Roth transfers

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Q. Can you transfer Voluntary Contributions into the Roth balance of your TSP account? A. No. Transfers into the Roth TSP are limited to Roth 401k, Roth 403b and Roth 457b plan balances.

Loan default

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Q. I’ve decided that it would be financially advantageous for me to default on my current TSP loan, in order to pay off other, more pressing and expensive debts. My loan payment is currently deducted automatically from my biweekly civil-service paycheck by the Treasury Department. So I have three questions: 1) Is there a mechanism by which I can have Treasury stop making the loan payment/deduction? 2) If so, then if I do so as of Oct. 15, will I be liable for the taxes on the deemed disbursement in this tax year, or in the next tax year? (I…

TSP early withdrawal

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Q. I will be retiring with a law enforcement 1811 pension. I will still owe $30,000 on a TSP loan.  I understand I will have to pay taxes on the loan as they will consider it a pay-out. My question is about the additional penalty that may be involved. I have read under the Pension Protection Act of 2006 (PPA), Section 828, which  allows a retired federal law enforcement officer to withdraw funds from their TSP.  When the IRS form 1099 reflects the distribution code of “early withdrawal – no known exception, the retired employee can file a form 5329 with the…

Payoff mortgage with TSP

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Q. I am 65 years old and have been retired 5 years from USPS under FERS.  My mortgage balance is $58,500 at 4.5%.   I pay $665/mo. for principal and interest.  The mortgage balance will be paid off in Dec 2023. My TSP balance is $129,000 and all in the G fund earning 2.5%. Right now I take monthly payments of $700 from my TSP.  I am thinking of increasing my monthly TSP payments (during open season) from the present $700 to $2,000.  I would then put an extra $1,200 per month towards my monthly mortgage payments.  I would then pay…

TSP account

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Q. Read your Money Matters columns in the Federal Times and am always intrigued by what advice you put for.  Particularly interested in a column you did for the October 6, 2014 issue, entitled “Why market timing is a sucker’s bet.”  I am a federal retiree with 30 years federal service, and have been retired 8 years.  One of the issues I wish you would discuss, either in association with the above column, or as a standalone, is how retirees can continue to invest, albeit in a more careful manner.

TSP 415(c) annual addition limit

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Q. I recently returned from Afghanistan.  I maxed tax exempt ROTH TSP contributions ($17,500) and made tax exempt Traditional TSP contributions as well.   All contributions were tax exempt between January and June. Upon redeployment, I planned to continue to contribute tax deferred contributions not to exceed $17,500 between July and December in accordance with the 415(c) annual addition limit of $52,000.  However, my TSP contributions were stopped.  DFAS told me I could make NO additional Traditional TSP contributions as I had left the CZTE and was no longer eligible to contribute over the TSP limit. I spoke with a TSP representative and they stated…

TSP G Fund interest

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Q. Can you tell me why TSP G Fund doesn’t earn interest every day? I retired just about two years ago. On the advice of my tax accountant, I consolidated all of my TSP into the G Fund about a year prior to retirement at age 62. I don’t have a lot in the TSP, but it is over $300,000. I created a spreadsheet to track my daily, weekly and monthly interest earned and payouts (that should continue till I am in my 80s). There are no TSP postings on weekend days, but on the next work day interest is posted,…

TSP withdrawal

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Q. I am 64 years old with 27 years of federal service and will retire in two years (FERS). I want to withdraw $50,000 now to help out my kids. When I retire can I make a lump-sum withdrawal? Can I make another withdrawal when I retire? If I took a lump sum I would probably invest most of it. What options do I have with my TSP money at age 66 when I retire after I withdraw money at 64?

Admin costs

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Q. How do administrative costs of TSP compare with TIAA-CREF? A. In general, the TSP costs are lower. TIAA-CREF offers a wide variety of investment and plan options and the administrative costs vary among them, so the difference depends upon what, exactly, you are comparing to the TSP.

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