Q. A client of mine retired from federal government after 16 years and took her employee contributions out of the retirement plan upon retirement. She is working for the federal government again and wants to buy back in to the pension plan for the employer portion of the 16 years she previously worked. Does she have to use after-tax dollars, or can she do a rollover from an IRA or other retirement plan? A. She must use after-tax dollars for the buyback.
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Q. In an effort to increase my Thrift Savings Plan account before I retire Sept. 30, I assume I can open a traditional IRA and roll it over to my TSP account with no restrictions on amount. Is that correct? A. Correct, as long as the IRA contains only pretax money.
Q. Overview: I began in the Air Force Non-Appropriated Fund in 1996, enrolled in NAF retirement plan in 2000, ported to GS in 2005 with deferral of my NAF retirement (calculated at 5.27 yrs) and entered FERS. My current GS position will be abolished in 2014 (at nine years FERS). I have the potential of porting into a NAF position. I wish I had just retained NAF retirement, but lack of research and misguided human resources recommendations led me to where I am with a split retirement outlook. Given my FERS time will total only nine years at abolishment, if I move…
If you own a Thrift Savings Plan account and plan to use it to fund your standard of living in retirement, you are a pension fund manager. As a pension fund manager, you are responsible for the standard of living your TSP account produces. This standard of living will depend heavily on the decisions you make in the course of managing your account. It is critical to recognize that a single stumble along the way — one bad outcome from one bad or overlooked decision — can cost you dearly later in life. The margin for error is razor thin,…
Q. I am a fully vested CSRS employee with the Environmental Protection Agency for 33 years at age 55. I have received my numbers, but I missed my first date to retire. How long does it take to receive my first full check? Should I take all of my Thrift Savings Plan out at once; leave about $10,000 in and roll it over to a Roth IRA; or leave it in the TSP? Is there a counselor at TSP to speak with about taxes and IRAs. A. You should leave your money in the TSP for as long as possible…
Q. Based on a reading of Internal Revenue Service Publication 721, it appears to say that since the CSRS and FERS retirement systems are considered “eligible retirement plans” you could roll over a distribution (including a regular annuity payment) into another IRA and defer the taxes, or into a Roth IRA and pay the taxes immediately. If this is the case, the normal IRS limitation on contributions to IRAs and Roth IRAs are bypassed. Am I reading this correctly? A. From IRS Publication 721: “Distributions eligible for rollover treatment. If you receive a refund of your CSRS or FERS contributions when you…
Q. If I leave my money in the Thrift Savings Plan, will I be penalized? Is it correct to say that I have the option of rolling it into an IRA or withdrawing all of it or part of it? A. You may leave your money in the TSP until the IRS minimum distribution requirements begin. The TSP does not penalize you for leaving your money there.
Q. I would like to roll over my Roth IRA into my Roth TSP. Do you see the government allowing this some day? A. It’s possible, but I can’t handicap the odds. While it would be nice to be able to do this, it shouldn’t be significant in the big picture. If it is, you’re doing something wrong. You should focus on making sure that your Roth IRA is as close to the Thrift Savings Plan in its low cost, simplicity and diversification as possible.
Q. I retired in 2011 before the Roth TSP was created. Can I roll over a private Roth to the Roth TSP? A. No.
Q. I have retirement funds in TIAA-CREF. The funds are listed as 401(a) and 403(b) accounts. All are pretax. May I roll over these accounts into my Thrift Savings Plan? I am considering this only for consolidation purposes. A. Yes.