Q: The letter from Treasury Secretary Tim Geithner to Harry Reid said that they could suspend re-investment of the G-FUND if the debt ceiling was not increased. How would this impact the G-FUND? A: This has been done before and the government will make up any losses, so there should be no affect on participants’ accounts.
Q: My husband, a federal Defense Department employee, keeps mentioning how the new health reform bill will cause us to have to pay tax on the FEHB premium (our portion and the portion the government pays?). I try to keep up with the new changes, but I really don’t know what he is talking about. Can you clarify? A: There are provisions in the law that will phase in increased costs on certain health care plans. As I understand it, these costs will be passed along in the premiums you pay.
Q: I am 70 and plan to retire when I am 72. I received a letter from TSP saying I am going to start receiving a mandatory payment amount effective now. I do not wish to draw money until retirement. What can I do to delay the payments? A: If you are still working for the government, you received the payment in error. You should report the error to the TSP.
Q: If I retire at age of 56½ and elect to draw equal payments from my TSP, will this be considered earned income? A: It would be considered ordinary income, but not “earned income.”
Q: I loaned money from FERS in 2010. Must I claim this on my income tax return? A: I suspect your question is about the TSP, but it’s not clear. TSP loans are not reported on your tax return.
Q: Is there an option to take a 7-year annuity to empty your TSP? A: Not through the TSP, but you might find one on the retail annuity market.
Q: I retired under both CSRS and FERS (converted to FERS in 1998 after 22 years with CSRS) under 6C law enforcement provisions at age 52. At the time of my retirement, I chose not to take a withdrawal from my TSP account. I am now 57. When can I take a withdrawal from my TSP account without penalty? At the time of my retirement, I was led to believe that I could do so at age 57 1/2. I am now being told I must wait until age 59 1/2. A: You’ll have wait until age 59 1/2 unless…
Q: I have seen numerous questions about the feasibility of rolling 401(k) contributions into an existing TSP account. All of your answers indicate it is a good idea to do so. How do I go about accomplishing said transfers? A: You must contact your 401(k) administrator and make arrangements for rollover distribution. At the same time, you must complete a Form TSP-60 and submit it to the administrator along with your distribution request. Ultimately, the completed Form TSP-60 and the distribution check must reach to the TSP for the transfer/rollover to be completed, and one section of the Form TSP-60…
Q: I have $110,000 in my TSP account. I took out $40,000 for a home loan, and I still owe $25,000 on it. I want to retire in April 2012 at age 56. How will the unpaid loan be handled? How much will come out of the $110,000 I have in the account? A: The unpaid loan balance, including interest, will be declared a taxable distribution from your account.
Q: I just saw a short article in your blog (12/29/10) that contains a reference to Congress getting its hands not only on TSP funds, but private-sector retirement accounts as well. I have seen articles already that discussed lawmakers raiding the TSP, but this is the first reference I have seen to them stealing non-government retirement accounts. However, there is little detail given. Can you provide more information on this issue, i.e., what is the source, status, etc.? A: I’m not a political reporter, and don’t spend much time tracking proposals of this kind. I have read a few stories…