Lifetime job guidelines -- must read!

Thursday - 3/20/2014, 2:00am EDT

Did my first official, live online chat yesterday!

High-five to self!

When I said "did," I mean that I stood around and looked concerned and tried to appear useful, while Tammy Flanagan, Lauren Larson and Julia Ziegler did the work. Tammy is a top federal benefits expert and frequent participant in the National Institute of Transition Planning radio program, For Your Benefit, Mondays at 10 a.m. Lauren and Julia work for — some would say run — Federal News Radio.

The chat was fascinating. The range of questions was amazing. And good. The answers (with Tammy at the helm) were on target.

Many feds, especially as they approach retirement, have questions about Medicare, survivor benefits, the Thrift Savings Plan and health insurance. While they've all been answered (sometimes many times before), most people don't focus on them until they get down to serious retirement planning.

To see an archived version of the chat, click here.

Meantime, as a sample of the expertise our experts brought to the conversation, this is one of the first question from a listener/reader along with Tammy's response.

The question, from a reader named Linda, asks: "In retirement, is leaving my funds with the TSP any advantage for tax or inheritance purposes/options over moving them to a private outside fund" like Fidelity or Vanguard?

Simple question, right? Either the answer is yes or no, right? Wrong! This is the government. Here's Tammy's answer:

There isn't a problem with leaving "your" TSP account invested after retirement. It is a problem when you die and your spouse (if applicable) inherits your TSP account. If they leave the money in a beneficiary participant account, there are limitations for the beneficiary of that account. If you are not married, then your beneficiary would not be able to leave the money in the TSP since a BPA is restricted to a spouse beneficiary only.

Spouse beneficiaries automatically have a beneficiary participant account (BPA) established upon notification of death of the TSP participant:

  • Balance is automatically invested in the G Fund
  • Beneficiary participants have same investment and withdrawal options as separated TSP participants
  • Beneficiary participants are not eligible for TSP loans
  • TSP cannot accept transfers or rollovers into BPAs
  • Spouse may designate beneficiaries using Form TSP-3
  • Death benefit payments from a BPA are single payments to the designated beneficiaries; cannot be transferred or rolled over to an IRA (to include inherited IRA) or eligible employer plan
  • Required Beginning Date for distributions from a BPA is based on the age of the deceased participant
The owner of a TSP BPA can withdraw their money and have it transferred to their own employer plan or IRA:
  • Money transferred will become subject to the rules governing the gaining account
  • Before requesting a transfer, make sure you understand the differences and be certain that you are choosing the account or plan that best suits your personal situation.'
For more Q&A from the on-line chat, click here.


NEARLY USELESS FACTOID

Compiled by Jack Moore

Before he wrote the classic potboiler Jaws (later immortalized on film by Steven Spielberg) Peter Benchley cut his teeth writing speeches for Lyndon Johnson.

(Source: Mental Floss)


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