Ask The Experts: Money Matters

By Mike Miles

TSP rollover and FEHB

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Q. I am age 59½, retired from the Postal Service through a Voluntary Early Retirement Authority. I am looking at rolling over my Thrift Savings Plan to a certified financial planner. Could this affect my health benefits or my spouse’s health benefits?

A. It will not affect your Federal Employees Health Benefits eligibility, but I question the wisdom of this move. Why would anyone with your best interests in mind recommend this move? For your benefit or his/hers? The certified financial planner label does guarantee that this person is trustworthy.

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Rolling over IRA into wife’s TSP

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Q. I have an IRA with Prudential Insurance. Can I roll over my IRA into my wife’s Thrift Savings Plan account with the federal government? The money would be hers, not mine. This way, when she retires in a year or two, she’d have more money in her TSP account.

I already have a pension and don’t need that money, but my wife’s retirement will be less than mine and I’d like her to have more in her TSP.

A. No.

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Transferring spouse’s 403(b) into TSP

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Q. Are there any advantages and does it make sense to transfer my wife’s 403(b) account into my Thrift Savings Plan account before I retire? I am planning to retire in 2015 at age 55 with 33 years of service (CSRS Offset). Will TSP even allow a spouse’s account to be transferred into the TSP? She will be retiring in 2014. She is not federally employed.

A. It makes sense, and there would probably be advantages to doing this. But, alas, it’s not allowed.

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Consolidating IRAs into TSP

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Q. My wife is retired under FERS with a Thrift Savings Plan account and I, too, will retire at some point under FERS with a TSP account. Both of us have individual IRAs. Can each of us consolidate the IRAs into our own TSP accounts?

A. Yes, as long as they don’t contain money that is eligible to be withdrawn without being taxed (tax basis).

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Social Security reduction

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Q. My husband was forced to retire early when the Army depot closed here in Sacramento, Calif. Several years later, he was forced to stop working due to a stroke and applied for Social Security disability.

He was told that his Social Security allotment was greatly reduced because of his Thrift Savings Plan retirement account.

He never thought this was fair because he has worked and paid Social Security all his life, but instead of receiving about $1,500 a month on Social Security, he receives a reduced $450. By comparison, I retired on a state pension and am fully qualified for all of my Social Security benefits. But they are also slightly reduced because of his TSP.

Is this correct?

A. This doesn’t sound right. I know of no offset to Social Security benefits based on a TSP account balance. There are offsets for other sources of income, however, and you should visit to review the rules and see if you have a basis for appeal.

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Transferring spouse’s IRA into TSP 401(k)

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Q. My understanding is that a spouse’s traditional IRA (not a Roth IRA) cannot be transferred into a government employee’s Thrift Savings Plan 401(k) account? Can you tell me if that is correct?

A. That is correct.

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Combining TSP for married couples

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Q. My wife and I plan on retiring in seven years. We are covered by FERS and will each retire at the minimum age (56) with over 37 years of service for both. Can we combine our Thrift Savings Plan accounts at retirement?

A. No.

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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 to NAF:

* Will I have the option of re-entering the NAF retirement system, or am I required to remain in FERS?

* If I can switch back to NAF retirement, will I have to wait until 62 to draw any FERS retirement since I only achieved nine years, versus reaching MRA+10?

* Will I be able to retain Thrift Savings Plan in nonactive status (until draws begin at 59½) and begin contributing into the NAF 401(k), or will I have to roll TSP into 401(k)?

* Are there any conflicts with drawing two annuities at retirement (both APF and NAF)?

* Does AF NAF retirement pay the full amount of the retirement calculation (less 4 percent for each year before age 62) until I reach age 62? And is the only reduction at 62 the annuity reduction calculated at 2.5 percent of Social Security (x) # of NAF years?

* At age 65, do the health benefits automatically roll to supplementary when Medicare starts?

* What is the current cost for full family coverage and also the current cost for just the supplementary insurance?

* If, at 65, full coverage reduces to supplementary and my spouse is not yet 65 years old, can I elect to continue full coverage?

* If the NAF position is abolished via business-based action (after 2016) is there the possibility of being offered a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay retirement based on my service computation date providing 20 years of combined continuous service without a break since 1996?

A. Mike: You may maintain your TSP account.

Reg: I wish I could be of help but I don’t know anything about the rules that cover someone transferring from FERS to a NAF position. You’ll have to check with the NAF personnel office.

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Transferring spouse’s profit-sharing plan into TSP

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Q. My wife works for a dental office which has a profit-sharing plan. Only her employer makes contributions to this pretax plan. She will retire in one more year. We would like to do a direct rollover of her funds into my Thrift Savings Plan, so that all holdings can be distributed from this one account. However, I have been told by TSP personnel that the ownership of any plans to be transferred must be in my name, not my spouse’s name. Is there any legal way for getting her profit-sharing plan funds to transfer into my TSP account? For example, since I am 2½ years from retirement, we were thinking of rolling over all of her profit-sharing plan holdings into a traditional IRA in which the ownership or registration would be in my name. I could contribute to this plan for two years prior to my retirement, then just before retirement do a direct rollover or transfer of the entire IRA holdings into my TSP. Will this idea work, or is there another way?

A. I don’t know of any way to do it. What you’re suggesting is not allowed.

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Disability retirement

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Q. I am being considered for disability retirement in the coming months. My application is pending consideration from the Office of Personnel Management. I am a GS-14 FERS employee, 54 years old, with about 32 years of service. I have approximately $250,000 in the Thrift Savings Plan, and my allocations are as follows: 15 percent C, 15 percent S and 70 percent I. I realize that is somewhat aggressive, but it has been like that for about seven years or so, and I have been hopeful of the international home run. Regrettably, this hasn’t necessarily come to fruition. I will likely shelter some of my remaining funds in G or F when I find out if my retirement is approved.

If I should retire, I plan to withdraw approximately $150,000 to pay off my mortgage. Therefore, should something happen to me or if the market fails, at least my home is paid for. I will have a reasonable annuity, and my wife draws $1,800 monthly as a service-connected disabled veteran. Combined, I feel we will have adequate income, especially when our mortgage of $1,000 per month is satisfied. Not rich, but with no real debt ($15,000 vehicle loan) consistent income and no mortgage. Sounds OK to me. Or am I off-base?

A. I think that what’s off-base is that, like too many investors, you are willing to gamble — without knowing the odds — with your life savings. If you’re not willing or able to prudently manage the money, then it’s probably your safest bet to use it to pay off your mortgage. At least you won’t lose it overnight. This might mean that later on, however, if you need the money to pay your bills, it won’t be available. There is no easy answer. That’s why I’m in business. If you’d like to discuss your options, you can contact me through

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