Q. A client of mine retired from federal government after 16 years and took her employee contributions out of the retirement plan upon retirement. She is working for the federal government again and wants to buy back in to the pension plan for the employer portion of the 16 years she previously worked. Does she have to use after-tax dollars, or can she do a rollover from an IRA or other retirement plan? A. She must use after-tax dollars for the buyback.
Monthly Archives: June, 2013
Q. I am under FERS. I want to purchase a Thrift Savings Plan annuity. After I retire, is it possible for me to add funds to my TSP savings to increase my monthly TSP annuity? A. The only way to add funds to your TSP account after you retire is to transfer money in from a qualified IRA or employer-sponsored retirement plan. This will have no effect on a TSP annuity that has already been purchased, however.
Q. I have selected a retirement date of June 28, 2014. I will be 59½ years old with 33½ years of government service. I have been FERS my whole career. I have $365,000 in my Thrift Savings Plan. I will retire with a high-3 at GS-13, Step 4 and a 16.51 percent locality pay. I am debating paying off my mortgage on my retirement home by taking a partial withdrawal from my TSP. The reasons for this are: 1) Escrow of property taxes 2) Flood insurance imposed by Dodd-Frank 3) Desire to be mortgage-free in retirement. I owe $185,000 on…
Q. I expect to retire at 65 and live at least to 90 (longevity runs in my family). The L Fund documentation recommends choosing a fund with a target date that closely matches your retirement date, while your advice column consistently recommends a date that corresponds to your life expectancy. The earlier date would obviously lessen portfolio investment risk. Assuming I will have enough money at retirement to survive for 25 years, is there another reason that you prefer the life expectancy date? A. I have always recommended that you use the lowest risk investment strategy that will safely fund your goals. Which…
Q. I want to take the remaining required minimum distribution for 2013 in one lump sum (I have received monthly payments through May). Can this be done online at the TSP.gov website? If so, where exactly? If not, how do I do this? A. You can do it via the website by clicking the My Account link or using form TSP-77, which is available at https://www.tsp.gov/PDF/formspubs/tsp-77.pdf.
Q. I’m planning to take out a residential loan to make a down payment on a house. Am I able to take out an amount but not use all of it toward the actual down payment? Would I be able to use a portion toward home improvement? A. Purchase or new construction only. Residential loan proceeds may not be used for renovation or repairs, which I assume includes improvements. You may want to contact the Thrift Line with your particulars to be sure, but I don’t think it will be allowed.
Q. I am a Postal Service employee who has civil service retirement and has been on workers’ compensation for several years now and probably will not go back to work. Can I get my Thrift Savings Plan money now as payments or do I have to retire first? Also, how can I add money into my TSP if I can’t take it out? A. As I understand it, unless you have separated from covered service, you will be subject to the TSP’s restrictions for in-service withdrawals. You should call the Thrift Line to be sure, however.
Q. I am CSRS and plan to retire Jan. 3, 2014. Since my annual leave payout will be part of my final paycheck and thus will be taxed as 2014 earned income, can I contribute part of it to Thrift Savings Plan for 2014 even though I will be retired? A. No.
Q. In an effort to increase my Thrift Savings Plan account before I retire Sept. 30, I assume I can open a traditional IRA and roll it over to my TSP account with no restrictions on amount. Is that correct? A. Correct, as long as the IRA contains only pretax money.
Q. I retired in 2011 because of a base closing. Before leaving, I put everything in the G Fund. Can I take money out of the G Fund and put it into another fund now that I’ve retired? A. Yes.