Q. I’m a non-career SES (presidential appointee). How many years must I work in the federal government to be eligible for a FERS-FRAE pension and for the entire 5 percent federal contribution to my TSP if I am involuntarily separated? A. Most FERS participants are vested in Agency Automatic (1 percent) Contributions after completing 3 years of service. FERS employees in congressional and certain noncareer positions become vested in Agency Automatic (1 percent) Contributions after 2 years of service. BRS members become vested in Service Automatic (1 percent) Contributions after 2 years of service. If you leave government service before…
Browsing: TSP contribution
Q. Does it make since to invest in more than one TSP L Fund? I will be retiring within the next 5 to 10 years. I have a portfolio value of $420,000. I moved all of my money from 75 percent C stock fund and 25 percent F bond fund to 100 percent G fund trying to protect my assets during the first week of January to plan for a market correction. The market is still doing well and I regret that I moved all money to the G fund. I am going to move all money to the L2030 fund,…
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. Can a deceased spouse’s TSP account be rolled into the survivors existing TSP account? A. From the brochure “Your TSP Account”: If you have an existing TSP account from your own employment with the federal government or the uniformed services, you can move your beneficiary participant account into your existing TSP account. The money that you move will be treated as an employee contribution, but it will not be subject to the Internal Revenue Code (IRC) annual elective deferral limit, which limits the amount of regular tax-deferred and Roth contributions you can make to the TSP in a calendar…
Q. I am scheduled for full/voluntary retirement in February 2023. I currently have my TSP contribution at 100 percent in the L2030 fund. I am getting a little nervous about the volatility of the market, so I am inclined to do something like reallocate to 50 percent L2030 and 50 percent G Fund just to try and mitigate any potential losses. Of course, I would like to increase my current $253,000 balance, but wouldn’t be averse to it not increasing that much by retirement. Conversely, I would hate to see a loss on what I have and not be able to…
Q. My ex-husband has given me the forms to receive money from his TSP account, but what form do I use to roll it over into my IRA account? A. The distribution request form should contain a section where you can direct the proceeds to be paid to your IRA custodian for your benefit. If not, you’ll have to roll the funds over yourself using your IRA custodian’s deposit form.
Q. Which would be more advantageous to reduce my annual federal tax bill: contribute more into TSP or withhold more and have more from my salary go toward federal taxes? Am I correct that contributing more into TSP would go toward retirement savings, reduce my taxable income and lower my federal tax bill? A. It’s impossible to say which will be “best.” One is prepaying your federal taxes, and the other is deferring income tax from the current year into a future year. If you can do both, do both. If you can only do one or other, then pay…
Q. In your May 7, 2018, “Money Matters” blog you provided information concerning the rollover of CSRS Voluntary Contribution Program (VCP) funds into a Roth IRA. Can the contribution portion of such funds (non-interest, after tax portion) be rolled over into the Roth TSP? Form RI 38-124, referenced in your earlier column, suggests not, but the most current version of that form predates the creation of the Roth TSP. Such a rollover would be particularly attractive in light of the ability to designate TSP withdrawals as traditional, Roth or a proportional amount of each, with the new withdrawal flexibilities coming to…
Q. If I retire from civil service (under FERS) and I return to work as a civil servant at a later date, I know that my annuity will be subtracted from my pay. However, will I be able to contribute to TSP again? If so, can I contribute to my original TSP account or would I have to start over with another account? A. You will allowed to contribute to the TSP for during any period of eligible employment under TSP’s rules: https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/index.html. A new TSP account will be opened for you when your are eligibly employed.
Q. I currently make the maximum and catch-up contributions to my TSP account and plan on retiring after 20 years of service as a law enforcement officer. I have a traditional IRA and also make the maximum yearly contribution with the idea of rolling this into my TSP post-retirement. Can I continue contributing to the IRA after I separate from government service, if I continue to earn income, then roll it into my TSP anytime post-retirement? A. Yes, although transfers of post-tax IRA money (from non-deductible contributions, usually) into the TSP is not allowed.