Browsing: retirement

Q. I was offered VERA at office. I would like to accept, but have a TSP loan balance for a home loan that won’t get paid by the 90-day deadline. My retirement is set for July 2020. When I separate and still have outstanding balance, how will I get taxed and at what percentage rate? I was not due to retire until May 2027. Also, will it affect annuity payments, and how long do I have to pay the loan back? A. Any unpaid balance will be declared a taxable distribution and added to your tax return for that year as ordinary income. The tax…

Q. I will turn 60 next year and plan to retire with 30 years of service. I am invested in the L2020 Fund. Upon retiring, can I stay there or do I need to move my money? A. You may keep your TSP account, and manage it as you like, for life.

Q. I will be 62 next year and am a CSRS Offset employee. I would like to know if I can apply at that time for Social Security benefits and retire afterwards (within a few months), and whether a salary is reduced as it is with the pension.  A. You may apply for Social Security benefits while you are still working. Your earned income will not be reduced by the offset provision of your retirement system.

Q. I have 43 years of service: 22 years under CSRS, which includes 4 years military active duty that I “ bought back,” as well as 21 years under FERS. There was no break in service. Will my 4 years of active duty, in which I paid Social Security, give me essentially 25 years of “ substantial earnings” towards the WEP provision? A. It depends upon how much you earned year. The schedule of annual earnings required to qualify as “substantial” is available at https://www.ssa.gov/pubs/EN-05-10045.pdf. You can compare the earnings for year as listed in your Social Security benefit statement…

Q. I retired from the military in 2009 with 20 years of active service, then entered federal service in 2009-2012. I resigned for 1.5 years due to medical, then returned to federal service in 2014 to present. So, if I depart in 2020, I would have 10 years of federal service. What is my path to collect a pension for time served and how am I impacted by the minimum retirement age? I am born in 1966. If I want to depart federal service before my MRA, can I resign and defer annuity until 62 to forego penalty? If so,…

Q. I retired from my dual-status job on Dec. 31, 2018, at the age of 53 in Mississippi, which is below my minimum retirement age. Am I able to collect from my TSP plan without paying a penalty since I am under my MRA? What are the laws that govern this for my CPA to use at tax time? A. If you receive a TSP distribution before you reach age 59 ½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable portion of the distribution not…

Q. If I retire from civil service (under FERS) and I return to work as a civil servant at a later date, I know that my annuity will be subtracted from my pay. However, will I be able to contribute to TSP again? If so, can I contribute to my original TSP account or would I have to start over with another account? A. You will allowed to contribute to the TSP for during any period of eligible employment under TSP’s rules: https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/index.html. A new TSP account will be opened for you when your are eligibly employed.

Q. I work for the Centers for Medicare & Medicaid Services and am currently 65 years old. I started working for the federal government on July 4, 2010. The plan is to continue working as long as I can, past 70. When I retire it will be under FERS (born Sept. 12, 1953). Do I start taking Social Security at age 70 if I’m still working? Also, can I continue putting money into my TSP after age 70 and 1/2 (the required minimum distribution age)? Are there any other things I should be aware of if I retire after age…

Q. I currently work for the U.S. Postal Service and have 38 years of service. I’ll be 66 years old in December 2019 and can collect my Social Security benefits in full while still working at the Post Office. Will they still reduce my benefits (government offset) even though I’m not retired or collecting my CSRS pension? A. The Social Security earned income offset will not apply to your Social Security retirement benefit once you reach your Social Security Full Retirement Age. The windfall elimination provision is calculated based on your earnings history and will be applied whether, or not,…

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