It’s easy to make mistakes when you are planning to retire. Some of the biggest mistakes apply to all employees; a few apply only to CSRS or FERS retirees. All can be costly. Here they are and what you can do to avoid them: Retiring on the spur of the moment. It can be disastrous, for two reasons. First, if you hand in your retirement application at the last minute, it may contain errors that delay processing or even cause it to be rejected. Second, decisions made in haste often come back to bite you. Once committed to a course…
Browsing: CSRS
Q. I am a longtime CSRS employee with a pretty good Thrift Savings Plan balance. I plan to retire in two years and move to another city when I retire. My spouse is planning to retire in eight months, and we are planning to buy a house in the new city. We would like to buy the new house and begin the transition to the new city without selling our existing home until I retire. We are looking at a number of ways to finance the purchase of the new home and afford a mortgage payment on that house, a…
Q. I am 63 years old and will be retiring under CSRS in January. I have about $150,000 in my Thrift Savings Plan account. I have talked with a financial adviser who told me it would be better to buy from outside and cheaper than MetLife annuity. The annuity is from Prudential and has a living benefit rider. They claim it is the cheapest one out there. Can you give me any advice as to which annuity would be best? A. Your “financial adviser” is not an adviser but a salesperson. Don’t be foolish. Now is not the time to buy a fixed annuity…
Q. Are there any advantages and does it make sense to transfer my wife’s 403(b) account into my Thrift Savings Plan account before I retire? I am planning to retire in 2015 at age 55 with 33 years of service (CSRS Offset). Will TSP even allow a spouse’s account to be transferred into the TSP? She will be retiring in 2014. She is not federally employed. A. It makes sense, and there would probably be advantages to doing this. But, alas, it’s not allowed.
Q. I am a CSRS Postal Service employee and plan to retire at the end of 2014, when I will be 55 years old with 38 years of service (including sick leave). After reading other answers, I understand that I can immediately withdraw funds from my Thrift Savings Plan without penalty but would like advice regarding those withdrawals. Considering that TSP withdrawals are subject to regular income taxation, is it beneficial to move the funds to an IRA? Would I avoid any tax? Other than future growth potential and smaller tax rate, is there any benefit to delaying withdrawals until later in…
Q. I have been a CSRS retiree since Jan. 3, 2002. I turned 69 on July 14. What should I do with my Thrift Savings Plan funds at my age? What are my options? A. You may invest your TSP money in any of the available investment funds or use the money to buy a life annuity. The investing option allows you to retain control of the principal but bring with it the risk of loss. The annuity will guarantee income for life, but you’ll give up the principal. You’ll have to determine which is appropriate for your particular situation. There is…
Q. I am a former employee that left employment with the federal government three years ago. I was under the old CSRS Offset system (23 years). I am 59 years old. It is my understanding that I can apply for my retirement at age 62. How do I go about doing that? Do I contact the Office of Personnel Management in Boyers, Pa.? Also, what forms do I need to complete? Is it possible to receive my retirement sooner than age 62? Do you have contact information for the OPM office? I also participated in FERS (Thrift Savings Plan only, no match).…
Q. I worked in the Veterans Affairs Department (CSRS) from 1981 until 1985 and then left federal service and withdrew my retirement. I re-entered federal service in 2007 (CSRS Offset) and have enough money in my Thrift Savings Plan to pay the redeposit for my time from 1981 until 1985. Can I switch over the tax-deferred TSP funds to CSRS without having to pay taxes on the transfer? I know I can make an age-based (age 67) in-service withdrawal into a qualified trust or an eligible retirement plan (as defined in IRC 402 (c) (8)). Is CSRS considered an “eligible…
Q. I was first employed by the Defense Department in October 1982 and placed in CSRS. During a reduction in force, I lost my position in July 1994. In 1996, I withdrew my CSRS contributions and had them rolled into an annuity with American Express (now Ameriprise). In November 1998, I was rehired by DoD and became a FERS employee. When I was rehired by DoD, I took the funds I had earned at my previous (1994-1998) job’s 401(k) and rolled them into the same annuity with Ameriprise. I am now nearing retirement age and plan to buy back the CSRS…
Q. After entering retirement from CSRS, are Thrift Savings Plan funds withdrawn classified as income in addition to the 20 percent accessed at the time of withdrawal from the TSP account. Are there ways to avoid double taxation if they are taxed twice other than rolling over into an IRA or Roth IRA? A. The traditional TSP funds you withdraw are classified as ordinary income on your tax return. They are not subject to double taxation. The 20 percent withheld from your payment(s) is a deposit against your tax liability. If the distribution is not a required minimum distribution and you…