House set to vote on easing TSP early withdrawal penalty

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jmcapps said:
I found under the text tab in the link that it seems this is only for certain federal jobs.

"To amend the Internal Revenue Code of 1986 to allow Federal law enforcement officers, firefighters, and air traffic controllers to make penalty-free withdrawals from governmental plans after age 50, and for other purposes."
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yes, for those that qualify to retire before 55. It's not limited to just those careers listed in the article and it would (should) apply to all federal retirees who qualify. If they were to pass this tomorrow I'll be retired by Friday. :cheesy:
 
House passed the bill. Now we wait for the senate to act. If/when this becomes law, I'll retire 30 days later!
 
The bill passed the House and then moves to the Senate. Call your Senators if you are affected by this like I am.

Frank
 
Lakebound said:
The bill passed the House and then moves to the Senate. Call your Senators if you are affected by this like I am
Click to expand...

There's probably no need for that. The bill will help those who would be eligible to retire at 50 so I'm sure they'll vote themselves a new benefit. This is pretty much guaranteed to pass. :laugh:


"Under both CSRS and FERS, Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary."

The above excerpt is from http://www.senate.gov/reference/resources/pdf/RL30631.pdf
 
So another thing to consider is if you have outside 401k. If you roll your private 401k's into TSP will that unlocked those funds. (I'm thinking yes because how are they going to differentiate between what was rolled over and what was contributed.) But then the down side is you're still in the TSP which is limiting.

I was thinking of moving out of TSP when I retired but now I may need to rethink that if my money is going to be available to me should I decide to retire before 55.
 
Yes and I'm hoping that this thing gets past the Senate and signed into Law ASAP! You think it would since it has virtually no opposition.
 
Itchn2retire said:
There's probably no need for that. The bill will help those who would be eligible to retire at 50 so I'm sure they'll vote themselves a new benefit. This is pretty much guaranteed to pass. :laugh:


"Under both CSRS and FERS, Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary."

The above excerpt is from http://www.senate.gov/reference/resources/pdf/RL30631.pdf
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Doubtful. If you read the proposed legislation, if only applies to a select group: "expand the exemption to include specified federal law enforcement officers, customs and border protection officers, federal firefighters, and air traffic controllers who similarly have reached age 50."

Please feel free to correct me if I am wrong but, Congress critters don't meet those requirements but I do. And, the reasoning behind this legislation (sadly) is that group named above, of which I am a part of tend to have a shorter life span due to the stress of our occupations.

So....... I'm calling my Senators.

Frank
 
Lakebound said:
Doubtful. If you read the proposed legislation, if only applies to a select group: "expand the exemption to include specified federal law enforcement officers, customs and border protection officers, federal firefighters, and air traffic controllers who similarly have reached age 50."
Click to expand...
I'm hoping it's not limited to those specific career services and the legislation applies to "all similar" plans. I'm going to be checking with the retirement branch.
 
Tom,

Reading the bill my understanding is this will change the IRS rule that allows certain Federal employees who retire after 50 to withdraw from Gov't plans. Not sure what Gov't plans mean. Good question.

Jeff

Itchn2retire said:
So another thing to consider is if you have outside 401k. If you roll your private 401k's into TSP will that unlocked those funds. (I'm thinking yes because how are they going to differentiate between what was rolled over and what was contributed.) But then the down side is you're still in the TSP which is limiting.

I was thinking of moving out of TSP when I retired but now I may need to rethink that if my money is going to be available to me should I decide to retire before 55.
Click to expand...
 
Hey I've been retired for over 5 years, why can't I empty my TSP TAX FREE? I haven't touched it 20% is a big Federal hit!
 
This is for a specific set of Federal Employees.

Here is what Govexec.com says:

House Passes Bill Exempting Some Feds From Retirement Tax Penalty - Pay & Benefits Watch - Pay & Benefits - GovExec.com


House Passes Bill Exempting Some Feds From Retirement Tax Penalty
By Kellie Lunney May 12, 2015 31 Comments


"The House on Tuesday passed bipartisan legislation 407-5 that would allow federal law enforcement officers and firefighters to access money in their Thrift Savings Plan accounts without penalty when they are eligible to retire.
H.R. 2146 would reform the tax code so that federal law enforcement officers and firefighters, who are eligible to retire earlier than many other federal employees, aren’t subject to the 10 percent tax penalty on TSP retirement funds and other 401(k)-type plans tapped before the age of 59 and a half. Civilians who access their retirement investments, such as a 401(k), prior to turning 55 if they are retired, or 59.5 if they are still working, incur the IRS fine...."
 
Senate passed bill with minor changes. Back to the House it goes for vote. This bill should be passed and signed by the president soon. My opinion, this changes everything for the select few who qualify. Big question is how will TSP administer this change to our TSP accounts.

Time to start filling out my retirement papers and make an appointment with my financial planner.

Jeff
 
ATCJeff said:
Senate passed bill with minor changes. Back to the House it goes for vote. This bill should be passed and signed by the president soon. My opinion, this changes everything for the select few who qualify. Big question is how will TSP administer this change to our TSP accounts.

Time to start filling out my retirement papers and make an appointment with my financial planner.

Jeff
Click to expand...

Concur. This is great news for me too!
 
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