Q. I have been assisting a federal employee (FERS) who is looking to retire in the very near future. She is married and her husband has dementia. He is currently in hospice. She does not want to leave a survivor benefit to him and she knows she needs to get him to sign the form giving spousal consent and have it notarized. He is unable to sign due to his condition. The same would be true for a TSP withdrawal application. What are her options? How is she able to complete her retirement application and make the necessary choices regarding her TSP without her husband…
Browsing: TSP withdrawal
Q. I withdrew my federal TSP in March 2019 and they took the appropriate amount of federal tax. I just received a 1099-R for that withdrawal to file with my taxes for 2019. I know that it is not considered earned income, so will I get taxed again? If not, why am I required to file it with my 2019 return? A. When you took your withdrawal, the amounts that were withheld were deposits against your tax liability for 2019. When you file your return, you will report the gross amount of your withdrawal as Ordinary Income and it will…
Q. I am currently employed with Bureau of Prisons with the law enforcement offer FERS retirement potential. I am 40 years old, with nearly 4 years in with the Bureau. I am in the process of buying back 3.4 years military service. I also have a 100 percent permanent VA disability rating. Being that I began federal service late, I am not sure how my body will hold up to being a corrections officer for 20 years. But looking ahead, if I cannot continue my job due to aggravated or increased disabilities and I end up medically retiring early, meaning before…
Q. I am 57 years old, currently working at DHS/CBP and have 12 years and 5 months of service. I have degenerative disc disease, which in turn limits my abilities to do my daily activates at work as well as at home. I have had several treatments over the past 15 years and there is not much that can be done to relieve my pain without taking anti-inflammatory medication along with narcotics for pain relief. The pain meds limit my thinking abilities and make me drowsy and I can’t drive my one-hour commute to work every day. I can’t sit or…
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 have both TSP Traditional and Roth monies in my account. When I begin to withdraw from my account, is the withdrawal disbursed proportionally? A. You may now specify the source – Traditional or Roth – of your distribution.
Q. I am 68 years old retired and a FERS retiree. Currently, my wife and I do not need my TSP retirement to withdrawal. We know we need to start withdrawing at age 71½ and we will probably set up a monthly payments from my TSP account (not annuity). However, if I die before 71½, can my wife still receive the monthly payments? A. Your TSP required minimum distribution will begin when you reach age 72. As long as your wife is the beneficiary of your account, she will be able to take money from it after your death.
Q. What agency would I need to seek remedy on requesting a TSP withdrawal with paying no federal tax and the IRS withdrawal penalty? I am a 58-year-old FERS employee with four years to go before I can retire. I can get a TSP withdrawal at age 59½ years old without paying the IRS penalty, but I need the money now due to immediate financial needs, including not paying the federal/state taxes and penalty. A. Since you are currently eligible to contribute to the TSP and are under age 59½, there are only two ways to remove money from your…
Q. What is considered a good percentage to withdraw from your TSP beginning at age 56? I’m married, so we have dual TSPs and dual pensions. Is there a formula that is generally accepted? I was considering 3 to 4 percent a year and have my funds in the L2020 and L2030 at this time. A. There is no generally safe rate higher than zero since the answer will depend upon how you manage the money along the way.
Q. To calculate the monthly installment and figure how many months before you deplete your account, what is a reasonable rate of return to insert into the calculator? Or is there a better way to figure this out? A. You’ve pointed out the problem that makes this calculator useless at best and dangerous at worst. Competently run Monte Carlo Simulation is needed to figure this out. Without that and some corresponding account management, you should consider using your funds to buy a fixed immediate annuity to provide lifetime income.