Q: I read your article about a fully inflation-indexed immediate life annuity. How does it work, and since TPS doesn’t offer it, who should we turn to in order to find out more information? A: My article was arguing for the development of an inflation-indexed annuity for federal retirees. No such solution currently exists. I encourage you to contact your members of Congress to suggest that such an annuity be part of any retirement reform package.
Browsing: retirement
Q. I will be retiring in 2012 and must also take a required minimum distribution from my TSP in 2012. I would like to do a partial withdrawal in the amount of the RMD prior to the date I retire, to be followed by monthly payments upon retirement. My question is whether I can rollover the RMD into a Roth IRA, so that I would be paying income tax on the Roth IRA withdrawals as the withdrawals are being done, rather than on the entire amount of the RMD. If I read the TSP material correctly, it appears that this…
Q: I retired with both CSRS and FERS components during my federal tenure. How is my COLA calculated? Is it calculated based on both respectively or is it based solely on the latter FERS component? A: Each component will have its own COLA computed using the appropriate formula.
Q. Everyone I work with seems to hold the same opinion, that after retirement all TSP monies should be left in the G fund throughout retirement. Is this a pretty standard opinion everywhere, or just where I work? A. I can’t tell you what everyone else thinks, but I can tell you that I’ve never had a single client that was willing to proceed with a plan that included a an allocation of more than 50 percent of their entire investment portfolio in the G fund. They either can’t afford to live with such a constraint, or they were rich…
Q. I’ll be retiring early next year (2012) and would like to learn if (or how) a Thrift Savings Plan withdrawal taken at retirement that is used to purchase or build a primary residence would be subject to federal tax. A. It will be taxed as ordinary income.
Q. I am a Postal Service employee scheduled to retire Oct. 1. I am 60 years old. Can I take a partial withdrawal from my Thrift Savings Plan account and invest that portion in a private annuity and then take monthly payments from what is left in my TSP account? A: Yes, as long as you have not already taken a partial withdrawal from your TSP account.
Q. I did a hardship to take care of my mother who had become ill, taking a pay cut on the way, and leaving behind the house I bought in 2005. After a year and a half on the market, the house I used to live in has become a short sale. The bank wants $25,000 in cash, which I don’t have at the moment. The bank also wants to see my Thrift Savings Plan account. I know they cannot levy against it, but I assume they want me to, in order to make up some of the difference. I would like to retire…
Q. I am going to retire under the Civil Service Retirement System. I will be 58 when I retire. Will I be able to withdraw my Thrift Savings Plan upon retirement without any penalty? I will be 59 one month after I retire. A. Yes.
Q. If I have more than 240 hours of annual leave when I retire, will I be allowed to cash that amount in also, or will I have to take the leave before retirement? If I retire at the end of a calendar year, will I be able to cash in my annual so that it is taxed the following calendar year? Does this also apply to TSP? A. You may delay your TSP withdrawals for as long as you like, subject to the Required Minimum Distribution rules that apply beginning at age 70½.
Q. I plan to take an early out (Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay) effective Aug. 31, 2011. I am under the Federal Employees Retirement System plan. At the time of my retirement, I will be 54 years old. I have read that if you retire before age 55, your withdrawal/rollover is subject to a 10 percent penalty. I have also read that any action can be postponed, but postponed to what age? 55 or 59.5? Does this mean I cannot withdraw and/or roll over to an Individual Retirement Account until I reach age 59.5? I don’t understand why I would have…