Browsing: CSRS

Q. I retired after 43 years under CSRS last year. Because of my sick leave balance (3,800), my CSRS annuity is 83 percent of my working salary. My wife will be retiring at the end of this year with 20 years under FERS. Her net pay will drop from just under $2,600 a month to under $900 with her basic FERS annuity. Besides our TSP (Traditional & Roth), we also have two small traditional IRAs and two good size Roth IRA accounts. I have reached the minimum 40 credits for Social Security; however, because of the WEP, it would be under…

Q. I’m a CSRS employee with an active Voluntary Contributions Program account. My year-end contributions statement of 12/31/2019 shows a total earned interest of $32,076 since I opened the account. If I convert the entire balance of my VCP account to a Roth IRA, will I be responsible for paying taxes on the $32,076 earned interest at the time of conversion? A. The conversion will be reported as taxable ordinary income for the year in which it is constructively received. Interest refunded to you is subject to a mandatory 20 percent tax withholding. However, if the interest on the voluntary contributions account is…

Q. I’m a CSRS employee with an active TSP account, but I have not contributed to my account through payroll deductions in several years. I’m over 60 years old and eligible for catch-up contributions. Can I make a one-time cash contribution this year and, if so, what is the maximum amount? I’d like to move funds from a low-paying IRA savings account into TSP for better returns. A. You may not make a lump-sum cash contribution to your TSP account. Your options are payroll deferral or transfer of qualified funds from an IRA account.

Q. My late husband was a FERS retiree when he passed in 2017. I am also a federal employee, but am under CSRS. I’m planning to retire soon, and am wondering if I have our TSP funds in the correct L Funds. I was told it should correspond to your retirement year, but just read that it should be based on my life expectancy. Which is accurate? Also, is it correct that if I withdraw from my husband’s TSP it would not be subject to the 10 percent penalty? A. There is no “accurate” or correct way to choose an…

Q. My husband is a retired CSRS annuitant and I’m a retired FERS annuitant. I turn 66 this year, which is my full retirement age for Social Security. I haven’t yet begun to receive SS payments or withdrawn any funds from my TSP, but would like your opinion as to leaving the TSP funds until I need to make Minimum Required Distributions. My feeling is that if I predecease him, he will not receive any of my SS, but will inherit my TSP. Our accountant thinks I should start drawing down the TSP and invest those funds, since we don’t…

Q. Can CSRS annuitants take Social Security at 62, or do I have to wait until I reach full retirement age? And will my Social Security benefit be impacted by my federal annuity? A. You may claim your benefit at age 62. Your retirement annuity is not counted as earned income. You might be subject to the Windfall Elimination Provision (https://www.ssa.gov/pubs/EN-05-10045.pdf), however.

Q. I am enrolled in CSRS Offset. I am 68 years old and still working. My plan was to work until I am 70 and then collect my social security. The reason is to maximize the amount of money I get from Social Security. I have been told that I should start collecting my Social Security now while I am still working because the amount of money I receive from Social Security toward my retirement will not change from the age of 62. Is that correct? Will I get more money if I continue to work and not collect Social…

Q. I am a CSRS Offset retiree who is now 62 and eligible for Social Security. I am currently employed as a contractor working in a government agency. The Office of Personnel Management is reducing my annuity by the amount SS reported to them that I am eligible to receive. I don’t dispute the amount and understand that this would happen. However, SS told me that I earn too much money and they will not make up the difference. I was told during the retirement seminar that regardless of the amount I earned, I would get the SS portion because…

Q. I had 12 years service under CSRS, a break of 13 years in the private sector, and have been a CSRS Offset employee since 2003. I understand that the government pension offset could reduce my wife’s Social Security spousal benefits by $2 for ever $3 I would receive from my CSRS annuity. Does this apply just to the annuity earned while a CSRS employee or the annuity I would receive for my total government service? Since she has earned her own Social Security benefit from non-government service, and I have 30 years of substantial earnings under Social Security, including the years…

Q. I am currently a CSRS Offset employee. Between private sector employment and Offset employment, I will have over 30 years of paying into Social Security. By the time I retire, I will have 30 years of combined CSRS (12 years) and CSRS Offset (18 years) employment. Is there some formula that weighs pure CSRS vs Offset employment. Will the WEP still negatively affect my Social Security payments? A. There is no simple formula for this. You’ll need to calculate your benefits under each system to compare them. The WEP will affect your Social Security benefit unless you have 30…

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