Q: If I retire at the end of the year and receive my last paycheck for the wages in the next year, could that income be used as the basis for contribution to an IRA? You recently said “no” for this option regarding receipt of lump-sum annual leave, but what about wages earned in 2010, but not received until 2011? A: That is earned income for 2010, deferred into 2011, so is not earned income for 2011.
Q: I am retiring in August at age 57 due to mandatory law enforcement officer’s coverage. I understand that you can choose to take a monthly withdrawal amount as low as $25 per month from your Thrift Savings Plan. I also understand that you can change this monthly withdrawal amount at a designated time each calendar year. After my retirement date, is there a set period of time in which I have to let the TSP know that I want to take a set monthly withdrawal amount? A: No, although you are subject to the IRS minimum withdrawal requirements beginning…
Q: I retired as a Federal Employees Retirement System annuitant Feb. 1, 2006 at age 62 plus a couple of weeks. If I am rehired, can you tell me:If I have the maximum withheld for retirement ,including the over 50 extra amount, deducted and invested in the TSP am I matched by the federal government for 5 percent plus the over 50 amount withheld? Are all government matches vested from Day One for as long as I decide to work? I left my TSP with the federal government, and I have not taken anything from the TSP. I currently work…
Q: If I retire at the end of 2010 and receive my lump sum annual leave payment in 2011; will I be able to put money into an IRA or the Thrift Saving Plan in 2011, even though I did not actually work that year? In other words, would the lump-sum payment in 2011 be considered earned income? A: No. The payment is considered deferred compensation and is not a basis for contribution to an IRA or the TSP.
Q: If I retire at the end of 2010 and receive my lump sum A/L payment in 2011, will I be able to put money into an IRA or a TSP in 2011 even though I did not actually work that year? Would the lump-sum payment in 2011 be considered earned income? A: No. The payment is considered deferred compensation and is not a basis for contribution to an IRA or the TSP.
Q: What happens to IRA basis when a Traditional IRA is rolled into TSP and there was a basis of $18,000 that was put into IRA after taxes? A: In order to transfer an IRA balance into the TSP, you must sign a statement saying that it contains no basis. If you did this, you basis is lost and all withdrawals from the TSP are taxable income.
Q: Is it possible to obtain the various recommended asset allocation models that you mentioned in your column of Feb. 8, 2010? That was an excellent article! A: Our allocation models are proprietary and intended for use as part of an integrated management process. You will find a useful set of TSP allocation models at www.tsp.gov in the L Funds section. Use the starting allocation for each of the L Funds as a guide.
Q: I retired as a FERS annuitant Feb. 1, 2006, when I was 62. If I am rehired, will my current FERS gross annuity before taxes be deducted from the new gross salary before taxes? If I have the maximum for retirement, including the over 50 extra amount, deducted and invested in the TSP, am I matched by the federal government and vested from day one for as long as I decide to work? I left my TSP with the federal government and I have not taking anything from the TSP. I’m working as a federal contractor. A: Your TSP…
Q. Can I take advantage of an traditional IRA under these circumstances. I am retired, with a pension from my former job plus Social Security distributions. I am 70.25 years old (limit 70.5). If I am eligible to start an IRA, then how long must it remain to avoid any withdrawal penalties? And what fees are involved during withdrawals? I understand that I would only be eligible to make a one-time catch up contribution of $6,000. This move is an effort to reduce the taxes due for 2009. A. You are not eligible to contribute to an IRA unless you…
Q. I retired under CSRS in 2006 . I already took out my one-time withdrawal of TSP a couple years ago. I did not go to work after retiring and do not have enough credits to receive Social Security. I also do not have any other IRAs or a Roth IRA. My question is, if I want some of the money, is there anything I can roll it into where I can draw out partials when I want, or is the only other thing I can do is withdraw it all and pay the taxes on it? I don’t want…