Q: I am under the Federal Employees Retirement System and have money in the Thrift Savings Plan. I returned to government service after 16 years in the private sector (I was under the Civil Service Retirement System from 1975 to 1987 but was placed in FERS in 2004 when I returned). I have retirement accounts outside TSP, but I find TSP to be easy to manage. I have considered transferring my other 401(k) accounts into TSP, but I have also heard concerns that Congress may target TSP as a source of “revenue.” I will be considering retirement in the next…
Browsing: CSRS
Q: I am a Civil Service Retirement System retiree. What happens to my Thrift Savings Plan account after my death? My notes from a retirement seminar 10 years ago say that if my spouse is listed as my beneficiary, she may move my TSP funds into her individual retirement account with no tax or penalty. If my children are listed as beneficiaries they do not have the same option, and in most cases the TSP funds are fully taxable. Is this still correct? A: Your spouse may transfer the balance to an IRA and avoid current taxation or may, under…
Q. I am 67 years old and have 10 years in the government now and want to work another 10 years before I retire. I began working in 1966 for the government for 15 years and resigned, taking the retirement money. I would need to pay $23,000 at this point to refund that money. Is it worth it or should I remain CSRS Offset? I could possibly pay back the money with my savings in one year or I could put the money in a savings account or pay more on my mortgage. A. Let me clear up a few…
Q: Can you transfer (or rollover) money from your existing IRA to a CSRS Voluntary Contributions account? A: No.
Q. I work for the FBI and belong to the CSRS. I’ve managed to put some money aside in a voluntary contributions account. I’ve heard that it is now possible to transfer the entire amount from the VC account into a private Roth IRA account. I’ve set up a brokerage account at USAA for the money, but no one at the Office of Personnel Management seems to be able to advise me if there are tax implications in moving the money, or if the money has to be moved by Dec. 31. A. OPM will not give you tax advice.…
Q: I am a federal employee with a fairly complicated work history. The Office of Personnel Management tells me that to obtain full credit for all of my time served, I owe approximately $60,000 in deposits and redeposits. It’s worth it to me to pay that amount, because it means the difference between 34 years of service and about 20 years of service if I were to retire now. I just turned 59 1/2. What I would like to do is withdraw the money from my Thrift Savings Plan account and send it directly to OPM to pay off my…
Q: I’ve recently received a civil service deposit account statement and have two questions regarding payment. I am planning on rolling over an IRA account for payment. My first question: Can you confirm that there are no tax penalties for rolling over an IRA to the Civil Service Retirement System (Redeposit)? These are the instructions I am planning on giving my IRA company: Make check payable to Office of Personnel Management. Indicate FBO [my name] and include the claim number in the memo. My second question: Do you expect that this will cause any delays in processing my payments? If…
Q: I am about five years from retirement under CSRS. I would like to take out a TSP loan to purchase a used car and to pay off a high-interest credit card balance. It seems to make sense to me since the interest rate is at 3.25 percent (G-fund). By being able to set the terms of the loan, I plan to have it paid off well before retiring. Does this make sense? What is the downside for my TSP account as I head toward retirement. A: You’ve explained your plan. I can’t tell you whether it’s the best option…
Q: I am currently in a Civil Service Retirement System 6C designated law enforcement officer position. Aside from my CSRS retirement benefits, of which I will reach the maximum annuity of 80 percent at the end of this year, I have also contributed to the Thrift Savings Plan. I am not planning on relying on my TSP funds to supplement my retirement. I know there are ways to avoid the 10 percent tax penalty for early withdrawals before turning 55 years old (taking the money in a monthly annuity, etc.). I would like to take all of my TSP out…
Q: I am a 44-year-old Federal Employees Retirement System employee. I have a financial planner who wants to explore withdrawing part of my Thrift Savings Plan and rolling it into a Roth individual retirement account to take advantage of the two-year payout of taxes. I told the financial planner we only have two options for TSP withdrawals: One is for hardship, and the other applies if you are more than 59 1/2 years old. Because I do not meet either requirement, it appears to me that I cannot make an in-service withdrawal. Are there other options for in-service withdrawals? The…