Q: I am 63 and have been retired since 2005. I have been laid off once and let go from a fee-for-service job. When I retired, I took out $25,000. I need to be able to take out more money as I am 3 months behind on my mortgage. Getting another job takes at least three months, once hired, because of credentialing. Can I take an emergency withdrawal? Do I have any other options? I am about to lose my home. A: If you’re talking about your TSP account, since you’ve already taken a partial withdrawal, you’re only access to…
Monthly Archives: March, 2011
Q: What happens if your total contributions to the TSP for the year exceed the IRS limit of $16,500? A: I’m not sure how this could happen since the payroll system should cut off your payroll deferral when the annual limit is reached. I suggest you contact the ThriftLine at 877-968-3778 to discuss the situation.
Q: I am a CSRS employee and plan to retire Dec 31. I will meet the minimum age and years-of-service requirement for retirement. If I close my TSP account and withdraw all my funds prior to my retirement date, will I incur the 10 percent early withdrawal penalty? A: You’ll have to wait until you retire to close your account. If you withdraw your funds while still in service after you have reached age 59½, you will not be penalized for an early withdrawal. If you wait until you retire during the year in which you reach age 55, you…
Q: I am a CSRS employee. When I decide to retire (possibly age 55 or 56), I’m not sure what to do (if anything) with my thrift savings account. I do not plan to rely on this savings as part of my living expenses during retirement. Do you recommend keeping in the thrift plan or place it in something else? A: What you do with the money should depend upon what you expect from it. Since you have no expectations for the money, there is no appropriate investment strategy and it doesn’t matter what you do with it.
Q: I was born in 1956, serve under FERS and completed 10 years of federal service this year. Can I resign from the service and draw reduced annuity at age 56? Also, am I eligible to draw 40 percent of my TSP contribution with the remaining amount in monthly annuity immediately after resignation? A: Under those circumstances, you will be permitted to take a partial withdrawal followed by monthly withdrawals or annuity payments.
Q: What is the best resource for retirement planning for federal employees? Is there is listing of qualified fiduciaries or financial planners available for retirement planning who are not commission-driven brokers? A: I know of no such resource. My practice is Variplan, LLC, and I believe that we are the best resource you’ll find – fiduciaries, fee only, cost effective, experts. www.variplan.com.
Q: I’m 57 and just retired from CSRS a month ago with 30 years of service. I want to do a full withdrawal to pay off my mortgage but I’m trying to determine if I will have to pay the 10 percent penalty tax. According to page 4 of the TSP-536 (1/10) flyer, “the additional 10 percent tax generally does not apply to payments that are: Paid after you separate from service during or after the year you reach 55.” The word “generally” concerns me. I read the TSP Withdrawing Your TSP Account After Leaving Federal Service, dated June 2007…