Q. Are TSP lump-sum withdrawals considered earned income for the purposes of the earned income test for FERS disability retirement? A. TSP withdrawals are not considered earned income.
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Q. If I take money out of an IRA to make a redeposit into CSRS, do I have to pay taxes on the money taken out of the IRA? A. Yes.
Q. I’m unsure of what to do with my Thrift Savings Plan account. I understand that I could leave it in the account as it is until I’m 70½. I can also make a full or partial withdrawal. Full withdrawal is not an option for me. A TSP life annuity (both single or joint life) option is based on life expectancy or until the money runs out. Also there is the TSP annuity vendor (MetLife) where I could get the annuity but money used to purchase this annuity goes to the insurance company if you die before it’s used up.…
Q. After I retire, I am planning to withdraw $4,000 per month from the Thrift Savings Plan and I am not claiming Social Security. How will Social Security taxes be paid for the TSP I withdraw? A. Social Security taxes can’t be paid from your TSP withdrawals since they are not considered earned income.
Q. I have reverted back to a more conservative Thrift Savings Plan allocation: 67 percent G Fund/33 percent C Fund. I put in the maximum, including the maximum catch-up and, with match, it’s nearly $30,000 per year. My balance at 60 when I retire in five years should be between $500,000 and $600,000 depending on the return. I am estimating a 4 percent return. I am wondering about keeping this asset allocation and taking monthly payments starting near 4 percent or slightly higher at age 60. Is a distribution with 70/30 as indicated above a bad idea? I like the conservative allocation and…
Are you planning to retire soon? If so, you’ll need to figure out whether you’re financially able to make it work in the near and the distant future. Because there are few, if any, truly reliable financial guarantees, this can be a difficult thing to determine. The essential question is this: “Will I have the resources — usually cash — available when I need it to support my desired standard of living for the rest of my life?” If someone else is depending upon you for all or part of their financial support, your retirement decision will affect them, as…
It’s easy to make mistakes when you are planning to retire. Some of the biggest mistakes apply to all employees; a few apply only to CSRS or FERS retirees. All can be costly. Here they are and what you can do to avoid them: Retiring on the spur of the moment. It can be disastrous, for two reasons. First, if you hand in your retirement application at the last minute, it may contain errors that delay processing or even cause it to be rejected. Second, decisions made in haste often come back to bite you. Once committed to a course…
Q. I am a longtime CSRS employee with a pretty good Thrift Savings Plan balance. I plan to retire in two years and move to another city when I retire. My spouse is planning to retire in eight months, and we are planning to buy a house in the new city. We would like to buy the new house and begin the transition to the new city without selling our existing home until I retire. We are looking at a number of ways to finance the purchase of the new home and afford a mortgage payment on that house, a…
Q. My husband and I would like to participate in a fixed index annuity offered by a nongovernment company, but the information I gathered about Thrift Savings Plan transfers, withdrawals and annuities is confusing. It appears that if we want any type of annuity, we can only purchase if TSP does it for us, and the choices are extremely limited. Also, there seems to be no “non-hardship” type of distribution available before age 59½ that we can use to move our funds. Am I missing anything here, or are we just stuck with our limited options and no way to…
Q. I withdrew the bulk of my Thrift Savings Plan account a couple of years ago and rolled it over to an IRA, thinking I could get better earnings on my investment. It has not worked out that way. Can I put this money back into my TSP account? I have not yet retired and am still contributing 5 percent of my earnings to my TSP. A. As long as the IRA contains only untaxed money, you can and should transfer the money back into the TSP. Use Form TSP-60 to do this.