Browsing: survivor benefit

Q. My wife and I are both long-time feds with 35-plus years and significant TSP accounts (more than $1 million). We both are inclined not to elect a survivor benefit because it seems we will have ample funds in retirement if either of us passes. Are we being short-sighted or is this a practical approach? A. Each of you, as the potential survivor, should carefully consider the worst-case scenario you might face in the various factors you can’t control, like how long each of you will live, how your investments will perform, inflation rates, spending needs, etc., before you decide…

Q. Can a deceased spouse’s TSP account be rolled into the survivors existing TSP account? A. From the brochure “Your TSP Account”: If you have an existing TSP account from your own employment with the federal government or the uniformed services, you can move your beneficiary participant account into your existing TSP account. The money that you move will be treated as an employee contribution, but it will not be subject to the Internal Revenue Code (IRC) annual elective deferral limit, which limits the amount of regular tax-deferred and Roth contributions you can make to the TSP in a calendar…

Q. I am divorced and my ex received a lump sum payment from my TSP account. When can she begin receiving benefits? She is 62 years old now. Are her benefits in anyway tied to my age and retirement? A. Once her share has been removed from your TSP account and distributed to her, it is hers to do with as she chooses. Her options are no longer connected with your age.

Q. My brother, and only sibling, died recently. I am the executor and beneficiary of his estate. He never married, nor did he have children. I am inheriting: $770,000 from an employer 401(k) managed by Vanguard; $73,000 from a past 403(b) pension; and $320,000 in life insurance proceeds. I am 59, receive a military pension ($60,000/year), and am employed full time by the federal government. I have $500,000 in the TSP. Can any of the inherited funds be rolled into my TSP? Can any or all of the inherited funds be combined into a single fund? What would you do? A. The TSP…

Q. I had 12 years service under CSRS, a break of 13 years in the private sector, and have been a CSRS Offset employee since 2003. I understand that the government pension offset could reduce my wife’s Social Security spousal benefits by $2 for ever $3 I would receive from my CSRS annuity. Does this apply just to the annuity earned while a CSRS employee or the annuity I would receive for my total government service? Since she has earned her own Social Security benefit from non-government service, and I have 30 years of substantial earnings under Social Security, including the years…

Q. I’m a CSRS person. Will my survivor annuity increase as my CSRS pension increases due to COLA? Will this occur if I select less than a full survivor annuity? A. Any survivor benefit you elect will increase for inflation at the same rate as your benefit.

Q. I hope to retire in 2020 under the FERS retirement system. My spouse is a school teacher, does not pay into Social Security, and is covered by the Ohio State Teachers Retirement System (STRS). Will either of us lose a substantial amount of survivor benefits when one of us passes due to the WEP or GPO? A. The windfall elimination provision does not apply to survivor’s benefits, but the government pension offset may reduce or eliminate your wife’s survivor benefit, if she survives you.

Q. My spouse and I are both retired CSRS employees with TSP accounts. As a general rule, I know that if one of us dies the survivor can have the deceased member’s TSP balance transferred to their TSP account. We are each the primary beneficiary of the other’s account. How does this work once we are taking RMDs? Say one of us dies in 2020. Does the TSP take the deceased member’s account balance, deduct any RMDs still due to be paid in 2020, transfer the remaining balance to the spouse’s account and send a check for the remaining RMDs…

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