Q: I retired under the Civil Service Retirement System in 2008. I am 57 and my wife is 56. The financial adviser at our credit union recommends that I transfer $100,000 (half of my Thrift Savings Plan balance) from my TSP account to purchase a variable annuity from Prudential. It is called a Spousal Highest Daily Lifetime 6 Plus. The brochure guarantees that a $100,000 investment will double to $200,000 after 10 years. What are the pros and cons of such a transfer? A: I won’t comment on the pros and/or cons of a specific investment product. I continue to…
Browsing: CSRS
Q. I took an early retirement and receive a monthly annuity check from the CSRS. I am currently 54 years old. Can I roll over the taxable amount of the annuity into an IRA to avoid paying the tax on this money until a later year? A. No.
Q. I am a 61-year-old CSRS retiree. I have approximately $120,000 in the TSP. I do not plan on touching the money but leaving it as an inheritance to my children. Recently, however, with housing prices being low, I have thought about cashing it out and buying a second home in Florida ,which of course the children would also inherit. This would give me a second home with no mortgage. Would the tax on the withdrawal make this a foolish move? A. It’s not foolish to use your money to live your life the way you want. The taxes will…
Q. I am a U.S. Postal Service employee covered by CSRS and I have a fellow employee covered by FERS with the same question. Aside from the “catch-up contribution,” is it possible for me to make a one-time contribution to my TSP account. For example, I would like to take the amount of my federal income tax refund and add it into my TSP. I realize that I have already paid income taxes on this money and won’t enjoy the full tax benefits of a “pretax” contribution. I am more interested in building up my TSP balance. FYI, I am…
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…
Q: I retired three years ago at age 56 with 33 years of civilian service in the Civil Service Retirement System. I elected to take my Thrift Savings Plan contributions and roll them over to a qualified program. I began drawing off my investment in the fall of 2008. After talking to our tax adviser this year, I learned that I was penalized for early withdrawal in 2008 and will be again in 2009 because I will not be 59 1/2 until June of this year. After attending a retirement seminar several years ago, I was informed that because I was…
Q: I retired in 2006 at the mandatory age of 57 under the Civil Service Retirement System/Federal Employees Retirement System. I am able to live comfortably on my monthly annuity and have not made any withdrawals from my Thrift Savings Plan account, which remains in the L2030 fund and now totals approximately $250,000. I would like to start withdrawing from the account in the next year or two to add to my quality of life, and not for living expenses. Does it make more sense to take monthly withdrawals rather than buying an annuity since I am not overly concerned…
Q: I retired last year under the Civil Service Retirement System and have read that the rules for Roth IRAs have changed. Can I roll over my Thrift Savings Plan money to a Roth IRA in order to reap the tax-free benefits down the road? I’m 61, and will not be eligible for Social Security. If I can roll over the money, is there a limit as to how much? A: You may convert your TSP funds to a Roth IRA and there is no limit on the amount. However, you should carefully consider whether this would be in your…
Q. I am having a hard time finding a retirement calculator for a federal retiree that can help me determine if my current retirement income (from 30 years under CSRS), plus my investments, will be sufficient for me and my wife. Most calculators assume one is still working, contributing to a 401(k) etc., and they want to sell you their investments products. Could you direct me to a calculator (if one exist) for a retired federal employee that allows one to input his yearly retirement benefit plus having allowances for adding inputs for investments with future returns so that I…
Q: I plan on retiring in 2010 under the Civil Service Retirement System. I have recently opened a voluntary contribution (VC) account but only have put $25 into the VC account. I plan on putting a large amount of money in the VC account once I retire and then roll over only the after-tax contributions in the VC account into a Roth IRA. Will conversion of the VC account into a Roth IRA require that I aggregate my other IRA balances for the purpose of figuring out the taxable amount of this conversion? A: This is really a question for…