Roseanne is a retired USPS employee with an extensive background in USPS retirement, disability retirement, OWCP, EEO, Labor Relations and HR. She conducts individual and group counseling and is able to comprehensively discuss the pros and cons of employees who are on OWCP, disability retirement and regular retirement. Roseanne will be happy to answer your postal retirement questions. Contact Roseanne at roseanne.jefferson@icloud.com.
Good Day Postal Employees…
…and I was going to say Welcome to a New Decade BUT I heard on the news that the new decade does not start until 2021…so welcome to the almost new decade!!
Because of the changes to TSP (TSP Modernization Act of 2017), which took effect September 15, 2019, it has relaxed many of the regulations surrounding the withdrawal of your TSP funds. TSP Bulletin 19-10 will give guidance on how to access your TSP funds. Go to tsp.gov for that informational bulletin. With every change…you got to give up something, and in this case, the change that is being given up, is no more paper forms. You will have to do everything on-line….so like I have been preaching for years, and it is the last thing I say in a group retirement session; ” if you are going to make it in retirement….you are going to HAVE TO GET RID OF THAT FLIP PHONE!!”
Q 1. Hi Roseanne and thanks for all your help. I have two questions. If you retire at 57 at thirty years, ie, full retirement. Some of a lot of my co-workers are under the impression that they are only allowed one withdrawal from their TSP. I was under the impression that TSP was part of the retirement system. Postal pension, Social Security, TSP. Are are you able to use your TSP as anyone age 59 1/2 when you retire?
2. If you retire at the age of 56 with 26 years of postal and 4 years of military already paid back, does that 4 years of military mean that you can not take the supplement. Or does it mean that the supplement will be based on the 26 years in the USPS? And thanks for all of your help thru the years…PG
A. q1. Hi PG, You were always allowed to apply and use your TSP, as a portion of your monthly income, once you retired, 56,57. You absolutely do NOT have to wait until you are 59 1/2 to collect from TSP. That 59 1/2 is something that is very different than if “you actually retired”. I truly recommend going on line and reviewing the new TSP rules and regulations. And now with using the TSP 99 (only available on-line) you are able to change your monthly payments each month if you like. It has made your TSP much more accessible to you. So let me reiterate at the age of 57 with 30 full credible years…(or in some cased 56…your date of birth dictates your MRA), you are able to take your TSP in any form you wish.
2. Yes….the 4 years of paid back military is credible for FERS retirement calculations, as is that 26 postal years; (with a full 4years of military paid back), brings you to 30 credible years and yes that is full FERS retirement. That being said, the Special Supplement is only calculated on postal years, which in your example case of 26 years. So you are correct. I can tell you have been reading the columns!! Roseanne
Q 2. Dear Mrs. Jefferson, Thank you so much for the service you provide. I have read your forum since I first came across it years ago. I recently started re-reading archives of it, and taking notes on subjects that apply to my situation.Thanks again. I will be eligible for FERS retirement on Leap Year Day, 2020 (BTW, stinks to have that as your birthday!). I will have 35 years in. If I stay slightly longer, maybe 6/27/2020, that will put me over the earnings limit for the FERS Social Security Supplement for 2020. When do I get hit with the penalty for going over that threshold, 2021’s Tax season? Also I may have a small amount left on a TSP loan at that time and the implications of not paying it off completely pre-retirement are unclear to me. If there is a balance when I retire, I believe it will be treated as income, and I will receive a 1099 as such. Is that also counted towards the SS supplement threshold (I would assume yes)? And finally, I have approx. 330K in the TSP and would like to seriously tap into it for a property purchase (100k +). I assume that too would have a detrimental effect on the FERS supplement also (along with serious tax implications) as it is not an annuity withdrawal. Thank you so much! LB
A. 2 Hi LB, That’s a lot of questions in one email..
1. If you are going to retire….do it no sooner than 02/29/2020…and NOT A DAY BEFORE, any date after that is fine. (As I assume you reach your eligibility on your birthday Feb 29, 2020). For me, it’s all about ensuring the Special Supplement. With a birthdate like that I WOULD NEVER retire February 29 (on a leap year) NEVER…I would wait until March 30th.
2. That earnings limit does not count when you are retiring as it relates to Social Security, when you visit the SS office you will find that out.
3. N/A
4. A TSP loan, if not paid back prior to retirement (keep in mind you are paying YOU back); you will receive a 1099 for that money.
5. Any time you take a lump sum out, it will be approximately 20% right off the top in taxes. So if looking for $100,000 you’d better ask for more to cover the 20% tax that will be immediately deducted. Roseanne
Q 3. Hi Roseanne, I am 55 yrs old with 31 1/2 yrs in the post office as a letter carrier and I intend on retiring on my 56 birthday in June of next year 2020. My wife who now works plans on retiring at the age of 64 in April of 2020. Because she will not be eligible for Medicare and she will no longer be enrolled in her employer sponsored health plan, our intention is to add her to my health care plan. Would ‘her’ retirement qualify to to make an addition to my healthcare plan in April? Is there a minimum time frame that she needs to be on my plan before I am able to retire? Thanks for your help and all of the information you provide. C
A 3. Hi C, First, I would prepare for this by adding your spouse during to either your same plan or a different plan during Open Season. Her retirement plan would not allow a change to your federal health benefits. And even if she was on your FEHB, her employment issues would not have an effect. So, I would suggest to do it during this open season, and get a single plus one or family health plan, versus the single plan you are currently on. Then when you retire, you should select the “reduced by 10% or 5% annuity” to ensure that your spouse (should you predecease your her) will be eligible for a pension and also eligible for the federal health benefits. Open season is in a couple of days….do it NOW for the 2020 year. That is the only way to protect your spouse fully should you pass away before them. Roseanne
Q 4. Hey Miss Roseanne, I received my 1st check from OPM today. My TSP account was also freed earlier than was told to me. I also got to select both my single withdrawal and the monthly at the same time – as you told me. HR said I wouldn’t be able to do that but once again they were WRONG, and you were right. I’m trying to keep you updated as to everything that’s going on. Thank you again for your time and patience. Oh yeah I’ve received both single and monthly also. My wife and I cannot thank you enough. R
A 5. Hi R, I am so pleased it’s working out. I know this was challenging and a struggle, based on all added issues. Thank your Union President, as your advocate, she made a very convincing argument for me to take your case, which as you know was complex to say the least. Congratulations on your retirement! Roseanne
Q 6. Hello Roseanne, My ex husband has just retired ( from another job) and has quite a few years of service for the post office prior to that. If I begin to apply for retirement benefits for myself will that affect the amount of his check? Isn’t money set aside in the event of a divorce so that an ex spouse can receive it? Would a judge notify the system of this at the time the divorce happens? He is giving me a difficult time releasing his social security number and exact date of birth so I can have my small check. He was in the CSRS system. Thank you in advance. ( please do not use my real name -thank you for your help in advance)
A 6. Hi, I NEVER use anyone’s name or real city that they are in..and if I use your question in a column, I sanitize names and locations first- because it would help the “masses”, and the information is what is needed not necessarily WHO wrote the email, or where it came from.
So the first thing is, I am going to assume that in the divorce decree that you were awarded a “portion” of your ex-spouse’s pension when he would retire. And you could be a postal employee yourself, so all of this information is assuming you are NOT a postal employee…hmmmmm
All that I am saying is no more than….ASSUMPTIONS based on your email…keep that in mind…
IF ALL that you say is true and that was the judges decision in your divorce case (which would be identified on the divorce decree), then OPM (Office of Personnel Management) would have received that information from the attorney and especially your attorney, if they were on their game. Most attorney’s KNOW where (OPM) to send this divorce decree to when dealing with a federal employee’s divorce case. Being divorced (while a federal employee) and being also being a CSRS employee/retiree… I am very familiar with the process!! The thing you don’t say is if he retired from the USPS, or still working with the USPS, again that would change the answer, and simply retired from this “other”job.
You don’t say that at all….all you say is he has just retired from another job..and has quite a few years in the post office prior to that. I can’t tell if he still works for the post office or not based on your email. He may not understand how to apply for, or what the requirements are, to receive a retirement from the Post Office if he no longer works there.
He may in fact, have withdrawn the “retirement” funds from OPM. So there are really many variables that could and would change my answer. I’ve been married X of times, & still know the date of birth of an ex-spouse. Are you serious…you don’t know his SSN…OK maybe…but the date of his birth, you don’t know that either, but were married long enough to be awarded a portion of his retirement, and KNOW that he was in the CSRS retirement system, but ya just don’t know his date of birth. Ahh.. sounds so much like a BS fishing expedition to me, but the information is still valid, and reading this, it may help someone else. ( I think you are a postal employee…been doing this way too many decades my dear!!) Roseanne
Q 7. Good afternoon – Hi, I need your advice on what to do. I have been out on sick leave since September 8 due to stage 5 kidney failure. My retirement date is not until October 2023. I will be 56 and have 30 years. I hear for every year you go early use lose 5% on annuity, is this true?So bottom line I’m trying to figure out to try drag out 4 years or go out on medical disability. Thank you D (Postmaster)
A 7. Hi D, What you heard is so incorrect, but I would have to re-invent the proverbial wheel just to explain why. That being said, I would encourage you to call HRSSC at 1-866-476-5563 to initiate a claim for Disability Retirement. Keep in mind because you have a 3 part retirement, when you apply for disability with OPM (FERS retirement) you are also required to file with the Social Security office as well. Start NOW,….it is a very long process. Roseanne
7. Follow Up: Sorry. I know this is a lot of questions but husband is already on social disability. Would you do with or without survivors benefits on my annuity?
R 7. Hi D, In my opinion yes you should do a spousal benefit annuity. If you are married it’s the law- unless your spouse signs off on the paperwork (SF 3107-2) & is notarized. But even if he does get SSDI, should you pass away at least he’d have half of your retirement pension. Roseanne
Q 8. Hi Roseanne, (this is – – – ) You might remember me from Greensboro District, maybe not. Anyway, I’ve been trying to get a straight answer from HRSSC to no avail. My question is: currently I am not on any USPS health plan, but I know that if I want to have health insurance when I retire, I have to have it for 5 years prior to retirement. Fine. I need to know if I have to have my wife on the USPS plan for 5 years prior to retirement or can I just have a Self only plan for 5 years and add her when I retire. And is there any written documentation of this? I haven’t been able to find it anywhere. Open season ends Monday so I need a response pretty quickly if at all possible. I wish someone had let me know you take questions via email sooner. Thanks in advance.
A 8. Hi – – – , (and of course I remember you)…And FYI…not a second too soon based on the open season dates buddy !!!. Correct you must have health benefits 5 years IMMEDIATELY preceding your retirement date. And they are not playing about the 5 full years. So let’s look at this logically.
You can change your FEHB plan every open season to family, to single to single plus 1 and any plan under the FEHB umbrella
You can during open season go back and forth to single or family, each and every year
The FEHB rules are about YOU, the EMPLOYEE not your spouse
SO MAYBE THIS STATEMENT CAN CLEAR UP SOME CONFUSION:
YOU DON’T HAVE TO HAVE THE SAME EXACT INSURANCE “PLAN” FOR 5 YEARS, YOU JUST HAVE TO HAVE FEHB (regardless of which plan) COVERAGE FOR 5 YEARS, IMMEDIATELY PRECEDING RETIREMENT.
You could get divorced or a spouse could pass away, or you could be single as well. And because you can change coverage every year, you taking single coverage has no bearing on the 5 year rule or how long you’ve had the (single) coverage. Look at it this way…if you were not married… & have single coverage, then get married 10 months before you retired, you would of course put her on your health benefits, make her a beneficiary on your life insurance, and would no doubt prepare to put her as a spousal annuitant. And by doing that, would your spouse would be able to continue your HB if you passed away…of course she would! Now look how logical that was…and it sounds right, because it is right. This is an issue that has been dealt with when two postal employees marry and how so many don’t understand how that really works. I’ve known many that this has been an issue, not that they did not HAVE the FEHB plan (that is truly unusual); but that they didn’t have the spouse on their federal health plan (which at the time they weren’t married). Got married after retirement, and the spouse was able to continue. But If I were you, (& you should take my advice)…put her on the year before you retire…for at LEAST 1 year, so there is continuity in your records, it just make things go so much easier. Roseanne
Q 9. Merry Christmas Roseanne! I happily retired 8/19. The retirement process was very easy in part to all of your very helpful answers in your column. I also like to thank Karen in HRSSC, she called me to let me know that I had a correction on one form that was not allowed.( afterwards I remembered reading about that same thing on your forum). I was going on a extended retirement trip and appreciated the call instead of waiting for the form to be mailed back. I received my vacation pay on the very next pay, the interim pay in a timely manner and the retroactive pay within 4 months. The retirement benefit was exactly as the annuity estimate showed, the only difference was the supplement amount was about 7-8% less than what was on the estimate. Just out of curiosity ( I wouldn’t of change my retirement date) is the difference because I retired at 58 and that estimate was based on age 62? I think the supplement amount remained the same on all the dates I entered on liteblue for retirement estimates for different dates. Thank you for all your useful information, I will continue to read your column and will enjoy retirement immensely.
A 9. Merry Christmas and a Very Happy New Year!! The Supplement is a strange “creature”. You don’t say if you had military time that was paid back….so there are a few things that will change the amount that is listed on the NARCES estimate. Keep in mind, they “say” estimate. That amount is as a result of what is in the Social Security fund (based on your overall earnings & “postal earnings”). Therefore, you retiring at 62 has no bearing on it…because if you were retiring at 62, then there would be no need for the Special Supplement or the calculation of it. Thank you for the update. I will put this in the column, and of course sanitize all references to who and where the email came. Congratulations on your well deserved retirement! Roseanne