Q. I am a CSRS employee, and I plan on retiring in 2016. I currently have 37 years of service. If I elect to contribute money (up to 10 percent of my lifetime earnings) to the Voluntary Contribution Program, I understand one option is to receive an annuity that will pay a yearly amount of approximately 9 percent of my contribution amount. I will be 65 in December of 2016.
Q. I have retired from the United States Postal Service because of disability. I want to do the one-time withdrawal of $60,000 and monthly annuities of $1,000 dollars. I have $318,000 in TSP. I am also a 100 percent disabled service-connected veteran. Will I be charged the 10 percent early withdrawal penalty from the IRS? My monthly annuities will last well into my 60s. Also, what is the special retirement supplement?
Q. I’m retirement eligible for the FERS annuity and FERS annuity supplement. How does exercising the one-time TSP withdrawal affect the annuity supplement, if at all? The basis of this question comes from my understanding that TSP withdrawals are considered Earned Income from a federal/state tax perspective, which would subject the FERS Supplement to the income test.
Q. I am under FERS and considering retiring in 2016 at age 66 with 32 years of service. I recently attended a retirement class through work, and they recommended rolling over my TSP ($400,000) into an Allianz Fixed Index Annuity with a guaranteed 6 percent growth and no downside. It has a .95 percent annual fee, so I’d lose almost $4,000 from Day One. Being a skeptic I feel there has to be even more of a downside, but there seems to be as many people online that favor as oppose. What is your opinion of these fixed annuities?
Q. If I buy an annuity with my TSP funds when I retire, will there be two separate annuities? One for my traditional TSP account, and one for my Roth TSP account? Or, will the Roth balance be merged into to one annuity tax free?
Q. I am a CSRS offset employee. I retired from federal service when I reached age 55 with 30 years service. When I reached age 62, my CSRS offset annuity was reduced by the Social Security retirement applicable, even though I was not drawing Social Security. I did not apply for Social Security until I was 65. Is there a way to recover the Social Security payments I lost from age 62 to 65?
Q. Earlier in my career I was employed under the Civil Service Retirement System. When I left the government, I withdrew my retirement contributions. Several years later, I was rehired by the federal government and brought in under the Federal Employees Retirement System. Now I’m contemplating retirement and have the option to deposit my CSRS withdrawal in order to receive a CSRS annuity in addition to a FERS annuity. Can I directly repay CSRS with a portion of my TSP funds?
Q. I will be retiring in August 2015 and am looking for advice on taking my TSP in annuity payments or monthly installments. I understand that if I go with the annuity, the money no longer is in my control, but I will have a guaranteed income for life. Whereas with the monthly payments I still have control to change the monthly payments on a yearly basis if I so desire but run the risk of outliving my funds. I am leaning toward the monthly payments since I am going to play it rather conservatively with my TSP funds in…
Q. I plan on making the full survivor (50 percent) annuity reduction at retirement. I understand the cost is 10 percent, but I have received different answers as to the ongoing cost. One expert said the cost is calculated at 10 percent at the time of retirement. The other expert said the 10 percent cost also grows with each annual COLA so that the ongoing cost is always 10 percent of the then-current annuity payment after COLA. Which is correct?
Q. I am a FERS retiree and following your advice, I have not touched my TSP. This year I must start Required Minimum Distributions and am thinking of having TSP buy an annuity. The news says “the Fed” may raise rates soon. Will that raise the TSP annuity interest rate?