Leaving Uniformed Services (2024)

FAQs

What happens to my TSP if I leave federal service? ›

Once you leave the uniformed services, you'll no longer be able to make contributions to your account. However, you can keep more of what you save thanks to our low costs, change your investment mix, and transfer eligible money into your account — all while your account continues to accrue earnings.

Can an employer require an employee to produce military orders before granting a military leave of absence? No. The Uniformed Services Employment and Reemployment Rights Act (USSERA) requires that an employee or a responsible military official provide advance notice to the employer of military service.

To be creditable for leave accrual purposes, uniformed service must have: (1) ended honorably. That includes: an honorable discharge or a discharge under honorable conditions (general) or transfer to the inactive reserves under honorable conditions. (2) been active duty in a uniformed service.

Federal employees accrue leave, which is accumulated through years of service. For non-retired members, full credit for uniformed service (including active duty and active duty for training) performed under honorable conditions is given for annual leave accrual purposes.

Withdrawing Funds: Soldiers are eligible, but not required, to withdraw from the TSP account as soon as they separate from the uniformed services. Service members should be aware that there may be tax penalties for withdrawing funds prior to age 59½. For more information please consult the IRS TSP fact sheet.

Consider leaving your funds in the TSP unless you don't want to deal with extra paper work or you want more investment options. Otherwise, consider rolling your TSP account assets into your new 401(k) plan if you have one, or one of the other following options.

Leave Service Computation Date

All federal employees gather annual leave at a rate of four hours per pay period during their first three years in service. After three years of service, federal employees accrue annual leave at six hours each pay period.

Under California Government Code §19775, individuals who are employed in California are entitled to up to 30 days of paid military leave for active duty (including active duty training). The paid military training does not cover leave for inactive duty training, such as drills.

Your creditable service is based on your retirement service computation date (RSCD). OPM uses your RSCD to determine the beginning of your Years in Service for the pension calculation. Your credible years of service are 100% tied to your RSCD. You can find your *Estimated* RSCD on your Personal Statement of Benefits.

You can be appointed to any position for which you qualify up to GS-11 or equivalent (the promotion potential of the position is not a factor). You must meet the qualification requirements for the position. (Note: any military service is considered qualifying for GS-3 or equivalent.)

Is it worth buying back my military time? ›

Your Federal Pension is determined by your High-3 Salary, your Years in Service and your CSRS or FERS Pension Multiplier. If you buy back your military time – it will increase your Years in Service. And the more Years in Service you have, the larger your pension will be.

DD-214 reports will also provide the candidate's discharge type. While the type of discharge can be viewed by an employer, the employer should not ask the candidate to provide a reason as to why they were discharged from the military during the hiring process.

Verification of Military Service

Please use the Defense Manpower Data Center's (DMDC) Military Verification service to verify if someone is in the military. The website will tell you if the person is currently serving in the military. The site is available 24-hours a day.

Every command will have its own procedures for requesting leave. It may involve a paper or electronic leave request form sometimes called a “leave chit.” The command will then approve or deny the leave request.

Taking a loan from your TSP is a bad idea. The money you're putting into your TSP is for retirement, not for buying a new car. If you leave federal employment with an outstanding TSP loan you have to pay back the full loan balance within 90 days.

Government match — The Department of Defense will contribute 1 percent of your basic pay to your Thrift Savings Plan after 60 days of entering service and will begin to match your contributions (up to an additional 4 percent when you contribute at least 5 percent), at the start of your third year of service.

You have the option of changing withholding to any percentage you want, including to 0%. The taxable portion of your withdrawal is subject to federal income tax at your ordinary rate. Also, you may have to pay state income tax. An additional IRS early withdrawal penalty of 10% may apply if you're under the age of 59½.

Average TSP balances

The average TSP balance has grown steadily in the last decade, reaching the six-figure mark in 2013. As of 2021, the average TSP balance for FERS participants was $181,279, while the average TSP balance for CSRS participants was $194,424.

“In general, leaving your TSP invested in a Lifecycle fund and leaving it alone will be the right answer for the majority of people. Personally, I left my TSP account alone when I separated. I check it once a year.” In his book, Reese preaches the “LADS” concepts – Low-Cost, Automatic, Diversified and Simple.

What is the rule of 55 for TSP? ›

The rule of 55 is a great feature of your Thrift Savings Plan that helps early retirees. This IRS rule means that those who leave service in the year they turn age 55 or later can take TSP withdrawals without penalty.

Cashing In Leave

37 U.S. Code § 501. Leave is valued at 1/30 of base pay per day cashed in. No other allowances, such as BAH or BAS, are included in the value of leave.

Members may sell back up to 60 days of leave over the span of their career. Members who are approaching transition with extra leave have 3 choices regarding what to do with that leave. They can: (1) use the leave before transition, (2) sell back the leave when they transition (3) take terminal or separation leave.

Annual leave calculator

For a basic calculation of leave allowance, multiply the number of days you work on average each week by 5.6. For example, if you work a five day week, you would be entitled to 28 days' annual leave a year.

Holidays and non-duty weekends do not count against the 15-day regular military leave ceilings. Regular military leave is recorded by fiscal year. If an employee uses military leave in the pay period of the fiscal year change, a split Time and Attendance (T&A) record is required.

Employers may not deny employment, reemployment, retention in employment, promotion or any other benefit of employment because of past or present membership in the armed forces or intent to join the military. This applies to active and reserve service, whether voluntary or involuntary.

These requirements may also impact the scheduling of annual leave. Annual Leave: Active duty Soldiers earn 2.5 days of annual (chargeable) leave for each month of service, for a total of 30 days per year. Currently, Soldiers can bank up to 60 days of leave at the end of the fiscal year.

The difference between inflation in the second and third quarters generally amounts to the least. Out of those four good months, March is the best. A March 1 retirement date has historically provided the best initial COLA, because it results in the biggest difference between two quarters of average inflation.

Eligibility. You may purchase a maximum of four years of military service credit if you meet one of the eligibility requirements as follows: A current, former, or retired member of a CalPERS-covered employer that contracts for this option. A current or retired state or school member.

Creditable years of service are used to calculate your regular FERS retirement pension once you turn age 62. If you have less than 20 years of federal service (including years on Federal Disability Retirement) you'll receive 1% of your high-3 salary for each year of service.

What military rank is a GS-9 equivalent to? ›

An O-1 roughly translates to GS-9, and O-2 to GS-10 or GS-11. The rank of O-3 compares to a GS-12 level, while O-4, O-5, and O-6 translate to GS-13, GS-14, and GS-15, respectively.

In fact, it's a tremendous asset with significant value. For the average retiring officer (let's say an O5 with 20 years), the military pension amount is valued at well over a million dollars. Did you know that?

High-3 Average Salary

Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period.

The Soldier must be ordered to active duty for a period of more than 30 days when determined unfit and must have a career total of eight years of active service (active duty days) by the date of separation from active duty.

If you were married for at least 10 years to your spouse, and during that time your spouse performed creditable military service for at least 10 years, you can have your portion of the divided military retirement pay sent to you directly from the Defense Finance and Accounting Service (DFAS) instead of from your former ...

Supervisors may grant brief excused absences on an ad hoc basis for periods of up to 59 minutes. The authority can be used for all employees as long as the reasons are justifiable. Cases of occasional tardiness to work, for example, due to a flat tire or problem at home, can also be covered by the rule.

Did you know that claiming benefits at age 62 results in a 30% permanent reduction in benefits? Social Security benefits also increase by 8% per year each year you delay taking benefits between age 67 to the maximum benefit age of 70.

As a general rule, the federal sector tends to have better benefits. These federal employee benefits include health benefits, vacation, sick leave, paid (especially federal) holidays, retirement, steady and consistent raises, etc.

If you decide to roll over your TSP assets to an IRA, you can choose either a traditional IRA or Roth IRA. No taxes are due if you roll over assets from a traditional TSP account to a traditional IRA, or if you roll over your contributions and earnings from a Roth TSP account to a Roth IRA.

Can I cash out my TSP early? ›

You have the option of changing withholding to any percentage you want, including to 0%. The taxable portion of your withdrawal is subject to federal income tax at your ordinary rate. Also, you may have to pay state income tax. An additional IRS early withdrawal penalty of 10% may apply if you're under the age of 59½.

Yes. Participants may roll over eligible rollover distributions from their TSP accounts to a qualified trust or an eligible retirement plan (as defined in IRC § 402(c)(8)). (See 5 USC § 8433(c)(2).) An eligible retirement plan can be either an IRA or an eligible employer plan.

You must work at least 5 years with the Federal Government before you are eligible for a FERS Federal Pension, and for every year you work, you will be eligible for at least 1% of your High-3 Average Salary History. Automatic deductions that can range from .

Eligible rollover distributions of your traditional balance may be rolled over to a traditional IRA, an eligible employer plan, or a Roth IRA. taxed in the current year, and no income tax will be withheld. You won't be taxed on this money until you withdraw it from the traditional IRA or the eligible employer plan.

You can only withdraw funds in which you are vested (i.e., funds you are entitled to keep) based on your years of service. The amount of your age-59 ½ withdrawal must be at least $1,000 or your entire vested account balance (even if it's less than $1,000).

You can change your TSP contributions from tax-deferred to the ROTH by logging into your TSP account online and selecting to do so.

When you are ready to withdraw your money from your TSP account, you can do it all at once (commonly referred to as a lump-sum payment) or over a period of time. Or you can purchase an annuity that will make payments to you for life. You also can choose any combination of these full withdrawal options.

Any payments that are not sent directly to an IRA or an eligible employer plan can be sent to your checking or savings account electronically by direct deposit. Otherwise, we'll mail a check to the preferred address on your account.

Another reason to consider a rollover is because of withdrawal options. One of the biggest downsides to the TSP is that it limits how you can take money out in retirement. In many cases, these limits won't present an issue. But if you need more flexibility, a rollover may be necessary.

While they may not have as many funds to choose from, TSP participants do have one big advantage over most 401(k) investors: lower fees. The total expense ratio, which covers both investment and administrative fees, is 0.066% for individual TSP funds.

What happens if you quit a government job? ›

You must submit your reason for leaving on a Standard Form 52 (Request for Personnel Action). You must complete a Clearance Checklist (CPSC 236) and take care of any financial obligations before you leave. If you leave Federal service you receive a lump sum payment for any unused annual leave, not sick leave.

FERS employees are eligible for a full (unreduced) immediate annuity at age 62 with 5 years of service. With 5 years or more service, at age 62 or older, workers can leave federal service and claim a full pension.