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[TSP_Strategy] US Construction Spending

[TSP_Strategy] US Construction Spending

 


U.S. Construction Spending

Chart of the Week for March 29, 2019 - April 4, 2019

U.S. Construction Spending increased in January 2019.

The chart above shows the monthly percentage change in U.S Construction Spending from January 2018 through January 2019. Data captured includes residential building, nonresidential private building, public buildings, roads, and utility lines.

U.S. Construction Spending was mixed over the past year, ranging from a high of 2.3% growth in February 2018 to low of -1.8% in September 2018. For January 2019, construction spending increased by 1.3%, better than the consensus forecast of 0.4% growth, and also better than December 2018's revised -0.8% growth. Economists noted that public construction was largely responsible for the increase in January 2019, increasing 4.9% from December 2018 and up 8% year-over-year. Within public construction, spending on highways and streets rose by a double-digit rate, which could be a good sign for infrastructure spending going forward.

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Posted by: sarah_oz@yahoo.com
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Neither the TSP Strategy group, nor individual members, are licensed or authorized to provide investment advice. Any statements made herein merely reflect the personal opinions of the individual group member. Please make your own investment decisions based upon your personal circumstances.

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[TSP_Strategy] TSP and Retirement Date

[TSP_Strategy] TSP and Retirement Date

 


The TSP and Your Retirement Date

March 28, 2019

Last week, we explored the topic of required minimum distributions from the Thrift Savings Plan and other retirement savings accounts. This week, let's look at the specific issue of how TSP distributions can affect your decision about the date on which to retire.

I recently received this email about a new retiree's experience with RMDs:

I am over age 70 ½ and I recently retired, effective close of business Dec. 31, 2018, with my first day of retirement Jan. 1, 2019. On Feb. 6, I received correspondence from the TSP stating that the RMD and associated taxes are due to be withdrawn from my account for both 2018 and 2019. Since I worked through all of 2018, it seems to me that there shouldn't be a 2018 RMD. I was told by the TSP that the 2018 RMD was because my payroll office reported that my date of separation was Dec. 31. I assume (maybe incorrectly) that this situation stems from the TSP interpreting Dec. 31, 2018 as my first day retired, and so I was not employed for the entire year. This TSP distribution creates an unwarranted tax obligation, lowers my TSP balance and raises my 2019 income, which may affect my Medicare Part B premium.

According to IRA expert Ed Slott, with respect to the still-working exception to RMD rules, one issue that routinely surprises both financial advisers and their clients is the requirement that an employee be employed throughout the entire year to qualify for the exception and delay RMDs past the year in which they turn 70 ½.

The confusion in the emailer's case revolves around a single day: Dec. 31. I've heard similar stories in the past. I learned that the TSP is required to pay the first RMD for an employee who is over age 70 ½ in the year of retirement and who retires in that year. That's true even if the retirement is effective on Dec. 31. The payments must be made by April 1 of the year following the year of separation from service—in this case by April 1, 2019.

Would retiring on Jan. 1 avoid this dilemma? Yes, but it might create other problems. Remember that under the Federal Employees Retirement System, your retirement commences the first day of the month following your date of retirement. By retiring on Dec. 31, your retirement would begin on Jan. 1, with the first benefit payment due on Feb. 1 (for the month of January).

By retiring on Jan. 1, your retirement would start on Feb. 1, with the first payment due on March 1 for the month of February. No benefit would be payable for Jan. 2- 31. This would cause the loss of a full month of retired pay. On the other hand, if you retired on Jan. 31, you would forfeit any excess annual leave hours above the carryover limit. (Although due to the furlough this year, many employees had their excess leave restored for 2019.)

By retiring in 2019 instead of 2018, you would have more breathing room, instead of having to make a withdrawal decision post-haste. Employees who are over 70 ½ in their year of retirement and who want to cash in annual leave above the carryover limit (typically 240 hours) must make a choice ahead of time.

By the way, here's a note for those of you who are over 70 ½ who are retired and taking monthly payments from your TSP: If your withdrawal election does not meet the RMD threshold for 2019 (say, for instance, you are receiving monthly payments of $25, the minimum monthly payment amount), the TSP will issue a supplemental lump sum payment in December 2019 that ensures you will satisfy the 2019 RMD. This avoids the IRS penalty for failing to take the required amount of RMDs, which is a 50 percent excise tax on the amount not distributed as required.


March 28, 2019

https://www.govexec.com/pay-benefits/retirement-planning/2019/03/tsp-and-your-retirement-date/155897/

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Posted by: sarah_oz@yahoo.com
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Neither the TSP Strategy group, nor individual members, are licensed or authorized to provide investment advice. Any statements made herein merely reflect the personal opinions of the individual group member. Please make your own investment decisions based upon your personal circumstances.

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[TSP_Strategy] President Signs 1.9% Pay Raise

[TSP_Strategy] President Signs 1.9% Pay Raise

 


White House Finalizes 1.9 Percent Pay Raise for Civilian Feds

2:58 PM ET

President Trump on Thursday signed an executive order authorizing a 1.9 percent pay increase for federal employees this year, retroactive to January, ending six weeks of waiting and speculation about when the measure would be implemented.

On Feb. 15, Trump enacted a spending package to keep the government open through September that included a 1.4 percent across-the-board pay increase for civilian federal workers and an average 0.5 percent increase in their locality pay for this year. The provision was retroactive to the first pay period of the year, which began Jan. 6.

But since then, it had been unclear when the measure would be implemented. Last week, acting Office of Personnel Management Director Margaret Weichert told reporters that the process was very "legalistic" but that the pay raise was in the "final clearance" stages.

Pay tables on OPM's website had not yet been updated as of mid-Thursday afternoon and the agency did not immediately respond to a request for comment.

Depending on how quickly federal payroll processors are able to switch over to the new pay tables, federal employees could see the raise reflected in their paychecks as early as next week. But it is unclear when they will receive lump sum payments to cover what they are owed as part of the retroactive portion of the pay increase.

The raise overrode a pay freeze that Trump had authorized last December. Trump has proposed another pay freeze for federal civilian employees in 2020, although he proposed a 3.1 percent pay raise for members of the military in his fiscal 2020 budget request.


2:58 PM ET

https://www.govexec.com/pay-benefits/2019/03/white-house-finalizes-19-percent-pay-raise-civilian-feds/155904/

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Posted by: sarah_oz@yahoo.com
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[TSP_Strategy] Re: TSP Withdrawals

[TSP_Strategy] Re: TSP Withdrawals

 

Even the profits - from a traditional 401K - are treated as taxable income and not taxed as capital gains?

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Posted by: Scott N <scottnieto@gmail.com>
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Re: [TSP_Strategy] TSP Withdrawals

Re: [TSP_Strategy] TSP Withdrawals

 


On Mon, Mar 25, 2019, 16:39 dlstox dlstox@gmail.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:
 

It would have been nice if she would have given an amount in her example; say on FERS employee with a TSP account holding $500,000 after working 30 years. 

I've got at least 10 years, but always want to learn for when the time comes.

me


On 3/21/2019 7:03 PM, sarah_oz@yahoo.com [TSP_Strategy] wrote:
 


When and Why You Have to Take TSP Withdrawals

By Tammy Flanagan

3:26 PM ET

Under IRS regulations, when you reach a certain age, you must begin taking a required minimum distribution from your Thrift Savings Plan account or other retirement savings accounts each year. You generally have to start taking such withdrawals when you reach age 70½, unless you're still working.

This week, we'll take a look inside the world of RMDs. But be warned: the tax rules regarding such distributions are complex. You may want consult a financial adviser before making any decisions based on what you read today.

The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS's Uniform Lifetime Table. This table can be found on page 8 of the TSP pamphlet titled, Important Tax Information About Your TSP Withdrawal and Required Minimum Distributions. One of the differences of computing RMD's outside of the TSP is that a separate table is used if the sole beneficiary is the owner's spouse who is 10 or more years younger than the owner. The TSP does not distinguish between married or unmarried participants for RMD computations.

Here's how the distribution requirements work:

Suppose you're retired and your 70th birthday was June 30, 2018. You reached age 70½ on Dec. 30, 2018. You must take your first RMD (for 2018) by April 1, 2019. If your 70th birthday was July 1, 2018, you reached age 70½ on Jan. 1, 2019. You do not have an RMD for 2018. You must take your first RMD (for 2019) by April 1, 2020.

For each subsequent year after your required beginning date, you must withdraw your RMD by Dec. 31.

The first year following the year you reach age 70½ you will generally have two required distribution dates: an April 1 withdrawal (for the year you turn 70½), and an additional withdrawal by December 31 (for the year following the year you turn 70½). To avoid having both of these amounts included in your income for the same year, you can make your first withdrawal by December 31 of the year you turn 70½ instead of waiting until April 1 of the following year.

RMD rules after an account owner dies are different from the rules for living participants. The TSP has a publication on RMDs for beneficiary participants that explains how these differences apply to a beneficiary of a TSP account.

Note that in general, Roth IRAs do not require withdrawals until after the death of the owner. This does not hold true, however, for the TSP. If you have invested in the Roth TSP, your entire account is subject to RMD, including your Roth balance.

Also be aware that if you receive a payment from an account that has both taxable and tax-exempt contributions, your distribution will be paid proportionally from taxable and nontaxable amounts. For example, if 80 percent of your account is in your traditional balance and 20 percent is in Roth, any withdrawal you take will be 80 percent traditional and 20 percent Roth. The good news is that under new withdrawal rules that will take effect later this year, you can still use this method, but you'll also have the option to take your withdrawal only from your Roth balance or only from your traditional balance.

Here are a couple of other things to remember about RMDs:

  • You can withdraw more than the minimum required amount.
  • Your withdrawals will be included in your taxable income, except for any part that was taxed before or that can be received tax-free (such as qualified distributions from designated Roth accounts).

By Tammy Flanagan

3:26 PM ET

https://www.govexec.com/pay-benefits/retirement-planning/2019/03/when-and-why-you-have-take-tsp-withdrawals/155737/


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Posted by: Doug Peterson <dpatd10@gmail.com>
Reply via web post Reply to sender Reply to group Start a New Topic Messages in this topic (7)

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Neither the TSP Strategy group, nor individual members, are licensed or authorized to provide investment advice. Any statements made herein merely reflect the personal opinions of the individual group member. Please make your own investment decisions based upon your personal circumstances.

SPONSORED LINKS
.

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