By Reg Jones
Calculating interest on redeposits
December 3rd, 2012 | Uncategorized
Q. I left federal service in 1988 after 13 years of service and took out my CSRS money, which was about $20,000 at that time. I have decided to return to federal service and want to be in CSRS Offset. I was told that repayment would include yearly interest and would be about $80,000. How is interest calculated? May I roll over either an IRA, Roth or my personal 401(k) into the CSRS Offset account to repay my debt and avoid paying taxes? What about the taxes on the $20,000 that I paid in 1988? Would they eliminate at least taxes on $20,000 of my IRA, etc., repayment if I cannot roll it over?
A. To find out how interest on redeposits is calculated, go to www.opm.gov/retire/pubs/handbook/C021.pdf.
Tags: CSRS offset, interest, IRA, redeposit, rehired, rollover, Roth IRA, taxes
VCP transfer into Vanguard Roth IRA
March 30th, 2012 | Uncategorized
Q. I will have 40 years with the Internal Revenue Service in 2012 and plan to retire either this year or in 2013. I have been contributing to both the Thrift Savings Plan and the Voluntary Contributions Program. I plan to leave the TSP contributions to the G Fund alone and let it grow.
The VCP is another matter. I have a Roth IRA with Vanguard and would like to transfer all of the VCP to the Vanguard Roth IRA.
I know I am required to pay tax on the interest the VCP has earned in the year received. How do I do this transfer? There seems to be a lot of information about the TSP, but I am finding it difficult to find information about the VCP.
A. To find out how to make the transfer, you can call the Office of Personnel Management at 888-828-9451 from 8 a.m. to 5 p.m. Eastern time. In the Washington, D.C., area, you can reach them at 202-606-0706. You may also contact them by email at VoluntaryContributions@opm.gov, or write to:
U.S. Office of Personnel Management
Voluntary Contributions
1900 E Street, NW, Room 3H30
Washington, DC 20415
Tags: G Fund, IRS, OPM, RETIREMENT, Roth IRA, transfer, TSP, voluntary contributions program