Q. I have elected to switch to CSRS under FERCCA. I understand I will be given the option of the refund of my portion of Thrift Savings Plan contributions. When I left the Postal Service after my first seven years in the 1980s, I withdrew my CSRS money. If I take the refund of my portion of TSP deposit over the CSRS maximum contribution, can I pay back the withdrawn CSRS money without tax implications? A. The refund of your TSP contributions will be taxable, since you never paid taxes on the money when you earned it. You may then…
Browsing: maximum contribution
Q. I plan to retire under FERS law enforcement on May 30, contributing my full $17,500 and $5,500 catch-up contribution in my first 10 to 12 paychecks. If I purposely make larger contributions early in the year in an attempt to reach the annual maximum contribution before retiring, will I lose out on agency matching contributions? A. Not if you spread the contributions out evenly over the duration of your remaining employment.
Q. I am a retired government worker who has contributed the maximum amount to the Thrift Savings Plan. After being retired for several years, I transferred the TSP to a traditional IRA. If I convert the traditional IRA to a Roth IRA, how do I figure my “basis” in the IRA to determine the amount that is taxable? A. If the only thing you ever put into the IRA was your traditional TSP assets, then the account has no tax basis and is all taxable upon distribution (or conversion). If you have contributed nondeductible or other after-tax money to the…
Q. I am an unmarried federal employee. I max out my contribution to the Thrift Savings Plan. I plan to work until at least 62, which will give me 21 years of service, or possibly until 65 with 24 years. As a federal employee in FERS and with TSP, what is the best way to provide income for two siblings when I die? I am not opposed to taking a reduction in monthly benefits if that is the best way to do so. My home will be paid off in 2014. I have no other debt and live on about…
Q. You state that we should invest in the Thrift Savings Program based on goals for retirement. My goal is to have $1 million in my TSP account by the time I retire; $1.5 million to $2 million would be even better. My TSP account has about $350,000. What can I do to grow my TSP to $1.5M to $2M over the next 10 to 15 years, given that I will max out the contributions (TSP $17,500 and TSP catch-up $5,500) every year until then? A. There is no way to answer this since you’ve provided a very wide range…
Q. Are the Thrift Savings Plan and non-TSP Roth contribution limits exclusive? In other words, can I contribute the maximum to my TSP ($17,000 for 2012) and maximum ($5,000) to my non-TSP Roth IRA, so long as my adjusted gross income is below the limit imposed for the Roth? Or is the $17,000 limit imposed for both retirement vehicles combined? A. The two limits are separate.
Q. My retirement time frame under FERS is about 2035. Prior to joining the feds, I had virtually no retirement planning. But when I joined the feds at age 33, I started making diligent contributions to the Thrift Savings Plan. Six years later, my TSP account has hit a $110,000 balance. This year, I started a Roth IRA with a $5,000 contribution. I am married, and our income just slid slightly below the adjusted gross income ceiling for Roth IRA contributions, mostly because I contributed $17,000 into the traditional TSP. As I look now to the Roth TSP, I am considering for the…
Q. Does a Vanguard Roth decrease the elective amount that I can place in the Thrift Savings Plan? This year, I have already maxed my Vanguard Roth to $5,000. Can I only place $12,000 into TSP, or can I still contribute the total $17,000 to TSP? I understand that if I contribute $5,000 to the Roth TSP, I can only place $12000 into the regular TSP. Does the Roth TSP preclude from using the Vanguard Roth? A. The amount you contribute to a Roth IRA does not affect the amount you may contribute to the TSP, but your income might…
Q. I plan to retire in nine years (at 63). I have $176,000 in the Thrift Savings Plan. I add the maximum to the TSP every year ($22,500) and will continue that until I retire. Then, my strategy, once retired, is to withdraw a monthly income from my TSP, and I will then start adding that money to a Roth IRA (e.g., a Vanguard fund) until I max out the Roth for both my husband and me. My thought is that I am getting a tax break by adding the max to the TSP during my high-income years as a…
Q. I am 29 years old and serve in the Air Force. I contribute the maximum $5,000 amount to my Roth IRA every year, and have a few thousand dollars in the standard Thrift Savings Plan. I am concerned about the lack of investing options besides the G, F, S, C, I and L funds within the TSP. With the new Roth TSP option, would it be possible for me to continue to contribute $5,000 directly to my Roth IRA, then contribute $17,000 to a Roth TSP, and finally roll that $17,000 over to my Roth IRA each year? A. Your participation…