Monthly Archives: November, 2009

Q: I am retiring Dec. 31, 2010. I will be 55 years and 11 months old with 35 years of service. I would like to leave my Thrift Savings Plan monies, but make one withdrawal only and leave the rest until I either have to take withdrawals or need additional income to supplement my pension. Can I make the one withdrawal without paying the 10 percent penalty? A: Under the circumstances you describe, you will be allowed one partial withdrawal after you retire, without penalty. You may then take a full withdrawal — either in monthly payments or a lump…

Q: As a Federal Employees Retirement System employee, I was told that the limit on Thrift Savings Plan contributions changes once you reach age 50. Is this true? If so, what is the additional amount? A: You’re talking about catch-up contributions, which are an additional contribution (or total amount of annual contributions) that can be made starting when you reach age 50. For 2009, the catch-up contribution limit is $5,500. Check www.tsp.gov for more details.

Q: Mike Miles gave this answer recently: “The [Thrift Savings Plan] is a better investment environment than any retail IRA account I have ever seen, and I generally recommend that eligible investors move their IRA money into the TSP whenever possible. You are eligible if your IRA account contains no after-tax money — money from non-deductible contributions. Check with your IRA custodian to determine what, if anything, they will charge for liquidating your account.” You say that the individual is eligible if his IRA contains “no after-tax money.” Isn’t it true that even if the IRA contains both before-tax and…

Q: I am a federal employee under the Federal Employees Retirement System. In the year and month of my retirement, I will have about $170,000 in my Thrift Savings Plan. In the year of my retirement, can I do a one time withdrawal of $30,000 and not request a monthly withdrawal that year, and then the following year of my retirement start my monthly withdrawals? A: Yes, if you have not used up your one-time partial withdrawal prior to taking the $30,000 withdrawal. — Mike Miles

Q: I would like to know what my options are for withdrawing from my Thrift Savings Plan account? What would be the tax consequences for those options? I am a Federal Employees Retirement System retiree approaching the age of 70. A: I suggest that you first review the information available at www.tsp.gov including: The booklet at www.tsp.gov/forms/tspbk02.pdf and the tax notice at www.tsp.gov/forms/octax92-32.pdf. If, after you’ve studied these, you have any specific questions, I’ll be happy to answer them. — Mike Miles