Readers' Comments
Total Comments: 14
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Another Retirement Option? Roth IRA's and the Federal Employee
Total Comments: 14
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March 18, 2010
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Roth IRA
State Department
Thu Nov 30, 2006 8:30 AM
Post Reply
I believe an important aspect of the Roth IRA is the ability to withdraw your contributions anytime without penality or interest. It is the earnings that are restricted and have the potential to be taxed and penalized.
Hip hip hooray, we want an IRA!
DOD
Thu Nov 30, 2006 8:38 AM
Post Reply
I think adding an IRA option is a great idea and I hope they implement it within our retirement system very soon! It's a great option for federal workers, especially those who are maxed out on their TSP contributions and still want to contribute money towards their retirement (using for instance a life cycle fund), while keeping everything under the (trusted) Federal Retirement Umbrella – “one-stop shopping” if you will.
Also, if you have an emergency, I think that you can borrow the money with less hassle than through the TSP program because you would have already paid your taxes on your IRA contribution. If they offer it to us, (which I hope they do) it would be nice if we could get some sort of matching fund, but I guess that would be asking too much?
Re: Hip hip hooray, we want an IRA!
IT Spec
Thu Nov 30, 2006 10:24 AM
TSP and IRAs
Department of State
Thu Nov 30, 2006 10:23 AM
Post Reply
Please study the tax rules before you make any assumptions. Non-deductible IRA contributions must have an established cost basis every year so withdrawals are not taxed twice. TSP contributions are not taxed, so the withdrawals (consisting of contributions, capital gains and dividends) are only taxed one time. As Government employees, we have been blessed with the best retirement plan! Just ask the contractor employee sitting next to you and compare! THANK YOU UNCLE SAM!!!
Roth IRAs
eeoc
Thu Nov 30, 2006 11:01 AM
Post Reply
Thanks for the article. I've been thinking about starting a Roth IRA in addition to my TSP. Does the IRS cap on annual contributions that applies to TSP also apply to Roth IRA contributions, or does the IRS cap only apply to pre-tax contributions as opposed to the post-tax contributions that would go into the Roth IRA?
Re: Roth IRAs
EPA
Fri Dec 1, 2006 10:53 AM
roth ira
dod
Fri Dec 1, 2006 9:39 AM
Post Reply
I rolled my voluntary contribution account (VCP) into a ROTH on my retirement under CSRS. Due to IRS rules, the money had to roll thru a traditional IRA to the ROTH. I waited until my last year of federal employment to establish a voluntary contribution account.
(See the OPM brochure "Retirement Facts 10.")
Re: roth ira
nws
Sun Nov 8, 2009 1:05 AM
Roth IRA
SSA
Wed Dec 6, 2006 9:57 AM
Post Reply
I am not a tax accountant, so don't rely on this, but it is my understanding that the $10,000 for purchase of new home is even better than it looks.
If you have your money in for 5 years (can be less, actually, since it starts with the tax year for which it is established, and can come out at any time during the fifth year) you meet the 5 year rule. Your contributions then dont count as a distribution. Run this past your tax expert, but that is my reading, sooo. A nice young, married couple can stuff their IRA with $8,000 per year (if income limits are met) for 5 years, and each can take out $10,000 in earnings for that first home. So if earnings are good enough, they can save for a house and have $40000 in contributions to take out, and $20,000 in earnings to take out. All tax free.
Use FSA to 'Launder' Money?
DOD
Wed Dec 20, 2006 1:27 PM
Post Reply
Since money returned to you from medical expenses or other qualified expenses by the Flexible Spending Account is not taxed, could you roll that into a ROTH and avoid ever paying taxes on it?