Q: If I can withdraw from my TSP if I retire in the year I turn 55 (CSRS) without the penalty, can I also roll over my TSP to a Roth IRA without the penalty? From what I have read, any rollover prior to 59 1/2 would trigger a penalty. Is there any special provision that allows the rollover at 55, like the early withdrawal for federal employees? Because I may be in a higher tax bracket later in my career, I would like to move it now, but not at the expense of the 10 percent penalty. A: If…
Monthly Archives: December, 2011
Q: I recently paid my loan off but I overpaid it. Will TSP send the remaining balance back to me, or will they put it into my TSP account? A: Since you are not permitted to simply deposit money to your TSP account, the amount should be refunded to you. You should contact the TSP to advise them of the situation and make sure they refund the overpayment.
Q. I will be 66½ when I retire with 15 years of federal service. How long can I leave my money in TSP until I am forced to take it out? Will I have to pay taxes on it when I am forced to withdraw, and is there a penalty accessed? A. You must begin taking withdrawals – called Required Minimum Withdrawals – by April 1 of the year following the calendar year in which you reach age 71½. Visit www.tsp.gov for more information.
Q. When I hope to retire in FERS, I will be 62 years old with 28 years creditable service. I will receive TSP payouts, Social Security benefits and a FERS pension. My wife will benefit from Survivors’ Benefits. I’m concerned about what the living costs will be as a retiree. Will I have to pay federal income taxes on all of the above income that I receive. I am told that the tax rate is cheaper after retirement. Is that just because there is less income, or is it also because we are in a lower tax bracket? A. All…