Q. My husband and I signed up for the FLTCIP package a little over 10 years ago and are now in our early 70s. I’ve set money aside from my inheritance to pay for the premiums, as they would be unaffordable otherwise. The money I set aside should have been enough to cover 30 years of premiums, but if we can continue to expect huge premium increases every seven years, I will run out of money before I really need the coverage. Please steer us to resources that can help us make the right decision; i.e., whether to keep one…
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. I am retired military age 64, and my wife is 62. I plan to retire this year after seven years of federal service. On top of my military retired pay, Social Security and federal retirement I would like to take $20,000 per year from my TSP, 401K and IRA investments. I have approximately $225,000 in the TSP and $750,000 spread across several Vanguard and USAA funds. How would you recommend that I consolidate these funds where I can have the $20,000 available each year with the remainder continuing to grow?
Q. My family and I are covered by the federal Blue Cross Blue Shield (BCBS) program through my federal position. My wife, who is older, will be 65, (I am 57) in a couple of months and has just filed for Medicare Part A coverage. I asked the local BCBS representative for our agency when and whether she would need to file for Medicare Part B part. The representative said when I retire, my wife would need to file for Part B coverage. Would having and paying for Part B with the BCBS policy be redundant coverage?
Q. Let’s suppose I have a TSP account balance of $300,000, and when I die I leave the $300,000 to my spouse in a beneficiary participant account (BPA). She then sets it up so the two children we have are beneficiaries in equal shares. When she passes, my understanding according to TSP rules is the children cannot transfer the money into an inherited IRA to minimize their tax consequences. The money will have to be paid out in equal shares to the children and be fully taxable. I was told that in this case the spouse should transfer the money out of…
Q. I am leaving NAF service and going GS. I currently have NAF retirement and a 401(k). I have to decide on whether to keep the NAF retirement plan. I was advised once before this is a better plan than FERS and TSP, but recently was told otherwise. Do you have any information that breaks down the pros and cons of each benefit system?
Q. I retired after 26 years of active military service at the age of 52. I’m now 61 years old. I would like to withdraw all the funds in my TSP account for use in various home improvement projects. Am I subject to a 20 percent income tax and 10 percent early withdrawal penalties?
Q. Do you have a follow-up on a way to leverage a TSP loan? I thought it might be a good idea to take out a loan against the TSP and put it into a real estate investment trust such as MTGE or CIM that pays pretty good dividends and have those dividends pay back the loan payments. Do you have any articles about leveraging a loan against the TSP?
Q. I have a TSP loan which I anticipate will not be repaid by the time I retire sometime past age 70. Will the unpaid amount of the loan that is declared a distribution after I retire be counted for the purposes of the Required Minimum Distribution for that year?
Q. What is the difference between earned income and ordinary income?
Q. I will turn 62 next year and at that time I will also have 20 years of federal service as a FERS employee, 14 with USPS (hired 1985) and six with Department of Commerce, Bureau of the Census (2011 – current). My high-3 years were 1997-1999 when I was a manager, and I have no expectation of bettering that even in non-adjusted amounts with Census employment. Since the high-3 was so long ago, the inflation-adjusted amount would be over 1.5 times the 1997-1999 amount (using the same adjustment Social Security uses). Is the high-3 adjusted for inflation?