Q. I am a former employee that left employment with the federal government three years ago. I was under the old CSRS Offset system (23 years). I am 59 years old. It is my understanding that I can apply for my retirement at age 62. How do I go about doing that? Do I contact the Office of Personnel Management in Boyers, Pa.? Also, what forms do I need to complete? Is it possible to receive my retirement sooner than age 62? Do you have contact information for the OPM office? I also participated in FERS (Thrift Savings Plan only, no match).…
Yearly Archives: 2013
Q. I have 15 years of federal service and would like to do an early retirement with MRA+10. Would I have to take a reduction in my Thrift Savings Plan, or just my federal retirement only? A. Mike: I’m not sure what you mean by a reduction in your TSP, but there is no reduction to your TSP account balance due to retirement. Reg: If you retired under the MRA+10 provision, the only reduction would be in your annuity.
Q. I recently retired but will not be withdrawing any of my Thrift Savings Plan for a few years. I’ve considered rolling over my balance to USAA because of the possibility of a government default. Is that advisable? In the case of a government default, will my TSP balance be safe? A. I wouldn’t do it if I were in your shoes. I’m not sure how the debt ceiling uniquely threatens your TSP account.
Q. My husband happens to be one of the 800,000 who got furloughed. I have an IRA of $3,400. Would I be able to cash that in without a penalty to get us by for, say, a month or so, depending on how long the furlough lasts? A. There is no exception to the early withdrawal penalty for a government furlough. You will be subject to the penalty unless you are age 59½ or meet one of the other exceptions to the penalty described in Internal Revenue Service Publication 590.
Q. What would happen to the Thrift Savings Plan investments, specifically the G, F and I funds, if the government can’t raise the nation’s debt ceiling before the Oct. 17 deadline for default? Are we looking at another financial meltdown like we had in 2008? A. The G Fund will hold its value. The other funds are vulnerable to loss in value. So far, however, the stock markets aren’t predicting disaster. They’re in good shape as of today – still near their multiyear highs. You should accept that predicting future market behavior is a risky thing to do. If your financial…
Q. If the government doesn’t raise the debt ceiling, what does that mean in practical terms for the TSP G Fund, and for government bonds and securities, in general? The G Fund is backed by the good faith and credit of the government, but if the government doesn’t have the ability to pay its debts, even for a short time, does that mean that the G Fund could have a zero return for that period? A. Interest rates could rise and bond values could fall. Higher interest rates are generally bad for the F Fund and good for the G…
Q. I am 64 years old with 12 years of federal service. I plan to retire when I am 66. I have done well in the L funds except in 2008. I have 80 percent in the 2020 fund and 20 percent in the 2030 fund. Should I put all of this money in the G Fund until the current financial crisis is over? A. How you manage your account should depend upon your goals and circumstances, as well as a plan for future decision making. In general, market timing adds more risk to investment management than it avoids. It’s not part of my…
Q. I have two Thrift Savings Plan accounts — one with the military and one civilian. Because of my financial situation, I would like to take some money out for debt consolidation. I was weighing the option of borrowing from my civilian vs. closing my military account (which I am no longer contributing to) and using those funds. If I close my military account, can I roll a portion of it over to my civilian account, and use the rest? What/how much of a tax penalty am I looking at if I do either? Would it make sense to close my military…
Q. I worked in the Veterans Affairs Department (CSRS) from 1981 until 1985 and then left federal service and withdrew my retirement. I re-entered federal service in 2007 (CSRS Offset) and have enough money in my Thrift Savings Plan to pay the redeposit for my time from 1981 until 1985. Can I switch over the tax-deferred TSP funds to CSRS without having to pay taxes on the transfer? I know I can make an age-based (age 67) in-service withdrawal into a qualified trust or an eligible retirement plan (as defined in IRC 402 (c) (8)). Is CSRS considered an “eligible…
Q. I’m retired from the military after 28 years. I have been working for the Defense Department since March 2008 and have 17 percent going into the Thrift Savings Plan. As of right now, I have 71 percent in the C Fund and 29 percent going into the S Fund. Should I leave the contributions where they are during the government shutdown? I have friends advising me to move 70 percent to the F Fund and 30 percent to the G Fund. Not sure if that is the right move. A. Neither of these asset allocations is remotely risk efficient.…