Q: Does a federal employee who is fired get to retain Federal Employees Retirement System defined benefit plan annuity and government contributions to his Thrift Savings Plan? A: You are always fully vested in your contributions and the government’s matching contributions. The automatic 1 percent agency contribution under FERS vests after you have completed three years of federal civilian service (two years for congressional and certain other noncareer positions).
Browsing: FERS
Q: I have five years of military service that I am considering applying to my federal retirement years. I have waited way to long to do this and am hoping I could use my Thrift Savings Plan monies to pay for the military service, similar to rolling over an individual retirement account. Is this possible? A: A rollover to the Federal Employees Retirement System or the Civil Service Retirement System for service is not allowed.
Three proposals to help reduce the nation’s deficit could reduce the standard of living of retirees covered by the Federal Employees Retirement System: Computing the pension benefit with the average of the highest five years of salary, instead of the highest three. Reducing cost-of-living adjustments. Increasing the employee’s share of contributions to FERS before retirement. Changes like these could affect the life you enjoy for many years after you stop working, so it is important that you understand what they mean to you. I analyzed the case of a hypothetical employee near the top of the pay scale, but the…
Q: Upon FERS retirement can I roll all my TSP into a hybrid annuity with an 8 percent floor? A: Yes.
Q: I have seen conflicting opinions on how the FERS annuity supplement is taxed at the federal level. Is it fully taxed, or is it taxed at 50 percent if your combined income is $32,000 to $44,000 and taxed at 85 percent if your income is $44,000? I start receiving the FERS supplement in June and I have to know how it’s taxed for next year’s tax filing. I retired under FERS. I get the supplement from my MRA of 56 years old until I’m 62 years old. A: It is taxed as if it were a Social Security benefit.…
Q: I am 57 and hope to retire at 62. I have FERS and I put in 25 percent. My husband says I should stop contributing to FERS because this would increase my income for Social Security benefits reporting. Do you advise this? A: First, I assume that you’re talking about contributing to the Thrift Savings Plan, since the FERS question you posed makes no sense at all. Second, your husband is misinformed. Your TSP contributions escape current federal and state income tax, but not Social Security and Medicare contributions. You should continue to contribute as much as you can…
Q. Age: 56 (will be 57 in July 2011) Service comp date: May 1983 Hired: July 1984 Retirement: FERS from the start Break in service: May 2007-February 2009 (about 22 months) Military: USMC 1975-1978 (“bought” the time) VER Authority: Application deadline and irrevocability date 4/25/2011 Effective date 5/31/2011 RIF Effective Date: Sept 9, 2011 Questions ========= If I lost my job on Sept. 9 (with 28 years and about four months service) and took a discontinued service retirement, would I be eligible for: a) Annuity supplement (Social Security offset) b) No “+ 10” reduction of my FERS annuity c) TSP…
Q. I understand that the thrift annuity payment is for life — does that mean until death? As a FERS retiree, will my Social Security annuity be reduced based on how much I have in my retirement fund (frozen CSRS) and/or thrift account? A. Is this a trick question? Yes, a life annuity means that payments continue, on a accrual basis, until the annuitant’s death, unless a survivor benefit option is elected at the time of purchase. In that case, the payments continue until the survivor dies, if later. Your Social Security benefit might be reduced by the Windfall Elimination…
Q: I was born in 1956, serve under FERS and completed 10 years of federal service this year. Can I resign from the service and draw reduced annuity at age 56? Also, am I eligible to draw 40 percent of my TSP contribution with the remaining amount in monthly annuity immediately after resignation? A: Under those circumstances, you will be permitted to take a partial withdrawal followed by monthly withdrawals or annuity payments.
Q: I am a FERS employee who will be retiring in the year in which I will turn 70½, which will be in 2012. I am having difficulty understanding the timing requirements for withdrawing the RMD from my TSP account. I would like my first RMD to be a partial withdrawal from TSP of the lump sum required to be withdrawn; this would be followed by monthly payments starting a year later. Under the scenario above, would I have to take a RMD for the year 2012? Or does the RMD requirement start in 2013, the year after the year…