By Mike Miles
May 9th, 2013 | Uncategorized
Q. If I start taking my retirement now at 62 — FERS, Thrift Savings Plan payments and Social Security — and end up being picked back up at some point in federal service: I understand my FERS benefits would be cut by the amount I make in a new job. What about TSP payments? Are they exempt from penalties of re-employment?
A. If you are rehired, your automatic monthly payments will stop and you will be subject to the in-service withdrawal rules.
February 4th, 2013 | Uncategorized
Q. My wife was RIFed in 2008 at age 48 with 28 years of service with a $7,000 Thrift Savings Plan balance and was placed on CSRS discontinued service retirement. She was re-employed by the government five months later with a different agency. Because she is a re-employed annuitant, she can no longer contribute to TSP and is covered by Social Security’s Old Age, Survivors and Disability Insurance only. Emails and telephone calls to TSP have proved less than helpful; TSP has advised her that the only action possible is to leave the fund as is. We both wanted to verify TSP’s advice.
A. From the bulletin available at https://www.tsp.gov/PDF/bulletins/09-9.pdf: “Employees appointed to positions that are not covered by FERS or CSRS (e.g., a position covered by Social Security (FICA) only) are not eligible to participate in the TSP.” I encourage you to read the relevant parts of the bulletin for more details that may apply to you.
December 31st, 2012 | Uncategorized
Q. I was involuntarily separated under FERS discontinued service retirement with 26½ years of service. I was rehired to a federal job and opted to receive both salary and annuity. I no longer contribute to FERS and understand why I no longer get matching contributions to the Thrift Savings Plan, but why can’t I contribute my own money to TSP and get the tax deferral? I have a TSP account but do not plan on withdrawing money until I permanently retire in several years.
A. The only way that you’re allowed to contribute to the TSP is through payroll deferral or by transferring pretax money in from an IRA, 401(k), 403(b) or other qualified retirement plan.
November 12th, 2012 | Uncategorized
Q. I retired from the Air Force in 2004 after 30 years of service. I was rehired into the civil service ranks in November 2004 and immediately started investing into the Thrift Savings Plan’s L2020 account. I just turned 58 and plan on retiring when I hit 60, maybe 62 if my health holds up. How long should I keep my investments in the L2020 account? As I get closer to retirement date, should I move it from L2020 to one of the individual funds?
A. If you’re not sure about what to do, to support you goals with a minimum of risk, I suggest that you consider keeping your TSP money in the L Fund that most closely corresponds to your life expectancy — that is, the age that you think would be a reasonably long life for you or your spouse, whichever is longer.
September 24th, 2012 | Uncategorized
Q. I have been working for the federal government for just over two years. I am planning on moving in the next few months. I have applied to federal jobs, as well as private-sector jobs and have, so far, heard back from the private-sector jobs. I read that the Thrift Savings Plan is vested at three years and that employees are entitled to retirement benefits after five years. If I were to leave the federal system at this point, would I be able to return to the system in the future and “restart,” as it were, at my two-year mark?
A. Mike: Your service credit for use in meeting the three-year TSP vesting requirement will pick up where it left off, but any automatic agency contributions that were forfeited when you separated will not be restored.
Reg: Yes, you could, if you didn’t take a refund of your contributions when you left. If you did take a refund, you’d have to re-deposit that money when you returned to get any credit for that time.
May 29th, 2012 | Uncategorized
Q. I am leaving my career-conditional federal service for a job in private industry after just over three years. The value of the account is rather small, but I was able to vest for the match. I have not ruled out returning to the service at a later time because I am still in my early 20s. If I were to take the cash option and then subsequently wish to re-enroll in the Thrift Savings Plan in the event I become federal again, would I have to repay this amount plus any interest that would have accrued to get back in the program? If this is the case, I think rolling the amount over to an IRA would be best. However, the cash would be most desirable for me if there is no possibility of a future required payment on re-enrollment into TSP.
A. You would not be required to repay the money into the TSP on rehire. You would begin a new TSP account.