Browsing: TSP

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…

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. 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.

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…

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,…

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