Q. I am a federal firefighter and a FERS employee. In 2022, I will have 21 years of creditable service and four years of bought-back active military time and be 48 years old. 1. Will I be able to retire under the provisions of 25 years of service at any age? 2. Will I receive the special category retirement percentages (1.7 x high-3 x creditable service, etc.)? 3. Will I receive the special retirement supplement until 62? 4. Will I not be able to withdraw any Thrift Savings Plan annuities until 62? A. Reg: 1. No, you won’t be able…
Yearly Archives: 2013
Q. I received a disability retirement four years ago. I had 25 years of service and will be 57 years old in February. I have rolled over my Thrift Savings Plan. At what age can I start receiving it? A. You can withdraw money from an IRA at any time.
Q. I am a CSRS employee planning on retiring at age 55. I also have been paying into the Thrift Savings Program. Will I be able to withdraw from TSP when I retire at age 55 without penalty? A. Yes.
Q. I recently retired (CSRS, law enforcement) and am trying to decide whether to leave my money in the Thrift Savings Plan or roll it over into a privately managed IRA portfolio including diverse programs that will meet my goals of growth, income, annuities and a certain amount of liquidity. If my TSP portfolio is diversified to meet the above goals, if you compare apples to apples, is the TSP considered better or worse (value performance, management, fees) than rolling into a privately managed portfolio (with a broker I trust). A. TSP is the best retirement investment vehicle there is.…
Q. If I have Medicare and Blue Cross/Blue Shield, is there any need to obtain long-term care insurance? A. There might be a need since Medicare and BC/BS medical insurance provide very limited benefits for long-term custodial care.
Q. I retired as a FERS employee in July 2011 under a Voluntary Early Retirement Authority. I was 56½ with 28 years of service. During my years of employment, a Roth TSP option was not available. Therefore, all of my Thrift Savings Plan money is in a non-Roth/traditional account. I would like to use partial withdrawals to move this money into a Roth IRA. I know I must pay taxes but wondered if I must wait until I am 59½ to avoid penalty? I see references that a 10 percent penalty may not apply in the case of VERA and…
Q. I took out my Thrift Savings Plan lump sum, mainly to pay off my house. My lump sum was approximately $340,000, with about $68,000 in taxes taken out. Is the lump sum considered ordinary income? If so, this puts me in a high tax bracket for this year and has me owing about $40,000 to the government in taxes. Is this right? If so, this isn’t something they warn you about when you take it out. A. Yes, a TSP distribution is taxed as ordinary income and you’ve provided an excellent example of why you should not make such…
Q. I have tried to understand the issue of the 70½ age thing and what should be done with my Thrift Savings Plan. Do I need to roll it over, or can I keep it where it is and have the minimum withdrawal done each year? Also, can I withdraw $10,000 at that time? I did a one-time withdrawal in 2008. Does this mean I cannot make another withdrawal when I am 70½? A. You may leave your money in the TSP for life, but you must take Required Minimum Distributions each year if you are no longer working and have…
Q. I am a GS-14 criminal investigator with 16 years covered service, and I am expecting to contribute to the Thrift Savings Plan for another 10 years or so before retiring. I have been contributing the TSP maximum for the past 10 years. What is your guidance with the Roth option? Should I scale back my TSP contribution to the 6 percent minimum to capture the matching contributions and invest the rest with the Roth option? A. Without a good reason to do otherwise, I prefer the tax-deferred contributions.
Q. I have an IRA that I would like to transfer to my Thrift Savings Plan account. The IRA contains both deductible and nondeductible funds. I understand that the nondeductible funds cannot be transferred to the TSP, but the deductible portion can. Is it as simple as transferring all but the nondeductible funds and their associated earnings? A. To the best of my knowledge, once you comingle the funds, they can’t be separated, but you might want to check with your tax preparer to be sure.