college expenses (tuition, fees and books) along with room and board if the student is enrolled at least 12 credit hours. Can I take money out of my IRA for educational purposes while still taking money out using Rule…