Ask The Experts: Money Matters By Mike Miles

Time 2020-09-23 18:04:11

Web Name: Ask The Experts: Money Matters By Mike Miles

WebSite: http://money.federaltimes.com

ID:57246

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Q. I have been assisting a federal employee (FERS) who is looking to retire in the very near future. She is married and her husband has dementia. He is currently in hospice. She does not want to leave a survivor benefit to him and she knows she needs to get him to sign the form giving spousal consent and have it notarized. He is unable to sign due to his condition. The same would be true for a TSP withdrawal application. What are her options? How is she able to complete her retirement application and make the necessary choices regarding her TSP without her husband Read More Q. I withdrew my federal TSP in March 2019 and they took the appropriate amount of federal tax. I just received a 1099-R for that withdrawal to file with my taxes for 2019. I know that it is not considered earned income, so will I get taxed again? If not, why am I required to file it with my 2019 return? A. When you took your withdrawal, the amounts that were withheld were deposits against your tax liability for 2019. When you file your return, you will report the gross amount of your withdrawal as Ordinary Income and it will Read More Q. I am currently employed with Bureau of Prisons with the law enforcement offer FERS retirement potential. I am 40 years old, with nearly 4 years in with the Bureau. I am in the process of buying back 3.4 years military service. I also have a 100 percent permanent VA disability rating. Being that I began federal service late, I am not sure how my body will hold up to being a corrections officer for 20 years. But looking ahead, if I cannot continue my job due to aggravated or increased disabilities and I end up medically retiring early, meaning before Read More Q. I am 57 years old, currently working at DHS/CBP and have 12 years and 5 months of service. I have degenerative disc disease, which in turn limits my abilities to do my daily activates at work as well as at home. I have had several treatments over the past 15 years and there is not much that can be done to relieve my pain without taking anti-inflammatory medication along with narcotics for pain relief. The pain meds limit my thinking abilities and make me drowsy and I can’t drive my one-hour commute to work every day. I can’t sit or Read More Q. I retired after 43 years under CSRS last year. Because of my sick leave balance (3,800), my CSRS annuity is 83 percent of my working salary. My wife will be retiring at the end of this year with 20 years under FERS. Her net pay will drop from just under $2,600 a month to under $900 with her basic FERS annuity. Besides our TSP (Traditional Roth), we also have two small traditional IRAs and two good size Roth IRA accounts. I have reached the minimum 40 credits for Social Security; however, because of the WEP, it would be under Read More Q. Concerning the “First Year Rule,” I will reach full retirement age (66) in October 2020. Suppose I earned $10,000 a month, so by Oct. 1, I would have earned $90,000 for the year, which means I would have paid the 7.2 percent tax into my Social Security Insurance account during that time. Since I would have surpassed the $47,000 number, do I owe $1 for every $3 for the $43,000? Also assume, once I retire, I would receive $3,000 per month in SSI retirement benefits. If I worked after retiring during October thru December and made $3,000 per month, Read More Q. I am a retired federal employee and intend to work as a real estate agent with plans to establish an LLC for my business. Would this be subject to the earnings test for my annuity supplement?  A. Since this is earned income, it will be counted in computing any offset.Read More Q. I m a CSRS employee with an active Voluntary Contributions Program account. My year-end contributions statement of 12/31/2019 shows a total earned interest of $32,076 since I opened the account. If I convert the entire balance of my VCP account to a Roth IRA, will I be responsible for paying taxes on the $32,076 earned interest at the time of conversion? A. The conversion will be reported as taxable ordinary income for the year in which it is constructively received. Interest refunded to you is subject to a mandatory 20 percent tax withholding. However, if the interest on the voluntary contributions account is Read More Q. I’m retired and will be 61 in May 2020. My allocations are 25 percent C Fund, 50 percent I Fund, and 25 percent L2020. I also have $9,000 sitting in the S Fund. Should I move the 25 percent in the L2020 and the $9,000 in the S Fund to L2050? Not sure what to do with the C I Funds.  A. If you don t know what to do, I suggest that you put your balance into the L Fund that most closely corresponds to your life expectancy.Read More Q. I have both TSP Traditional and Roth monies in my account. When I begin to withdraw from my account, is the withdrawal disbursed proportionally?  A. You may now specify the source – Traditional or Roth – of your distribution.Read More About the Author Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.Search Money Matters Search for:SUBMIT A QUESTION First, please review previous Q&As to see if your question already has been answered. If you cannot find the answer, submit your question to our Money expert at fedexperts@federaltimes.comPLEASE NOTE! Do not submit ANY questions via the Comments form. Questions submitted via the Comments form will NOT be answered!IF YOUR QUESTION IS NOT ANSWERED Federal Times’ experts answer as many readers’ questions as possible but, due to the volume of e-mail, they cannot answer every question submitted. You’ll have the best chance of getting an answer to your question if you follow these steps:• Ask questions that have not previously been answered. Before submitting a question, review the Q&As already on the site by using "search" above.• Ask questions that fall within each expert’s scope of expertise. Reg Jones, for example will answer questions about federal civilian benefits; he will not answer questions about military benefits.• Provide sufficient information about yourself — for instance, a question about retirement should say which retirement system you are in.• Do not expect personal legal, financial or career advice. Answers that require a legal opinion, particularly those involving divorce and court orders, cannot be provided.CategoriesCategories

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