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Ssdi & Tsp Cash Out

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MPsgt

Question

Does the IRS consider Social Security Disability Insurance as a waiver for the 10% penalty tax on the TSP cash out for employees retired under FERS disability retirement?

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  • HadIt.com Elder

Yes it does.

What you really need is a Doctors statement and do the disability withdrawal form. They will only withhold 30 percent.

I didnt do that but I fiiled a letter and got a refund of the additional 10 percent.

Good luck and let me know how it goes. My wife is in same situation.

Basser

A Veteran is a person who served this country. Treat them with respect.

A Disabled Veteran is a person who served this country and bears the scars of that service regardless of when or where they served.

Treat them with the upmost respect. I do. Rejection is not a sign of failure. Failure is not an option, Medical opinions and evidence wins claims. Trust in others is a virtue but you take the T out of Trust and you are left with Rust so be wise about who you are dealing with.

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Yes it does.

What you really need is a Doctors statement and do the disability withdrawal form. They will only withhold 30 percent.

I didnt do that but I fiiled a letter and got a refund of the additional 10 percent.

Good luck and let me know how it goes. My wife is in same situation.

Basser

Is the disability withdrawal form an IRS or TSP publication? What is the form number? Thanks.
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  • HadIt.com Elder

You can transfer your TSP money to an IRA along the way. When you take money out of your TSP or IRA you just take out what you need for that year. If you need an extra 500 bucks a month from your TSP just take that amount since you have to pay tax on it, and you probably have to pay quarterly tax. Chances are you will get your OPM first which is taxable. Just remember you don't have to cash it all out at once.

John

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You can transfer your TSP money to an IRA along the way. When you take money out of your TSP or IRA you just take out what you need for that year. If you need an extra 500 bucks a month from your TSP just take that amount since you have to pay tax on it, and you probably have to pay quarterly tax. Chances are you will get your OPM first which is taxable. Just remember you don't have to cash it all out at once.

John

Thanks, that seems like sound advice. I just received my first payment from SSDI April 18th. I figure OPM will offset FERS DR before May 1st and establish my interim payments. The OPM has been fast with processing my FERS DR. I hope they have in finalized by June 1st.
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  • HadIt.com Elder

MP

Yes, they will reduce your OPM by 60% of your SSDI. Are you going to keep the OPM health insurance? I kept mine via family plan and I got about $300 a month net from OPM. Of course, this makes TDIU or 100% from the VA almost a given. The Feds are anxious for you to take OPM before you get the crazy idea you might be eligible for OWCP wage loss. Are you retired military, I forget? You will be doing OK no matter since you will get SSDI, OPM and TDIU. The bulk of your money will come from TDIU or 100% VA. You have the means to wait the VA out so go for it! Jbasser, Testvet, me, you and a few others are in this boat and none of us wanted to be there but we will have more in retirement than all those people who cast doubt on us.

John

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MP

Yes, they will reduce your OPM by 60% of your SSDI. Are you going to keep the OPM health insurance? I kept mine via family plan and I got about $300 a month net from OPM. Of course, this makes TDIU or 100% from the VA almost a given. The Feds are anxious for you to take OPM before you get the crazy idea you might be eligible for OWCP wage loss. Are you retired military, I forget? You will be doing OK no matter since you will get SSDI, OPM and TDIU. The bulk of your money will come from TDIU or 100% VA. You have the means to wait the VA out so go for it! Jbasser, Testvet, me, you and a few others are in this boat and none of us wanted to be there but we will have more in retirement than all those people who cast doubt on us.

John

My wife and I plan on keeping our FEHB, dental, and vision. We have two kids. The only thing that might change our FEHB is the VA increasing to IU, preferably IU P & T. Unless we receive good advice as to why we should keep it. I'm not retired military. I did five years in the Army from Jan 99' to Jan 04', and I won't say more than that. I appreciate your optimistic nature. My wife hates my pessimistic outlook of the real world and the dumb-ass people walking around in it. What can I do but , try to deal with it?

Edited by MPsgt
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