The Obstacle:

Joan is considering filing her retirement papers with the Federal Government.  After a lifetime of climbing her ranks through the GS levels, she now tries to decipher the various decisions she needs to make with her retirement benefits.  She wants to make sure she is making the best decision for the rest of her life and her family.

WSF Guidance & Results:

Joan was looking for a comprehensive financial planning firm to help make these decisions and guide her financial journey so she could enjoy retirement. She wanted to ensure that:

  1. She could continue to live the same lifestyle in retirement
  2. She could leave a legacy for her children and grandchildren
  3. She was as tax efficient as possible

The Plan:

  1. Implement risk management strategies for TSP funds and other assets
  2. Set annual plan for Roth conversions of pre-tax monies for future legacy goals. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitation for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you covert, you must do so before converting to a Roth IRA.
  3. Set monthly spending monitoring to ensure she is staying on track
  4. Ensure proper insurance coverages for catastrophic events
  5. Choose appropriate FERS option to provide for her and her spouse
  6. Review and update Estate Planning documents to provide for future goals and family legacy 

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes.

A Roth IRA conversion—sometimes called a backdoor Roth strategy—is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.

To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions.

This material is for informational purposes only and does not constitute tax, legal, or investment advice. Please consult a qualified tax professional regarding your individual circumstances.