Q. I was speaking with a Thrift Savings Plan representative recently and they said that not all of my years working with the federal government were vested. I started my career with the Federal Deposit Insurance Corporation (FDIC), then went to DoD, and now I’m with the Department of Veterans Affairs. I have 25 years served all together with just one break in service of two years. Do I need to speak with each agency to see if I’m vested? A. From the TSP Bulletin 15-1: Thrift Savings Plan Vesting Requirements and the TSP Service Computation Date: The TSP Vesting…
Q. I have often read you stating to put your TSP in the L Fund most closely matching your expected life expectancy if you are not able to analyze the market (which I am not able nor willing to hire someone to do that). I am a former FERS employee, retired at age 56. I am now 59 and I only have $120,000 in my TSP and hope to wait until age 70 (or just leave it alone for my sons), if possible. I wondered if the L Fund most matching your life expectancy is suggested for a current employee…
Q. What happens to life insurance you have been paying throughout the service after you retire? A. I’m not going to try to cover all of the possibilities here. An explanation is provided on pages 15 through 20 of the booklet at https://www.opm.gov/healthcare-insurance/life-insurance/reference-materials/federalbooklet.pdf.
Q. I work for the U.S. Postal Service and would like to resign at 58 with 24 years of service. I will postpone my annuity date till I am 60 years of age, but I need to tap into my Thrift Savings Plan to tide me over for the two years I am waiting for my pension. Will I face the 10 percent penalty since I am not 59 1/2? I am retiring, but delaying the pension to avoid the 5 percent per year under 62. Would I need to use the lifetime average or could I set the amount I want to…
Q. I plan on retiring September 2020 with over 41 years of service. What states don’t tax a U.S. Postal Service pension, if any, or what states tax the least? A. Take a look at Alabama, Alaska, Florida, Hawaii, Illinois, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wyoming.
Q. I will be 72 in November and will continue working for the government for another two years. Can I change my TSP contributions to a Roth IRA now and be able to withdrawn the money from the account without penalty when I retire in June 2021? A. A penalty will be assessed against any Roth TSP earnings that are withdrawn before age 59 ½ or less than 5 years after Jan. 1 of the year in which you made your first Roth TSP contribution, whichever is later.
Q. I’m a retired worker over 70 1/2. Are required minimum withdrawals required for the Roth TSP portion after the new rules go into effect or only for the Traditional amount of the TSP? If only for the traditional part, then the payment can come from either the Traditional or Roth part or both?
Q. I’m planning to retire on a December 31, which in the year I’m planning to retire will be in the middle of a pay period. I have a set amount taken out of TSP every paycheck. If I leave in the middle of a pay period, will I still have a withhold and will it be matched?
Q. Some employees are in disagreement over the minimum required distributions of TSP accounts. We are discussing retirements beginning five years or more from now, so the new TSP rules would apply. Would moving the Roth TSP funds to an outside Roth IRA account avoid the need for minimum required distributions on this Roth portion of a TSP account or would those particular funds still be a part of the funds subjected to MRD?
Q. I’m retiring and I’m having a withdrawal from the TSP. I understand the consequences of taxes and I am planning to move the rest of the money to an IRA, but should I leave any money in the TSP?