Retirement (FAQ)

Just for completeness, there are three separate things in question here:
  1. IRA. $6k limit in 2022. This limit is for Roth and Traditional IRAs combined.
  2. TSP - employee contribution. $20.5k limit in 2022. This limit is for Roth and Traditional TSPs combined.
  3. TSP - overall contribution including employer (gov't) matching and non-elective contributions. $57k limit for 2022. The government does not provide extra contributions beyond the 5% match, so the highest amount they will ever contribute is $9.65k (the legal cap on base pay times 5%)—so this limit does not affect us.
To reiterate, the contribution limits are for your combined Traditional and Roth accounts. You can direct the money into each type of account however you like, but the total contributions have to be within the limits.
 
In the FAQ for retirement it is stated the 1.7% & 1% are calculated from base pay. Does that mean without locality? Or does that mean without all the premiums such as Sunday pay, OT etc...
 
For TSP withdrawal at retirement, how does it work if you've given money to both Traditional and Roth? Lets say my pension is 50k and I withdraw 50k from traditional for a taxable income of 100k that year. Could I withdraw another 50k from my Roth portion that to receive anything above 100k tax free?
 
For TSP withdrawal at retirement, how does it work if you've given money to both Traditional and Roth? Lets say my pension is 50k and I withdraw 50k from traditional for a taxable income of 100k that year. Could I withdraw another 50k from my Roth portion that to receive anything above 100k tax free?
You are not allowed to determine the portion of that $50K withdrawal that comes out of your traditional vs. Roth. You just decide how much to withdraw, and the TSP will allocate the withdrawal evenly between Trad/Roth based on the total current balance in each category.

EXAMPLE:

Total TSP balance $500K
Roth balance: $300K (60% of total balance)
Traditional balance: $200k (40% of total balance)

A hypothetical withdraw of $50K will be allocated as follows:

$30K from Roth (60% of $50K)
$20K from Traditional (40% of $50K)
 
You are not allowed to determine the portion of that $50K withdrawal that comes out of your traditional vs. Roth. You just decide how much to withdraw, and the TSP will allocate the withdrawal evenly between Trad/Roth based on the total current balance in each category.

This is incorrect. The TEP modernization act changed this. You can now decide which to withdraw from.

You can also roll over your ROTH or traditional into an IRA, giving you flexibility as well.
 
Are controllers subject to 10% withdrawal penalties on Roth TSP contributions prior to age 59.5? I know we can withdrawal from traditional but unsure on the Roth aspect.
 
If you have 20 years of good time and retire at age 50, is the pension reduced? Are ATCers subjected to a reduced pension for working under 25 years? I plan on working 20 years only - I was hired at age 30.5 and am going to retire at age 50.5. Anybody know for sure? I can't find an answer in the FERS Guide for SCE book.
 
If you have 20 years of good time and retire at age 50, is the pension reduced? Are ATCers subjected to a reduced pension for working under 25 years? I plan on working 20 years only - I was hired at age 30.5 and am going to retire at age 50.5. Anybody know for sure? I can't find an answer in the FERS Guide for SCE book.
No, if you have 20 years service and are in the year in which you turn 50 you will get your pension. 1.7% x high three for the first 20 years in that case. Beyond 20 years you get 1% x high three unless you get to MRA + 30.
 
I’ve gotten so many conflicting opinions on this. I’m in the ARNG and plan on retiring in 2046 with 30 years of service. To date, I have over 2 years of “active” time with at least a deployment or two to go in the career.

Can I buy back my time for the FAA pension if I’m also going to be retiring with the military? Initially I had been told no, but I was recently told by a reservist that just retired from the Air Force that he had done his. If I am able to, what does that do for me? Also, is it beneficial to buy back what I have accrued now and then buy back more after each deployment?

If I retired in 2046 from the FAA as well, that would be 27 years of time (55 years old.)

I know some of you will hate this one, but if you come up a year and a half short on MRA+30 and get an age waiver can you still get 1.7 for all 30?
 
No, if you have 20 years service and are in the year in which you turn 50 you will get your pension. 1.7% x high three for the first 20 years in that case. Beyond 20 years you get 1% x high three unless you get to MRA + 30.
So you don’t have to wait until your actual 50th birthday? You can retire in the year you turn 50 (when you’re still 49)?
 
I’ve gotten so many conflicting opinions on this. I’m in the ARNG and plan on retiring in 2046 with 30 years of service. To date, I have over 2 years of “active” time with at least a deployment or two to go in the career.

Can I buy back my time for the FAA pension if I’m also going to be retiring with the military? Initially I had been told no, but I was recently told by a reservist that just retired from the Air Force that he had done his. If I am able to, what does that do for me? Also, is it beneficial to buy back what I have accrued now and then buy back more after each deployment?

If I retired in 2046 from the FAA as well, that would be 27 years of time (55 years old.)

I know some of you will hate this one, but if you come up a year and a half short on MRA+30 and get an age waiver can you still get 1.7 for all 30?
Did you ever get an answer on this? If I get hired ATC I'll already have 12 years in the AFNG and want to make a plan for what to do.
 
Did you ever get an answer on this? If I get hired ATC I'll already have 12 years in the AFNG and want to make a plan for what to do.
Almost positive you can buy your time back and retire from both. You're buying back your active duty years of service and since your guard retirement is based off points and not years of service for your pension it doesn't effect it. Now if you end up buying your time back and going AGR down the road you would have to start building your 20 years all over again if you wanted an active duty retirement. That's how I understand it.

Now buying your active time back doesn't count towards your minimum retirement age for the FAA it just adds those years (at 1%) on top of your years of good time in the FAA
 
Almost positive you can buy your time back and retire from both. You're buying back your active duty years of service and since your guard retirement is based off points and not years of service for your pension it doesn't effect it. Now if you end up buying your time back and going AGR down the road you would have to start building your 20 years all over again if you wanted an active duty retirement. That's how I understand it.

Now buying your active time back doesn't count towards your minimum retirement age for the FAA it just adds those years (at 1%) on top of your years of good time in the FAA
Thank you.
 
Are controllers subject to 10% withdrawal penalties on Roth TSP contributions prior to age 59.5? I know we can withdrawal from traditional but unsure on the Roth aspect.
Im retired ATC (13) years so far You should check this out.
In the past, the 10% penalty didn’t apply for withdrawals from workplace plans if the worker left a job in the year they turn 55 or older, or age 50 for public safety employees. Now, private-sector firefighters and state and local corrections officers also can qualify for the public safety exception after they turn 50. In addition, public safety employees with at least 25 years of service with the employer sponsoring the plan can now avoid the penalty regardless of their age

So ATC is Safety related Occupation, in fact we have the same retirement classification as police firefighters.
So no at age 50 I did not pay the 10% early withdrawal penalty.
Side note: I attended several FAA retirement seminars and not one mentioned this.
BUT DO YOUR OWN RESEARCH ITS YOUR TAXES NOT MINE!
we have forced retirement at age 56 so we should have access to our money.
 
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Im retired ATC (13) years so far You should check this out.
In the past, the 10% penalty didn’t apply for withdrawals from workplace plans if the worker left a job in the year they turn 55 or older, or age 50 for public safety employees. Now, private-sector firefighters and state and local corrections officers also can qualify for the public safety exception after they turn 50. In addition, public safety employees with at least 25 years of service with the employer sponsoring the plan can now avoid the penalty regardless of their age

So ATC is Safety related Occupation, in fact we have the same retirement classification as police firefighters.
So no at age 50 I did not pay the 10% early withdrawal penalty.
Side note: I attended several FAA retirement seminars and not one mentioned this.
BUT DO YOUR OWN RESEARCH ITS YOUR TAXES NOT MINE!
we have forced retirement at age 56 so we should have access to our money.
 
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