Q. I am receiving Social Security Disability Insurance benefits due to stroke, seizures and other medical issues. I am getting letters from the IRS for payment of taxes in 2008. Can they tax my SSDI benefits? A. Yes; however, you may have little or nothing to pay. To find out more, go to www.ssa.gov/pubs/10153.html, click on About Your Benefits and scroll to Paying Taxes on Your Benefits.
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Q. After 38 years of contribution to my retirement fund, of $78,000, why do I have to wait for a full annuity payment? The money is there, and I need my full annuity monthly. Who can I speak to in order to get what I worked for? Also, why do I have to pay taxes on my annuity every month when I paid taxes when I was working for 38 years? I am under CSRS and my retirement date was five months ago. A. You have to wait because the Office of Personnel Management is both short-staffed and overloaded with…
Q. I retired in 2004 from the Postal Service on a CSRS disability. I had 28 years total service (paid back military time) and am 100 percent disabled through the Veterans Affairs Department (combat-related). At the time of separation, my personal office told me after age 62 (August 2011), I would no longer have to pay taxes. Is that true? A. There isn’t any tax advantage to being retired on CSRS or FERS disability unless you are totally disabled for all gainful employment. Since the Office of Personnel Management can’t make that determination, you’ll have to check with your local…
Q. My mother worked for the Department of the Army for 36 years. She retired at age 57 and died on March 22, 2007, at the age of 77. On April 1 of that year, her retirement check was deposited into her bank account for approximately $1,500.00. This money was returned to the federal government by her bank due to legal requirements of the government. What happened to that money? It seems to me that she was only retired for 20 years and she should have had at least 16 years left of retirement benefits. What happens to the remaining money she…
Q. I am 60 years old and had emergency major open heart surgery May 16, 2011. The Mayo Clinic in Jacksonville, Fla., installed a left ventricular assist device. I had to stay away from my home in Georgia and stay close to the Mayo Clinic following this procedure for several months, which put a strain on my savings. I was forced to have to retire with approximately 37 years of government service. My retirement date was Sept. 2, 2011. I put in for an alternate retirement annuity because of my qualifying medical condition to help me pay my medical bills…
Q. I retired from the Postal Service on Jan. 1 at age 59 with 30 years under FERS. I got a job right away mainly with intentions of making enough only to survive until the retirement process was complete (six to eight months). I will probably exceed the maximum allowable for Social Security supplement by May. Am I correct in understanding that this will follow me into next year even if I change my job situation? A. Your special retirement supplement will be adjusted when the Internal Revenue Service’s records are matched with the Office of Personnel Management’s. This means…
Q. I plan on retiring in August and have a question about federal and state tax. Is the annuity taxed before the spousal is taken out? Or is the spousal taken out, then whatever is left is taxed? A. I assume that you are asking about the tax consequences of electing a survivor annuity for your spouse. The reduction in your own annuity occurs when it is adjudicated by the Office of Personnel Management. Therefore, the starting point for federal taxation is the annuity you receive, not the one you would have received if you hadn’t elected a survivor annuity. However,…
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…
Q. I am getting ready to retire in three weeks after 37 years with the Civil Service Retirement System. While working with the personnel office and getting the package ready to send to OPM, I brought up about the CSRS contribution balance. Back in 1986 they converted to the new system and I had a rather large balance in the CSRS contributions. We noticed that our balance went to zero when the new pay stubs were issued. They told us not to worry back then and the money would be added back in when we retired. My current leave and…
Q. I am getting ready to retire at the end of December after 37 years with the Civil Service Retirement System. In 1986, the Office of Personnel Management converted to a new system and I had a rather large balance in CSRS contributions. We noticed that our balance went to zero when the new pay stubs were issued. They told us not to worry back then and the money would be added back in when we retired. My current LES shows again a large amount of contributions. I asked the human resources office about a document that combined both balances,…