Q. I am a 59-year-old federal employee with 34 years of service under CSRS. I am retiring soon and heard about the Voluntary Contributions Program. I don’t have a wad of cash except accessing some of the equity in my home (I have about $200,000 of equity, and I could pull up to $100,000 out). Is it worth refinancing (at a low 3.5 percent) to access the money and use the VCP to convert it into a Roth IRA? A. Probably not, unless you need the cash for expenses.
Browsing: CSRS
Q. All of my Thrift Savings Plan deposits are in the G Fund. I am a CSRS retiree. Since most of these funds are interest earned on federal bonds, are my withdrawals taxable by the state? I know they are federally taxable. I believe my contributions (which started in 1987) were both federal and state tax deferred, but I can’t recall with certainty. I called the Montana State Revenue once on this and they said they aren’t state-taxable, but I have my doubts. A. You should consult a qualified tax preparer for the answer. In general, your withdrawals are taxable, unless your…
Q. I am retired and made a voluntary contribution to CSRS and then rolled it over to a Roth IRA in 2012, prior to my retirement. Now I’m interested in what I need to do, if anything, on my 2012 tax returns regarding this rollover. Will the Office of Personnel Management be sending me a Form 1099-R? Any advice on how to report on my 1040 will be helpful. Pub 590 (tax year 2011) says that “you do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions to the plan.” A. We…
Q. I understand that some states do not tax CSRS or FERS pensions. I also understand that there are some states that do not tax or only partially tax Thrift Savings Plan withdrawals. Would you please list the states that have income tax and that fully or partially tax TSP withdrawals? A. Nope. You’ll have to do that research yourself. I suggest you start by directing your Web browser to “google.com.” Or, I’m pretty sure that Kiplinger.com can provide this info.
Q. My wife was RIFed in 2008 at age 48 with 28 years of service with a $7,000 Thrift Savings Plan balance and was placed on CSRS discontinued service retirement. She was re-employed by the government five months later with a different agency. Because she is a re-employed annuitant, she can no longer contribute to TSP and is covered by Social Security’s Old Age, Survivors and Disability Insurance only. Emails and telephone calls to TSP have proved less than helpful; TSP has advised her that the only action possible is to leave the fund as is. We both wanted to verify…
Q. I retired from the Transportation Security Administration on Aug. 1 under CSRS Offset. I was employed in the 1970s and 1980s and owe approximately $42,000 if I wish to buy back this time and get credit for it in my annuity. I was considering using my Thrift Savings Plan dollars for part of this buyback instead of taking the TSP as an annuity or lump sum. Is it possible to transfer the TSP balance to CSRS in some way so that I would not pay a withdrawal fee or taxes on it? (I am 66). A. No.
Q. I agreed to a $20,000 retirement incentive bonus offer from the Postal Service and retired in May 2011. The first half of the bonus was paid in November 2011 and the second half in November 2012. Today, I received a W-2 from the Postal Service describing this second half of the bonus as wages received in 2012 even though I officially retired in May 2011 and haven’t worked for them since then. (I had been assuming the bonus payment in 2012 was going to be incorporated into my CSRS retirement accounting.) I haven’t earned any other income since I retired,…
Q. I plan on retiring in August at age 60 with over 37 years of service. I am under CSRS. I also contribute to the Thrift Savings Plan and started a Roth in December. Given that the feds are planning to “borrow” from the G Fund, would I be wiser to convert all TSP monies to Roth or withdraw and put into another IRA? A. I don’t think so. The law requires that the G Fund be made whole.
Q. I would like to know a good allocation of my Thrift Savings Plan funds. I retired a year ago, and I am under CSRS. I have about $140,000 in the F Fund. I am 60 years old and do not need the money as of yet. I am looking for a fairly safe allocation within the funds for a 6 percent to 10 percent return. A. A good allocation will produce the maximum possible expected return in exchange for the level of risk it produces, and there are many such allocations. You should note, however, that there many more…
Q. I am a 64-year-old CSRS employee. If I transfer some of my Thrift Savings Plan into an IRA with a private company, does it need to go into a traditional IRA, or can it be transferred into a Roth IRA? A. It can go into either, but check with a CPA before proceeding.