Q. I am a Federal Employees Retirement System employee and a reservist. I have a uniformed service Thrift Savings Plan account and would like to use some of the money to buy in to my FERS annuity. Does the FERS annuity qualify as a tax-deferred retirement plan, or will I have to pay taxes on the money? A. You’ll have to pay taxes on the money.
Author Mike Miles
Mike Miles
Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.
Q. Now that I have retired and am over the age of 59½, can I have monthly annuities coming to me for life? How? A. Yes. You may use your Thrift Savings Plan money to purchase a life annuity from their provider, MetLife, or any other insurance company you choose (by rolling over the money to an Individual Retirement Account). Visit www.tsp.gov and search for “annuity” or call the ThriftLine at 877-968-3778.
Q. At age 56, I would have 30 years and five months of service and could retire. I am currently 51 and have 25 years and seven months of service. If I left the federal government to go into a different field of work today, can I continue to add to my TSP account? A. You may not contribute directly to your TSP account after you are separated from federal service, but you may contribute to another retirement plan and then transfer that balance into your TSP account later.
Q. I am an FAA air traffic controller with 27 years of service. I was wondering about the age 55 rule for a one-time withdrawal of TSP funds without penalty. If I retire at age 53, can I take out a lump sum when I turn 55, or do I have to work and retire the year I turn 55 to do this? If so, how much money can be taken out without penalty. I also was wondering if I worked till mandatory retirement age, and get forced out, can I still get the one time lump-sum withdrawal without penalty…
Q. I’m a federal law enforcement officer and I’ll be retiring in March after 25½ years of creditable service. I intend to take my Thrift Savings Plan funds when I retire and receive monthly payments based on my life expectancy. I understand this life expectancy option and an annuity are the only ways I can eliminate the IRS 10 percent penalty for early withdrawal since I’ll be 53 when I retire. The TSP manual (on page 16) states I have a one-time opportunity to switch from the life expectancy payments to specific dollar amount payments. I called the TSP representative…
Q. I am planning on retiring from the Federal Employees Retirement System in five years at my minimum retirement age. I consider myself a long-term buy-and-hold investor and have accumulated the following assets from regular investing at opportunistic times over 25 years: TSP ($250K) + max annual contributions in C fund, USAA Strategic Advisor Fund ($100K) and International Fund ($150K), First Command Roth IRA Destiny Fund ($150K), CDs and Money Market ($250K), Gold Fund ($50K). Is there any advice you could give me to shift my assets to best protect my investments for that five-year mark? I feel I am pretty…
Q. Can I do an in-service withdrawal for a down payment on a house? A. Only if you are at least age 59 1/2 and have not already taken one, or you can demonstrate financial hardship.
Q. There was a proposal earlier this year to amend the Federal Employees Retirement System so that retiring employees could contribute their annual leave balance to the Thrift Savings Plan. Has anything happened on it? A. It appears to be dead.
Q. I recently retired at age 57 due to the mandatory law enforcement officer provision. Are there any additional options or advantages in receiving payments from my Thrift Savings Plan at age 59½ compared to now? A. No.
Q: I just turned 49 and I have been a law clerk for a federal judge for 22 years. I have been asked to either submit my resignation effective in several weeks or be terminated. Which option should I choose? There are further complications/options available which are too lengthy to get into. I would like to retain the services of an expert, but I don’t know who to contact. I need help quickly as clock is ticking for possible break in service. A: It sounds like you should start by talking with a lawyer who specializes in federal employment matters.…